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Providing Content in Canada's Official Languages

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

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

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

 

 

 

 

 

 

 

              TRANSCRIPT OF PROCEEDINGS 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 /

Diverses demandes de radiodiffusion

 

 

 

 

 

 

 

 

 

 

 

HELD AT:                              TENUE À:

 

Conference Centre                     Centre de conférence

Outaouais Room                        Salle Outaouais

140 Promenade du Portage              140, Promenade du Portage

Gatineau, Quebec                      Gatineau (Québec)

 

May 14, 2008                          Le 14 mai 2008

 


 

 

 

 

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 /

Diverses demandes de radiodiffusion

 

 

 

 

 

 

BEFORE / DEVANT:

 

Michel Arpin                      Chairperson / Président

Len Katz                          Commissioner / Conseiller

Michel Morin                      Commissioner / Conseiller

 

 

 

 

ALSO PRESENT / AUSSI PRÉSENTS:

 

Jade Roy                          Secretary / Sécretaire

Francine Laurier-Guy              Hearing Manager /

                                  Gérante de l'audience

Jean-Sébastien Gagnon             Legal Counsel

                                  Conseiller Juridique

 

 

 

 

HELD AT:                          TENUE À:

 

Conference Centre                 Centre de conférences

Outaouais Room                    Salle Outaouais

140 Promenade du Portage          140, Promenade du Portage

Gatineau, Quebec                  Gatineau (Québec)

 

May 14, 2008                      Le 14 mai 2008

 


- iv -

 

           TABLE DES MATIÈRES / TABLE OF CONTENTS

 

 

                                                 PAGE / PARA

 

PHASE I (Cont'd)

 

 

PRESENTATION BY / PRÉSENTATION PAR:

 

Christian Hit Radio Inc.                          257 / 1405

 

Ottawa Media Inc.                                 304 / 1720

 

Astral Media Radio inc.                           361 / 2035

 

Frank Torres (SDEC)                               407 / 2306

 

Mark Steven Maheu (SDEC)                          466 / 2645

 

RNC Média inc.                                    518 / 2945

 

 

 

 

 

 

 

 

 


- v -

 

                      ERRATA / ADDENDA

 

 

 

 

May 13, 2008

 

 

Page i (cover page) should read:

 

 

"HELD AT:                             TENUE À:

 

 Conference Centre                    Centre de conférence

 Outaouais Room                       Salle Outaouais

 140 Promenade du Portage             140, Promenade du Portage

 Gatineau, Quebec                     Gatineau (Québec)"


                 Gatineau, Quebec / Gatineau (Québec)

‑‑‑ Upon commencing on Wednesday, May 14, 2008

    at 0904 / L'audience débute le mercredi 14 mai 2008

    à 0904

1398             THE CHAIRPERSON:  Good morning.

1399             Welcome to the second day of our public hearing.  I will ask now the Hearing Secretary to make the introductory remarks.

1400             Thank you.

1401             LA SECRÉTAIRE:  Merci, Monsieur le Président.

1402             We will start this morning with Item 6, which is an application by Christian Hit Radio Inc. for a licence to operate an English language FM commercial specialty religious radio programming undertaking in Ottawa.

1403             Appearing for the Applicant is Mr. Turcotte.

1404             Please introduce your colleagues and you will then have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

1405             MR. TURCOTTE:  Thank you very much.

1406             First of all, Mr. Chair and members of the Commission and staff, delighted to be here again.

1407             We've applied, as just was stated, for a licence for a religious FM station to serve Ottawa at the drop‑in frequency at 99.7.  The callsign of CFMO‑FM and a tag of Word FM.

1408             We're going to have a panel here, others will be joining us, they're not all here yet, Mr. Chair, but those that are here I will introduce and make some words.

1409             Fay Chao is a past board member of CHRI and a member of the Chinese community.

1410             Bill Collins, my ex‑partner actually, is a market research consultant.

1411             Bob Du Broy sitting beside me who is on the ‑‑ a director of CHRI.

1412             Rabbi Arnold Fine who hasn't yet joined us who is Rabbi Emeritus of Congregation Agudath Israel.  He's also founding chairman of the Christian‑Jewish‑Muslim Trialogue and is a patron of the Multi‑Faith Housing Initiative.

1413             David Gallucci, just the other side of Bill, one of Ottawa's prominent media sales specialists.  He can answer any questions on ad sales and stuff of that nature after our presentations.

1414             Deborah Gyapong is a seasoned journalist and former television producer, not yet here and will hopefully join us shortly.

1415             Henri Lemay a Catholic lay evangelist and television producer, also not here, he was here yesterday.

1416             At the far end of the table we have Reverend George Desjardins who is a ministry leader, teacher and author.  George was also a past board member of CHRI.

1417             David MacDonald is a Christian recording artist, a radio producer and a specialist in resource access for the disabled.

1418             We have a proposal in front of you that is proposing which we believe is an excellent viable format for which there is a proven demand.

1419             That Word FM would add significant diversity to programming content and news voices in this market is an assertion we make.

1420             That Word FM will not draw revenue away from existing stations we totally believe.

1421             You already know that Ottawa is a robust and growing ad revenue market for radio and meeting these criteria of viability, diversity and not harming existing stations meets your licensing criteria.

1422             We did appear before this body four years ago and, although this application is similar, there are some differences and one is that people like myself are older, some of you may notice that.

1423             So, the whole population is aging, as you know, from your demographics.  We believe that builds the case for Word FM.

1424             We've submitted a new technical brief and programming requirements and we encourage you to read the transcripts from the December meeting when our initial application was heard.

