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 further to calls for

applications for broadcasting licences to carry on radio programming undertakings to serve Owen Sound, Windsor and Peterborough, Ontario /

Plusieurs demandes en radiodiffusion suite aux appels de demandes de licence de radiodiffusion visant l'exploitation d'entreprises de programmation de radio pour desservir Owen Sound, Windsor et Peterborough (Ontario)

HELD AT:                          TENUE À:

Rooms B, C & D                    Salons B, C et D

Delta Hotel London Armouries      Hôtel Delta London Armouries

325 Dundas Street                 325, rue Dundas

London, Ontario                   London (Ontario)

December 13, 2007                 Le 13 décembre 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 further to calls for

applications for broadcasting licences to carry on radio programming undertakings to serve Owen Sound, Windsor and Peterborough, Ontario /

Plusieurs demandes en radiodiffusion suite aux appels de demandes de licence de radiodiffusion visant l'exploitation d'entreprises de programmation de radio pour desservir Owen Sound, Windsor et Peterborough (Ontario)

BEFORE / DEVANT:

Rita Cugini                       Chairperson / Présidente

Peter Menzies                     Commissioner / Conseiller

Helen del Val                     Commissioner / Conseillère

ALSO PRESENT / AUSSI PRÉSENTS:

Cindy Ventura                     Secretary / Secrétaire

Joe Aguiar                        Hearing Manager /

                                  Gérant de l'audience

Kelly-Anne Smith                  Legal Counsel /

                                  Conseillère juridique

HELD AT:                          TENUE À:

Rooms B C D                       Salons B C D

Delta Hotel London Armouries      Hôtel Delta London Armouries

325 Dundas Street                 325, rue Dundas

London, Ontario                   London (Ontario)

December 13, 2007                 Le 13 décembre 2007

- iv -

           TABLE DES MATIÈRES / TABLE OF CONTENTS

                                                 PAGE / PARA

PHASE I

PRESENTATION BY / PRÉSENTATION PAR:

Andy McNabb (OBCI)                                895 / 5499

Anderson Parish Media Inc.                        995 / 6211

PHASE II

INTERVENTION BY / INTERVENTION PAR :

Andy McNabb (OBCI)                               1040 / 6479

PHASE III

INTERVENTION BY / INTERVENTION PAR :

CBC                                              1042 / 6493

Ontario Federation of Snowmobile Clubs           1050 / 6535

Michael Graham                                   1059 / 6569

Jack de Keyzer                                   1066 / 6613

Bill McKay                                       1071 / 6643

Active Green + Ross                              1073 / 6655

- v -

           TABLE DES MATIÈRES / TABLE OF CONTENTS

                                                 PAGE / PARA

PHASE IV

REPLY BY / RÉPLIQUE PAR:

Anderson Parish Media Inc.                       1085 / 6753

Andy McNabb (OBCI)                               1089 / 6770

Frank Torres (OBCI)                              1094 / 6798

Acadia Broadcasting Limited                      1097 / 6816

Evanov Communications Inc.                       1099 / 6837

K-Rock 1057 Inc.                                 1103 / 6869

Larche Communications Inc.                       1109 / 6898

Newcap Inc.                                      1111 / 6921

591989 B.C. Ltd.                                 1113 / 6933

                   London, Ontario / London (Ontario)

‑‑‑ Upon commencing on Thursday, December 13, 2007

    at 0906 / L'audience débute le jeudi

    13 décembre 2007 à 0906

LISTNUM 1 \l 1 \s 54915491             THE CHAIRPERSON:  Ladies and gentlemen, good morning.

LISTNUM 1 \l 15492             Madam Secretary.

LISTNUM 1 \l 15493             THE SECRETARY:  We will now proceed with item 15 which is an application by Andy McNabb, on behalf of a corporation to be incorporated, for a licence to operate an English‑language FM commercial specialty radio programming undertaking in Kawartha Lakes.

LISTNUM 1 \l 15494             The new station would operate on frequency 96.7 MHz (channel 244B1) with a maximum effective radiated power of 4,370 watts.

LISTNUM 1 \l 15495             Appearing for the applicant is Mr. Andy McNabb.

LISTNUM 1 \l 15496             Please introduce your ‑‑ I'm sorry.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 15497             THE SECRETARY:  You will have 20 minutes for your presentation.

LISTNUM 1 \l 15498             I apologize

PRESENTATION / PRÉSENTATION

LISTNUM 1 \l 15499             MR. McNABB:  Hello.  I'm Andy McNabb, the applicant, and on my left is Andy McNabb, my vice‑president of programming.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 15500             MR. McNABB:  To my right is Andy McNabb, my vice‑president of sales.

LISTNUM 1 \l 15501             And had there been any doubt about cloning it's probably disappeared by now.

LISTNUM 1 \l 15502             But anyway, thank you, CRTC Commissioners and staff.  It's been eight years since I have had the opportunity to appear on the firing line with a bunch of competitors.  We are all out for each other's blood it seems right now, but what we hope to do, my goodness, with 10 frequencies identified and various combinations and permutations, I hope a few of us can walk away happy and being able to serve the citizens of the City of Kawartha Lakes and Peterborough for the betterment of the Canadian broadcasting system.

LISTNUM 1 \l 15503             I am focused on the City of Kawartha Lakes.  That's the place of my birth.  And this city is the result of a year 2000 amalgamation of 33 small towns and villages up in cottage country, about an hour and a half northeast of Toronto, with Lindsay being the population; commercial and political hub of that market, and with 75,000 people being situated in this city that's over 3,000 square kilometres.

LISTNUM 1 \l 15504             So just to give you an idea here, just take a look off the City of Kawartha Lakes website.  That's 100 kilometres north to south, 45 kilometres east to west.  That's a lot of territory.  Now, compare that to the City of Peterborough which has approximately 75,000 people, and the City of Peterborough is nicely condensed in 58 square kilometres.  So you can understand why the biggest and best signal needs to go over here because that's all that's left.  There is nothing left available that could potentially cover the majority of the population of the City of Kawartha Lakes.

LISTNUM 1 \l 15505             So you take a look at Peterborough, seven frequencies licensed in a city of 75,000, a CMA of 116,000.  The City of Kawartha Lakes has one frequency licensed with a census agglomeration of 75,000, and that's all according to StatsCan 2006 Census figures.  So where is the greatest need?

LISTNUM 1 \l 15506             We take 96.7 away from the City of Kawartha Lakes, there is no chance to unite a very geographically‑dispersed community with a whole bunch of different interests because they are so geographically dispersed.  This is the one and only chance to make this happen.

LISTNUM 1 \l 15507             So what we have to do is take a look at Peterborough.  They have got the Peterborough licensees, the four of the seven that are rated, being the two CHUM CTVgm stations and the two Corus stations; a 56.5 percent share of tuning to rated local stations, adults 18 plus, and that's with the BBM ratings hot off the presses last week.

LISTNUM 1 \l 15508             In the City of Kawartha, poor old BOB FM, almost half of the hours tuned I had when I was on an AM in that market, and they had just got a 13 percent share of tuning, adults 18 plus.  It's pretty sad and, yet, they have got this mother of an FM signal.  So what's going on?  BOB is not up to the job.  Why is that?  Well, we will identify that a little later.

LISTNUM 1 \l 15509             Peterborough has two Christian licensees, the Christian hard rock station Kings Kids and CJLF‑2 which is a hot AC/rock station repeater of the Barrie station.  Well, poor old City of Kawartha Lakes has none.

LISTNUM 1 \l 15510             Right smack dab in the middle ‑‑ now if you can see this, this was given to me by Industry Canada.  These are the market contours of the good folks in Barrie, their 3 millivolt perimeter contour for the Christian station there.  There is their 3 millivolt repeater for Peterborough, and it just touches the southeast corner of the City of Kawartha Lakes.

LISTNUM 1 \l 15511             There is no market quality signal available for people who want spiritual comfort thanks to the Religious Broadcasting Policy of 1993.  So what do we do to resolve it?  Well, we want to establish a Christian talk‑dominated radio station to make that happen, and give people who are well deserving their own Christian radio station.

LISTNUM 1 \l 15512             So what we want to do here, we take a look at the City of Kawartha Lakes being hugely underserved by local radio in comparison to Peterborough.  We know it's the last opportunity to serve the majority of the population of the City of Kawartha Lakes with the one signal that's capable of covering the majority of the population with a market rate 3 millivolt perimeter contour with a format, with the only format out of all formats before you this week that is not competitive for ratings, that is not competitive for revenue with the other broadcasters, and especially not competitive for revenue nor ratings with the underperforming CTVglobemedia operation in that market, the station that I used to own.

LISTNUM 1 \l 15513             So let's take a look at the application's overview.  This is going to be the only local station before you out of all applicants that's going to be delivering local news every hour every day around the clock; twice daily death notices.  Now, don't laugh.  This is big news in a marketplace where you don't have a local daily paper or is widely spread out and people don't find out that people died until the paper is published and, yet, the funeral was two days ago.

LISTNUM 1 \l 15514             We are going to have daily local call‑in talk shows to bring the City of Kawartha Lakes their first ever voice to the community, focusing on issues of public concern and faith and family topics.

LISTNUM 1 \l 15515             Plus, we are going to bring back what was dropped by the CHUM CTVglobemedia people and dropped by Centario Communications, and that's the uplifting Bible‑based talk and teaching programs that actually thrived but they were kicked to the curb because it didn't meet with the format consistency requirements of the previous owners and the current owners' format preferences.

LISTNUM 1 \l 15516             So we are going to talk about four building blocks to make a radio station work really well, and I call them the four Cs of communication.  Number one is convenience, number two is content, number three is community and number four is connectivity.

LISTNUM 1 \l 15517             Now, convenience; folks, there are going to be up to eight local news stories every hour every day.  And I walk the talk on this.  This is something that I have done with CKLY when I had it as an AM before it was flipped by subsequent ownership groups to FM.  For the first time in history in the City of Kawartha Lakes you are going to be able to get local news around the clock.

