TRANSCRIPT OF PROCEEDINGS BEFORE

             THE CANADIAN RADIO‑TELEVISION AND

               TELECOMMUNICATIONS COMMISSION

             TRANSCRIPTION DES AUDIENCES DEVANT

              LE CONSEIL DE LA RADIODIFFUSION

           ET DES TÉLÉCOMMUNICATIONS CANADIENNES

                       SUBJECT/SUJET:

VARIOUS BROADCASTING APPLICATIONS /

PLUSIEURS DEMANDES EN RADIODIFFUSION

HELD AT:                              TENUE À:

Conference Centre                     Centre de conférences

Outaouais Room                        Salle Outaouais

Portage IV                            Portage IV

140 Promenade du Portage              140, promenade du Portage

Gatineau, Quebec                      Gatineau (Québec)

March 29, 2007                        Le 29 mars 2007

Transcripts

In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

bilingual as to their covers, the listing of the CRTC members

and staff attending the public hearings, and the Table of

Contents.

However, the aforementioned publication is the recorded

verbatim transcript and, as such, is taped and transcribed in

either of the official languages, depending on the language

spoken by the participant at the public hearing.

Transcription

Afin de rencontrer les exigences de la Loi sur les langues

officielles, les procès‑verbaux pour le Conseil seront

bilingues en ce qui a trait à la page couverture, la liste des

membres et du personnel du CRTC participant à l'audience

publique ainsi que la table des matières.

Toutefois, la publication susmentionnée est un compte rendu

textuel des délibérations et, en tant que tel, est enregistrée

et transcrite dans l'une ou l'autre des deux langues

officielles, compte tenu de la langue utilisée par le

participant à l'audience publique.

               Canadian Radio‑television and

               Telecommunications Commission

            Conseil de la radiodiffusion et des

               télécommunications canadiennes

                 Transcript / Transcription

            VARIOUS BROADCASTING APPLICATIONS /

            PLUSIEURS DEMANDES EN RADIODIFFUSION

BEFORE / DEVANT:

Rita Cugini                       Chairperson / Présidente

Michel Arpin                      Commissioner / Conseiller

Richard French                    Commissioner / Conseiller

Barbara Cram                      Commissioner / Conseillère

Helen del Val                     Commissioner / Conseillère

ALSO PRESENT / AUSSI PRÉSENTS:

Jade Roy                          Secretary / Secrétaire

Valérie Dionne                    Legal Counsel /

Conseillère juridique

Joe Aguiar                        Hearing Manager /

Gérant de l'audience

HELD AT:                          TENUE À:

Conference Centre                 Centre de conférences

Outaouais Room                    Salle Outaouais

Portage IV                        Portage IV

140 Promenade du Portage          140, promenade du Portage

Gatineau, Quebec                  Gatineau (Québec)

March 29, 2007                    Le 29 mars 2007

           TABLE DES MATIÈRES / TABLE OF CONTENTS

                                                 PAGE / PARA

PHASE I

PRESENTATION BY / PRÉSENTATION PAR:

Larche Communications Inc.                        783 / 4951

Haliburton Broadcasting Group (OBCI)              842 / 5332

PHASE III

INTERVENTION BY / INTERVENTION PAR:

Music and Film in Motion                          910 / 5751

PHASE IV

Connelly Communications Inc.                      921 / 5817

William Wrightsell                                923 / 5830

Joco Communications Inc.                          925 / 5839

           TABLE DES MATIÈRES / TABLE OF CONTENTS

                                                 PAGE / PARA

PHASE I

PRESENTATION BY / PRÉSENTATION PAR:

Canadian Documentary Channel Limited Partnership  927 / 5854

PHASE II

INTERVENTION BY / INTERVENTION PAR:

CFTPA                                             968 / 6108

Documentary Organisation of Canada                991 / 6234

AFFIRMED:  MR. DAVID J. MANCY                    1032 / 6460

PHASE I

PRESENTATION BY / PRÉSENTATION PAR:

CJRN 710 Inc.                                    1032 / 6463

                  Gatineau Quebec / Gatineau (Québec)

‑‑‑ Upon resuming on Thursday, March 29, 2007

    at 0900 / L'audience reprend le vendredi

    29 mars 2007 à 0900

LISTNUM 1 \l 1 \s 49454945             THE CHAIRPERSON:  Order, please.

LISTNUM 1 \l 14946             Madam Secretary.

LISTNUM 1 \l 14947             THE SECRETARY:  For the record, Newcap has filed their market study.  This document is available in the examination room.

LISTNUM 1 \l 14948             We will now proceed with Item 17 on the Agenda which is an application by Larche Communications Inc. for a licence to operate an English‑language FM commercial radio programming undertaking in Sudbury.

LISTNUM 1 \l 14949             The new station would operate on frequency 91.7 MHz, Channel 219B, with an effective radiated power of 50,000 watts, non‑directional antenna/antenna height of 120.9 metres.

LISTNUM 1 \l 14950             Appearing for the applicant is Mr. Paul Larche, who will introduce his colleagues.  You will then have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

LISTNUM 1 \l 14951             MR. LARCHE:  Thank you.

LISTNUM 1 \l 14952             Good morning, Madam Chair and Commissioners.  My name is Paul Larche.  I am the President of Larche Communications Inc., or LCI for short.  It is a privilege, as always, to be in front of you today applying for a new FM radio service for Sudbury.

LISTNUM 1 \l 14953             I would like to introduce my panel.  Unfortunately, Mora Austin, who is our company's Vice President, could not join us this morning as her son is having surgery, so I have asked our Midland Station Manager's General Sales Manager, Linda Young, to do a little pinch‑hitting for Mora this morning.  Linda has worked at CICZ for over 10 years and she is to my far left, your far right.

LISTNUM 1 \l 14954             Next to Linda ‑‑ actually, next to me, is our company's Music and Program Director, along with Morning Show Host of CICZ‑FM Ted Roop.  Ted recently won the Canadian Country Music Association's On‑Air Personality of the Year Award for 2006.

LISTNUM 1 \l 14955             Seated next to Ted is our Promotions Director for CIKZ‑FM Kitchener, Beth Warren.  Prior to joining us just over three years ago, Beth worked for more than 10 years in the Canadian Independent Country Music industry.  She won Manager of the Year award in both 1999 and 2000 at the Ontario Country Music Awards and Record Company Person of the Year at the CCMA awards in 1999.

LISTNUM 1 \l 14956             Madam Chair and Commissioners, I can't tell you how excited I am to be here today.  Sudbury really does hold a very special place in my heart and life.  In 1986, I was transferred out of Timmins, my home town, to Sudbury in the capacity of General Manager of CKSO and CIGM‑FM, two stations Telemedia had just purchased from the Plant family.

LISTNUM 1 \l 14957             When you grow up in Timmins, moving to Sudbury is a big deal.  Sudbury was, and still is, the largest city in Northern Ontario.  I was only 26 years old, but what I lacked inexperience I hope I made up in enthusiasm.

LISTNUM 1 \l 14958             The two stations needed a lot of work and, with the help of a great group of people, many of whom still work there, we turned these stations around from money losers to a profitable business.

LISTNUM 1 \l 14959             I made many friends in Sudbury that I'm still very close to today.  My second daughter, Jessica, was born at Sudbury General.  She is 19.  Whew, time flies.

LISTNUM 1 \l 14960             Sudbury is where I was first exposed to the Salvation Army.  I sat on their Board and marvelled at the great things they unselfishly do for the communities they serve.  They taught me so much about giving back.

LISTNUM 1 \l 14961             I spent four years in Sudbury.  It was, and still is, a great city that sometimes gets an unfair rap.

LISTNUM 1 \l 14962             I also hoped I could do business there again.  Northern Ontario is a great place to grow up and do business.  I understand its culture and needs.  J'apprécie et comprends la culture du nord Ontario ‑ de le point de vue anglais et franco‑ontarian.

LISTNUM 1 \l 14963             We are very proud of the application before you today.  We believe it strikes the perfect balance of reflecting and satisfying market needs, sound business judgment, and fulfilling the mandate of the Broadcast Act.

LISTNUM 1 \l 14964             So let's start with our business plan.

LISTNUM 1 \l 14965             Ted...?

LISTNUM 1 \l 14966             MR. ROOP:  Thank you very much, Paul.

LISTNUM 1 \l 14967             Good morning, Commissioners.

LISTNUM 1 \l 14968             We are applying for a country music station in Sudbury.  I want to make it clear that this decision was not based on the fact that we are known for country radio, but because that is what the market wants.  We commissioned research to determine the viability of the top three radio formats currently missing on the FM band in Sudbury:  Country, CHR and Alternative Rock.

LISTNUM 1 \l 14969             The format with the best potential for success was clearly Country.  This stands to reason, as Sudbury is one of the few communities of its size in Ontario that does not have a country FM.  Country radio is Canada's third most listen to format, and forth in Ontario.

LISTNUM 1 \l 14970             As you know there is an AM station owned by Rogers in Sudbury that does air some country music.  This station, however, is not for filling the needs of the market, particularly with listeners under the age of 50, where CIGM only garners a 3 percent share of hours tuned.

LISTNUM 1 \l 14971             This is an unfortunate reality of music on AM radio today and is why several are finding alternative formats such as sports and talk.  Country listeners in Sudbury have abandoned radio for iPods and internet to get their country fix.

LISTNUM 1 \l 14972             The new station were applying for will be called KICX 91.7, Sudbury's Hot New Country, branded in the same way as our Midland station, CICZ, which we call KICX 104, and CIKZ which we call KICX 106.

LISTNUM 1 \l 14973             But KICX 91.7 won't be a rebroadcaster or of our existing station.  All of the programming will be local.  KICX 91.7 will feature the best in country music from the late '80s, '90s and today.  Core artists will include Shania Twain, the Dixie chicks, Paul Brandt, Alan Jackson and Terri Clark.

LISTNUM 1 \l 14974             Approximately 50 percent of our selection will be current.  However, heritage country artists, like Patsy Cline and Anne Murray, will also find a home of our station.  We will place a special emphasis on Canadian country music.  That's why we have proposed as a condition of licence a minimum of 40 percent Canadian content.

LISTNUM 1 \l 14975             We are also very proud of our track record to developing and exposing new country emerging artists.  Beyond our substantial CCD commitments, we have committed to airing vignettes that highlight emerging Canadian artists that we have added to our playlist.

LISTNUM 1 \l 14976             We are prepared to accept as a condition of licence a quota on Canadian emerging artists, although we do believe the CRTC must clearly articulate how it will define an emerging artist and the regulatory mechanism it will use to measure it.  We support the CAB's intervention for this hearing regarding these matters.

LISTNUM 1 \l 14977             I am very proud of the track record KICX 104 in Midland has established.  The Canadian Country Music Association has chosen us as Country Station of the Year for four out of the past five years.  We would like to duplicate this success in Sudbury.

LISTNUM 1 \l 14978             Of course, music is only one component of a successful station.  Our non‑music programming, in a nutshell, will be local, local and more local.  That is what has made us successful in Central Ontario, that is what is making must successful in Kitchener, and that is what will make us successful in Sudbury.

LISTNUM 1 \l 14979             In today's age of iPods, Satellite Radio and other emerging technologies, terrestrial radio's true edge is being local:  Informing, reflecting and discussing local and regional content.

LISTNUM 1 \l 14980             We have committed to over 12 and a half hours of meaningful local spoken‑word programming.  For example, we will program is six times per day special community vignettes called "Community Clips".  They will feature a wide range of local topics and interviews aimed to reflect the needs of Sudbury and cultural diversity of the region.

LISTNUM 1 \l 14981             With over 300 lakes in the greater Sudbury Watershed, we will offer comprehensive daily recreation and tourism reports throughout the year focused on boating, fishing, camping, skiing, snowmobiling and more.