1425             That application received almost twice as many original letters, 565, as any of the applicants did.

1426             There are a number of appendices we put on this one.  They are a recasting, in fact, of information previously input to the Commission and the purpose of recasting is to hopefully make it easier to understand what we're saying.

1427             Appendix 1, we provided quotes of the seven presentations of the interveners on the programming desires they expressed at that hearing.

1428             Two questions were raised in 2004 that we'll address more thoroughly today.

1429             First, how are we going to promote balanced programming to the target audience?  Secondly, how would we ensure compliance with CRTC's open‑line policy?  This will be covered, as I say, later.

1430             Our existing contemporary Christian music station in Ottawa, CHRI, has established Christian Hit Radio as a responsible, successful broadcaster in our 11 years on the air.

1431             We're the only locally owned and operated commercial station in Ottawa.  We are present at many, many community events.  We provide a showcase for Canadian musicians of Canada and Ottawa on the air and on stage by sponsoring over 100 concerts and 300 international festivals.

1432             We partner with local and national charities like Ottawa Intercity's Ministries and Compassion Canada to help the poorest of the poor.

1433             We run about 80 free public service announcements for charities at any given time.

1434             CHRI‑FM has become a wholesome radio option for young families.  CHRI‑FM is great at reaching young adults with contemporary music.

1435             But there's another half of the faith community which I represent, that other half that wants to hear more traditional content, spoken word religious programming, spiritual music, current affairs programming.

1436             This is currently not offered by radio in Ottawa, but tens of thousands of more mature people like myself want to hear it.

1437             Christian Hit Radio Inc. knows this market and we're ready to deliver the programming that these people want.

1438             Toronto, Montreal, Kingston and  Vancouver now get this kind of programming from U.S. stations.  You'll see this in Appendix 2 which hopefully, as I say, is recast to make it readily understandable.

1439             Appendix 3 and 4 show that U.S. cities the size of Ottawa, half a million to 1.3‑million are typically served by four plus Christian radio stations, each usually serving a different age segment.

1440             Fifteen of those 24 cities are outside what's commonly called the Bible belt and even those 15 average more than four.

1441             In addition to the five cities served by both American and Canadian Christian stations in Appendix 2, there are four cities listed in Appendix 5 that are served by two Canadian Christian stations each.

1442             Touch Canada reports that each of its two Calgary radio stations has a weekly cumulative audience of 60,000.  We're here hoping that Ottawa will be added to that list and be the next one with two Christian radio stations.

1443             I'll now turn the microphone over to Bob Du Broy to tell us more about the format and the market.

1444             Bob.

1445             MR. DU BROY:  The U.S. experience is an indicator of the success that Word FM will have in future if licensed.

1446             The first thing that jumps up from Appendix 6 is that the U.S. has about 7.4 Christian stations per million people, if you consider the U.S. population is about 300‑million people, while Canada has 1.2 at a Canadian population of 31‑million, and Australia with its 68 Christian stations has twice our number of Christian stations per capita.

1447             So, we have some catching up to do it seems if we want to come up to a world standard.

1448             The next striking thing is that only about a quarter of the 39 Canadian stations have teaching and traditional music formats similar to what we're proposing for Word FM.

1449             In contrast, three quarters of the U.S. stations have teaching and traditional music formats such as what we're asking for Word FM.

1450             That format has a proven track record of financial success and attractiveness to Christian audiences, yet few English language Canadian stations have adopted it.

1451             The U.S. Arbitron data in Appendix 7 shows that the 45 plus age group prefers the traditional religious format proposed by Word FM, whereas the 18‑44 age group prefers the CCM format of our existing station CHRI‑FM.

1452             Appendix 8 illustrates that Ottawans and Canadians are on average older than Americans.  Based on age, the traditional religious format that we're proposing should attract an even larger audience here than in the U.S.

1453             On a personal note, most people who will enjoy Word FM are active, healthy and happy, such as those representatives you have here on our panel.

1454             However, many people will turn to the station as a source of solace and encouragement during difficult times.  An example of my parents alone, when they were dying of cancer at the Bruyerè Centre and at the Montfort long‑term health care facility, all of their abilities left them over a period of several months, but they would still respond to familiar prayers and to the hymns of their youth.  Word FM would have been a comfort to them, day and night, during that difficult time.

1455             Now, my mother‑in‑law faces a prolonged decline from Alzheimer's Disease and I'm hoping that Word FM will be there for them.

1456             Bill Collins will tell us more about the demand for this kind of radio.

1457             MR. COLLINS:  We've shown that Word FM's proposed teaching and spiritual music format would flourish given Ottawa's size and age distribution in comparison with U.S. radio markets.

1458             We've also shown that at least nine Canadian cities sustain more than one faith‑based radio station.

1459             Now, I'll zoom in on the demand for Word FM in the Ottawa market.  A market study of Ottawa's church‑going households by my firm, equal‑IT Consultants Inc., which was included in the Word FM application in 2004 indicated that although some older listeners would transfer their listening time from CHRI‑FM to Word FM, total hours tuned across the two stations would be expected to double, some at the expense of CBC Radio.  In light of CBC Radio Two's announced reduction in orchestral programming, we can expect that Word FM's sacred classical music programming would attract an even greater audience.

1460             Appendix 9 shows that there is a large church‑going population in Ottawa above 45 years of age, more so than between 15 and 44.  This means that Word FM has a potential audience at least as large as CHRI‑FM.

1461             Getting back to age categories, we have found that the 45 plus age group which represents about half the adult population and growing is served by only five of the 30 radio stations heard in Ottawa.

1462             Appendix 10 also shows that according to Arbitron, 12 to 44‑year‑olds are one and a half to four times more likely to use new media like iPods and subscription radio than the 45 plus group.