LISTNUM 1 \l 15518             In terms of content, there is going to be very compelling talk programming that brings the spiritual comfort as mandated by the Religious Broadcasting Policy and lifts people up when they are knocked down by the day‑to‑day circumstances we all face in life.  We are going to be talking about issues that matter, how to get along with your spouse, how to raise your kids, how to overcome adversity; all based on solid biblical precepts from people who walk the talk in meeting those challenges.  So it's all about home, heart, health, pocketbook, but based on the Bible.

LISTNUM 1 \l 15519             We are going to be talking about a community as our third cornerstone here.  We have got what we call our church of the week and charity of the week initiatives.  Volunteers are the backbone in any small community.  They can't get media exposure with limited funds and we are giving them free and very, very unique fundraising and market tools to help raise funds and draw more volunteers to their causes and help local churches make an impact as they reach out to their communities.

LISTNUM 1 \l 15520             We are even giving them an opportunity to get free advertising over and above the traditional, you know, community calendar and community bulletin board and, you know, come on in for an interview and we will do a local news story on you type of angle, where if they become volunteer news correspondents they are going to get extra free advertising in return.

LISTNUM 1 \l 15521             So we are leveraging something on a real cause‑related affinity‑minded angle here, where people say, "Hey, I want to get more" ‑‑ "I want to get more free advertising for the Red Cross.  I'm going to do a local news story a week for the new radio station at 96.7 and so on, and so on, because you have got well over 100 non‑profit groups in the City of Kawartha Lakes.  And that's not even counting the 63, 64, 65 churches in that city.  So by gosh, if you add 63 plus about 120, you have got about 183 organizations that can offer us volunteer correspondence.  You bet your boots that we are going to have it covered left, right and centre.

LISTNUM 1 \l 15522             The fourth cornerstone:  Connectivity.

LISTNUM 1 \l 15523             For the first time ever, local citizens are going to have a voice, and with our three hours a day of local call‑in talk shows, people, for the first time ever, can speak to those issues that matter most.  Nobody in Peterborough, nobody in the City of Kawartha Lakes, has this kind of initiative put in place.

LISTNUM 1 \l 15524             We are doing this because a religious community is just that, a community, and the whole religious community functions best locally ‑‑ local news every hour of every day, local events, local talk shows that speak to the issues of the day, based on Biblical perspectives.

LISTNUM 1 \l 15525             This is a great opportunity to not focus on doctrinal divisions, but move forward on the common ground that people of different faith groups hold in common.  No compromise, but we identify what is in common, and we can invite people of all persuasions to hear and to be heard.

LISTNUM 1 \l 15526             I would like to tell you a bit about my history and my desire to return to the City of Kawartha Lakes, and more specifically, that hub, Lindsay.

LISTNUM 1 \l 15527             I was raised from diapers in radio in Lindsay.  My dad owned CKLY from 1961 right through to 1986.  It was a tremendous environment.  My dad really understood what local radio was all about.

LISTNUM 1 \l 15528             That station survived and thrived, when surrounded by the stations now owned by Corus in Peterborough, with their big mother of an FM signal that beams into the City of Kawartha Lakes, and is still quite actively there; with CHUM's big mother of an FM signal that beams into the City of Kawartha Lakes, and is still quite actively there; with the stations that used to be owned by Corus down in the south, in Oshawa, and by a previous owner, and beamed into the City of Kawartha Lakes, and were sold quite actively there; as well as the big 100,000 watt mother of a signal, CHAY‑FM in Barrie, which completely covers the City of Kawartha Lakes, which was always actively sold in that marketplace.

LISTNUM 1 \l 15529             But the station survived and thrived as an AM station because of content, because of a significant commitment to localization.

LISTNUM 1 \l 15530             So when I had gone to cut my teeth and sell advertising in Kitchener, after business school, my dad was retiring and he said:  Tell you what.  I will let you match my best offer, and you can come home and buy the station.

LISTNUM 1 \l 15531             That was mighty kind of him, because he had to get the money out of it so he could enjoy retirement.

LISTNUM 1 \l 15532             So I came back up, and the bank backed me, and for a million bucks I got myself a radio station.

LISTNUM 1 \l 15533             The station, at that time, was only doing $655,000 in revenue, when I bought it, so you can imagine that we had a real debt‑to‑revenue ratio.  I knew that I had to hustle.

LISTNUM 1 \l 15534             What happened?  We put together some very solid marketing principles.  We even enhanced local news coverage, if it could be done more than that.

LISTNUM 1 \l 15535             What happened in the first year?

LISTNUM 1 \l 15536             This is net of debt service; not before debt service, net of debt service.

LISTNUM 1 \l 15537             We turned more profit in the first year of my ownership than the previous 10 combined.  Why?  It was based on knowledge of the market and a commitment to serve the market.  Boy oh boy, could we ever market the station.

LISTNUM 1 \l 15538             Sales shot up 81 percent ‑‑ retail sales shot up 81 percent, and took the station from 655 to over a million bucks inside of three years.

LISTNUM 1 \l 15539             That is all documented in Document No. 3, entitled "Million Dollar Success Stories".

LISTNUM 1 \l 15540             You will see a letter from the good national accounting firm of BDO Dunwoody documenting that.

LISTNUM 1 \l 15541             The station went on to become one of the highest rated radio stations on AM, period, in the whole country ‑‑ AM or FM ‑‑ with a 24 percent share of hours tuned in the fall of 1988.

LISTNUM 1 \l 15542             We had a lot of fun.  Within two years we took that station and we really rocked the market, despite being surrounded by the FMs, despite being in the footprint of all the monster Toronto signals.

LISTNUM 1 \l 15543             We competed by being local, and local news, local news, local news.  In fact, our whole marketing campaign was built around local news and information ‑‑ get this ‑‑ up to 50 times a day.

LISTNUM 1 \l 15544             How many radio stations do you hear that on to this day?

LISTNUM 1 \l 15545             I don't want you to think I am full of myself, but those are validated facts.  I look at my competitors behind me, and I hold them in great admiration, because most of them have a very significant seven‑figure net worth.  I guess I am the only exception to that rule.

LISTNUM 1 \l 15546             You could call them rags‑to‑riches stories.  Folks, guess what?  I'm a riches‑to‑rags story.  I have to tell you what happened.

LISTNUM 1 \l 15547             I figured when we shot to a 24 percent share of hours tuned, one of the few small market stations doing over a million bucks in revenue, when our pre‑debt normalized operating margins were almost 200 grand ‑‑ mind you, remember, I had a heck of a debt service going for me, so there wasn't much cash left over.

LISTNUM 1 \l 15548             I basically developed a Napoleonic complex.  I thought:  If I can do it here, I can do it anywhere.

LISTNUM 1 \l 15549             So I tried to become the Donald Trump of cottage country real estate, and I soon found out that I wasn't.

LISTNUM 1 \l 15550             I started investing in condominium project after condominium project, and they all went bankrupt.  Not too bright.

LISTNUM 1 \l 15551             What this tells you is, you can ask me a wee bit about radio, but don't ask me anything about real estate, because I will steer you straight to the poorhouse.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 15552             McNABB:  But, no, that wasn't enough punishment.  I had to go before the CRTC in 1990 for an FM licence in Kitchener.

LISTNUM 1 \l 15553             Get this.  Foolhardy as I was, I spent over six figures on that application.

LISTNUM 1 \l 15554             Guess what?  Nobody got a licence in Kitchener.

LISTNUM 1 \l 15555             And you know how many people got licensed just a few years ago.

LISTNUM 1 \l 15556             I was not operating with a sound mind.  That being the case, folks, if that wasn't enough, then came the recession.

LISTNUM 1 \l 15557             Remember the recession of the early nineties?

LISTNUM 1 \l 15558             In cottage country, money retracts first before it retracts elsewhere.  Why?  It's the discretionary dollar.  People sell off their recreational properties and hunker down to their big homes in Toronto.

LISTNUM 1 \l 15559             What happened?  We got hit in the recession just like everybody else did, and we took a six‑figure hit.

LISTNUM 1 \l 15560             Guess what?  That was a bit of a wake‑up call for me, and we worked, and even while the recession was on, we bounced back as quickly as we fell back, and we were on a pace.  We were on an annualized six‑figure increase in sales ‑‑ this is small market radio, mind you ‑‑ and a six‑figure increase in the bottom line.

LISTNUM 1 \l 15561             What happened then?  As if we haven't had enough punishment already, guess what happened?  Hey, it's time to renew the agreement.  Let's do an asset valuation.

LISTNUM 1 \l 15562             Cottage country property values crashed more than they did elsewhere because of the discretionary effect.  It's the first thing to retract in a recession and the last thing to come back in a recovery.

LISTNUM 1 \l 15563             They did the valuation and they said:  Andy, the value of your properties has fallen by multiple six figures.  Guess what?  We have a debt equity covenant in our banking arrangement.  Yeah, you might make your payments every month, but we loan on two things:  payments and collateral.  You don't have collateral.  You have blown the debt‑equity ratio sky high.  We are calling your loan.

LISTNUM 1 \l 15564             Where do you think you can get money in the midst of a recession?  You can't.

LISTNUM 1 \l 15565             Guess what they did, folks.  They took the radio station.

LISTNUM 1 \l 15566             They put one of my junior sales people in charge of revenue.  We toppled from a million dollars in revenue to under 600,000 bucks.

LISTNUM 1 \l 15567             I lost the family legacy because I took my eyes off the golden goose.  I led it into financial ruin because I didn't keep my eyes on the ball.  I thought I would become Mr. Real Estate entrepreneur, and I didn't make sure that I had proper people running the show while I went off to play in real estate.

LISTNUM 1 \l 15568             Lesson learned.  Very sobering.

LISTNUM 1 \l 15569             I just want to put everything in balance.  There were great accomplishments, but there was a great failure.  Very sobering, but I ain't going to make the mistake again.

LISTNUM 1 \l 15570             That being the case, what do we do now?

LISTNUM 1 \l 15571             I want to come back.  These are the people I grew up with.  These are the people I worked with.  These are the people I voted for.  These are the people I played pick‑up hockey with.  I would travel three hours from my home in St. Catharines, all the way back to my true home in Lindsay, the City of Kawartha Lakes, to socialize.  You can take the boy out of Lindsay, but you can't take Lindsay out of the boy.

LISTNUM 1 \l 15572             Let's talk about a need for a station.  The market is not serviced well by local news, and there is a hole big enough to drive a truck through, which we will illustrate in a minute, and we are bringing a convoy full of 18‑wheelers, chocked full of local news for that community.