LISTNUM 1 \l 14982             You will find our community cruiser at many community events such as the Northern Lights Festival, offering both on‑site and on‑air exposure.

LISTNUM 1 \l 14983             In addition, the station will invite various community groups and charitable organizations to post their information, special events and links on our website.

LISTNUM 1 \l 14984             KICX 91.7 will also offer a new and diverse news voice to the Sudbury market.  We will provide a comprehensive news service, broadcasting over four hours of news and information per week.  The news will be supplemented by local sports, local weather and local traffic reports throughout the broadcast day.

LISTNUM 1 \l 14985             And, as an added benefit, we will cross‑promote news, public events and tourist attractions between our Midland and Kitchener operations.

LISTNUM 1 \l 14986             Now to talk to you a little bit more about our company, here's Linda.

LISTNUM 1 \l 14987             MS YOUNG:  Thanks, Ted.

LISTNUM 1 \l 14988             Madam Chair and Commissioners, I have worked at CICZ‑FM for over 10 years.  Prior to Paul's purchase, I can honestly tell you it was in bad shape.  We only had a staff of six people.  We were losing money, revenues, let alone morale.

LISTNUM 1 \l 14989             It's hard to believe that Paul bought the station 10 years ago.  I guess time really does fly when you are having fun.  And what a great ride it has been.

LISTNUM 1 \l 14990             Under Paul's leadership CICZ‑FM has been a great broadcast success story.  We are very proud to say were doing the same in Kitchener.

LISTNUM 1 \l 14991             Our Mission Statement is exceedingly simple:  MOCHA.  This stands for Make Our Customers Happy Always.  Our customers are the people of communities we serve, including our listeners, our advertisers, and our employees.

LISTNUM 1 \l 14992             In fact, it is mandatory at LCI that all management volunteer for a service group or charitable organization within our market.  The core values behind MOCHA are really quite simple:  Make sure we have the right strategy, the right people, effective systems and quality in everything we do.

LISTNUM 1 \l 14993             Our vision is to be the most successful small, independent broadcaster in Canada.  We want to be envied as a leader in community service, ratings, profitability, innovation and also a place to work.

LISTNUM 1 \l 14994             It really comes down to this:  Ask our customers what they want and give it to them.  What a concept!

LISTNUM 1 \l 14995             Despite the size of our company, Paul has set high standards that bring out the best in all of us.  His staff and peers respect and admire him.  He believes in rewarding people, both promotionally and financially, and our profit‑sharing programs exhibit his generous character.

LISTNUM 1 \l 14996             I speak on behalf of the entire staff, when I say Paul has taught us all so much, so much about running a profitable business; so much about managing and coaching; and so much about the importance of serving our communities with the same dedication and passion that we all have for this great business, radio.

LISTNUM 1 \l 14997             We want our company to grow.  Paul wants to give his employees an opportunity to grow as well.  That is why we are here today.  We have shown ourselves and we have shown the industry that despite being a small independent we can compete with the very best in the country.

LISTNUM 1 \l 14998             I would now like to pass it over to Beth.

LISTNUM 1 \l 14999             MS WARREN:  Thanks, Linda.

LISTNUM 1 \l 15000             I have worked in the music business in a number of capacities for more than 20 years.  This is my first occasion to present in front of the CRTC, and I would like to take this opportunity to tell you first‑hand that the dollars committed by radio really do make a difference.  I have worked with several artists that have gone on to have successful careers and they couldn't have done it without the help and the financial support of radio.

LISTNUM 1 \l 15001             LCI is committing a total of $350,000 over the first licence term.  We believe our initiatives will make a real difference, particularly with emerging artists.

LISTNUM 1 \l 15002             $20,000 per year will go to FACTOR.  It goes without saying the great job they do at developing new talent and assisting Canadian talent in general.

LISTNUM 1 \l 15003             Another $10,000 per year will go to the CCMA's Country Talent Development Fund.  These funds provide emerging Canadian artists great showcase opportunities, including Canadian Country Music Week each September.

LISTNUM 1 \l 15004             We have committed $10,000 per year to send Sudbury and area emerging artists to Canadian Music Week.  These participants will attend special artist/creator development courses, seminars, workshops and mentoring sessions that will help provide new artists, writers and musicians with the knowledge and tools they need to succeed.

LISTNUM 1 \l 15005             KICX 91.7 will also host the StarQuest talent search at the cost of $10,000 per year.  This will be modeled on the successful StarQuest's we conduct in Midland and Kitchener.  The winner will receive studio time, reproduction and, of course, airtime on all of our stations.

LISTNUM 1 \l 15006             Our application also outlines a commitment of $50,000 per year in airtime devoted to promotion of music‑related activities in Sudbury and area as it relates to emerging artists.  This would include the promotion of concerts and performances by local artists; artistic programs in the community; and the release of CDs for local artists.  These are truly outstanding CCD initiatives, that we believe exceed and surpass the Commission's CCD plan as outlined in the recent Radio Review.

LISTNUM 1 \l 15007             LCI is committed to Canadian country music ‑‑ it's our lifeline ‑‑ and we know we need a steady supply of high quality talent for our listeners.  We always strive to present Canadian emerging artists any time we are able to, often opening for a popular headliner so that we can have a built‑in audience.

LISTNUM 1 \l 15008             LCI has presented many country music concerts in both Central Ontario and Kitchener‑Waterloo.  These shows are done at our expense and our risk.

LISTNUM 1 \l 15009             And we often present concerts at no cost to the audience.  For example, Paul challenged me a few years ago to present five Canadian artists in on night for more than 2,000 people.  It sounds simple enough, however all five artists were playing in three different venues in three different cities.  It was a bit of a challenge logistically, however, we exposed as many of our listeners as possible to as much Canadian country talent as possible in just one night.  The audience, our listeners, were absolutely thrilled.  Three years later I still have people telling me what a great time they had.

LISTNUM 1 \l 15010             The artists?  Not only did they also have a great time, but they sold more CDs in that one night than they have at most gigs and, as a result, they now have a tonne of loyal fans.

LISTNUM 1 \l 15011             In my career, I have worked on the artist side with many radio stations from across the country.  I know it sounds a little bit like job security, but I can honestly tell you that I have never seen a company that puts so much time, effort, money and heart into promoting and exposing Canadian talent.  We hope to have the chance to do this in Sudbury.

LISTNUM 1 \l 15012             Paul...?

LISTNUM 1 \l 15013             MR. LARCHE:  Thanks, Beth.

LISTNUM 1 \l 15014             In this time of consolidation, radio station ownership is changing very quickly.  Independent broadcasters are becoming rare, which is a shame because I believe we play a vital role in Canada's broadcast system.  Beyond offering an alternative voice, we create many of the jobs in our industry, particularly for people starting out, and often consolidation results in staff reductions.

LISTNUM 1 \l 15015             But equally important is that our industry functions at its best with many stakeholders, not just the voice or position of five big companies with various competing interests.  That's why I'm so active with the Canadian Association of Broadcasters and I chair several committees, including the Independent Radio Caucus Committee, to ensure the smaller players have a voice.

LISTNUM 1 \l 15016             The larger companies, with their considerable financial and human resources, can make it difficult for an independent to survive if they want, especially if they decide to go head‑to‑head in a competitive market.  Some can afford to lose money for years.  An independent broadcasters cannot.

LISTNUM 1 \l 15017             LCI is being proactive with this application.  We are positioning ourselves for the long term.  Economies will be realized for us in areas such as programming, management and accounting, and since all three stations will have the same format, several promotions could involve all entities.

LISTNUM 1 \l 15018             I mentioned earlier my exposure to the Salvation Army in Sudbury in 1986.  This is an organization I'm still very much involved with today.  This past Christmas, our two stations collectively raised over $50,000 for needy families in our communities with the Salvation Army:  making a difference in the communities we serve.  At our Christmas party we talked about it.  There wasn't a dry eye in the house, because we all consider this a privilege.

LISTNUM 1 \l 15019             We are custodians of broadcast licences that belong to the Canadian people.  The Broadcast Act wisely lets us hold on to it if we give back and reflect our country and our communities.  What a deal.

LISTNUM 1 \l 15020             You have had several great applications in front of you yesterday and TV today by some great broadcasters.  I don't envy your position.

LISTNUM 1 \l 15021             But, in conclusion, I hope you will agree this application exceeds and surpasses the Commission's criteria for licensing a new radio station.  I trust you will agree that it a fair, realistic application based on what we have already proven we will do, not just on what you want to hear.

LISTNUM 1 \l 15022             Approval of this application will fill the largest under served format in the market, country, by a young group of broadcasters who are considered by their peers, as the best in Canada when it comes to this format.  We will bring listeners back to radio.

LISTNUM 1 \l 15023             Approval of this application will introduce a new editorial voice in the city, one that will offer extensive news and community programming, as well as a number of additional community initiatives that will expand and reflect the make‑up and culture of the great city of Sudbury.

LISTNUM 1 \l 15024             Approval of this application will result in a 40 percent Canadian content and a comprehensive series of expenditures on Canadian talent totalling over $350,000 over the licence term.

LISTNUM 1 \l 15025             Finally, approval of this application will allow a small, independent radio company to get stronger, stronger to hold its own against much larger public companies, stronger to weather economic downturns, and stronger to contribute and enhanced, the goals and aspirations of the Canadian Broadcast Act.

LISTNUM 1 \l 15026             Thank you very much.  We appreciate your time and we are ready for your questions

LISTNUM 1 \l 15027             THE CHAIRPERSON:  Thank you, Mr. Larche, and your colleagues.

LISTNUM 1 \l 15028             Commissioner del Val...?

LISTNUM 1 \l 15029             COMMISSIONER del VAL:  Thank you, Madam Chair.

LISTNUM 1 \l 15030             Thank you for your presentation, Mr. Larche and your team.

LISTNUM 1 \l 15031             We will start with the easy stuff first.  Let's just go to the format that you have chosen.

LISTNUM 1 \l 15032             The age range, the demographic that you have identified, 35 to 64, is quite a wide range.  Can you identify within that range what is the sort of the core target group?

LISTNUM 1 \l 15033             MR. LARCHE:  Thirty‑nine year old female.

LISTNUM 1 \l 15034             COMMISSIONER del VAL:  That is quite a narrow ‑‑ all right.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 15035             MR. LARCHE:  Is that narrow enough for you?

LISTNUM 1 \l 15036             COMMISSIONER del VAL:  You can widen it a bit more than just one year.

LISTNUM 1 \l 15037             MR. LARCHE:  We have a fictional couple called Jack and Diane.  Diane is 39 and Jack is 41 and we know who they are, what is important in their lives, where they work, where their kids go to school, the types of things that mean a lot to them in terms of values in their life.

LISTNUM 1 \l 15038             Country music is a very roots‑based‑type format with strong values.  So we have a very, very, very clear definition of who our target customer is and all of our on‑air staff and, frankly, our entire staff, know Jack and Diane very well.

LISTNUM 1 \l 15039             I can tell you where they live in Midland and in Kitchener if you want.

LISTNUM 1 \l 15040             COMMISSIONER del VAL:  So are those the same target groups in your Midland and the Kitchener stations?

LISTNUM 1 \l 15041             MR. LARCHE:  That is correct.

LISTNUM 1 \l 15042             COMMISSIONER del VAL:  I know you have also named and identified the country music from the late '80s, '90s. and then 50 percent is from that category, '80s, '90s up to today.  Then you have named some of the Patsy Cline's and Anne Murray's, the older artists.

LISTNUM 1 \l 15043             Are you going to be sort of day‑parting your programming or are you going to mix it all up?

LISTNUM 1 \l 15044             MR. LARCHE:  I will let Ted talk a little bit more about that, but we do mix it all up and we do feature some of what we call "classic country".  We call them "KICX Classic Cuts" and we position those not every hour but through the day for those country fans who do enjoy some of the older heritage stuff.