1463             Word FM would have little competition from existing stations and new media.

1464             As we have demonstrated in our application documents, the 45 plus group has even more characteristics that appeal to Word FM.  The 45 group is far more likely to donate money and time and is more generous with those donations than younger age groups.  We also have more opportunities.

1465             The 45 plus group also listens to more radio than younger groups, which is surprising, given that fewer stations target them.

1466             Now, let's look at the future.  The Ontario Department of Finance projects that the 45‑64 and the 65 plus age groups are the only ones to grow in Ottawa over the next 23 years, even taking into account generous assumptions about immigration.

1467             This is in Appendix 11.  The future is gray and that is good for Word FM.

1468             We believe that Word FM is the most effective use of 99.7 FM.  In Appendix 12 we counted 780 letters in support of Word FM.

1469             This is more than any other applicant before you in these proceedings and is a strong indicator of market demand.

1470             The introduction of CHRI‑FM into the Ottawa market 11 years ago demonstrated that adding a Christian music station to a city's media mix enlarges the advertising pie and does not take revenue away from existing stations.

1471             It does this in two ways:  by increasing total hours tuned from previously unserved listeners, and by attracting affinity advertisers that agree with the station's wholesome sound.

1472             Word FM would go one step further.  Its main commercial revenue source would be from air time buys from syndicated programs, local churches, private donations.

1473             I'll turn it back to Bob and he'll tell us some more.

1474             MR. DU BROY:  In Appendix 13 we have one program distributor that's offering to put a lot of programs, eight in fact, on the air at about $120 per half hour.  Other perspective distributors have shown an interest.

1475             In Appendix 14 we have other Canadian shows ‑‑ shows that are broadcast in Ottawa but not yet ‑‑ sorry, in Canada but not yet in Ottawa that are willing to come on board, it seems because they're in Canada already.

1476             We're proposing substantial locally produced programming, that is in Appendix 15, and we're also developing all kinds of news provider relationships which I can tell you about now.

1477             Radio Vatican is one and there are several others beyond broadcast news.  News and current affairs programming would be delivered in a locally produced segment between 6:00 a.m. and 6:30 a.m., repeated 6:00 p.m. Monday to Saturday.  We would also have a 15‑minute segment from the Vatican World News Service which is similar to BBC's World News Service.

1478             Zoom, a program from Salt + Light, Canada Watch Radio and Family News in Focus would also be added to the news package and in drive hours we would have locally produced headline news for three minutes, sports and weather at the tops of hours as well as PSAs at the bottoms of hours.

1479             David MacDonald now is going to talk to us about the impact Word FM will have on listeners' lives.

1480             MR. MacDONALD:  So, CHRI has done a great job at promoting Canadian talent in the contemporary area of music and Word FM will do the same for Canadian traditional praise and worship, southern gospel, liturgical, inspirational artists.

1481             You find a list of such artists in Appendix 16.

1482             Word FM would do this through air play, sponsoring concerts, contributing to the charts, just like CHRI‑FM is doing for contemporary artists right now.

1483             CHRI has consistently exceeded Canadian content requirements for specialty music and Word FM plans to do the same.  It will help Canadian artists, it will help me as a Canadian artist.

1484             I was on Broadway, I was in the U.S. national tour of Cats.  I lost everything because of alcoholism and it was a Christian message that put me back on my feet.

1485             And my brother who was a successful director in the government, I can't help but think that the morning that he committed suicide, it would have meant ‑‑ perhaps if he had turned on the radio and heard a message of hope that was geared to his age group, a message of inspiration, maybe he would have made a different decision that day.

1486             We have old people all over this city who are isolated, who are coming from broken families, divorce, loss of a spouse, addiction rates, alcoholism rates soaring among this community, a lot of them can't get to church and they'd like to.  These are people who we need to reach out to through the media.

1487             And I believe that Word FM will give them a message of hope that we need on Ottawa's airwaves.

1488             And now I'll turn it over to George who will talk about our proposed open‑line show which is called Converse.

1489             REV. DESJARDINS:  We propose a weekly call‑in show from 7:30 to 8:30 a.m. that would allow listener participation.  This is important on an information rich station like Word FM because it would engage the audience.

1490             It would also allow listeners to express their opinions on the topics of the day.  And, thirdly, it would allow the audience to dialogue on differences between denominations and religions that would emerge in other Word FM programming.

1491             Music would be played between calls, perhaps sometimes live by guest musicians.

1492             Other guest hosts could be civic, business and religious leaders including non‑Christian leaders.

1493             To comply with the CRTC's open‑line policy, Public Notice CRTC 1988‑213, Word FM will implement appropriate operator training and technology.

1494             First, station management will require that both the on‑air host and the operator must be familiar with the policy through formal training before working on the show.

1495             Second, the policy will be prominently displayed in the studio.

1496             Third, the host will remind the audience of the policy over the air at least once a month.

1497             Although not required by the CRTC, the station will have a profanity delay device such as the Symetrix 610 or the Eventide BD‑500 so that the host or operator can catch and stop any abusive comment from a caller, a guest or the host before it goes over the air.

1498             Fay will tell us more about programming Word FM plans to produce in other languages.

1499             MS YEN‑HUI CHAO:  We have received several proposals from the community for programs in languages other than English.  These programs will cover events, interviews with authors and artists, current affairs and religious instruction, in particular, weekly programs in French, Arabic, Cantonese, Mandarin and Spanish have been proposed.

1500             Appendix 17 indicates the significance of these language groups in Ottawa.

1501             Appendix 18 gives the distribution of Chinese population by religion in Canada and Ottawa.

1502             And Rabbi Fine has more to say about the populations.

1503             RABBI FINE:  As you'll see in Appendix 19, adherents to non‑Christian religions make up about 7.35 per cent of the population of Ottawa.  This is a population that religious broadcasting policy would expect Word FM to reflect, the challenges to make multi‑faith programming instructional and attractive to the station's main audience of Christian listeners.