LISTNUM 1 \l 15573             No station is providing the largest cultural group in the City of Kawartha Lakes, those people that identify themselves with the various Christian faith groups, with a service that fulfils the objectives of the religious broadcasting policy in providing spiritual comfort.

LISTNUM 1 \l 15574             That largest cultural group, folks, is the 79.8 percent of residents that identified with various Christian faith groups in the 2001 census.

LISTNUM 1 \l 15575             Let's take a look at the needs of the market vis‑à‑vis the Broadcasting Act and the religious broadcasting policy.

LISTNUM 1 \l 15576             The religious broadcasting policy is for all Canadians; not just people in Calgary and Edmonton and Timmins and London and Woodstock and Kitchener and Peterborough and Barrie.  Guess what?  It's for the people of the City of Kawartha Lakes, too.

LISTNUM 1 \l 15577             What we have here is the situation where the City of Kawartha Lakes ‑‑ we should not be deprived of our own station to reflect our own values, given that the secular media does a fine job of not doing so.

LISTNUM 1 \l 15578             In regard to the Broadcasting Act, the public should have a reasonable opportunity to be exposed to the expression of differing views on matters of public concern.  And the station is going to be the only station providing that public expression in the City of Kawartha Lakes, three hours a day, seven days a week.

LISTNUM 1 \l 15579             Licensing yet another music service spinning the tunes falls way far short of that objective.

LISTNUM 1 \l 15580             Let's take a look at the market.  What has happened there?  What are the effects on my former station, flipped to an FM by the company that Ray McMurray used to run, which was then taken over by CTVglobemedia back in 2000?

LISTNUM 1 \l 15581             What are the effects on Bob FM and my two music competitors in the City of Kawartha Lakes, and why does this not affect me?

LISTNUM 1 \l 15582             The City of Kawartha Lakes, in the past six months, has been dealt a series of five economic body blows in a row.  They have lost a ton of manufacturing capacity, resulting in, number one, a reduction in the number of shifts at GM.  That is the largest corporate employer in the City of Kawartha Lakes, employing 1,000 people.

LISTNUM 1 \l 15583             Fleetwood, the recreational trailer manufacturer, shut down this spring, ceasing 400 jobs.

LISTNUM 1 \l 15584             Pearlman, the plastics company, is now ceasing its Canadian operation, leaving an announced shutdown of 80 to 100 positions.

LISTNUM 1 \l 15585             The Turner & Seymour custom chain manufacturer cut from two shifts to one.

LISTNUM 1 \l 15586             THE SECRETARY:  Excuse me.  I'm sorry, Mr. McNabb, but I would just like to let you know that you have two minutes left for your presentation, if you would like to conclude.

LISTNUM 1 \l 15587             MR. McNABB:  Wow!  Thank you.  Okay, I appreciate that.

LISTNUM 1 \l 15588             Northern Plastic Lumber ‑‑ cutbacks.

LISTNUM 1 \l 15589             As a result, the rules of the game have changed.  If you are selling spots, that's a tough thing to do, and Bob FM is already underperforming.

LISTNUM 1 \l 15590             But guess what?  I don't sell very many spots.  I have 50 percent of my revenue on the books already from Christian‑paid talk programs.

LISTNUM 1 \l 15591             I get my other revenue, 67 grand a year, out of funeral announcements, based on the proven history of how many announcements a day, times the rate, equals 67 grand.

LISTNUM 1 \l 15592             I am only selling 30 grand a year in spots, and that is typically to churches, and maybe the odd Christian business that wants to talk to the flock.

LISTNUM 1 \l 15593             Plus, another $12,000 of Christian concerts and conferences that I had organized and that is our event revenue.  So I am not competing for revenue.

LISTNUM 1 \l 15594             If the market goes to H‑E double toothpicks in a hand basket I am not affected because the people who support those paid Christian talk programs are typically empty‑nesters and they are not affected as much.  They have a greater range of discretionary income that is not affected in a recessionary economy.

LISTNUM 1 \l 15595             So there you go.  The City of Kawartha Lakes has one of the highest number of churches per capita.  It is 32 percent higher than the Canadian average.  It is 50 percent higher than that of Barrie ‑‑ pardon me, Peterborough, where you have two stations licensed.

LISTNUM 1 \l 15596             So if you have got a .65 churches per capita ratio in Peterborough and we have got .92 in the City of Kawartha Lakes, how much more deserving are we of a signal that can cover the majority of the market?

LISTNUM 1 \l 15597             Anyway, The Post is hurting.  They have cut back a 100‑year‑old daily, cut back to twice a week.  They can't even sell ‑‑ prior to Christmas they can't even sell the corner ads in the newspaper.  Look at that.  That is the lowest entry fee into the local market.

LISTNUM 1 \l 15598             Folks, it is not as rosy as it seems but we are the only ones who don't hurt anybody and as a result this is why we really feel strongly ‑‑ and I say we because there is going to be a we, there is going to be staff on board.  That is why we feel we should get the licence.

LISTNUM 1 \l 15599             If you take a look at the whole deal, the letter from Barry Devolin that Mr. Torres read yesterday, I actually told him to write that letter and send it to all applicants, the reason being they didn't want to send it to just one.

LISTNUM 1 \l 15600             I said:  All right, tell why local news is important because we are doing the most, more than our two competitors are, way more if you check the numbers.  So talk about local news, how important it is.  We automatically stand out.

LISTNUM 1 \l 15601             So, Mr. Torres, it was because of me you got the letter.  Congratulations!

LISTNUM 1 \l 15602             THE CHAIRPERSON:  Mr. McNabb, I apologize, can you please wrap up?

LISTNUM 1 \l 15603             MR. McNABB:  Yes.

LISTNUM 1 \l 15604             THE CHAIRPERSON:  Just for procedural fairness.

LISTNUM 1 \l 15605             MR. McNABB:  Yes, ma'am.

LISTNUM 1 \l 15606             THE CHAIRPERSON:  We give applicants 20 minutes.  Please wrap up.

LISTNUM 1 \l 15607             MR. McNABB:  Okay.  I apologize.

LISTNUM 1 \l 15608             THE CHAIRPERSON:  Thank you.

LISTNUM 1 \l 15609             MR. McNABB:  I am just going to give you one quote.

LISTNUM 1 \l 15610             Max Radiff is the former Mayor of Lindsay before it became the City of Kawartha Lakes and he sent me an e‑mail a couple of days ago:

"In the past 15 years ‑‑ and that is since I left Lindsay ‑‑ there has been a steady erosion in the supply of effective news coverage in the County of Victoria and its successor the City of Kawartha Lakes.  The inability of this city to develop a cohesive nature is due partially to the fact that residents often have little idea as to what is happening in their municipality and little opportunity to feel that they are now much part of a bigger picture." (As read)

LISTNUM 1 \l 15611             So folks, I am just going to end it on there.  I have got quotes from other mayors.  I have got quotes from everybody else and we might address those in your questions.

LISTNUM 1 \l 15612             So have at it.  I am ready to take the shots.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 15613             THE CHAIRPERSON:  Thank you, Mr. McNabb.  You will have ample opportunity in answering our questions to give us whatever information you want.

LISTNUM 1 \l 15614             I have to say that I want to thank you for increasing the energy level in this room this morning.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 15615             THE CHAIRPERSON:  I think you have given our translators a run for their money.

LISTNUM 1 \l 15616             MR. McNABB:  And that was despite two Valiums too.

LISTNUM 1 \l 15617             THE CHAIRPERSON:  That is great.

LISTNUM 1 \l 15618             I am going to ask Commissioner del Val to lead the questioning.  Thank you.

LISTNUM 1 \l 15619             COMMISSIONER DEL VAL:  Thank you, Mr. McNabb.  I honestly don't know how I am going to keep up with you but let's just go with the programming first, okay.

LISTNUM 1 \l 15620             So you are proposing a specialty Christian talk format and I can see from your numbers that there is a very, very high emphasis on spoken‑word programming, and because it is also a Christian station ‑‑ and I can see that you are familiar with the religious broadcasting policy from your application.

LISTNUM 1 \l 15621             Now balance is very important and that policy requires us as a Commission to ask you to explain exactly how you are going to achieve the balance and to be specific about the balance that you will provide.

LISTNUM 1 \l 15622             I know that you have mentioned 21 hours of balanced programming and that you are prepared to commit to that as a condition of licence.

LISTNUM 1 \l 15623             So just that one question:  Are you prepared to commit to 21 hours of balanced programming?

LISTNUM 1 \l 15624             MR. McNABB:  Yes.

LISTNUM 1 \l 15625             COMMISSIONER DEL VAL:  Okay.

LISTNUM 1 \l 15626             Second question:  Now then can you give me a better idea of what exactly that balanced programming will be?

LISTNUM 1 \l 15627             I know you have mentioned:

"In general, balance would be addressed in the overall open‑line programming offered by this applicant over a reasonable period of time." (As read)

LISTNUM 1 \l 15628             Is it only open‑line or could you just describe all of the balanced programming you have planned?

LISTNUM 1 \l 15629             MR. McNABB:  Definitely.  Balance is one of the most effective programming and marketing tools this radio station has.  I will tell you why.

LISTNUM 1 \l 15630             You have got ‑‑ in the City of Kawartha Lakes you have got ‑‑ talk about a religiously homogeneous marketplace.  Listen to this.

LISTNUM 1 \l 15631             0.7 percent of other religious groups, other than people who would say they belong to the Christian faith, 0.7.  You don't get much more homogeneous than that.

LISTNUM 1 \l 15632             Then you take a look at people who say they have no religion, 19.5 percent.  That leaves 79.8 percent of people who say, hey, we belong to a Christian faith group.

LISTNUM 1 \l 15633             So rather than focus on doctrinal division, we want to focus on the common ground that Christians would believe on and that is two fundamental principles.  They believe Jesus is Lord and you can't get to heaven without him.  So that is what they all agree.  So let's just focus on that and let's build on commonality.

LISTNUM 1 \l 15634             But what about ‑‑ let's see now, what about the 150 Muslims in the City of Kawartha Lakes or the 55 Jews?  Well, tell you what, what we are doing here is we are going to have a heap of fun.