LISTNUM 1 \l 15045             Ted, do you have anything to add to that?

LISTNUM 1 \l 15046             MR. ROOP:  We do mix it up.  We have a very good era balance between all of the artists.  We don't do any day‑parting.  We try to go with sort of a Gold Record and a Current Record and a Gold Record and a Current Record.  So we split it up almost about 50:50.

LISTNUM 1 \l 15047             COMMISSIONER del VAL:  Thank you.

LISTNUM 1 \l 15048             Where do you think you will slot in the emerging artists?

LISTNUM 1 \l 15049             MR. ROOP:  The emerging artists would be part of our Current Records.  They would go in as a current.  It doesn't matter if it's Canadian or international, it's 50:50 Gold/Current.

LISTNUM 1 \l 15050             COMMISSIONER del VAL:  I was also looking at the study that you filed with your application.

LISTNUM 1 \l 15051             Is that an excerpt from the study?  Because what I seem to have is about five pages, and that is on your application Addendum 2.

LISTNUM 1 \l 15052             MR. ROOP:  Yes.

LISTNUM 1 \l 15053             COMMISSIONER del VAL:  Would it be possible for you to file the full study?

LISTNUM 1 \l 15054             MR. LARCHE:  That is the full study.

LISTNUM 1 \l 15055             COMMISSIONER del VAL:  Oh, all right.

LISTNUM 1 \l 15056             I know that you said that the respondents were asked:  Are there any stations you can listen to like that now?  Meaning country.

LISTNUM 1 \l 15057             MR. ROOP:  Yes.

LISTNUM 1 \l 15058             COMMISSIONER del VAL:  I couldn't interpret from the study that you filed the answers to that question.

LISTNUM 1 \l 15059             MR. LARCHE:  I can't remember the number off the top of my head, but it is in there and I can get that number back to you.

LISTNUM 1 \l 15060             COMMISSIONER del VAL:  More specifically, I know that you have identified in your supplementary brief that the reason that the current country station has only a 3 percent share is because the FM sound is not optimal for music.

LISTNUM 1 \l 15061             Now, were the participants in the study asked specifically:  Why are you not listening to the current AM country station?

LISTNUM 1 \l 15062             MR. LARCHE:  No, they were not.

LISTNUM 1 \l 15063             COMMISSIONER del VAL:  All right.

LISTNUM 1 \l 15064             MR. LARCHE:  We are basing that on what is I think pretty well generally accepted in the industry today, is that AM radio particularly ‑‑ when we say a 3 share, that is under the age of 50.

LISTNUM 1 \l 15065             COMMISSIONER del VAL:  Yes.

LISTNUM 1 \l 15066             MR. LARCHE:  The station share is higher than that.  Certainly when you go over the age of 50 I think it jumps up to a 21 or 22 share.  I think that is just reflective of what we have seen in several markets and not just in country in different formats.  As the demographics get older, the demographic group that likes to listen to music on radio, if given a choice, would prefer FM over AM.  We have seen it time and time again.

LISTNUM 1 \l 15067             So we did not specifically ask the question, but we feel pretty convinced that is the situation, because Rogers are very good programmers and it wouldn't be an issue that the product isn't good, it is an issue of the product is on AM.

LISTNUM 1 \l 15068             COMMISSIONER del VAL:  We won't have the record show that the table is falling apart on you right there.

LISTNUM 1 \l 15069             MR. LARCHE:  Thank you.

LISTNUM 1 \l 15070             I tried very nonchalantly to fix it, but it's not working.  Oh, here we go.  We are good.  Thank you.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 15071             COMMISSIONER del VAL:  Now then, can you tell me more about the differences you see between your FM country station and the AM country station?

LISTNUM 1 \l 15072             MR. LARCHE:  Certainly, the biggest one will be that we are on FM.  We are a 24‑hour‑a‑day country station.

LISTNUM 1 \l 15073             What Rogers is doing ‑‑ and I want to pick my words carefully because I know that they are in the room and I don't want to speak on what their intentions are, however, I do know that they have already repositioned CIGM as Sudbury's news leader.

LISTNUM 1 \l 15074             I know that if you go to the front web page for their radio station you won't see the words "country music" or "music" for that matter.  They are going with talk, I think from 6:00 p.m. until 6:00 a.m., and expanded news coverage.  So the amount of country music they are playing is only between 6:00 a.m. and 6:00 p.m.

LISTNUM 1 \l 15075             The music they are playing will definitely be very similar to ours.  We are not going to say we are playing different music, but we are playing it on the FM band.

LISTNUM 1 \l 15076             COMMISSIONER del VAL:  All right.

LISTNUM 1 \l 15077             MR. LARCHE:  Again, I would never be as presumptuous as to speak for Rogers, but I would think that they are heading in that news talk direction, as they have done in several other markets very successfully.

LISTNUM 1 \l 15078             COMMISSIONER del VAL:  Thank you.

LISTNUM 1 \l 15079             Maybe we can talk about the spoken word programming right now.

LISTNUM 1 \l 15080             You have given us quite a bit of very good information in your October 17th response to deficiencies.  I am referring to page 2 of the response, your answer to question 1(b).

LISTNUM 1 \l 15081             You said that 10 percent of your weekly programming ‑‑ and that 10 percent will equal 12 hours and 36 minutes ‑‑ would be devoted to spoken word and, of that, 20 percent of spoken word will be to news, which is 2 hours and 5 minutes, and then another 20 percent to regional sports, weather forecasts, traffic and road reports.

LISTNUM 1 \l 15082             Now, what about the other 60 percent?  I know you go on to list the other things you do in answer to 1(c).  Could you give us a further breakdown?

LISTNUM 1 \l 15083             MR. LARCHE:  Sure.  Sure.

LISTNUM 1 \l 15084             Community clips, that will be 126 minutes or 17 percent; our recreation reports are 96 minutes or 13 percent; our community cruiser, this is over the course of the week of course, 68 minutes or 9 percent; our emerging artists vignettes are 28 minutes; and then the other 25 minutes are mandated announcer community talk every hour where they talk about what is going on in the community, public service announcements, and so on.

LISTNUM 1 \l 15085             Just because I know this has come up a lot in the last few days, we can submit, if you want, a matrix of all of our programming throughout the course of the week that highlights when these things air.  We would be more than happy to do that for you, if it would clarify.

LISTNUM 1 \l 15086             COMMISSIONER del VAL:  That would be great, if you could please file that.  Yes.

LISTNUM 1 \l 15087             MR. LARCHE:  We have that with us here today.

LISTNUM 1 \l 15088             COMMISSIONER del VAL:  I know Ms Dionne will want to ask:  When do you think you could file that, please?

LISTNUM 1 \l 15089             MR. LARCHE:  Right after we are done.

LISTNUM 1 \l 15090             COMMISSIONER del VAL:  Perfect.  Thank you.

LISTNUM 1 \l 15091             Then, just when you are talking about the produced community features, is that also going to be live or ‑‑

LISTNUM 1 \l 15092             MR. LARCHE:  No.  They are pre‑produced by our news team.

LISTNUM 1 \l 15093             COMMISSIONER del VAL:  All right.

LISTNUM 1 \l 15094             MR. LARCHE:  We do this already in our other stations so we have the template and the model.

LISTNUM 1 \l 15095             Our news department, we run news in the morning and at noon and then later in the afternoon, so there is about a five or six‑hour period where the news department is gathering information.  One of their jobs is to put these community clips together.

LISTNUM 1 \l 15096             What it is, is basically it's a ‑‑ we will use a public service announcement as an example.

LISTNUM 1 \l 15097             If something is going on in the community, instead of just saying this is going on, what we will do is we will call the person who is organizing it, we will interview them.  Our news department will interview them on‑the‑air, we will record little bits about, you know, where this event is, why you are doing it, so on so forth.  So it's a lot more of a detailed thing than just mentioning it.

LISTNUM 1 \l 15098             If there is a cultural event going on we ‑‑ and we might do a series of them as well.  Sometimes if there is, you know, an event going on for a week that we know the community is interested in, we will do a series of them so that we will follow up on it.

LISTNUM 1 \l 15099             So we pre‑produce them because it allows us to edit them and make sure that we are giving the meat.  But they are done every day and they are done through the year.

LISTNUM 1 \l 15100             And we have a great response to them.  They are actually a very good programming tool.

LISTNUM 1 \l 15101             COMMISSIONER del VAL:  Great.

LISTNUM 1 \l 15102             You were talking about local, regional and national sports as part of your spoken word and you said an emphasis will be placed on local sports.

LISTNUM 1 \l 15103             "Emphasis" is sort of more than 50 percent or predominantly it's all local sports activities?

LISTNUM 1 \l 15104             MR. LARCHE:  Our news and our sports, we do run more than 50 percent local.  Our feeling is that if there is a huge international story that people will probably not seek us out to get all the detailed information.  We will certainly let them know about it, but ‑‑ particularly in some of the competitive markets we are in where there are 24‑hour live news talk stations.

LISTNUM 1 \l 15105             So what we try to do, particularly in the sports and in news, is go local.  You know, we strive for about 60 percent local and the other 40 percent would be regional and national/international.  Of course, depending on the day, that can move around, but that's what we have mandated our news people to do.  I think that is what, as we said, is a success to radio, is you have to be local.

LISTNUM 1 \l 15106             The only thing that we have going for us in this time of so much technology changing, satellite radio ‑‑ I haven't got one yet but, you know, a few of my friends do and they are pretty compelling.  They have a lot of good programming on them and, you know, Internet radio.

LISTNUM 1 \l 15107             I do have an iPod and my kids do, Ted does, we all do.  The only thing that is going to separate radio apart from all of these other technologies is being local.  So we really consider it our only competitive advantage.

LISTNUM 1 \l 15108             I know it sounds a little like what you want to hear, but this is ‑‑ you know, this is something that we really believe as a company is true to our long‑term survival and if we are not serious with it, you know, we can certainly be out of business pretty quick.

LISTNUM 1 \l 15109             COMMISSIONER del VAL:  That leads me to, I believe you said that you will have two full‑time ‑‑ is it two full‑time staff in the Sudbury station or two full‑time news staff?

LISTNUM 1 \l 15110             MR. LARCHE:  Two full‑time news.  One news director and another news person, and we also will have part‑time news people for weekends.

LISTNUM 1 \l 15111             COMMISSIONER del VAL:  All right.  So how many staff do you anticipate placing in the Sudbury station all together?

LISTNUM 1 \l 15112             MR. LARCHE:  On‑air we will have three full‑time announcers, we will have two news people, we would have obviously a station manager/general sales manager.  One of our announcers would act as the program director, just as Ted does in Midland.  He also does the morning show and cleans the office on Thursdays ‑‑

‑‑‑ Laughter / Rires

LISTNUM 1 \l 15113             MR. LARCHE:  But he's really good at it.

LISTNUM 1 \l 15114             We have to run, you know, a lean ship, and we have to ‑‑ you know, again, as I said in our opening remarks, this is a balancing act and we know what you want, we know what the Broadcast Act wants and we know what the community wants, but we always have to make sure that we are positioning ourselves for inevitable things that may come up and turn us down.

LISTNUM 1 \l 15115             With Kitchener, you know, we really had a devastating first year and a half when we launched because the signal that we were approved with turned out to be totally inadequate.  People could not hear us.  It was a disaster, frankly.  We had to immediately re ‑‑ and this was something that no one could foresee.  Other people had applied for this frequency.

LISTNUM 1 \l 15116             It was something called thermal ducting, which I will not pretend to know, from a Christian station in Buffalo, but needless to say it ‑‑ nobody could hear us.