1504             Judaism plays a special role in the identity of Christians and to members of other mono‑theistic faiths such as the Muslims.  A daily program on the Jewish Bible and culture would therefore have the broadest market appeal within and outside the Christian community.

1505             I currently host the weekly program Reflections on the Torah on CHRI‑FM.  We examine the weekly readings of the Torah and comment on.  We plan to expand the vision of the show and to run it six days a week on Word FM.

1506             A proposed 15 minutes daily program called The Ancient Faiths would have a broader religious scope.  Local Muslims, Buddhists, Hindus and Sikhs and Jewish religious leaders would be asked questions like:  What is Heaven?  How do you live a life pleasing to your God?, and to Describe your sacred readings.

1507             Word FM would run Jewish programming and the ancient faiths almost daily.  Word FM has committed to air a minimum of 7.5‑hours of balanced programming every week as a condition of licence.

1508             To ensure that balanced programming reaches its intended audience and enlists their participation, Word FM is forming a multi‑faith programming advisory committee to schedule interview guests for the ancient faiths and provide topics, scheduled guest panelists for one episode a week of a live call‑in show and proposed topics, provide a sounding board to ensure that other station content producers are sensitive to multi‑faith issues and to prepare promotion campaigns to get these programs known by their intended audiences.

1509             I must tell you that the advisory committee is already ‑‑ we've started, we've talked to a few members of the leadership of various communities and two at least have now bought into the idea.

1510             The advisory committee would meet formally at least twice a year and would dialogue informally several times a year.

1511             Word FM would also examine multi‑faith issues in its newscasts.

1512             And now Gerry will give our concluding remarks.

1513             MR. TURCOTTE:  So, what we've tried to present, Mr. Chair, is a picture of a working group, CHRI Inc., that is putting forward a proposal to create a new station that hits a demographic that is there, that looks totally viable from any business perspective I have and we encourage you to approve this application.

1514             Thank you.

1515             THE CHAIRPERSON:  Thank you very much, Mr. Turcotte.

1516             Well, thank you.

1517             I appreciate particularly your Appendix 19 where your catalogue have been put with Christians because we have a tendency at public hearings where we deal with Christian broadcasting but catalogues were not part of the Christians, so...

1518             MR. TURCOTTE:  We are a little different.

1519             THE CHAIRPERSON:  Commissioner Katz will ask you the first questions.

1520             COMMISSIONER KATZ:  Thank you, Mr. Chairman.  And good morning.

1521             In reading your application, it strikes me that one of the most significant bases for your application is the need to divide your audience, the fact that you have got a bifurcated audience, you have got those people that are 45 or over and the youth as well.

1522             Is there no other way of reaching the two audiences other than having a separate radio station for them?

1523             MR. TURCOTTE:  Not within the constraints of a 24‑hour day.  In other words, you've got the audience that you're targeting now and they take most of that space.

1524             COMMISSIONER KATZ:  Do you not find that the youth focus on certain hours of the day or week while adults focus on a different time of day and week?

1525             MR. TURCOTTE:  If I could just speak as an older person.

1526             I used to stay up when I ran the communications research centre until one o'clock every morning, get up at six o'clock and go to work.

1527             I still get up at six o'clock, but I tell you, I go to bed at 10:00 now.

‑‑‑ Laughter / Rires

1528             MR. TURCOTTE:  So, the time when we think that the elderly are available, in my experience, is marginal.  I'm sure there are some that can't sleep at night, et cetera, et cetera.

1529             And you're quite right that there's always a struggle as to what programming goes in what time slot.  And perhaps David could add a comment from the artist's point of view.

1530             MR. MacDONALD:  Yeah.  You know, in the 60s, you know, you'd have one black artist and everybody'd go, you have your star already, you have your black artist, that's it, you know, we're not ‑‑ what do you need another artist for, you know, you have one?

1531             And I can see the same sort of kind of thing here is, you know, Christians ‑‑ you know, Christians are not just one little pack of, you know, all huddled in a corner of society, we're out there in the world and living, you know, many different kinds of lives demographically and attitudinally and all kinds of things because of our age.

1532             And, so, I don't know but, you know, I hang around a lot of Christian youth and I can tell you they're a lot different than Christian adults, the same as youth in the general population.

1533             So, I honestly think that sort of the idea of only having just one little station with all these people huddled in the corner is kind of like the idea of the old days when we could only have one black rock star.

1534             COMMISSIONER KATZ:  But would the teachings be different of an ethnic culture, whether you are talking or appealing to people that are 45 or 50 versus the youth that are 18 to 25?

1535             MR. TURCOTTE:  If I could answer that question, Mr. Commissioner.

1536             Ottawa is a very sophisticated radio market and more and more we're seeing more and more specialized formats, so we're not just talking about adult contemporary music, it could be hot adult contemporary music or Triple A music or fine slices of gray.

1537             And the same is the case with the Christian market.  We've demonstrated in our numbers there are huge numbers of Christians in Ottawa.

1538             Statistics Canada finds that 29 per cent of Canadians are very religious and that's a large part of the population.

1539             To try to meet very diverse needs in a large population with one station is very difficult.  It's standard programming wisdom to deliver one format to one audience, and when you have a significant audience, target that audience and go with it.

1540             If you try to spread several formats over a station, you weaken total listenership because people will tune in at the time when programming doesn't interest them, brand the station that way and never come back.