LISTNUM 1 \l 15635             We are in an increasingly multicultural country and even though the City of Kawartha Lakes is very much unlike the rest of Canada, it is going to be coming to towns sooner or later.  So if we are going to be shopping at the same stores together, having our kids in school together, having our kids play ‑‑

LISTNUM 1 \l 15636             COMMISSIONER DEL VAL:  Mr. McNabb ‑‑

LISTNUM 1 \l 15637             MR. McNABB:  Yes.

LISTNUM 1 \l 15638             COMMISSIONER DEL VAL:  ‑‑ I know why balance is important.

LISTNUM 1 \l 15639             MR. McNABB:  Okay.

LISTNUM 1 \l 15640             COMMISSIONER DEL VAL:  I just need to know what ‑‑

LISTNUM 1 \l 15641             MR. McNABB:  What we are doing.

LISTNUM 1 \l 15642             COMMISSIONER DEL VAL:  ‑‑ are the programs, please.  Thank you.

LISTNUM 1 \l 15643             MR. McNABB:  What programs?

LISTNUM 1 \l 15644             Three hours a day of local call‑in talk shows, an hour and a half in the afternoon, with an hour and a half at night.

LISTNUM 1 \l 15645             Now what we do is we invite people with a ‑‑ we have a volunteer talk show host, a different pastor each day hosting.  We have the former co‑host of "100 Huntley Street" already confirmed and that is in the interventions that were filed in November, Diane Roblin‑Lee.

LISTNUM 1 \l 15646             These are volunteer hosts because they get free promotion for their business or their church group, et cetera.  But what we are doing, we are inviting different people from different faiths.

LISTNUM 1 \l 15647             So for example, we have a Sikh, Ken Bakshi.  Now, the Sikhs, Stats Canada says there's zero people in the City of Kawartha Lakes.  Well, I know the Bakshis personally and their family of six has been around there for 30 years.  So what we do, we seek out these people and we have them involved.  We have Sylvia Burke who will come on air and speak to issues from the Jewish perspective.

LISTNUM 1 \l 15648             We can talk ‑‑ for example, let's take this week.  What was the biggest ‑‑ one of the biggest news stories this week and how do you localize it?  Well, it was about the tragic strangling of that Muslim girl by her father.  So what is the talk of the show today:  How far should you push your faith on your kids?

LISTNUM 1 \l 15649             So we have a roundtable by three‑way calling coming into the studio where we can offer the Jewish perspective from Sylvia, the Sikh perspective from Ken.  We have the Muslim perspective from the President of the Islamic Federation.  So that is how we address it with issues of balance.

LISTNUM 1 \l 15650             COMMISSIONER DEL VAL:  So basically the 21 hours would be three hours per day times seven, seven days a week?

LISTNUM 1 \l 15651             MR. McNABB:  Yes.

LISTNUM 1 \l 15652             COMMISSIONER DEL VAL:  Okay.  I gather from your response that you have contacts in the community with the members of different faiths?

LISTNUM 1 \l 15653             MR. McNABB:  Yes.

LISTNUM 1 \l 15654             COMMISSIONER DEL VAL:  Right.  And then when you were talking about having three lines open, are you ‑‑

LISTNUM 1 \l 15655             MR. McNABB:  Oh! More than that.

LISTNUM 1 \l 15656             COMMISSIONER DEL VAL:  Okay.  When you have the call‑in shows, will you have sort of a panel of people representing the different faiths and then there will be the public calling in or are you relying completely on those who call in to sort of air what their views are?

LISTNUM 1 \l 15657             MR. McNABB:  You cannot rely on people to call in no matter what kind of a talk show you have.  You have got to go out and you have got to establish that these people are going to be participating on those calls.

LISTNUM 1 \l 15658             Whether it is a Christian station doing talk shows or a secular station doing talk shows, you have got to hunt them down, tie them up, glue them to the phone and let them participate, and that way you are assured of having quality participation.

LISTNUM 1 \l 15659             This is why I have called Ken.  This is why I have called Sylvia.  This is why I have got their agreement to participate.  Even Frank Dimant, who is the Vice‑President of B'Nai Brith in Toronto ‑‑ we can have local Sylvia Burke representing the Jewish people but Frank can speak to the international angles regarding Israel.

LISTNUM 1 \l 15660             So as a result we bring everybody in because they are willing to commit.  Why?  It gives them a great platform to be understood because if we can better understand we are going to get along better and that isn't just a warm and fuzzy thing, it is a practical step in an increasingly multicultural society.

LISTNUM 1 \l 15661             COMMISSIONER DEL VAL:  Thank you.

LISTNUM 1 \l 15662             Are you going to be bringing in these individuals, do you think, primarily from Kawartha Lakes, the city itself, first and then ‑‑

LISTNUM 1 \l 15663             MR. McNABB:  Always prioritize local because the more local you are, the more relevant you are to the people.  But we can add different perspective by bringing their national counterparts.  Like Sylvia local, Frank national, et cetera, et cetera.

LISTNUM 1 \l 15664             COMMISSIONER DEL VAL:  Thank you, Mr. McNabb.

LISTNUM 1 \l 15665             Then what corrective measures will you take if balance were not met?

LISTNUM 1 \l 15666             MR. McNABB:  If balance were not met, quite simply ‑‑ if you could give me an example because we are taking an extremely proactive approach to this in terms of getting people to commit and offering them something beneficial.

LISTNUM 1 \l 15667             Quite simply, we are going to be promoting the visit of the Israel Consul General to speak in Lindsay, the hub of the City of Kawartha Lakes.  Why?  Because Frank does a lot of work with the Israel Consul General.  So that is a good thing for him to further his agenda.

LISTNUM 1 \l 15668             So there is always a tradeoff.  We are doing something for them.  We are scratching their back big time for them to participate.  So by being this proactive, by providing a reward for their participation, if you will, we can't see how we would ever violate the principle of balance.

LISTNUM 1 \l 15669             COMMISSIONER DEL VAL:  Okay.

LISTNUM 1 \l 15670             One of the sort of guidelines that the religious broadcasting policy talks about, they talk about mechanisms that you should put in place to ensure balance and they talk about a regulatory review committee that you can establish in order to receive complaints because the matters that you deal with will be sensitive and there will be a lot of different points of view.

LISTNUM 1 \l 15671             So perhaps you could just play it out for me.  Say you have a program and then someone is not happy because they are Buddhist and believe that their view wasn't erred and should have been represented and therefore there was no balance.

LISTNUM 1 \l 15672             MR. McNABB:  Yes.

LISTNUM 1 \l 15673             COMMISSIONER del VAL:  Can you play it out from there?  What would you?  How would the complaint be received, how would it be dealt with, and if you find that in fact there was a mistake how would you correct it?

LISTNUM 1 \l 15674             MR. McNABB:  Quite easily.  The people who are our guest panellists are automatically part of that review committee, because what we will be doing is promoting on the fact that people can go to our website if they have a complaint or a problem or an issue they want addressed, if they type that in, that automatically goes to an e‑mail to each one of our panellists.

LISTNUM 1 \l 15675             When we talk about their next participation coming up we will say "Hey, Andy, what about that Buddhist fellow who tuned into the station?"

LISTNUM 1 \l 15676             Now remember, the City of Kawartha Lakes you are pretty much preaching to the choir because of the fact it is extremely dominant in terms of its representation of the Christian faith.  The vast majority of your listeners are going to be people who identify themselves as Christians, but we see this as an opportunity to educate Christians on other faith groups from a very involved and compelling point of view.

LISTNUM 1 \l 15677             But nonetheless, somebody, because of the promotion that we are doing ‑‑ because we want to expand, we want the Sikhs, we want the Muslims, we want the Hindus, we want the Buddhists, all 30 of them, tuning into the radio station.

LISTNUM 1 \l 15678             So our panellists receive the comment.  I am copied on the comment as well.  Why?  The buck stops here.  I'm the one ultimately responsible, aren't I?

LISTNUM 1 \l 15679             So what do is, our program director talks about it with me, we say "Listen, we got this comment.  What are we going to do to address it this week in this show?"  So that within a matter of business days it is being addressed on air.  "Frank Jones Buddhist from Dunsford" ‑‑ which is just 10 miles outside of Lindsay ‑‑ "they had a complaint, we are talking about it on‑air."  Why?  if we can show ourselves going to extreme lengths to address a balance consideration, we are going to be thought of pretty highly by every one of the people who comprises 0.7 per cent of other faith groups.

LISTNUM 1 \l 15680             COMMISSIONER del VAL:  Now, what would you say if I said that you probably need an objective pair of eyes, a third party who wasn't involved in producing the program or who were the hosts of the program and you really need someone who can look from outside and evaluate, because I think those who conduct the program could always have an interest in that they have done it right.

LISTNUM 1 \l 15681             MR. McNABB:  Sure.  Yes.

LISTNUM 1 \l 15682             COMMISSIONER del VAL:  Would you have any plans of sort of having a regulatory review committee that could be a bit objective?

LISTNUM 1 \l 15683             MR. McNABB:  I would be happy to.

LISTNUM 1 \l 15684             COMMISSIONER del VAL:  All right.

LISTNUM 1 \l 15685             MR. McNABB:  The original plan was literally for the panellists to act on that because ‑‑ our panellists being the Sikh, the Hindu, the Muslim, the Jew, et cetera, et cetera, can contribute a diversity of perspective toward handling that situation, but every single problem will be addressed on‑air, for the very simple fact that it shows that this radio station is going to the nth degree, to a point yet a third party ‑‑

LISTNUM 1 \l 15686             Hey, I'm willing to do it, I just hadn't thought of it.  I thought just by virtue of having a panel that is representative of all the 0.7 other religions in the City of Kawartha Lakes that might do the trick, but I am very open because, as you know, I'm pretty keen on this whole balancing from a marketing and programming expansion point of view.

LISTNUM 1 \l 15687             I would love to hear your thoughts, Ms del Val on who that third ‑‑ the type of person that third party might be.  Yes, they are not involved, but where would you grab that person?  What would you look for in terms of their background?