LISTNUM 1 \l 15117             So it really knocked us back on our business plan, knocked us back on where we thought we would be, because we had to reapply for a new frequency.  There are few frequencies down there, it was a competitive process, but the CRTC, in its infinite wisdom, did help us there and so we have only been with this new frequency for a year and a half.  So we are kind of in year one of where we thought we would be two years ago.

LISTNUM 1 \l 15118             The only reason I'm bringing this up is because, you know, I know as an owner/operator that you have to know how to run the business smart and lean and we are not sitting here with the biggest expenditures in programming or maybe in some other areas.  We look at synergies.

LISTNUM 1 \l 15119             We know what we are mandated to do, but we also have to make sure that we position ourselves.  I think our business plan is very realistic that way.

LISTNUM 1 \l 15120             Sudbury is ‑‑ I have a lot of respect for Rogers and for Newcap.  Newcap is a minority partner with us in Kitchener.  Whoever gets that licence it is not going to be a walk in the park.

LISTNUM 1 \l 15121             COMMISSIONER del VAL:  Yes.

LISTNUM 1 \l 15122             MR. LARCHE:  That's why we position ‑‑ I know I'm rambling a little on your question, but I think that tells you how we are going to set up our staff.

LISTNUM 1 \l 15123             COMMISSIONER del VAL:  No, you are not rambling, because those were areas that I had intended to ask on and so it leads me into those areas.

LISTNUM 1 \l 15124             MR. LARCHE:  All right.

LISTNUM 1 \l 15125             COMMISSIONER del VAL:  But before I go there, before I forget this, this point is just on the staffing of the Sudbury station.

LISTNUM 1 \l 15126             MR. LARCHE:  Yes...?

LISTNUM 1 \l 15127             COMMISSIONER del VAL:  The two news people and three full‑time announcers, do the three full‑time announcers overlap with the two news people at all?

LISTNUM 1 \l 15128             MR. LARCHE:  Yes.  Much in the same way as it was described yesterday by some broadcasters, we have one news person who works in the morning.  They do the on air stuff.  They also do some of the ‑‑ what they will do is, in the afternoon they will work on community clips or they will go cover interviews and do the reporting.

LISTNUM 1 \l 15129             COMMISSIONER del VAL:  All right.

LISTNUM 1 \l 15130             MR. LARCHE:  Then we have an afternoon person that comes in and they work from noon until 6 o'clock, and then we have part‑time stringers they are called who will also cover City Council meetings and bring stories in for us.  We usually just pay them on a per‑story basis and they come in on weekends.

LISTNUM 1 \l 15131             Our three announcers would be ‑‑ we would have a morning show host who would work from 6:00 to 10:00, then we have a midday person 10:00 to 3:00, and then we have an afternoon drive person who would work from 3:00 to 7:00.

LISTNUM 1 \l 15132             You will ask about voicetracking.  Yes, we will voicetrack in the evening from 7:00 to midnight, but that will be locally produced for that market.  We will also voicetrack overnight.

LISTNUM 1 \l 15133             On weekends we go live from 6:00 a.m. to 6:00 p.m. and we voicetrack in the evenings.

LISTNUM 1 \l 15134             COMMISSIONER del VAL:  Thank you.

LISTNUM 1 \l 15135             Is that pretty similar to the setup you have in, say, your Kitchener station?

LISTNUM 1 \l 15136             MR. LARCHE:  More similar to Midland.

LISTNUM 1 \l 15137             Kitchener is a bigger market, it's more competitive, we have more staff there.

LISTNUM 1 \l 15138             COMMISSIONER del VAL:  All right.

LISTNUM 1 \l 15139             MR. LARCHE:  We have three, you know, three or four people in our morning show in Kitchener.  It is just a much bigger, more competitive market so we have more resources there.

LISTNUM 1 \l 15140             COMMISSIONER del VAL:  Yes.

LISTNUM 1 \l 15141             MR. LARCHE:  But this is very, very similar to what our Midland operation is and, again, Midland or that part of Central Ontario and the market we compete in there with Barrie, Orillia, Midland, you know, the population is slightly bigger than Sudbury but the dynamics are not that different.  The format, you know, there is a Rock station FM, there is an AC, there is a Hot AC.

LISTNUM 1 \l 15142             COMMISSIONER del VAL:  All right.

LISTNUM 1 \l 15143             MR. LARCHE:  So from that respect, other than the fact that in Central Ontario we get a lot of spill from Toronto, so a lot of tuning goes out of the market.  Sudbury there is no spill and it is one of the things I miss from working up there, is at least your competition you can see them.

LISTNUM 1 \l 15144             COMMISSIONER del VAL:  Will there be times that ‑‑ during what times of the 24‑hour day will your Sudbury station be not manned ‑‑ or womaned, sorry?

LISTNUM 1 \l 15145             MR. LARCHE:  Personned?

LISTNUM 1 \l 15146             COMMISSIONER del VAL:  Yes, personned.  Yes.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 15147             MR. LARCHE:  Well, I guess assuming the afternoon drive person left right after they are finished at 7:00, you could say from 7:00 until probably the morning people come in at 4:00 or 5:00 the next morning.

LISTNUM 1 \l 15148             But again, this is the way many radio stations operate.  We do know that we have to be on call.

LISTNUM 1 \l 15149             Ted, maybe you might want to talk about some of the things we do to make sure that we can react very quickly if we have to get into the radio station.

LISTNUM 1 \l 15150             MR. ROOP:  In Midland our news director is on call 24/7.  Also, we have given his cell phone number to the police and the fire and the city just in case there are problems.  Actually, we have it set up where our news line is actually forwarded to his cell phone ‑‑ which probably he doesn't like all the time, but it is and there have been times actually when he has been called in.  We have had weather emergencies or other problems, Amber Alerts, and he has been at the station within about five minutes of when that happens.  It is a great system and it works very well for us.

LISTNUM 1 \l 15151             COMMISSIONER del VAL:  Thank you.

LISTNUM 1 \l 15152             Automated programming.  What part of the day do you anticipate that you will have automated programming and sort of ‑‑ well, yes ‑‑ or the duration of such programming?

LISTNUM 1 \l 15153             MR. LARCHE:  I'm not sure what you mean by "automated".

LISTNUM 1 \l 15154             COMMISSIONER del VAL:  Voicetrack.

LISTNUM 1 \l 15155             MR. LARCHE:  Voicetrack.  That is 7:00 p.m. through to 6:00 a.m. the next morning.

LISTNUM 1 \l 15156             COMMISSIONER del VAL:  All right.

LISTNUM 1 \l 15157             MR. LARCHE:  So using the broadcast week, 7:00 p.m. until midnight.

LISTNUM 1 \l 15158             COMMISSIONER del VAL:  All right.  Thank you.

LISTNUM 1 \l 15159             You have the Midland station and the Kitchener station.

LISTNUM 1 \l 15160             What resources do you plan to share with those stations?  What synergies will you have with those stations?

LISTNUM 1 \l 15161             MR. LARCHE:  Well, most of them would be probably more admin.  A lot of them would be administration.  Certainly, you know, our accounting, our traffic scheduling for commercials.  We would definitely centralize that.  Engineering.

LISTNUM 1 \l 15162             In terms of programming, we believe it is important that we have a program director in Sudbury, who lives in Sudbury, who understands Sudbury, but Ted is our Regional Program Director so that he would report through to Ted.  Right now our program director in Kitchener and Ted spend a lot of time on the phone talking about, you know, music ads, and so on so forth, what's going on in the community.

LISTNUM 1 \l 15163             So we would have the three of them working in concert, you know, just talking about what is going on at the radio stations.  But certainly from a news point of view, if there was a major story in one of our other markets that we could send a clip up to we would, but that is certainly not in the plans.  Because again it goes back to we have to be local and you can't be local running Sudbury out of Midland.

LISTNUM 1 \l 15164             COMMISSIONER del VAL:  What about the playlists?

LISTNUM 1 \l 15165             MR. LARCHE:  Do you want to talk to that a little, Ted?

LISTNUM 1 \l 15166             MR. ROOP:  The music playlist?

LISTNUM 1 \l 15167             COMMISSIONER del VAL:  Yes.

LISTNUM 1 \l 15168             MR. ROOP:  Yes.  Our music meetings we do right now with Kitchener and Midland, we match up every Thursday and we get together and talk about our ads and what we are going to add.

LISTNUM 1 \l 15169             There are some local artists that fit in more in Kitchener and vice versa, fit in more in Midland.  For the most part, though, our playlists are the same.

LISTNUM 1 \l 15170             COMMISSIONER del VAL:  Thank you.

LISTNUM 1 \l 15171             Now, these are what I call housekeeping items.

LISTNUM 1 \l 15172             Your funds that are earmarked to the Canadian Country Music Association, CCMA, and to the Canadian Music Week, can you just give a breakdown of how much each year to CCMA and how much each year to the CMW?

LISTNUM 1 \l 15173             MR. LARCHE:  I think it's $10,000 per year to each group.

LISTNUM 1 \l 15174             The CCMA is ‑‑ I'm also on the Board of the CCMA, but I have no influence on how they take this money.  Many radio stations contribute money to the fund.

LISTNUM 1 \l 15175             COMMISSIONER del VAL:  All right.

LISTNUM 1 \l 15176             MR. LARCHE:  It is primarily set up to help emerging artists, and often what they do with that money is they will bring new artists to Canadian Country Music Week ‑‑ which is in September and it moves around the country ‑‑ and allow these artists to be showcased at events throughout the weekend.  That's where you have all the record people and radio people together, so it's great money spent for that.

LISTNUM 1 \l 15177             COMMISSIONER del VAL:  StarQuest talent.  How much to that per year?

LISTNUM 1 \l 15178             MR. LARCHE:  That is $10,000 per year.

LISTNUM 1 \l 15179             COMMISSIONER del VAL:  All right, great.

LISTNUM 1 \l 15180             I just want to clarify your commitment to broadcasting of emerging artists.  You said 5 to 10 percent, but I want to know whether it is 5 to 10 percent of Canadian content or 5 to 10 percent of all your music, musical selections.

LISTNUM 1 \l 15181             MR. LARCHE:  It's 5 to 10 percent of all of our musical selections.

LISTNUM 1 \l 15182             COMMISSIONER del VAL:  Your business case.  You said that you expect your station to have minimal impact on current local broadcasters, particularly the country AM station.

LISTNUM 1 \l 15183             What we have right now in the market is Rogers Adult Rock, which targets 18 to 49 years old; their AC station which is 35 to 64; Country, 45 to 64; and then Newcap's Classic Hits which targets about, say, 25 to 49.

LISTNUM 1 \l 15184             So there is quite an overlap between the audience your advertising would be targeted to and those of the existing stations.

LISTNUM 1 \l 15185             Why do you say that it will be "minimal impact"?

LISTNUM 1 \l 15186             MR. LARCHE:  Well, I guess it is how you define "minimal", because I think we did say that 40 percent of our revenue would come from the incumbent stations ‑‑

LISTNUM 1 \l 15187             COMMISSIONER del VAL:  Yes.

LISTNUM 1 \l 15188             MR. LARCHE:  ‑‑ which I think is higher than what a lot of other applicants said, so to put that into context.

LISTNUM 1 \l 15189             But country, the way we sell country is we very much sell it as a format that is unique, has a unique loyal type of listener and, you know, we have been ‑‑ Linda and our sales manager in Kitchener have been very successful at it.  We know how to sell country.

LISTNUM 1 \l 15190             I believe some people shy away from country simply because they feel it's a little bit more difficult to sell than maybe one of the more mainstream formats.  We happen to know how to sell it and be successful with it and bring new people to it.

LISTNUM 1 \l 15191             There is no doubt that if we are going to have more impact on one station than any other it would most likely be CIGM, although we don't ‑‑ obviously we don't know how much they are billing.  We know that Rogers does very well.  We know that they combine that station with other stations as they are selling them together, but I think 40 percent ‑‑ again going back to the way we opened this thing ‑‑ is, I think, very realistic.