1541             I spoke to Malcolm Hunt, who was the program director for a network of stations, Touch Canada, five stations that they operate mostly in Alberta and British Columbia.  They have two stations in Edmonton, CJCA and CJRY‑FM.  CJRY‑FM is the contemporary Christian music station.  CJCA is the teaching and southern gospel station that reaches the older demographic.

1542             He is adamant about this, that this is the right way to go.  You cannot have a hybrid station, that he calls it, and program it properly, having teaching programs and traditional music programs on the same station as essentially a Christian rock station.

1543             Again I will reiterate, if you permit me, if somebody tunes in at the wrong time, if Gerry were to tune in during the rock block on CHRI at 9:00 p.m. Friday, his ears will be ringing and he will not come back.

1544             One of the people who funded CHRI at the very beginning, her name is Zita Hagan.  That was 12 years ago.  When we went on the air 11 years ago, I turned on the station for her ‑‑ this lady was over 65 years of age ‑‑ to show her this is what your money has done.  There was a rock song on the air and she sort of smiled politely and said oh, that's very nice.  But you know that is not very nice for her.  Whereas if a teenager tunes in at 1 o'clock in the afternoon and hears Insight for Living on CHRI, which unfortunately is one of the accommodations we have made to try to get a few teaching shows on the air, they will just be bored to tears and again maybe never come back.

1545             So this is the reality we are facing.

1546             There are at least two distinct markets, probably more, and large ‑‑ well, in Ottawa sized markets in the States, as we have shown, there are four Christian stations to serve these markets, even places like Boston where there is a large Catholic population.  So this is not just a Bible Belt phenomenon.

1547             Because of the need to target a market with targeted programming, there really is a need for at least two stations in Ottawa.

1548             David Gallucci is a media sales specialist and he can certainly address this.

1549             MR. GALLUCCI:  Mr. Commissioner, I would like to comment on advertising revenue, ad building and promoting our stations.  With the WORD‑FM teaching style and demographic reach and our target audience skewing 45 and higher, it will attract a totally different and more unique advertiser and advertising strategy for the advertiser.

1550             We are very professional in our approach, in our sales and marketing team structure and we are targeting to build and direct our advertisers to the proper programming and mix of advertising.  We feel that a lot of advertising will be new ads and different advertisers that CHRI is presently receiving, although some of course will enjoy both stations.

1551             If I can give a good example, Broyhill Furniture, a very popular and high‑end quality brand that he sells, he also has medium prices to attract the younger, new younger families, but he has the highest end that is available as well to attract maybe the retired, maybe the middle‑aged person who has a little more disposable income to invest as well.

1552             Now, again back to the different demographic of WORD‑FM, when I worked in Calgary, Alberta for 10 years, I was in my early 20s, mid‑20s, and I enjoyed and loved the teaching programs we received out of one station in High River, south of Calgary, and another one came out of Red Deer, and then the odd time we would pick up an Edmonton station.  Here I am a young adult, active and energetic working for the Calgary Sun Newspaper, a very 18‑to‑49 age level readership and flashy style compared to the Calgary Herald, which is like the Ottawa Citizen.

1553             My point I want to make is that I was young and I had a lot of Christian friends in our church that tuned in to these teaching programs that we picked up in Calgary and we loved them:  Focus on the Family, Chuck Swindoll, all these famous theologians and writers and producers.  They taught us a lot of things.  We learned a lot.

1554             Now, CHRI is a little different.  It has fantastic music, also some teaching programs in the early afternoon for three hours.  That is very limited.  But it has a total mix of all the items that were mentioned, the public service announcements, the ministerial associations and the terrific works in helping in every way they can to the poorest with their reach and their message.

1555             Advertisers enjoy that station.

1556             We would get a different advertiser slightly skewed higher on WORD‑FM.

1557             Now, if I could also mention I have been with the Toronto Sun, Sun Media Corporation, for 27 years.  We produce print and publish Forever Young.  We don't own it, but we publish that newspaper.

1558             We also have 50 Years Plus, we have Capital Parent.  There are many other publications that are skewed to a higher demographic, full of different types of advertisers in there: travel, homebuilders, automotive, all levels of retail.

1559             Again, it is a huge, enormous level and choice of different types of advertisers that I feel and we all agree that we will build revenue from, that are not currently on CHRI.

1560             COMMISSIONER KATZ:  I'm not questioning that.

1561             MR. GALLUCCI:  Sure.

1562             COMMISSIONER KATZ:  The point I was trying to make is it comes down to scheduling, and certain people watch at certain times.  I understand if the wrong person turns into a rock music, they may never come back again.

1563             MR. GALLUCCI:  Right.

1564             COMMISSIONER KATZ:  But that just ties into scheduling, promotion and advertising, no different than the CBC.  Some people want to watch hockey games and they will tune into the Stanley Cup and they won't watch local news or anything else.  Others only watch local news and never watch sports.

1565             MR. GALLUCCI:  Sure.

1566             COMMISSIONER KATZ:  I was trying to see whether there was a distinction there within the radio industry for your sector, and what I am hearing you telling me is the answer is no.

1567             MR. GALLUCCI:  Well, there is a distinction.  If I could answer, there is a difference in the content of each station, there is a big difference.

1568             COMMISSIONER KATZ:  Can I take you to your submission of January 17, 2007, if you have it.  If not, I will read you a couple of excerpts of it.

1569             It went with your application itself and on the second page of it there was a comment under "Viable" where it reads:

                      "CFMO‑FM will make efficient use of CHRI‑FM existing infrastructure to control costs."  (As read)

1570             And I will come back to that statement in a minute.

1571             The next sentence reads as follows:

                      "CFMO‑FM will efficiently exploit an otherwise unusable frequency by carefully locating its transmitters to optimize."

(As read)

1572             What do you mean by "otherwise unusable frequency"?  It sounds like you are saying that no one else can use it.