LISTNUM 1 \l 15688             COMMISSIONER del VAL:  Someone who does not have an interest in your ‑‑ not the interest in, say, a financial interest in your station.  Or if you are talking about ‑‑ like what would you do to tell the audience who were listening that, "Look, if you don't agree or if you have a complaint" where would you go?  Your complaint from there, a corrective measure.  Would it be that you can get the same panel together or the next week you are going to constitute a different panel with other representation or, say, including some representation of the Buddhism faith and say, "Okay, last week we heard from faiths 1, 2, 3 on this issue and we have had a complaint and to be more balanced week two we will have the same issue discussed by faiths 4, 5, 6?  Would you do something like that?  Would that be a corrective ‑‑

LISTNUM 1 \l 15689             MR. McNABB:  Well, that's actually part of the plan.  We do have revolving panellists for that very reason, because we keep perspectives fresh and it isn't always skewing to the perspectives of a few, it is balanced by the perspectives of what:  Many.

LISTNUM 1 \l 15690             So yes, again, they can go to the website, they can register any complaints, but every single complaint will be dealt with on‑air and people all the time will be encouraged to respond if they have a different point of view with a question.  That only makes a station stronger and it gets more people tuning in because they want to find out "Well, how are they going to address it?  I'm going to be tuning in."  What do we do?  We just expand our audience, thank you very much.

LISTNUM 1 \l 15691             COMMISSIONER del VAL:  I'm sorry, just give me one minute.

‑‑‑ Pause

LISTNUM 1 \l 15692             COMMISSIONER del VAL:  All right.  So I take it that you are very prepared to accept as a condition of licence that you will adhere to the guidelines in the religious broadcasting policy?

LISTNUM 1 \l 15693             MR. McNABB:  Yes.

LISTNUM 1 \l 15694             COMMISSIONER del VAL:  All right.

LISTNUM 1 \l 15695             Still on programming, and I hope I'm not going to try your patience on what I am trying to ask.  I know we have gone around this about the exact hours of spoken programming, local news, et cetera, et cetera, many times and I know you have tried to give us a lot of information.

LISTNUM 1 \l 15696             Now, I think that perhaps, though, I would like to keep it very simple and if you could just dumb it down for me.

LISTNUM 1 \l 15697             Because you have spreadsheets in your deficiency responses showing how you arrived at the numbers and you also expressed the numbers in terms of what your goal is in terms of local programming.  For example, you say the goal is 69.5, but the commitment is 63.  And then you express it in percentages and sometimes it's in minutes per day, sometimes it's hours per week.

LISTNUM 1 \l 15698             So it's a little bit difficult for us to make all of the calculations reconcile.

LISTNUM 1 \l 15699             I'm going to go through each category and if you could just state for me in terms of hours per week what each of these numbers will be, I would really appreciate it.

LISTNUM 1 \l 15700             MR. McNABB:  I will.

LISTNUM 1 \l 15701             COMMISSIONER del VAL:  All right.

LISTNUM 1 \l 15702             So what we will start first is:  What is the amount of hours per week of total spoken word?

LISTNUM 1 \l 15703             Let's just stick to commitments, not targets.

LISTNUM 1 \l 15704             MR. McNABB:  Right.

LISTNUM 1 \l 15705             COMMISSIONER del VAL:  So total hours of spoken word per week.

LISTNUM 1 \l 15706             MR. McNABB:  So let's take a look at page 6 of the spreadsheet.  Spoken word program totals, okay ‑‑ this is local and national ‑‑ 84.5 hours a week.

LISTNUM 1 \l 15707             COMMISSIONER del VAL:  All right.  Good, I will note that.

LISTNUM 1 \l 15708             You are showing on that same sheet non‑Canadian spoken word is 49.5 hours.

LISTNUM 1 \l 15709             Is that correct?

LISTNUM 1 \l 15710             MR. McNABB:  Hang on.  Okay, I go to my ‑‑ yes.

LISTNUM 1 \l 15711             49.5 hours, correct.

LISTNUM 1 \l 15712             COMMISSIONER del VAL:  All right.

LISTNUM 1 \l 15713             Canadian spoken word is 7 hours.

LISTNUM 1 \l 15714             Is that correct?

LISTNUM 1 \l 15715             MR. McNABB:  Canadian national spoken word programming is 7 hours.  That just hasn't been developed yet in this country ‑‑

LISTNUM 1 \l 15716             COMMISSIONER del VAL:  All right.

LISTNUM 1 \l 15717             MR. McNABB:  ‑‑ because the industry is still in its infancy.

LISTNUM 1 \l 15718             COMMISSIONER del VAL:  All right.

LISTNUM 1 \l 15719             Then weekly hours devoted to religious programming, is it 84.5 hours?

LISTNUM 1 \l 15720             MR. McNABB:  Well, let's see now.  I know music programming isn't considered an issue of balance, but ‑‑

LISTNUM 1 \l 15721             COMMISSIONER del VAL:  No.  Spoken word, yes.

LISTNUM 1 \l 15722             MR. McNABB:  So the 84.5 hours with the balance of hours being heavily weighted toward, you know, local surveillance with Christian music.

‑‑‑ Pause

LISTNUM 1 \l 15723             MR. McNABB:  So 84.5 hours spoken word program totals, local and then national, and then what we call the announcer‑hosted local spoken word and music hours 41.5.  Add the two together, there is your 126 hours a week.

LISTNUM 1 \l 15724             COMMISSIONER del VAL:  Could you run that by me again?

LISTNUM 1 \l 15725             MR. McNABB:  Sure.  We have spoken word program totals, local and national, 84.5 hours a week.  Then the announcer‑hosted, like 6:00 a.m. to 8:30 a.m. Monday to Friday; noon to 1:00 Monday to Friday; 4:00 to 6:00 Monday to Friday; plus 6:00 a.m. to 1:00 on Saturday and Sunday.  The announcer‑hosted hours that include music, but again music is taking a back seat because of the opportunities for local information, but those hours are 41.5.  So add the 84.5 to the 41.5, there is your 126 hours a week.

LISTNUM 1 \l 15726             COMMISSIONER del VAL:  All right.

LISTNUM 1 \l 15727             You also had a category of spoken ‑‑ I think religious spoken word.

LISTNUM 1 \l 15728             MR. McNABB:  Religious spoken word.  Now, I'm looking at my ‑‑ I'm looking at my spreadsheets here and I don't ‑‑

LISTNUM 1 \l 15729             COMMISSIONER DEL VAL:  Okay.  Maybe it was in a ‑‑

LISTNUM 1 \l 15730             MR. McNABB:  ‑‑ see the word religious.

LISTNUM 1 \l 15731             COMMISSIONER DEL VAL:  Okay, my mistake.

LISTNUM 1 \l 15732             MR. McNABB:  Because the spreadsheet is the final arbiter.

LISTNUM 1 \l 15733             COMMISSIONER DEL VAL:  Okay, great.  Okay, so I see where I see a local spoken word Bible teaching.  Okay.

LISTNUM 1 \l 15734             Sorry, total spoken word is 84.5?

LISTNUM 1 \l 15735             MR. McNABB:  Yes.

LISTNUM 1 \l 15736             COMMISSIONER DEL VAL:  What about total local programming?

LISTNUM 1 \l 15737             MR. McNABB:  Total local programming, okay.

LISTNUM 1 \l 15738             COMMISSIONER DEL VAL:  And I have ‑‑ I will tell you what I have and you can just tell me ‑‑

LISTNUM 1 \l 15739             MR. McNABB:  Yes.

LISTNUM 1 \l 15740             COMMISSIONER DEL VAL:  ‑‑ whether that's correct, that you are committing to 63 hours per week of local programming.

LISTNUM 1 \l 15741             MR. McNABB:  Nope.  I am committing to 69.5.  On that spreadsheet that has ‑‑ page six of one of the intervention responses there, if you go right, almost halfway down the middle it says:

"Local live and non‑live program totals for above‑noted programs which include local newscasts in each program, hours of local programming 69.5."

LISTNUM 1 \l 15742             COMMISSIONER DEL VAL:  Okay.  So that is the number that you will actually commit to, 69.5?

LISTNUM 1 \l 15743             MR. McNABB:  Yes.

LISTNUM 1 \l 15744             COMMISSIONER DEL VAL:  Okay.

LISTNUM 1 \l 15745             What about what I call ‑‑ oh, let's go with news, how many hours of news?

LISTNUM 1 \l 15746             MR. McNABB:  News, the building blocks of the whole radio station.  Without this we would be lost.

LISTNUM 1 \l 15747             We have got, let's see here now ‑‑ we have got 14.4 hours of just newscasts each week.

LISTNUM 1 \l 15748             COMMISSIONER DEL VAL:  Now, is that 14.4 pure news in what ‑‑ pure news I mean not including surveillance like traffic reports, weather?  It's 14.5 ‑‑ 14.4 of pure news?

LISTNUM 1 \l 15749             MR. McNABB:  Yes, those news packages would be news; local news and sports and weather is on top of that.

LISTNUM 1 \l 15750             COMMISSIONER DEL VAL:  So the 14.4 does or does not include surveillance?

LISTNUM 1 \l 15751             MR. McNABB:  Well, it does not include surveillance.

LISTNUM 1 \l 15752             COMMISSIONER del VAL:  Okay, great, so 14.4 of pure news.

LISTNUM 1 \l 15753             MR. McNABB:  In fact, I didn't even ‑‑ it was interesting.  I addressed surveillance issues but I never put them into my calculations.  So you know, you think of all the possible forms of surveillance we talked about were way over 14.4 hours, with news plus surveillance.

LISTNUM 1 \l 15754             COMMISSIONER del VAL:  Okay, but you did include the surveillance as part of the spoken word, didn't you?

LISTNUM 1 \l 15755             MR. McNABB:  No, I did not, no.  This is ‑‑

LISTNUM 1 \l 15756             COMMISSIONER del VAL:  Okay.

LISTNUM 1 \l 15757             MR. McNABB:  Not at all.

LISTNUM 1 \l 15758             COMMISSIONER del VAL:  Okay.  Then I think, Mr. McNabb, you are going to have to file a revised sort of delineation of the programming.  And could you please give me the number inclusive of all total spoken word and per week, what would be the total amount of spoken word in hours per week?