LISTNUM 1 \l 15192             COMMISSIONER del VAL:  All right.

LISTNUM 1 \l 15193             Now, Sudbury has the highest retail sales per capita amongst the major Ontario cities, and yet the income per capita is actually ranked substantially lower.

LISTNUM 1 \l 15194             Why do you think that Sudbury's retail market will grow to the extent of being able to support an additional station, let's just say one for now?

LISTNUM 1 \l 15195             MR. LARCHE:  Well, again, I don't have it right in front of me but I know that retail sales growth in Sudbury, if memory serves me right, is tracking about ‑‑ is at 20 percent.  I think it is the highest in that area.

LISTNUM 1 \l 15196             But I think certainly what Wendy Watson talked about yesterday in that market, and Commissioner French, the economics of that market are again very much driven by the price of nickel, and the price of nickel is very strong right now.  Of course, none of us know how long that's going to stay, but certainly the growth going on in China it really positions a market like Sudbury for the long term.

LISTNUM 1 \l 15197             COMMISSIONER del VAL:  I'm glad you referred to the discussion yesterday because that was the part that I was anxious to get to, because you are entering into a market where like in broadcasting terms we call it there is competitive imbalance.

LISTNUM 1 \l 15198             You also heard the exchange, I think yesterday, from Newcap and then also from the Connelly group about sort of the plight of the standalone station.

LISTNUM 1 \l 15199             MR. LARCHE:  Yes.

LISTNUM 1 \l 15200             COMMISSIONER del VAL:  I also noted, quite independent from that, I was going to ask you on the comments that you made in your supplementary brief and also this morning about being the independent entering into such a market.

LISTNUM 1 \l 15201             I would like to hear more about your views on that and the place for the independent broadcaster or station in such a market and how do you plan to conquer the competitive imbalance.

LISTNUM 1 \l 15202             MR. LARCHE:  Great question.

LISTNUM 1 \l 15203             First of all, to start with the importance of an independent ‑‑ and I know you have several independents who are vying for this thing ‑‑ the obvious of course is that we bring a new voice to the market.  We bring a new voice that is not mandated from a head office, can react to the market.

LISTNUM 1 \l 15204             Being a small, independent broadcaster one of the biggest advantages I still believe, beyond what I talked about at the beginning, is that we can make a decision immediately and we can react to something going on in the market and react to any competitive changes.

LISTNUM 1 \l 15205             In terms of competing against the big guys, you know it really gets down to the product you put out.  If you put out a good, local, quality product the person at the other end of the radio doesn't know if it's owned by an independent or if it's owned by a huge multinational company.  They know that they like it because it's good.

LISTNUM 1 \l 15206             Our mandate is always ‑‑ our mission is "MOCHA", "make our customers happy".  Ask them what they want and give it to them.  Asked them what they want and give it to them.  Ask them what they don't want and stop giving that to them.

LISTNUM 1 \l 15207             Doing that has allowed us to compete in markets where ‑‑ again Central Ontario, we are up against two combos there.  You know, there is Corus, we compete against Rogers in Kitchener and CHUM, so we can hold our own as long as we stick true to our values of making sure that we put out a good product.

LISTNUM 1 \l 15208             Just the second answer to that question would be that for us ‑‑ you asked:  How do we compete?  I think the other thing that we have to do is we have to be very realistic in our business plan.  I can come in front of you and I can put all kinds of stuff in my business plan about how much money we are going to spend here and there, and so on and so forth, but often at the end of the day if it is not a conditional licence things can change.

LISTNUM 1 \l 15209             I like to come in with, you know, a business plan that is sound, that would allow us to adapt to any market dynamics and, heaven forbid, a frequency issue like we had in Kitchener.  Again, that is something I think the smaller companies can do a little better.  We don't have a lot of the overhead costs that they do and ‑‑

LISTNUM 1 \l 15210             I don't know if that answers your question.

LISTNUM 1 \l 15211             COMMISSIONER del VAL:  No, that does.  I'm sorry, I gestured as if I was going to interrupt you.  I shouldn't have done that.

LISTNUM 1 \l 15212             But when you were talking about Midland, I just want to know:  Who are you up against in Midland and who are you up against in Kitchener?

LISTNUM 1 \l 15213             MR. LARCHE:  Well, in Midland we are a standalone in the town of Midland, but that part of Ontario, as some Commissioners might know, is considered one region, Midland, Orillia, Barrie, so we very much compete against the stations in those markets.

LISTNUM 1 \l 15214             So Corus has two radio stations in Barrie and there is another independent in Barrie, Doug Bingley who owns two radio stations.

LISTNUM 1 \l 15215             Rogers has a radio station in Orillia.

LISTNUM 1 \l 15216             We have had an affiliation with Rogers through an LSA in the past.  It is probably going to come up so I might as well come and talk about it right now.  This is something that when the new definition came down we felt that we had to break apart and we are in the process of doing that right now.

LISTNUM 1 \l 15217             COMMISSIONER del VAL:  I don't want you to have to disclose any of your own and trade secrets, but say Connelly yesterday referred specifically in terms of their plans to compete or conquer with lower advertising rates, targeting the smaller businesses, and we all know about being local, local, local.

LISTNUM 1 \l 15218             Do you have any sort of specific plans on competing?  Do you intend to come in with, say, lower advertising rates, or do you have any plans on who you are going to target?

LISTNUM 1 \l 15219             MR. LARCHE:  Heavens, no!

LISTNUM 1 \l 15220             COMMISSIONER del VAL:  All right.

LISTNUM 1 \l 15221             MR. LARCHE:  No, we wouldn't come in with lower advertising rates.  Low rates ‑‑ radio is undervalued in general and certainly low rates do not ‑‑ it's just not good for the business.  Radio ‑‑ and I'm not talking about just for us, for any radio ‑‑ should always be striving to get what it is worth, particularly as it competes against television or print for example.

LISTNUM 1 \l 15222             But we don't have any specific secrets when it comes to doing business in terms of doing stuff different, other than what we already do and what we stand for.  Again going back to MOCHA, our sales philosophy ‑‑ and maybe Linda can talk about it for a second ‑‑ but we really want to find out what the advertiser's problems are and then we like to come back and help them with a marketing plan that is based on addressing the problems that they are having.

LISTNUM 1 \l 15223             So we spend a lot of time in our sales department training our staff on advertising.  We try to consider ourselves advertising experts, not just radio experts, what works in advertising, what doesn't, you know, creative.  Creative has to be emotional versus factual for it to register with a listener.

LISTNUM 1 \l 15224             So our approach is not necessarily one of "We are a country station".  We come to a client and what we do is we want to partner with them to help their advertising be successful.  We more often than not would say "You should not just advertise with us, you have to advertise with, you know, two or three radio stations.  Let's find out what your needs are."  We come back with a plan and that has made us very successful.

LISTNUM 1 \l 15225             Linda, do you have anything to add to that?

LISTNUM 1 \l 15226             MS YOUNG:  The only thing I would like to add is, I think what makes us different than other radio stations is our clients are many times coming to us asking us for advice and they know we are going to give them the honest answer.  If they are asking us, you know, "What should I be doing?  Should I be doing television?  Should I be dealing newspaper?  Should I be doing another radio station?", we really do have an overall marketing plan for them and it is a great feeling to know that they are calling you because they really do think your team, our management team as well as our sales team, are experts in the market.  That is the same thing we would do in Sudbury.

LISTNUM 1 \l 15227             COMMISSIONER del VAL:  Thank you very much.  Thank you for your time.

LISTNUM 1 \l 15228             Those are my questions, unless you have something to add to Ms Young's answer, Mr. Larche?

LISTNUM 1 \l 15229             Thank you.

LISTNUM 1 \l 15230             MR. LARCHE:  No, I'm fine.  Thank you.

LISTNUM 1 \l 15231             COMMISSIONER del VAL:  Those are my questions, Madam Chair.

LISTNUM 1 \l 15232             Thank you.

LISTNUM 1 \l 15233             THE CHAIRPERSON:  Thank you.

LISTNUM 1 \l 15234             Vice Chairman Arpin..."

LISTNUM 1 \l 15235             COMMISSIONER ARPIN:  Thank you, Madam Chair.

LISTNUM 1 \l 15236             A few questions, Mr. Larche and Mr. Roop.  I will start with synergies.

LISTNUM 1 \l 15237             When I heard Mr. Roop replying regarding the music playlists and the discussions that he was having with the program people in Kitchener on a weekly basis, his answer prompted my attention.

LISTNUM 1 \l 15238             Are you producing a Central music log?

LISTNUM 1 \l 15239             MR. ROOP:  No, we produce our own music logs in Kitchener and Midland and we would produce our own in Sudbury as well.

LISTNUM 1 \l 15240             COMMISSIONER ARPIN:  In Sudbury.

LISTNUM 1 \l 15241             MR. ROOP:  It's kind of nice to have ‑‑ well, two heads are better than one, so when we are doing our music meetings ‑‑

LISTNUM 1 \l 15242             COMMISSIONER ARPIN:  Yes, okay.  So I can understand that.

LISTNUM 1 \l 15243             MR. ROOP:  Yes.

LISTNUM 1 \l 15244             COMMISSIONER ARPIN:  Obviously it allows you to discuss new ‑‑

LISTNUM 1 \l 15245             MR. ROOP:  Exactly.

LISTNUM 1 \l 15246             COMMISSIONER ARPIN:  ‑‑ entries and to share views.

LISTNUM 1 \l 15247             Regarding other aspects like traffic, accounting, will it be centralized somewhere or will it be done in each of the stations?

LISTNUM 1 \l 15248             MR. LARCHE:  Traffic, scheduling commercials traffic, would be centralized.  We do that currently.  Even for Kitchener we do it out of Midland.  The technology allows us to very easily do that.

LISTNUM 1 \l 15249             COMMISSIONER ARPIN:  I see.

LISTNUM 1 \l 15250             And accounting ‑‑

LISTNUM 1 \l 15251             MR. LARCHE:  Accounting as well.

LISTNUM 1 \l 15252             COMMISSIONER ARPIN:  ‑‑ billing and collections and everything, that is done centrally as well?

LISTNUM 1 \l 15253             MR. LARCHE:  Well, we have our sales reps do the collections.

LISTNUM 1 \l 15254             COMMISSIONER ARPIN:  I'm sure, yes, but ‑‑

LISTNUM 1 \l 15255             MR. LARCHE:  But, yes.  That only makes good business sense for us and, again, technology allows us to do that.

LISTNUM 1 \l 15256             COMMISSIONER ARPIN:  All right.  That's what I wanted.

LISTNUM 1 \l 15257             In your oral presentation at the top of page 5 you quoted that you were in support of the CAB intervention at this hearing regarding emerging artists and regulatory mechanism.

LISTNUM 1 \l 15258             The CAB has put forward a definition of what they will call an emerging artist, but they also say in their brief that it might not be the optimum definition at some point in time.

LISTNUM 1 \l 15259             Since you are saying that you are supporting the intervention, what are you really supporting?

LISTNUM 1 \l 15260             MR. LARCHE:  I am supporting the spirit of the intervention.  I really believe that all the stakeholders have to get together and come up with some definitions that would be acceptable to the CRTC.  We hope that ‑‑ and now I am speaking a little bit for the CAB because I am on the Radio Board ‑‑ the CAB hopes that we can get some dialogue going with the Commission to come up with some standards and some definitions and a mechanism that is very clear.

LISTNUM 1 \l 15261             Because right now, as you could tell by the line of questioning over the last few days, it is a little bit gray.  Frankly, we are not even 100 percent sure exactly how it works or how it will be measured.

LISTNUM 1 \l 15262             COMMISSIONER ARPIN:  So what you are supporting is that somewhere there has to be flexibility.