1573             We have a number of applications here by other folks as well who were looking for this frequency.

1574             So is there an implication here that I don't understand?

1575             MR. TURCOTTE:  Bob will speak to that.

1576             MR. DU BROY:  That was a slip of the keyboard.  It is a drop in frequency definitely.  Right now ‑‑ well, before info radio services or information ‑‑ Instant Information Services was on the air in Ottawa, you could hear The Bear's Pembroke repeater here in Ottawa if you were driving around that 99.7.

1577             So clearly 99.7 is a drop in frequency; there are restrictions on it.  You can't do too much with it for fear of the signal spilling over and getting into The Bear's protected territory farther north in the Ottawa Valley.

1578             So when we came up with our original technical brief, working very closely with our engineer on what the parameters are and what the target market was, we found a location for our transmitter that we thought just couldn't be matched otherwise for population coverage, for protecting The Bear and for reaching the market we wanted.

1579             So at that time, not seeing other technical briefs, it appeared that we made the most effective use of that frequency.

1580             Evidently now there are other proposals and some have had to negotiate with The Bear.  So I think that is where that situation is.

1581             COMMISSIONER KATZ:  Okay.  And then on that same page where you talk about "CHMO will add programming diversity to Ottawa" and you talk about your current listeners and you say, towards the end:

                      "CHRI current programming is 82% youth oriented contemporary Christian music, which would increase to 96% after CFMO‑FM would go on the air."  (As read)

1582             Which leads one to believe you would transition those people to the new radio station.  That would cause you to lose listeners on the home station CHRI.

1583             MR. DU BROY:  If it were a zero‑sum game, that's true, but it's not a zero‑sum game.

1584             As they demonstrated in Edmonton, by having targeted formats, you increase audience on each station.  So we fully believe that CHRI‑FM would attract more people by removing the programming aimed at older people and CFMO would pick up more than that many.  We would end up with a much happier end result.

1585             COMMISSIONER KATZ:  What is the current financial status of the home station, CHRI, right now?

1586             MR. DU BROY:  It's viable.

1587             COMMISSIONER KATZ:  It's viable?

1588             MR. DU BROY:  Yes.  It's solvent.

1589             COMMISSIONER KATZ:  It's generating a PBIT margin that is in keeping with industry norms?

1590             MR. DU BROY:  We would like it to do better.

1591             One of the difficulties on that station again is because ‑‑ introducing the teaching programming was supposed to be an interim strategy, as sort of an introductory offer to let people know what we would produce on CFMO.  But that interim has turned into close to four years now because our last application was in 2004.

1592             So that I feel has eroded our listenership.

1593             COMMISSIONER KATZ:  All right.

1594             When I look at the economic data that you filed, I think you are one of the few applicants who filed what I consider to be a very bold budget where your profitability shows up in the very first year and grows quite healthy over the seven‑year term.

1595             MR. DU BROY:  Indeed.

1596             COMMISSIONER KATZ:  You get very few businesses that walk in on day one with this strong a financial position.

1597             I want to explore with you both the revenue side of this thing and the likelihood of achieving these revenues ‑‑ and I guess there is someone here who will speak to that ‑‑ but also the overlap between some of your costs, I guess, and one of the statements that again you made in your filing of January 17th where you said:

                      "CFMO will make efficient use of CHRI's existing infrastructure to control costs."  (As read)

1598             That leads me to believe that the current operation has some excess costs or you are going to find some very creative ways of leveraging what you already have without incurring any additional costs.

1599             MR. DU BROY:  Sorry, Mr. Commissioner, that sentence really was referring to the incremental additional costs of a second station, not controlling costs on the current station.

1600             COMMISSIONER KATZ:  Okay.

1601             MR. DU BROY:  What it does mean is that economies of scale in a lot of areas, in administration and use of technical resources, even our contracts with engineers, sales people, accountants, would be then spread over two operations rather than one, and a lot of them would involve no additional cost.  Some of them would involve just a marginal additional cost to add the services for a second operation.

1602             COMMISSIONER KATZ:  I will come back to the revenue side of it in a minute.

1603             In looking at the results for CHRI ‑‑ and I know they are confidential so I won't release any data.  But when I look at your financials, there is roughly 75 or 80 per cent of your total costs lumped into one category called "Administration and General".

1604             So you have X amount of dollars in total expenses and roughly 80 per cent of that in one line called "Administration and General", and then you have some costs spread across "Programming", "Technical", "Sales" and "Promotion".

1605             What is "Administration and General"?

1606             MR. DU BROY:  This is for CFMO?

1607             COMMISSIONER KATZ:  For CHRI.

1608             MR. DU BROY:  Now, we didn't submit that in this application, did we?  That's outside of the application?

1609             COMMISSIONER KATZ:  Well, it is part of the leveraging of the two businesses together.  You are talking about using your economies of scale and leveraging, and so I want to get a sense of what's in here just so I understand how you are going to use some of this in your new application.

1610             MR. DU BROY:  But, Mr. Commissioner, you are referring to the application document we filed.

1611             COMMISSIONER KATZ:  I am referring to the application document you filed and some of the information that we have on record that you have filed yourself ‑‑

1612             MR. DU BROY:  Yes.

1613             COMMISSIONER KATZ:  ‑‑ perhaps not as part of this specific application but as part of your annual reporting obligations.

1614             MR. DU BROY:  Yes.  These are categories that are pretty standard, so it would be hard for me to tease those out.  I'm not a professional ‑‑

1615             COMMISSIONER KATZ:  I'm not actually after dollars.  All I want to know is what goes in there.

1616             MR. DU BROY:  General administration.  I would imagine a great deal of office rent, hydro, water.  I believe salaries go in there as well.