LISTNUM 1 \l 15759             MR. McNABB:  Done.  I noticed it as I was preparing for the hearing that I never even put my surveillance calculations in.  So I have done this and I will be happy to file it.

LISTNUM 1 \l 15760             COMMISSIONER del VAL:  Okay.  Then if you put this surveillance in what is your total spoken word?

LISTNUM 1 \l 15761             MR. McNABB:  Okay, 88.62 hours.  There is 4.12 hours of surveillance.  That's additional documented but not previously calculated spoken word commitments.

LISTNUM 1 \l 15762             COMMISSIONER del VAL:  Okay.  Does it change the local programming number?

LISTNUM 1 \l 15763             MR. McNABB:  You see in ‑‑ this is where it gets hairy because in local programming ‑‑ or let's talk about 7:00 to 8:00 a.m. just for the fun of it.  That's already a local programming hour and then we have subsets and surveillance within that local programming hour.  We break those out but the hour is still an hour, right?

LISTNUM 1 \l 15764             COMMISSIONER del VAL:  Yes.

LISTNUM 1 \l 15765             MR. McNABB:  And it's still local.

LISTNUM 1 \l 15766             COMMISSIONER del VAL:  Yes.

LISTNUM 1 \l 15767             MR. McNABB:  So we ‑‑ I have broken those out here and hopefully that will suffice.  It will be in memoriam funeral announcements, it will be the local church or charity of the week; it will be the community bulletin board, church and charity announcements.  It will be the Christian concert and event updates, all things that we talked about in the application but just never calculated.

LISTNUM 1 \l 15768             COMMISSIONER del VAL:  So Mr. McNabb, then you could file those revised numbers with us, please?

LISTNUM 1 \l 15769             MR. McNABB:  Yes.

LISTNUM 1 \l 15770             COMMISSIONER del VAL:  And may I just go through the list just so you know what we are expecting to receive ‑‑

LISTNUM 1 \l 15771             MR. McNABB:  Yes.

LISTNUM 1 \l 15772             COMMISSIONER del VAL:  ‑‑ in the revisions.

LISTNUM 1 \l 15773             So I am looking for hours per week of total spoken word, total local programming; total news in terms of ‑‑

LISTNUM 1 \l 15774             MR. McNABB:  Please, I want to make sure I am getting everything here.  So we are looking at what, again?

LISTNUM 1 \l 15775             COMMISSIONER del VAL:  Total spoken word.

LISTNUM 1 \l 15776             MR. McNABB:  M'hm.

LISTNUM 1 \l 15777             COMMISSIONER del VAL:  Total local programming, total pure news.  By pure news I mean not including surveillance like weather and traffic.  That's not included in pure news.

LISTNUM 1 \l 15778             Then in the pure news could you also break it down into what ‑‑ how many hours of the pure news would be local news?

LISTNUM 1 \l 15779             MR. McNABB:  May I address that, because there is something that we are doing that is extremely distinct from what you will hear literally on 95 percent of radio?

LISTNUM 1 \l 15780             COMMISSIONER del VAL:  Yes, you will have a chance to do that.

LISTNUM 1 \l 15781             MR. McNABB:  Okay.

LISTNUM 1 \l 15782             COMMISSIONER del VAL:  But let's just do the numbers right now.

LISTNUM 1 \l 15783             MR. McNABB:  Yes.

LISTNUM 1 \l 15784             COMMISSIONER del VAL:  Okay, so what percentage of the ‑‑ yes, but how many hours of local news.

LISTNUM 1 \l 15785             MR. McNABB:  M'hm.

LISTNUM 1 \l 15786             COMMISSIONER del VAL:  And then if local news doesn't total 14.4, then what would be the other parts of the news?

LISTNUM 1 \l 15787             Then I would like, please, total weather, total sports coverage if any and then total promotion of local events and activities.

LISTNUM 1 \l 15788             In fact, I believe that there is one deficiency response that I can find for you very quickly that summarizes what is included in spoken word.

‑‑‑ Pause

LISTNUM 1 \l 15789             MR. McNABB:  The October or the July letter?

LISTNUM 1 \l 15790             COMMISSIONER del VAL:  Here, it is on page four of the ‑‑ I believe it's the ‑‑ page four of the response to letter of June 27.

LISTNUM 1 \l 15791             MR. McNABB:  Okay.

LISTNUM 1 \l 15792             COMMISSIONER del VAL:  And it's in the question number 5, 5(i) that breaks down for you the categories of what we would say comprised spoken word.  So if you could break those numbers down as a final number?

‑‑‑ Pause

LISTNUM 1 \l 15793             COMMISSIONER del VAL:  Okay, is that doable?

LISTNUM 1 \l 15794             MR. McNABB:  Absolutely.

LISTNUM 1 \l 15795             COMMISSIONER del VAL: Okay.

LISTNUM 1 \l 15796             MR. McNABB:  Now, when would you like this filed by?

LISTNUM 1 \l 15797             COMMISSIONER del VAL:  I was just going to ‑‑ how long do you need?

LISTNUM 1 \l 15798             MR. McNABB:  Okay.  Well, after we finish the back and forth today, I can lock myself up in a room tomorrow and get this banged out for you.

LISTNUM 1 \l 15799             COMMISSIONER del VAL:  Would end of the day do, legal counsel, tomorrow?

LISTNUM 1 \l 15800             MS SMITH:  We will give you one week to file it, one week from today, end of day, please.

LISTNUM 1 \l 15801             MR. McNABB:  Fair enough, thank you.

LISTNUM 1 \l 15802             MS SMITH:  Thank you.

LISTNUM 1 \l 15803             COMMISSIONER del VAL:  Okay.

LISTNUM 1 \l 15804             So Mr. McNabb, when I'm looking at local programming even if I say with the revisions, I take it up to ‑‑ I don't know ‑‑ 75 hours.  You are saying you commit to 69.5 and you have added about say four hours in addition.

LISTNUM 1 \l 15805             Say if it's 75 hours, 75 out of 126 broadcast hours per week, that still leaves a big chunk of non‑local.

LISTNUM 1 \l 15806             MR. McNABB:  Yes.

LISTNUM 1 \l 15807             COMMISSIONER del VAL:  Of non‑local programming, and of that non‑local program I know you have also broken it down into non‑Canadian and Canadian.  And from the last set of numbers I received, the non‑Canadian amount about just under 50 hours.  It is 40‑something hours.

LISTNUM 1 \l 15808             MR. McNABB:  49.5.

LISTNUM 1 \l 15809             COMMISSIONER del VAL:  Yes, 49.5 which is what, 40 percent?

LISTNUM 1 \l 15810             And I know that in your submissions and all you talk about highly localized, you talk about intensely local.  For one, I find that not very ‑‑ just the numbers not very consistent with how you are characterizing this as highly localized.  That's the first point that you would need to address.

LISTNUM 1 \l 15811             And the second point is why?  Why do ‑‑ why such a high level of non‑local, non‑Canadian?  You could have a very good reason in terms of revenue or whatever.

LISTNUM 1 \l 15812             So could you address those two points, please?

LISTNUM 1 \l 15813             MR. McNABB:  Okay.  Why such a high level of non‑local and the two points ‑‑

LISTNUM 1 \l 15814             COMMISSIONER del VAL:  Non‑Canadian; non‑local and non‑Canadian.

LISTNUM 1 \l 15815             MR. McNABB:  Non‑Canadian.

LISTNUM 1 \l 15816             COMMISSIONER del VAL:  Yes.

LISTNUM 1 \l 15817             MR. McNABB:  I would have put this in perspective by establishing or identifying a standard for top level local service.  And the dean of local programming in radio in this country is Elmer Hildebrand.   Now, if you take a look at the ‑‑ and this is in the papers, my presentation papers I gave to Cindy.

LISTNUM 1 \l 15818             Elmer says, and this is where I quote.  He says:

"Local news is where we have hung our hats because, at the end of the day, music is readily available anywhere.  The important thing is the local service and the music is what holds it all together and fills in the off time.  But music is not what drives our business nor our radio stations."  (As read)

LISTNUM 1 \l 15819             MR. McNABB:  So the whole thing here is local news.  Let's take a look at an hour of non‑local time.  See if you have a Focus on the Family, these programs that comprise these 49.5 hours, these programs are heard on radio stations across this country.

LISTNUM 1 \l 15820             And as you know, the Religious Broadcasting Policy identified that our religious programming gets a short shift.  It is marginalized into the late evenings and all nights and Sunday mornings and there is an opportunity for people to get these programs that they know and they love.  So it's just like in a case of an hour of music you get a 10‑song hour and 60 percent of your songs are American and 40 percent of your songs are Canadian, here we have a situation where still a minority of our program hours are American and a majority of our program hours are Canadian.  So I really want to draw that distinction.

LISTNUM 1 \l 15821             And that being said, you take a look at Focus on the Family.  These paid programs are 28 minutes and 30 seconds in length on average.  That means when we run those programs there is going to be approximately three minutes an hour that we can squeeze into a two‑minute newscast.  We are going to do eight minutes on the hour from 6:00 a.m. to 8:30.  We are going to do eight minutes in the noon hour, doing eight minutes during our talk shows.  We are doing eight minutes in drive time.

LISTNUM 1 \l 15822             But in those hours that we have these 28 minute and 30 second programs, there is three minutes there to do some local news and get in a commercial or a promo or what have you.

LISTNUM 1 \l 15823             So these are programs that Canadians are already listening to, already know, already love and that we are just giving them at times that are more convenient to them.  And as a result, we can be highly local because people are going to tune in for the local news.  If they don't like the Canadian or the local or the non‑Canadian program they can go back to their favourite radio station, but they are always going to be coming back for local news, you know, updated every hour.

LISTNUM 1 \l 15824             Does that answer your question okay?

LISTNUM 1 \l 15825             COMMISSIONER del VAL:  I'm just trying to digest it.

LISTNUM 1 \l 15826             So I think ‑‑ is what you are telling me, that when you talk about highly localized what I should really be thinking about is that the local programming that you provide will be highly localized?  What local programming ‑‑ the 69.5 to 75 hours that is what will be intensely local?

LISTNUM 1 \l 15827             MR. McNABB:  Yes.

LISTNUM 1 \l 15828             COMMISSIONER del VAL:  Okay.