LISTNUM 1 \l 15263             MR. LARCHE:  There has to be.

LISTNUM 1 \l 15264             COMMISSIONER ARPIN:  It's not a one‑size‑fits‑all.

LISTNUM 1 \l 15265             MR. LARCHE:  No.  I think in our deficiency question when it came up, we also made the point very clear that no one has a better track record in country than we do, I think, for emerging artists and we can compare our emerging artists airplay to others looking at it through a BDS, and so on.  But we don't control the supply.  That's a big concern that we have.

LISTNUM 1 \l 15266             I can't speak for other formats, but in country it is a very cyclical flow of when stuff comes out.  There seems to be certain times of year where, you know ‑‑ for example around Canadian Country Music Week where everybody will be releasing something new, and then we can go through some dry spells and then we can go through a period where there is a lot of goods.

LISTNUM 1 \l 15267             So we don't like to limit ourselves on what we play.  If there is a lot of good stuff we want to play all of it, but if there is nothing coming out over the course of a three or four‑week period, then that concerns us a lot to have a quota.

LISTNUM 1 \l 15268             I proposed in my note back to the Commission that if you do impose something like this as a condition of licence, I would propose that the Commission consider averaging it over the course of a year.  So take 52 weeks of what you are doing and divide it by 52, because there will be times a year where we can play more than other times of the year.

LISTNUM 1 \l 15269             That is, of course, just a very humble suggestion, but I think it ties into what the CAB wants to sit down and talk about as well.

LISTNUM 1 \l 15270             COMMISSIONER ARPIN:  We may have to quadruple the number of staff, and even more than that if we start to monitor on a yearly basis.  We already have a hard time doing it on a weekly basis.  As you know, we sample a day and multiply by five or sometimes by seven, so if we were to do it a yearly basis we are going to be told that were running an empire.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 15271             MR. LARCHE:  Well, I don't have all the answers, I'm sorry.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 15272             COMMISSIONER ARPIN:  All right.  Thank you for that aspect.

LISTNUM 1 \l 15273             You answered that Diane was 39 and Jack was 41, if my memory serves me well, so I guess that your primary target would then be 35‑44?

LISTNUM 1 \l 15274             MR. LARCHE:  That's correct.

LISTNUM 1 \l 15275             COMMISSIONER ARPIN:  That's correct.

LISTNUM 1 \l 15276             Finally, how many stations do you think the Sudbury market could afford at this time?  There currently are four commercial stations ‑‑ five, because the French radio station is also commercial.  But on the English‑speaking side we are talking about four commercial radio stations.

LISTNUM 1 \l 15277             I will help you with my secondary question, if I may.

LISTNUM 1 \l 15278             If the answer is more than one ‑‑

LISTNUM 1 \l 15279             MR. LARCHE:  I know it's coming.

LISTNUM 1 \l 15280             COMMISSIONER ARPIN:  If the answer is more than one, which one will have the least impact on your business plan and which one will have the most impact on your business plan?

LISTNUM 1 \l 15281             MR. LARCHE:  Again, when we talked about the economics of Sudbury and where it's at, there is some in balance in the sense of ‑‑ particularly after Newcap shared with us yesterday that they only pick up 10 percent of that EBIT, certainly the market is profitable, but it certainly seems like a good chunk of it is going to the major player there.  Again, that is no surprise, they are smart broadcasters and they know what they are doing.

LISTNUM 1 \l 15282             I would hope it's one, but I know that if you are following the Broadcast Act and the numbers that are out there right now you will license two, so if it is two, yes, we would certainly want to be one of the two.

LISTNUM 1 \l 15283             In terms of which one would have the least impact on us, certainly from a programming point of view it would be Newcap because they are targeting youth and we are not, so certainly from a "business point of view, advertising point of view", we wouldn't really be competing with them on a dollar sense, however, we would be competing against a combo and a trio.

LISTNUM 1 \l 15284             You know, I have no illusions that whoever gets this, the first few years particularly are going to be tough and I think it's very important that whoever you put in there ‑‑ and, like I say, there are some great applications, please have good confidence that you feel that they can do it because it can ‑‑ as we found it in Kitchener, if you get a couple of hiccups it get can really shake you up, let alone your banker.

LISTNUM 1 \l 15285             COMMISSIONER ARPIN:  Well, Madam Chair, those were my questions.

LISTNUM 1 \l 15286             THE CHAIRPERSON:  Thank you.

LISTNUM 1 \l 15287             Legal counsel.

LISTNUM 1 \l 15288             MS DIONNE:  I have two questions regarding your contribution to Canadian development.

LISTNUM 1 \l 15289             I know you understand in your basic contribution that will be applied by way of regulation.

LISTNUM 1 \l 15290             As for your over and above commitment that we like to call as over and above ‑‑

LISTNUM 1 \l 15291             MR. LARCHE:  It's a good term.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 15292             MS DIONNE:  ‑‑ you propose to allocate 40 percent of your over and above to FACTOR.

LISTNUM 1 \l 15293             I just want to clarify whether you would accept this as a condition of your licence?

LISTNUM 1 \l 15294             MR. LARCHE:  Yes.

LISTNUM 1 \l 15295             MS DIONNE:  Regarding your contribution to StarQuest Talent Search of $10,000, could you provide a breakdown of the actual amounts?

LISTNUM 1 \l 15296             I think you want to spend amounts to hard costs like equipment, rentals, studio time and production of CDs, so what would these amounts be?

LISTNUM 1 \l 15297             MR. LARCHE:  $2,500 for the venue, stage, sound, lights; $5,000 for the recording session, the studio that the person would go to; and another $2,500 would go for the reproduction of the CDs and distribution.

LISTNUM 1 \l 15298             MS DIONNE:  Thank you, Madam Chair.

LISTNUM 1 \l 15299             THE CHAIRPERSON:  Mr. Larche, just a couple of questions with regards to emerging artists.

LISTNUM 1 \l 15300             I note your commitment to emerging artists in your current markets of Kitchener and Midland, do you play emerging artists from Kitchener in Midland and vice versa?

LISTNUM 1 \l 15301             Therefore, the second part of the question is:  Whatever you do in those two markets are you going to do that with Sudbury, if licensed?

LISTNUM 1 \l 15302             MR. LARCHE:  Well, certainly emerging artists, a good emerging artist we will play on all stations, you know, if it's good music.  It doesn't matter if they are local or from Edmonton or whatever if they are good.

LISTNUM 1 \l 15303             But to answer your question, yes, we do.  We have some great country artists in both the markets that we work in and that is one of the benefits, is we have been able to play their music and expose it in a market that isn't their home market.

LISTNUM 1 \l 15304             Ted, give us some examples.  We have Cathy Corpi.

LISTNUM 1 \l 15305             MR. ROOP:  Yes, there is an artist named Cathy Corpi who is a local artist in Midland who gets airplay in Kitchener and she is just starting out and doing quite well.

LISTNUM 1 \l 15306             Carla Crawford is another one that is a local from Midland that is making it down in Kitchener now because she is having airplay on our radio station down there.  She doesn't get very much exposure anywhere else so it is helping her out a lot, too.

LISTNUM 1 \l 15307             Then it happens the same way, that artists from Kitchener are getting airplay in Midland.  Jason Blaine is one of those, and his career has really actually taken off in the last year, which is really good for him.

LISTNUM 1 \l 15308             Yes, local artists down there, Jamie Warren, Beverley Mahood, things like that.

LISTNUM 1 \l 15309             THE CHAIRPERSON:  And they will make it up to Sudbury.

LISTNUM 1 \l 15310             MR. ROOP:  They would all be playing in Sudbury, too, and then Sudbury would be playing in Kitchener and Midland as well.

LISTNUM 1 \l 15311             THE CHAIRPERSON:  I can't resist, Jack and Diane?  Are you going to launch with John Couger Mellencamp?

‑‑‑ Laughter / Rires

LISTNUM 1 \l 15312             THE CHAIRPERSON:  Those are all our questions.

LISTNUM 1 \l 15313             You have two minutes to summarize your application and tell us why this service is the best use of the frequency in Sudbury.

LISTNUM 1 \l 15314             MR. LARCHE:  Thank you.

LISTNUM 1 \l 15315             I probably won't even use up my two minutes.

LISTNUM 1 \l 15316             I think there are five good, compelling reasons for you to consider us.

LISTNUM 1 \l 15317             The first one is that we are really going to fill the biggest unserved mass appeal format in that market and, contrary to the thought that we may not be increasing diversity, we will be increasing diversity was again a mainstream format.  Country is a mainstream format now.  It is ranked third or fourth in Canada, depending on where you are geographically.  Sudbury deserves a mainstream FM country station.

LISTNUM 1 \l 15318             The second point is, I think again our business plan, it's sound, it's realistic, it's made to adapt to the market forces.  We can ensure that we can live up to all of the commitments that we are making here and we can also run a business that will be profitable for us in the long term, but also give to the market what it wants.

LISTNUM 1 \l 15319             I think we have some great local initiatives that we are proposing.  We very much want to reflect the culture of the market.  Part of the culture in Northern Ontario and, frankly, in Central Ontario again is recreation, hunting, fishing, outdoors, snowmobiling, and we take that very seriously.  Ted has done his morning show from his fishing hut.  People love that stuff.  You have to get into what people eat, live and breathe in those communities and reflect it and I think we do that better than anyone.

LISTNUM 1 \l 15320             I think we have a very good CCD proposal.  I think it might rank ‑‑ I think it is tied for second or maybe even a little higher with the additional funds that we were asked to contribute to it.

LISTNUM 1 \l 15321             Finally, again, I think our company, we want to grow.  We want to grow and we think that we can contribute a lot to the system over the next few years.

LISTNUM 1 \l 15322             There is more consolidation that seems to be coming down the road.  Again, I think there were some great new broadcasters that were up in front of you today and, you know, we wish them luck, but I think we have the track record to tell you that we can deliver and we will deliver.

LISTNUM 1 \l 15323             So those are our reasons and we thank you for the opportunity.

LISTNUM 1 \l 15324             THE CHAIRPERSON:  Mr. Larche and your colleagues, thank you very much for your participation today.

LISTNUM 1 \l 15325             We will now be taking a 15‑minute break.  We will resume at 10:25.

LISTNUM 1 \l 15326             Thank you.

‑‑‑ Upon recessing at 1010 / Suspension à 1010

‑‑‑ Upon resuming at 1035 / Reprise à 1035

LISTNUM 1 \l 15327             THE CHAIRPERSON:  Order, please.

LISTNUM 1 \l 15328             Madam Secretary.

LISTNUM 1 \l 15329             THE SECRETARY:  We will now proceed with Item 18 on the Agenda, which is an application by the Haliburton Broadcasting Group Inc. on behalf of a corporation to be incorporated for a licence to operate an English‑language commercial FM radio programming undertaking in Sudbury.

LISTNUM 1 \l 15330             The new station would operate on frequency 88.5 MHz, Channel 203C, with an effective radiated power of 50,000 watts, non‑directional antenna, antenna height of 145 metres.

LISTNUM 1 \l 15331             Appearing for the applicant is Mr. Christopher Grossman who will introduce his colleagues.  You will then have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

LISTNUM 1 \l 15332             MR. GROSSMAN:  Good morning, Madam Chair and Commissioners.  My name is Christopher Grossman and I am the President of the Haliburton Broadcasting Group Inc.

LISTNUM 1 \l 15333             Before we begin our presentation, please allow me to introduce the individuals with me on the panel.  Bill Evanov is the President of Evanov Communications Inc., formally the Evanov Radio Group, which is the co‑applicant.

LISTNUM 1 \l 15334             Beside bill is Carmela Laurignano, Vice President and Radio Group Manager for ERG.