1617             COMMISSIONER KATZ:  Maybe you can look into it and if there is some way where they can let us know what is in there?

1618             MR. DU BROY:  Yes.

1619             THE CHAIRPERSON:  Well, I ‑‑

1620             MR. DU BROY:  This is a standard category, sorry.

1621             THE CHAIRPERSON:  There are two other phases where the applicant is authorized to appear, so they could provide a reply at that time.

1622             If you have chosen not to reappear, you could always file it in writing, but we will want to have it by the end of the day tomorrow at the latest.

1623             MR. DU BROY:  All right, I can obtain that.

1624             COMMISSIONER KATZ:  Thank you.

1625             MR. DU BROY:  But again, these are our standard accounting categories.  The CRTC most likely somewhere has a list of the details behind those line items.

1626             COMMISSIONER KATZ:  No, I mean they are standard accounting lines.  The issue is when we or when I look at other radio stations, I don't find a disproportionate amount of costs or expenses in that line itself.  It is usually spread across all the other categories:  technical, programming, sales and promotion.

1627             MR. TURCOTTE:  We will accept your suggestion we take it off‑line, but it is a small station and that's why.  I have asked the same question when I was Chair.

1628             MR. DU BROY:  Excuse me.

1629             Mr. Commissioner, when I was at CBC, for example, when all the numbers were rolled up, it seemed that human resources made up 50 per cent of the operating budget, very close to that, and that is very close to what we have seen in other broadcast operations as well.

1630             So I guess it shouldn't be too surprising that administration and general, if it includes labour, would be a large number.  But we will take it off‑line.

1631             COMMISSIONER KATZ:  Okay.

1632             MR. DU BROY:  I will submit it tomorrow.

1633             COMMISSIONER KATZ:  Can we move to the revenue side now of your current application.

1634             MR. DU BROY:  Certainly.

1635             COMMISSIONER KATZ:  Perhaps you can speak to some of the forecasts of revenue, in particular the objective of significant national revenue, which is unique to this sector as well, based on our experience across the country and the data that we have that you may not have as well.

1636             But this certainly is a unique situation where 50 per cent of your revenue is going to come from a national program, sales program.

1637             So perhaps you can expand upon that?

1638             MR. DU BROY:  Absolutely.  In fact, this is very conservative.  We would expect that national program sales would amount to far more than 50 per cent of the total revenue budget.

1639             National ads on conventional radio stations, especially local stations without a large national presence, would, as you say, in our estimation would probably amount to about 10 per cent of total ad sales and that has been our experience at CHRI, pretty close to it.

1640             There are a few large national advertisers like Compassion Canada and a few other of our clients that make up a good chunk of our revenue, but it has not exceeded 10 per cent of total sales.

1641             But the business model for a teaching and hymn station is very different.  The majority of the revenue would come from national programs.  These are our long‑form teaching programs that would buy air time in chunks of 15 or 25 minutes at a time.

1642             And because over 50 hours a week of the schedule would be paid time of that nature, that's why the national programs line is so large.

1643             COMMISSIONER KATZ:  Do you get any national revenue today for CHRI?

1644             MR. DU BROY:  I don't know if we break it out by advertiser, but we do break it out for national programs; and we do, yes.  It is over $100,000 a year.

1645             COMMISSIONER KATZ:  Okay.  Again, the information that I have in front of me here that is your filing, I believe, indicates that for CHRI there was none in the last several years and it is all categorized under "Local Time Sales".

1646             So if there is a reporting issue here, it might be worthwhile knowing that as well.

1647             MR. DU BROY:  Is most likely a reporting issue.  It is possible that our accountant can't distinguish between a national advertiser and a local advertiser.  I have an idea of the client list so I know that.

1648             But certainly programs should be distinguished from short form ad sales, and I guess our accountant just hasn't broken out the detail.

1649             COMMISSIONER KATZ:  I guess the question I'm asking is ‑‑ and if you are telling me it is an allocation problem, that is a different story ‑‑ is what experience do you have with national advertising sales, given I have seen none of it in your current operations?

1650             So what I need is some warm and cuddly as to your experience, your ability to deliver, your machinery of operations, sales, promotions, advertising, whatever.

1651             MR. DU BROY:  Well, I can let you know right now we are dealing with at least two large program distributors in Canada, C. Reimer out of Winnipeg and Eagle‑Com out of Delta, British Columbia.  They are buying time on the air, plus a couple of other smaller distributors, totalling 17 hours a week, which unfortunately makes CHRI‑FM the hybrid station that we don't want to be.

1652             But yes, we are dealing with program distributors.  We have good relationships.  These are national programs and we have significant national program revenue now.  So we have good relationships with those distributors.

1653             COMMISSIONER KATZ:  Okay.  I want to come back now to local programming and news.  Perhaps you can give me some indication as to the total number of pure news you will be broadcasting during the broadcast week?

1654             MR. DU BROY:  There is an appendix that addresses that.

1655             Appendix 21 goes over some of the conditions of licence we agreed to in response to deficiency letters.

1656             So the expected number of pure news hours for programming week ‑‑ well, actually the news programming hours is 12.5, but those include news packages that include sports and weather.

1657             COMMISSIONER KATZ:  Is there any way of breaking that out so we know what the pure news is distinct from the sports and what we call the other substantial issues?

1658             MR. DU BROY:  Eighty percent of that would be pure news, so at a very minimum 10 hours per week would be pure news.

1659             COMMISSIONER KATZ:  Okay.  You also ‑‑ and I guess maybe this is more of a confusion that I had, or some of the staff had as well.  The broadcast week is 126 hours and in some places there was reference to 168 hours, which is 24/7.