LISTNUM 1 \l 15829             MR. McNABB:  And then every hour of those other 49.5 you are going to have intensely local news in between those two programs at the top of every hour.

LISTNUM 1 \l 15830             COMMISSIONER del VAL:  Okay.  So it's just that what you will ‑‑ what you characterize as local will be very, very local?

LISTNUM 1 \l 15831             MR. McNABB:  Exactly.

LISTNUM 1 \l 15832             COMMISSIONER del VAL:  But overall the reality is that there will be a large proportion of the program when you ‑‑ of the station when you look at it as a whole, will be non‑Canadian programming and non‑local programming for reasons we thought we can explore later?

LISTNUM 1 \l 15833             MR. McNABB:  Yes.

LISTNUM 1 \l 15834             COMMISSIONER del VAL:  Okay, good.

LISTNUM 1 \l 15835             MR. McNABB:  But we will still be local every hour, no matter what.

LISTNUM 1 \l 15836             COMMISSIONER del VAL:  Okay.

LISTNUM 1 \l 15837             So that takes us ‑‑ that probably leads us into revenues and financials.  Now, I have a little bit of trouble again reconciling your numbers, and if I'm too slow at that or if there have just been too many revisions we may just ‑‑ I may just ask you again for an undertaking to file the final numbers.

LISTNUM 1 \l 15838             Now, you had a ‑‑ you filed a revised application and ‑‑

LISTNUM 1 \l 15839             MR. McNABB:  I think you have got me confused with another applicant.  I did one application.

LISTNUM 1 \l 15840             COMMISSIONER del VAL:  Okay, I hope so.

‑‑‑ Pause

LISTNUM 1 \l 15841             COMMISSIONER del VAL:  You are right.  That's great, that's good news.  Then I don't have to reconcile these.

LISTNUM 1 \l 15842             Okay, great.  Then I will just go back to your ‑‑ do you want to pull up your overview?

LISTNUM 1 \l 15843             MR. McNABB:  Sure.

‑‑‑ Pause

LISTNUM 1 \l 15844             MR. McNABB:  I have got it.

LISTNUM 1 \l 15845             COMMISSIONER del VAL:  Okay, great.

LISTNUM 1 \l 15846             So let's go to where you talk ‑‑ I think it's page four where you are talking about what we are selling.

LISTNUM 1 \l 15847             MR. McNABB:  Yes.

LISTNUM 1 \l 15848             COMMISSIONER del VAL:  Okay.  Now, I will first try and get a better understanding of what each of those are.  Then, secondly, I would like to know how they actually generate revenue and then, lastly, I sort of would like to reconcile those with the ‑‑ with your financial operations statement that you have filed.

LISTNUM 1 \l 15849             Now, just on page four when you are talking about ‑‑ and you described them in your October 3rd deficiency response, you know, programming that automatically comes with its own revenue.

LISTNUM 1 \l 15850             Now, let's go down to the first bullet of 318,240 in national pre‑produced Christian talk programs at specific primetime.  Now, this is brokered programming, is it?

LISTNUM 1 \l 15851             MR. McNABB:  Correct.

LISTNUM 1 \l 15852             COMMISSIONER del VAL:  Okay.

LISTNUM 1 \l 15853             Now, I know you have got right now not a parent company but your biggest financial backer is EMF or K‑Love in California.

LISTNUM 1 \l 15854             MR. McNABB:  Correct.

LISTNUM 1 \l 15855             COMMISSIONER del VAL:  Right, and they operate some ‑‑ I think two chains of Christian radio stations?

LISTNUM 1 \l 15856             MR. McNABB:  Right, yes, they have over 200 radio stations in the Christian format.

LISTNUM 1 \l 15857             COMMISSIONER del VAL:  Okay.  Is that the source of ‑‑

LISTNUM 1 \l 15858             MR. McNABB:  They are my banker.

LISTNUM 1 \l 15859             COMMISSIONER del VAL:  They are, yes.  And how does that play into the 318,240?  Are you buying the ‑‑ are you selling the time to them?

LISTNUM 1 \l 15860             MR. McNABB:  No.

LISTNUM 1 \l 15861             COMMISSIONER del VAL:  No?

LISTNUM 1 \l 15862             MR. McNABB:  No, K‑Love is providing the ‑‑ or the Educational Media Foundation, EMF ‑‑

LISTNUM 1 \l 15863             COMMISSIONER del VAL:  Yes.

LISTNUM 1 \l 15864             MR. McNABB:  ‑‑ is providing the financing that covers you know start‑up costs as we get rolling along.  But the 318 is revenue that we are selling to Focus on the Family, Back to the Bible, People's Gospel Hour; all these national Christian ‑‑ you see EMF K‑Love is a music‑oriented ‑‑

LISTNUM 1 \l 15865             COMMISSIONER del VAL:  Okay.

LISTNUM 1 \l 15866             MR. McNABB:  ‑‑ network.  They are all music.  Here I am all talk.  It's black and white.

LISTNUM 1 \l 15867             COMMISSIONER del VAL:  M'hm.

LISTNUM 1 \l 15868             MR. McNABB:  And so we sell to national Christian charitable organizations in Canada and in the United States who produce half‑hour shows, quarter‑hour shows based on Bible talk and teaching, and as a result they buy that time from us.

LISTNUM 1 \l 15869             The way they make their money is at the end of the program.  For example, Focus on the Family, let's say James Dobson has Gary Smalley who is one of the most prolific marriage and family authors around, and at the end of the show just say, "And if you would like a copy of Dr. Smalley's latest book, 'The Hidden Keys to a Loving Relationship', for your tax‑deductible gift of $35 we will have it on your doorstep in a week."  And then boom, that's it, nice soft sell.

LISTNUM 1 \l 15870             COMMISSIONER del VAL:  M'hm.

LISTNUM 1 \l 15871             MR. McNABB:  So they sell Christian books, audio CDs and DVDs.  That's how they make their money.  So it's like a direct response but it's not shilling product.  It's just a very soft sell at the end.

LISTNUM 1 \l 15872             If you ever want to get a handle on that, tune into CHRI in Ottawa and just listen to Focus on the Family.  You get an idea of how they make their money.

LISTNUM 1 \l 15873             COMMISSIONER del VAL:  Okay.  Now, is there any ‑‑ will there be any programming where you actually ‑‑ where there will be solicitation of funds from the audience, the listener?

LISTNUM 1 \l 15874             MR. McNABB:  No.

LISTNUM 1 \l 15875             COMMISSIONER del VAL:  Okay.

LISTNUM 1 \l 15876             The 24,700 in local live or pre‑produced local Christian talk programs produced by local church organizations is that ‑‑ that's basically selling them, the local organizations the time slots then?

LISTNUM 1 \l 15877             MR. McNABB:  You bet.

LISTNUM 1 \l 15878             COMMISSIONER del VAL:  Okay.  Yes, you have explained the funeral announcements.

LISTNUM 1 \l 15879             30,000 in commercial for local churches, bookstores, and those will be pure advertising?

LISTNUM 1 \l 15880             MR. McNABB:  Yes.

LISTNUM 1 \l 15881             COMMISSIONER del VAL:  Okay.  And the 12,000 in profits I understand that.

LISTNUM 1 \l 15882             On the ‑‑ are you going to be counting on any of these sources of revenue from Peterborough or only Kawartha Lakes?

LISTNUM 1 \l 15883             MR. McNABB:  Only Kawartha Lakes.  We are trying to bend over backwards to be a collaborator and not a cannibal in the market, for the very simple reason that I have got another application that I am filing with you good people hopefully before Christmas, and I have got to show a good track record of being a corporate citizen so I can get the second licence.

LISTNUM 1 \l 15884             COMMISSIONER del VAL:  Okay.  So I'm going along further down in the overview where you talk about ‑‑ you start with what revenues are budgeted and what is not budgeted.  You have three items that are budgeted:  the $30,000 in commercials, which we have talked about; the $25,000 in funeral announcements, which we understand; and the $12,000 in profit from different concerts.

LISTNUM 1 \l 15885             MR. McNABB:  Yes, and that's a typo, just so you know, because you can see in the financial operations part of the application, and in my column on page 4, that the funeral announcements amount is $65,700.

LISTNUM 1 \l 15886             That is based on historical numbers.

LISTNUM 1 \l 15887             COMMISSIONER del VAL:  Okay.  Then, on your non‑budgeted numbers, on the same page, you have Items 4 through 11, and you are saying "not budgeted", but asking for permission to generate.

LISTNUM 1 \l 15888             None of those ‑‑ you are asking for $25,000 in revenue for commercials for Christian‑owned businesses in Item 4, and so on.  Those are not activities that you need regulatory approval for to carry out.  You don't need our permission to do that.

LISTNUM 1 \l 15889             However, I think what we would like to ask you for is ‑‑

LISTNUM 1 \l 15890             I can only assume that you will carry those out, because there is no prohibition against it.  As a result, if you put those numbers back into your revenue projections, then I would need revised revenue projections, and, in turn, the impact on incumbents, according to your calculations, when you put those numbers back in.

LISTNUM 1 \l 15891             MR. McNABB:  Okay.  I would like to share with you why I asked permission.

LISTNUM 1 \l 15892             It is the old "darned if you do; darned if you don't" scenario.

LISTNUM 1 \l 15893             In 2004 I had the honour and privilege and unmitigated pleasure of being denied by the CRTC the 96.7 frequency because poor old CHUM/globemedia said that big, bad, Andy McNabb was going to come home and beat them up and sell too many commercials.

LISTNUM 1 \l 15894             So I travelled to Ottawa, and I said, "Guys, what do I do?"

LISTNUM 1 \l 15895             I said, "I will tell you what I will do.  I will pull off almost all of our commercials, and we won't go and beg the car dealer to buy us instead of the newspaper, or to buy us instead of BOB FM.  I will pull all of the commercials.  We will leave a smattering on there for Christian businesses, and we will go heavy on Christian talk."

LISTNUM 1 \l 15896             If you are wondering why we have a lot more American Christian talk, it is because Duff Roman and the gang were complaining that I was going to beat him up.  Poor kids.