LISTNUM 1 \l 15335             Behind her is Sean Moreman, in‑house counsel for ERG and Controller for PROUD‑FM, the world's first commercial radio station targeted at gays and lesbians.

LISTNUM 1 \l 15336             Sitting beside Sean is Gary Gamble, the Corporate Program Director with ERG.

LISTNUM 1 \l 15337             Behind me is Paul Evanov, Vice President Operations of ERG.

LISTNUM 1 \l 15338             Beside me, on my left, is Wendy Grey, who is the Corporate News Director for the Haliburton Broadcasting Group.

LISTNUM 1 \l 15339             In this era of consolidation, both Haliburton and ERG are strong, independent broadcasters who have built reputations for serving under‑represented markets based on age, as in the case of the Jewel in Ottawa; language as in the case with CHYC in Sudbury, or on sexual orientation, as with PROUD‑FM in Toronto.

LISTNUM 1 \l 15340             As you will see, this application continues that reputation, as we are proposing a strong business model that intends to serve the mature audience in Sudbury.

LISTNUM 1 \l 15341             Our company, Haliburton, has been in operation for the 10 years.  Since the beginning, our mandate has been to revive and operate successful radio stations in Northern Ontario in a way that other broadcasters have not been able to achieve.

LISTNUM 1 \l 15342             One of the first ventures was in the Sudbury market, which allowed us to reinvest in the northern radio markets and to grow to the 15‑station operation we are today, including the existing French‑language service in Sudbury.  We have a map showing these stations included in our package.

LISTNUM 1 \l 15343             Our French station in Sudbury is really the driving force behind the remainder of the Haliburton French cluster.  The synergies offered by this application to the French network will only serve to strengthen it.  As a result, we are more able to move money into less profitable markets in order to deliver quality programming across the region.

LISTNUM 1 \l 15344             Through the synergies available with the English station we propose, both the new station and the existing station will be able to remain competitive in an industry that is becoming even more consolidated.

LISTNUM 1 \l 15345             Mr. Evanov has been in the radio business for over 30 years and operates stations in small, medium and major markets across Canada.  The philosophy of the Evanov Radio Group is to serve under‑represented markets at each end of the demographic scale, and now the LGBT market.  Two of the Evanov stations, the Jewel in Ottawa and CKDX‑FM in Newmarket, serve the 45‑plus age bracket and offer a similar format to the one we are proposing for Sudbury.

LISTNUM 1 \l 15346             When the call for a new service in Sudbury was released, we were very excited at the prospect of expanding our presence in Sudbury and to fulfil our mandate of providing quality service to an under served market with an English‑language service.  We felt that with our experience in building a radio network across Northern Ontario, we would be able to develop a sound business plan that would properly serve the community.

LISTNUM 1 \l 15347             When we evaluated the market, we determined that the most popular demographic, 18 to 45‑year‑olds, is well served by the existing stations.  In the 18 to 34 bracket, they have seen a 60 percent increase in tuning from 2004 to 2006.

LISTNUM 1 \l 15348             What became clear to us was that the radio service in the market was not addressing the needs of the 45‑plus listener and that they were tuning out as a result.

LISTNUM 1 \l 15349             We are aware of the success that Bill has had with today's Easy Listening format in Ottawa and Newmarket and I approached him to develop a similar model that would meet the needs of Sudbury radio listeners.

LISTNUM 1 \l 15350             The Jewel in Ottawa was able to undo a lot of listener dissatisfaction in the older demo and hours tuned increased 31 percent in the 55‑plus demographic in the one year since the station was launched.

LISTNUM 1 \l 15351             It is that dialogue that led us to where we are today.  We feel that together we are able to bring diversity of editorial voice and ownership to a market to address the needs of Sudbury's under served 45‑plus radio listener.

LISTNUM 1 \l 15352             In addition to our French language service, the Sudbury market is also served by four major commercial English radio stations, as well as the CBC.  Newcap's Classic Hits format, Rogers Easy Rock, Classic Rock and AM Country Music, Sports and Talk station.

LISTNUM 1 \l 15353             Of all the stations currently serving the Sudbury market, only the AM station is successful in attracting a majority of its listeners from the 50‑plus demographic and the top‑rated 50‑plus Station, CJMX‑FM, attracts only 37 percent of its cume rating in that demo.  This fact is somewhat surprising, given the average age in Sudbury is above the national average and that 40 percent of the population in the market is over the age of 45.

LISTNUM 1 \l 15354             Combining the age factor in Sudbury with the fact that no FM music station successfully targets that demographic, we expected to find dissatisfaction with radio in Sudbury amongst the older age group.

LISTNUM 1 \l 15355             That is exactly what we discovered in our market research.  Less than one quarter of the people aged 40‑plus said that they were satisfied with the radio offerings in the Sudbury market.  Fifty‑six percent of the people stated that they would listen to radio more if there was something on the dial that appealed to them.

LISTNUM 1 \l 15356             Although Sudbury has seen an increase in radio tuning amongst most age groups over the last two years, that growth has been significantly lower among the older demographic.  There has been no growth whatsoever among the 65‑plus age group.

LISTNUM 1 \l 15357             This tepid response to radio amongst the 45‑plus demographic is due largely to the lack of variety being offered by the stations in the market.

LISTNUM 1 \l 15358             We feel strongly that Diamond 88.5 will provide the variety and will appeal to the older demographics in order to bring them back to radio.

LISTNUM 1 \l 15359             Bill will tell you exactly how the playlist on Diamond 88.5 will speak to those older listeners.

LISTNUM 1 \l 15360             MR. BILL EVANOV:  The format we are proposing for the Diamond is Today's New Easy Listening, a format of world‑class music we pioneered and made successful with our Newmarket station.

LISTNUM 1 \l 15361             This format was recently introduced to the Ottawa market as The Jewel.  The essence of the format is to play the best soft melodic music from many eras with lyrics that might be meaningful and touch something within the listener relating to life experience, memories, lifestyle or simply feel good.

LISTNUM 1 \l 15362             Because we blend a variety of music genres from different eras, we are not in a time warp, nor do we sit still.  We move from era to era.  It is exciting to hear this variety:  "Summer Wind" by Frank Sinatra from the '60s followed by a Barbra Streisand "The Way We Were" from the '70s, perhaps Toni Braxton from the '90s, "Cold Cold Heart" by Norah Jones from the era 2000, or in instrumental by Richard Abel or André Gagnon, and then a classic duet by Tony Bennett with Celine or K.D. Lang.

LISTNUM 1 \l 15363             Ninety percent of the music we will bring to Sudbury is not heard on existing stations.  A list of artists that have not been heard in Sudbury in the last month is in your package.

LISTNUM 1 \l 15364             Of all the applicants before you, we have made the highest commitments to Canadian music and emerging artists.  We will play 40 percent Canadian content at all times.  As well, we will play 40 percent emerging artists, such as Susie Arioli, who sang, "I'll Never Smile Again; Michel Berube "Lotta Love"; Rick Sonata "Bewitched", or Carol Welsman's "Fever".

LISTNUM 1 \l 15365             These Canadian artists will be complemented by the great American songbook artists Carly Simon, Rod Stewart, Barry Manilow and Bette Midler, all of whom, as a world renowned performers, realized that they, like their audience, were progressively getting older and that their music tastes have changed and elevated to a softer melodic sound with meaningful lyrics.

LISTNUM 1 \l 15366             This is the reason our proposed format is ideal for Sudbury.  Sudbury, just like these artists, and the aging baby‑boomer generation, has become older, as indicated by StatsCan and our research.  It will continue to get older as the baby‑boomer bubble travels from the 50 age demo up to the 60 age demo and beyond.

LISTNUM 1 \l 15367             Every hour of the day will feature Canadian instrumental artists such as Richard Abel performing "Offenbach's Bacarolle" and new emerging instrumental artists Howard Lopez or Alan Burlon performing pop classics.

LISTNUM 1 \l 15368             We know that as radio stations narrowed their playlists to fit the more rigid youth formatting, instrumental music on radio saw a drastic decline in the mid to late '70s.  Despite the decline in radio play, there is still a strong demand for instrumental music.  Seventy‑nine percent of people we surveyed who said they would definitely listen to the Diamond also expressed an interest in the instrumental music.

LISTNUM 1 \l 15369             Instrumental musicians, they exist across the country in every village, every town, every city.  They perform at private functions, at weddings, at Bar Mitzvahs, at concerts, in clubs and, in many cases including Sudbury, in symphony orchestras.

LISTNUM 1 \l 15370             Instrumental music is very much alive and yet, because it is being ignored by radio, it has been forced to operate as a cottage and basement industry.  The artists produce, they market and sell their recordings themselves via the internet, flea markets, small concerts or through word‑of‑mouth.

LISTNUM 1 \l 15371             We cannot ignore a form of music that has existed for centuries.  Surely, we cannot deny future generations the opportunity to hear instrumental music.  Today our stations in Newmarket and Ottawa provide exposure for this music.  We believe that, as our research points out, Sudbury would welcome this opportunity.

LISTNUM 1 \l 15372             Our instrumentals are uplifting.  They are fresh and definitely foreground.  They engage the listener, they invoke passion and emotion.  A sample of a broad variety of instrument music could include a Strauss waltz performed by André Rieu, or "Penny Lane" performed by the Boston Pops.  It could be emerging artists Jacques Duguay performing "My Elusive Dreams" or Paul Blissett performing  "Annette".

LISTNUM 1 \l 15373             As an additional way to showcase new Canadian and instrumental talent, the Diamond will have features geared to that end.  Paul Evanov will tell you more about those elements.

LISTNUM 1 \l 15374             MR. PAUL EVANOV:  Two of our features have been put into our program schedule in order to highlight new Canadian artists.  The "Canadian Spotlight" is an hour long show that will present the work of a new Canadian artists performing in the vocal or instrumental style.  During the feature, the host will discuss the artist's background and other relevant facts that are of interest to the listener.  Where possible, we will invite the artist into the studio for live one‑on‑one discussion.  Naturally, we will also play a selection of works by that artist during the hour.

LISTNUM 1 \l 15375             The "Canadian Spotlight" segment is scheduled to play on Saturday afternoon.  Mindful of the nature of shift work that accompanies the mining industry, we will re‑air the segment on Sunday mornings.

LISTNUM 1 \l 15376             The second feature focuses on instrumental talent.  The "After Nine" program is designed to run in the evening and is meant to appeal to a listener who wants to sit back and relax to some soothing music.  Although not exclusive to Canadian artists, this feature will draw on many of the artists who have signed on to our Catalogue of Canadian Instrumental Music, which Carmela will be addressing shortly.

LISTNUM 1 \l 15377             In brief, the catalogue provides a vehicle for instrumental musicians to get their work out, and the format we are proposing is a perfect fit for that type of music.

LISTNUM 1 \l 15378             We feel each of these features demonstrates that it is possible to have high quality programming that showcases new talent, while at the same time meets and exceeds minimum levels of Canadian Content requirements.

LISTNUM 1 \l 15379             I will pass things over to Wendy Gray to talk about other spoken word elements of our programming.

LISTNUM 1 \l 15380             MS GRAY:  As is the case in many northern markets, local news and information scored very important to 67 percent of the people of Sudbury.  Consequently, the newsroom at Diamond 88.5 will deliver an above average local component of 50 percent.  Listeners will be able to access information about what is happening in and around the Greater Sudbury Area 20 times per day from Monday to Friday.

LISTNUM 1 \l 15381             The lifestyle in northern Ontario sees people travelling from one town to another, either to visit family or to take advantage of some event that may be happening in another northern community.  Consequently, listeners want to know what there is to do in their region, as well as what is happening in the Greater Sudbury Area.

LISTNUM 1 \l 15382             To meet that need, we have scheduled a community calendar segment four times daily which will include events in Sudbury, but will also extend farther afield to areas such as Timmins and North Bay.

LISTNUM 1 \l 15383             Natural resources play an important role in the Sudbury market.  Recognizing the importance of Inco and X‑Strata to the local community, and Tembec and Domtar to the Northern Ontario region, we will air a business report twice daily focusing on local, national and international business news.

LISTNUM 1 \l 15384             As people age, health issues become more and more important.  Diamond 88.5 is targeting a more mature demographic and Sudbury is a Regional Health Centre for over 600,000 Northern Ontario residents seeking an acute, transitional, rehabilitation or cancer care.  Haliburton Broadcasting is the only applicant with radio stations in the surrounding communities that depend on Sudbury for health services.  Simply put, if you need cancer care, treatment for heart disease or mental health care in Elliot Lake, you will most likely be travelling to Sudbury for that care.  And once in Sudbury, those same residents can depend on a familiar voice to deliver relevant health information once a day during the lunch hour.

LISTNUM 1 \l 15385             We feel strongly that both the musical and spoken word programming will appeal to our target demographic and that we will have a solid listenership as a result.  Christopher Grossman will address how these numbers will impact on sales and the overall financial health of Diamond 88.5.

LISTNUM 1 \l 15386             MR. GROSSMAN:  Due to a revived interest in natural resources, Sudbury has seen a population growth in recent years.  Large companies such as Inco and X‑Strata have invested large sums of money in Northern Ontario.  This new job creation in the resource sector is fuelling housing starts and other industries such as medicine.  Because of this renewed investment, the net migration is on the increase as people who have left are returning to Sudbury.

LISTNUM 1 \l 15387             Overall, the Sudbury market is strong.  Retail sales in Sudbury far outpace the rate of inflation.  The radio PBIT in Sudbury has increased 60 percent since the year 2000.  The total radio market is worth $10 million.  We project that 75 percent of our revenue will come from new advertisers.  We expect to bring disenfranchised advertisers who target the more mature consumer back to radio.

LISTNUM 1 \l 15388             Edward Jones Group, Belanger Design Studio in the Sudbury Symphony Orchestra have all told us that they would be interested in advertising on a station that delivers the 50‑plus demographic.

LISTNUM 1 \l 15389             The remaining 25 percent of our initial revenue will come from existing stations.  The initial impact represents only 2 percent of the total market spend and we expect he will eventually be replaced as new advertisers expand their budget.

LISTNUM 1 \l 15390             As with all radio applications, we have allocated a portion of these revenues to be committed to Canadian Content Development.

LISTNUM 1 \l 15391             Carmela will tell you about some of the proposed CCD initiatives.

LISTNUM 1 \l 15392             MS LAURIGNANO:  You will note from our application that our CCD plan far exceeds the direct minimum requirements imposed by the revised Commercial Radio Policy.  We believe our CCD plan shows our commitment to developing Canadian content and talent.

LISTNUM 1 \l 15393             We are sensitive to the strong Francophone presence in Sudbury.  I believe we are the only applicant to have dedicated over $10,000 per year to MUSICACTION in order to develop Francophone talent in the region.

LISTNUM 1 \l 15394             In addition to our commitment to MUSICACTION, we continue to be dedicated to the Catalogue of Canadian Instrumental Music.  This initiative, worth close to $1 million was first approved by the Commission when we applied for our licence in Ottawa.  Since that time, we have developed the web‑based site and have started to register members.  We now have over 1,000 records in the database.  The soft launch of the website is scheduled for mid‑April.

LISTNUM 1 \l 15395             We are also planning an advertising campaign, including print and internet‑based advertisements in trade magazines to begin in June.  In the coming month, we will also be inviting existing members to add the balance of their work to the catalogue.

LISTNUM 1 \l 15396             We intend to make the database available to the film and television industry come the fall, so that they may source new and exciting instrumental music for their works.

LISTNUM 1 \l 15397             It is to these aspects of the catalogue that we are dedicating over $90,000 during the term of the licence.

LISTNUM 1 \l 15398             Given the strong number of aboriginal people in Northern Ontario, we have committed monies to two projects that will help to develop aboriginal talent.  The first of these projects is at Laurentian University and the second is the Aboriginal Media Education Fund.

LISTNUM 1 \l 15399             Laurentian University runs a communications program which covers all areas of broadcasting, including broadcast journalism.  As a requirement of the program, all students must take at least one course in aboriginal cultural studies.  We have committed $5,000 per year to be given to the program over the seven years of the licence term.

LISTNUM 1 \l 15400             The Aboriginal Education Fund is an an initiative which has, as its mandate, to foster a talent pool that will create, produce, distribute, market and broadcast programming that is relevant in today's aboriginal society, both nationally and internationally.  We have committed $10,000 per year over the seven years of the licence term to this initiative.

LISTNUM 1 \l 15401             Lastly, we have set aside $10,000 per year to promote Canadian talent at Canadian Music Week.

LISTNUM 1 \l 15402             Our total CCD package over the seven‑year licence term, in direct benefits alone, is $350,000.

LISTNUM 1 \l 15403             MR. GROSSMAN:  As you have heard, there is a gap in the Sudbury market that needs to be filled.  The 45‑plus demographic has stated they are unhappy with the radio service being provided to them.  Diamond 88.5 will change that situation.  With our blend of music from the last five decades as well as a combination of locals and instrumentals, our station will appeal to a more mature market and give them what they want.  Not only will our listeners be happy with the end product, but advertisers will also benefit from today's Easy Listening format which delivers an upscale, more mature market.

LISTNUM 1 \l 15404             Let's review the key benefits of this application.

LISTNUM 1 \l 15405             Number one, this application is a strong marriage of two very experienced independent broadcasters who will bring editorial, ownership and format diversity to the Sudbury market.

LISTNUM 1 \l 15406             Diamond 88.5 will repatriate lost tuning in the older demographic, as we have seen in The Jewel in Ottawa.

LISTNUM 1 \l 15407             This format in Sudbury will see increases in total advertising spending as new advertisers tap into the mature audience we create.

LISTNUM 1 \l 15408             Through the synergies created, both Haliburton and ERG will continue to provide quality programming to the under served communities.

LISTNUM 1 \l 15409             And, finally, Haliburton will be able to strengthen its French network.

LISTNUM 1 \l 15410             Diamond 88.5 will inject $350,000 into CCD benefits that will deliver hundreds of new and emerging Canadian artists to the Sudbury airwaves over the term of the licence.

LISTNUM 1 \l 15411             Before we go to questions, we have one in brief housekeeping matter to address.

LISTNUM 1 \l 15412             Sean...?

LISTNUM 1 \l 15413             MR. MOREMAN:  Yes.  As a matter of housekeeping, in our most recent reply to deficiencies there was a small mathematical error.  That error has been corrected and filed with the Secretary and does not impact on anything that was in the presentation.

LISTNUM 1 \l 15414             MR. GROSSMAN:  Thank you.

LISTNUM 1 \l 15415             This concludes our presentation and we would be pleased to answer any questions that you may have.

LISTNUM 1 \l 15416             THE CHAIRPERSON:  Thank you very much.

LISTNUM 1 \l 15417             Commissioner Cram...?

LISTNUM 1 \l 15418             COMMISSIONER CRAM:  Thank you.

LISTNUM 1 \l 15419             I will address my questions to you, Mr. Grossman, and you can direct them wherever you want.

LISTNUM 1 \l 15420             MR. GROSSMAN:  All right.

LISTNUM 1 \l 15421             COMMISSIONER CRAM:  I must say, this end of the table was getting very depressed when Mr. Evanov was talking about the fact that we are getting older.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 15422             COMMISSIONER CRAM:  I'm sort of having a hard time getting over the slight bit of depression caused by that thought.

LISTNUM 1 \l 15423             Anyway, you are targeting a 45‑plus audience you say, and I found it interesting in your talk, you talked about "upscale" older people just at the end.

LISTNUM 1 \l 15424             How do you know they are upscale?

LISTNUM 1 \l 15425             MR. GROSSMAN:  We would be looking at sort of the general trends of inheritance, the larger shift of wealth ever seen, where parents are handing over their estates and fortunes to their children.

LISTNUM 1 \l 15426             I think is just a generally ‑‑ general sense that there is more material wealth available to an older ‑‑ the yuppie generation that there ever has been.  I think we see that in the retail spends that are evident in Sudbury, as well as just common sense would prevail that there is money available, it is a more mature upscale audience than has been in the previous.

LISTNUM 1 \l 15427             COMMISSIONER CRAM:  I thought they gave all her money to their kids.

LISTNUM 1 \l 15428             MR. GROSSMAN:  They spend it first.

LISTNUM 1 \l 15429             COMMISSIONER CRAM:  Your core audience would be?

LISTNUM 1 \l 15430             MR. GROSSMAN:  It would be 55 to 64.

LISTNUM 1 \l 15431             COMMISSIONER CRAM:  Who is your ‑‑ is it a Jack or a Diane and what age are they?

LISTNUM 1 \l 15432             MR. GROSSMAN:  Paul, or Bill, do you want to dive into that?

LISTNUM 1 \l 15433             MR. BILL EVANOV:  It would be slightly skewed female, maybe 55‑45 or 53‑47 percent, just slightly, nothing major.

LISTNUM 1 \l 15434             The age demo really would be ‑‑ between 55 and 60 would be your predominant age group.

LISTNUM 1 \l 15435             Our core, like our heavy core, would be 55‑64, with the bulk of that, even the larger portion, being 55‑60, which is what we have experienced in Ottawa and also we have experienced that in Newmarket.

LISTNUM 1 \l 15436             COMMISSIONER CRAM:  All right.

LISTNUM 1 \l 15437             I thought it interesting at page 3 of your introduction today you are talking about:

"When we evaluated the market, we determined that the most popular demographic, the 18‑45 year olds, is well‑served by existing stations."

LISTNUM 1 \l 15438             You did your own evaluation of the market?

LISTNUM 1 \l 15439             Is that what I'm hearing?

LISTNUM 1 \l 15440             MR. GROSSMAN:  Yes, we did.  Yes.

LISTNUM 1 \l 15441             COMMISSIONER CRAM:  And you didn't really look at satisfaction levels, you looked at the fact of who the formats were directed at.

LISTNUM 1 \l 15442             Is that correct?

LISTNUM 1 \l 15443             MR. GROSSMAN:  That's correct.

LISTNUM 1 \l 15444             I will ask Sean to give you some background on the research that we did.

LISTNUM 1 \l 15445             MR. MOREMAN:  That is correct.

LISTNUM 1 \l 15446             What we did was looked at what services existed in the market and who they self‑identified as marketing to and we said that there was a hole ‑‑ in our opinion, there was a hole at the top end of the demographic.  We went in and did a satisfaction survey amongst the demographic that we ‑‑

LISTNUM 1 \l 15447             COMMISSIONER CRAM:  The demographic you were proposing to direct yourself at.?

LISTNUM 1 \l 15448             MR. MOREMAN:  That's correct.

LISTNUM 1 \l 15449             COMMISSIONER CRAM:  Yes, all right.

LISTNUM 1 \l 15450             So I find it interesting Newcap here is aiming at that very demographic, the younger demographic, and younger still, and we have always been told that it is that demographic that is leaving radio.

LISTNUM 1 \l 15451             Now, at the end of my career with the CRTC, I find out that there is another demographic leading, the 45‑plus.  Radio is in real trouble.

LISTNUM 1 \l 15452             You say you repatriated, can I say, the older listener, you think, in Ottawa and in Newmarket?

LISTNUM 1 \l 15453             MR. GROSSMAN:  The ratings from S106 for the four rating periods over the launch of The Jewel, there was 31 percent increase in tuning 55‑plus than there was before The Jewel was on the air.  That is evident in the BBM ratings in Ottawa.

LISTNUM 1 \l 15454             COMMISSIONER CRAM:  Oh, in the BBM ratings.  All right.