LISTNUM 1 \l 15897             COMMISSIONER del VAL:  I understand the history behind this, and I know why you are asking for permission, so I guess the other way around it is, say, in the Peterborough market, would you ‑‑

LISTNUM 1 \l 15898             I might be jumping the gun a bit, because I don't know what your plans are yet about Peterborough, whether you intend to broadcast there.

LISTNUM 1 \l 15899             Also, now with the change of the technical approval from Industry Canada, I don't know how much of Peterborough your contour will still cover.

LISTNUM 1 \l 15900             But, in any event, would you accept as a Condition of Licence not soliciting advertising from the Peterborough market, and not offering any Peterborough news or any other local spoken word programming as part of your Kawartha Lakes service?

LISTNUM 1 \l 15901             MR. McNABB:  I would be happy to.  I want to be a collaborator, not a competitor.

LISTNUM 1 \l 15902             COMMISSIONER del VAL:  Thank you.

LISTNUM 1 \l 15903             MR. McNABB:  Just to make sure that everybody is on base here, I am just fine with the revenue items in the income statement as they are.

LISTNUM 1 \l 15904             Because of the brouhaha that resulted in 2004, I said, "Hey, we can go to a car dealer and say, `Tell you what.  We are not going to sell any advertising.  We are going to broadcast each Saturday from your dealership.  Do you think we might be able to sell a car?  You make an average of 2,500 bucks profit when you sell a car.  Tell you what.  We will put up the remote broadcast for free, but we get a $1,000 for every one of our listeners who walks in and buys a car.'"

LISTNUM 1 \l 15905             That way we are not fighting for the scraps, like all media partners do.  We get to own a greater share of the action, and it's no money out of pocket for the car dealer.

LISTNUM 1 \l 15906             Win, win, win.  Win for us, win for the car dealer, win for poor little BOB FM, who is having trouble generating revenue and ratings.

LISTNUM 1 \l 15907             COMMISSIONER del VAL:  Okay.  Great.  That helps.

LISTNUM 1 \l 15908             Help me reconcile the numbers.  I am going to your application, Section 4.1, on the financial operations.

LISTNUM 1 \l 15909             It would help if you pulled that up, please.

LISTNUM 1 \l 15910             MR. McNABB:  Yes, it's right there.

LISTNUM 1 \l 15911             COMMISSIONER del VAL:  If I am looking at the revenues ‑‑ and let's just look at the first year ‑‑ the $318,000 number, I think I can match that to the national brokered programming on your overview.

LISTNUM 1 \l 15912             The $120,000 ‑‑ I just need confirmation of where that comes from.

LISTNUM 1 \l 15913             I added up the rest of those items that you listed on page 4 of your overview.  I think they sort of added up to $120,000, but is that what makes up what you call the local revenue?

LISTNUM 1 \l 15914             MR. McNABB:  Exactly.  Let's break that out.

LISTNUM 1 \l 15915             Programs to local churches, $24,700.

LISTNUM 1 \l 15916             Funeral announcements, $65,700.

LISTNUM 1 \l 15917             And the local direct commercials for the Christian churches and ministries, $30,000.

LISTNUM 1 \l 15918             That comes out to $120,400, to be exact.

LISTNUM 1 \l 15919             COMMISSIONER del VAL:  What is "Contra"?

LISTNUM 1 \l 15920             MR. McNABB:  That is where you trade off.

LISTNUM 1 \l 15921             For example, we will go to the local churches and say, "Listen, we want you to put an ad in your bulletin every single week ‑‑ "

LISTNUM 1 \l 15922             This is the most easily sought out market that you could ever look to target in broadcasting.  We know where our listeners are every Sunday.  They are pretty darned easy to reach and promote to.  It is a wonderfully efficient business model, and it turns traditional radio's business model upside down.

LISTNUM 1 \l 15923             As a result, we can go to the newspapers and say, "Listen, you do your faith page, don't you?"

LISTNUM 1 \l 15924             "Yeah, we do."

LISTNUM 1 \l 15925             "Well, tell you what; let's put an ad for the faith‑based radio station in there, and we will promote the articles you have on your faith page coming up in each issue."

LISTNUM 1 \l 15926             "Contra" is trading advertising for advertising.

LISTNUM 1 \l 15927             COMMISSIONER del VAL:  You have your total revenue for Year 1 at about $500,000 ‑‑ or $501,000.

LISTNUM 1 \l 15928             MR. McNABB:  Yes.

LISTNUM 1 \l 15929             COMMISSIONER del VAL:  Let's flip to the next page, where we are talking about the Statement of Changes.

LISTNUM 1 \l 15930             In Year 1 you show your Accounts Receivable as being over $100,000.

LISTNUM 1 \l 15931             MR. McNABB:  Yes.

LISTNUM 1 \l 15932             COMMISSIONER del VAL:  That's 20 percent.  That seems really high.

LISTNUM 1 \l 15933             MR. McNABB:  It is high.

LISTNUM 1 \l 15934             COMMISSIONER del VAL:  Where did that come from?

LISTNUM 1 \l 15935             MR. McNABB:  The formula in that spreadsheet ‑‑ we assumed that we would be collecting 90 days in the first year, and then we would bring it down over time.

LISTNUM 1 \l 15936             We just thought, being conservative ‑‑

LISTNUM 1 \l 15937             Typically, religious broadcasters do pay extremely promptly.  It's a matter of good stewardship.  But, again, we wanted to put as much conservatism into the cash flow projections as possible.

LISTNUM 1 \l 15938             COMMISSIONER del VAL:  Okay.  And that is from all of your clients, basically, who advertise or buy your slots.

LISTNUM 1 \l 15939             MR. McNABB:  Yes.

LISTNUM 1 \l 15940             COMMISSIONER del VAL:  I have looked at the loan agreement between you and EMF ‑‑ Educated Media Foundation?

LISTNUM 1 \l 15941             MR. McNABB:  Educational Media Foundation.

LISTNUM 1 \l 15942             COMMISSIONER del VAL:  Yes.

LISTNUM 1 \l 15943             There are no terms of default ‑‑ and here is where I am going with this question.  Would you lose control if you defaulted?

LISTNUM 1 \l 15944             I have read the agreement, and it is very carefully crafted, and it says that at no time will anybody do anything to render this offside of the regulations, in terms of control, but it is still a little unusual for a loan agreement to not have terms of default, and what happens on default, and what would be the creditors' rights on default.

LISTNUM 1 \l 15945             The first question is:  Is there any other loan agreement with them that you would intend to enter into, should you be granted a licence?

LISTNUM 1 \l 15946             MR. McNABB:  Absolutely not.

LISTNUM 1 \l 15947             COMMISSIONER del VAL:  If there were one ‑‑

LISTNUM 1 \l 15948             I am not doubting your word, but the world changes.  If there were one, would you undertake to file it as soon as it came into existence?

LISTNUM 1 \l 15949             MR. McNABB:  We would.

LISTNUM 1 \l 15950             But we addressed default and they said no, they are content to ‑‑

LISTNUM 1 \l 15951             When we were drafting this together, they were content to have the mechanism for mediation, which is very much described, in detail, in the agreement.

LISTNUM 1 \l 15952             COMMISSIONER del VAL:  You are not granting any other security?

LISTNUM 1 \l 15953             MR. McNABB:  Zero.

LISTNUM 1 \l 15954             COMMISSIONER del VAL:  I also see from the agreement that the American corporation is taking the maximum number ‑‑ has the right ‑‑ has the option to take the maximum number of shares without going offside the Canadian regulation.

LISTNUM 1 \l 15955             I assume that there will be a shareholders' agreement.

LISTNUM 1 \l 15956             MR. McNABB:  Yes.  If they do exercise that option ‑‑

LISTNUM 1 \l 15957             We are working on a couple of other initiatives that they may want to ‑‑ if they want shares, they may want to put them into that, but that is all down the road.

LISTNUM 1 \l 15958             But, yes, if they partnered with us, without question, we would have to have a shareholders' agreement.  It benefits me, it benefits them, and that would, naturally, be filed, should they exercise that option for the City of Kawartha Lakes.

LISTNUM 1 \l 15959             COMMISSIONER del VAL:  Could you undertake to file such documents, as they come into existence, that are relevant to the operation of your station, or that may relate to the control of your radio station, please?

LISTNUM 1 \l 15960             MR. McNABB:  Control will always be right here.  I have laboured too long, too hard, and suffered too much over 15 years to give anyone else control.

LISTNUM 1 \l 15961             COMMISSIONER del VAL:  What local revenue you are going to derive, how do you think it will impact King's Kids?

LISTNUM 1 \l 15962             MR. McNABB:  Zero.

LISTNUM 1 \l 15963             COMMISSIONER del VAL:  Why?

LISTNUM 1 \l 15964             MR. McNABB:  First of all, their signal doesn't even come into the City of Kawartha Lakes.

LISTNUM 1 \l 15965             Even if we were a Peterborough applicant, I would be saying zero.  Why?  Don't take my word for it, let's talk to Catherine Robertson, who responded in my response to Scott Jackson, in my November 15th filing to his intervention.

LISTNUM 1 \l 15966             Catherine Robertson, by the way, of Eagle‑Com, is the largest buyer of Christian program time in this country, buying millions upon millions of dollars of these half‑hour Christian program times, primarily for the benefit of American charities.  They have found that Canadians just love this programming.

LISTNUM 1 \l 15967             Because our industry is only 14 years old, we haven't had a chance to build a Canadian talk industry yet, and that is why we are doing what we are doing.

LISTNUM 1 \l 15968             Big oaks from small acorns grow, and we are going to start it right in the City of Kawartha Lakes.

LISTNUM 1 \l 15969             Catherine said:  There is no hope in ‑‑ you know what ‑‑ that there is going to be any chance of dollars coming off any other Christian radio station because of all the money they are putting with me.

LISTNUM 1 \l 15970             COMMISSIONER del VAL:  Thank you.

LISTNUM 1 \l 15971             You filed an Appendix 1A, "Combined Statement of Pre‑Operating Costs and Assumptions".

LISTNUM 1 \l 15972             MR. McNABB:  I am there.

LISTNUM 1 \l 15973             COMMISSIONER del VAL:  I see that a lot of your revenue has ‑‑ you show a 15 percent "Agency".  What is that?

LISTNUM 1 \l 15974             MR. McNABB:  That is how Catherine Robertson makes her money.