1660             So the question of 8 per cent of news being committed to, is that based on 24/7 or 18/7?

1661             MR. DU BROY:  Is based on the broadcast week.

1662             COMMISSIONER KATZ:  Based on the broadcast week.  Thank you.

1663             You focused on live to air programming as well in your application.  Can you expand upon it as well and explain perhaps how money hours the broadcast week will be live to air?

1664             MR. DU BROY:  At a very minimum, we would have a one‑hour weekday open line show that would definitely be live to air, with the accommodation of the time delay box.

1665             Beyond that we would have a live announcer who would introduce the morning programs, so essentially a program jockey or PJ who would allow the listener to feel they have a companion there with them.

1666             COMMISSIONER KATZ:  Okay.  I noticed and I think you mentioned CHRI as well having some degree of programming that overlaps with yours as well.

1667             I think you indicated that you would provide the best programming diversity in the market.

1668             Can you expand upon how you see your slate, your programming lineup as it relates to CHRI?

1669             MR. DU BROY:  There would be a transition time no doubt when we would be sending the teaching programming listeners of CHRI‑FM to WORD‑FM.  But ultimately if we adopt the programming philosophy of Malcolm Hunt on Touch Canada, for the Touch Canada network, ultimately CHRI‑FM would be almost entirely musical programming and WORD‑FM would be the teaching and hymns format.

1670             After the transition period, if the CHRI‑FM management decides they want to retain some of those teaching programs, there would still be no duplication.  We would have a very distinct program lineup on each station.

1671             Focus on the Family seems to want to stay on CHRI‑FM, because CHRI‑FM is reaching a lot of 30‑year‑old females that Focus on the Family wants to reach.

1672             Now, we have to decide whether we want to do what the client thinks is best or what we as programmers think is best, so we haven't quite resolved that yet.

1673             As programmers, we believe it would be best to have that program on WORD‑FM, not on CHRI‑FM.  Ultimately it would probably be better for the program as well.

1674             So these are things yet to resolve.

1675             COMMISSIONER KATZ:  Okay.

1676             MR. DU BROY:  Just to reiterate, there would be no duplication in programming.  Whatever the final outcome after the transition period, the titles on one station would not appear on the other.

1677             COMMISSIONER KATZ:  You talked about the size of the market and the audience you are going to be attracting and I think you talked relative to the audience for CHRI, but you never filed any information with regard to audience shares at all.

1678             Do you want to talk to it or provide us with some indication of what you are anticipating the audience share would be?

1679             MR. DU BROY:  Because we don't subscribe to BBM and we only get information through our own surveys, we have pieced together a picture of our audience size.

1680             It seems to be between 30,000 and 40,000 weekly cume.  And based on all of our numbers, we would see that number at least duplicated on WORD‑FM.  There might be a little bit of overlap, but it would be fair to assume that we will get 40,000 as a weekly cume for CFMO as well, especially given the Edmonton experience.  They are getting 60,000 as a weekly cume on each of their two stations.

1681             COMMISSIONER KATZ:  Do you see that in the first year or in the last year or constant throughout the period of time?

1682             MR. DU BROY:  We would probably achieve that by year two, after people have gone through a few cycles of our promotion programs.

1683             COMMISSIONER KATZ:  Has CHRI seen an increase in audience share over the last five years that you have been operating in?

1684             MR. DU BROY:  There was some increase in familiarity after the first two years.  It is really difficult to reach the people you know should be listening, so it has taken a while to build that up.  But since then it has been pretty stable.

1685             COMMISSIONER KATZ:  On the issue of CCD, I think you have said that you were looking at FACTOR as where the direction of the CCD would go.

1686             MR. DU BROY:  Correct.

1687             COMMISSIONER KATZ:  Would you have a problem with making that a condition of licence if in fact you were to achieve that licence?

1688             MR. DU BROY:  No.  We have accepted that as a condition of licence.

1689             COMMISSIONER KATZ:  Thank you.

1690             Those are all my questions, Mr. Chairman.

1691             THE CHAIRPERSON:  Thank you very much, Mr. Katz.

1692             Legal counsel...?

1693             Before going to legal counsel, we will make a copy of the oral presentation available at the Secretariat.  Our staff perused throughout the various appendices.  They are in some instances a remake of some information in another format, and they are also some of the appendices that are not material but probably were not filed as is.

1694             So if anyone wants to consult them, we accept them as part of your oral presentation this morning, but we will make them available through our Secretariat for the rest of the hearing.

1695             So, legal counsel...?

1696             MR. GAGNON:  Thank you.  Just a few questions.

1697             We two different numbers here on record regarding spoken word.  One of our numbers is 103 hours per week and the other one is 107.

1698             Could you explain or just tell us which one it is?

1699             MR. DU BROY:  It was most likely 107.

1700             What has happened is over time we discovered some programs were available, some were not.  Obviously some program producers no longer have them in the catalog.  So that number is varied.

1701             And some others that we found were Canadian were very attractive, so we added those to the last version.

1702             So if it is acceptable to have 107, that is what we would prefer.

1703             MR. GAGNON:  Okay.  Thank you.

1704             In terms of interference, we have noticed that you would be third adjacent with your own frequency on CHRI‑FM.  Do you expect any impact on any of the two frequencies and what impact would that be?

1705             MR. DU BROY:  There would be a very small impact.  Actually, I will be addressing that again in response to the intervention from CTVglobemedia because we would also be a third adjacency to Majic 100.

1706             Our proposal has our signal, the 115 DBU part of the signal, that contour ends up in Carlington Park where no one lives, and the most dense part of the population covered by that contour would be directly below our transmitter in a building, an apartment building of 275 units.  So that could be 530 or 550 people.

1707             They will not be affected by the 115 DBU signal; they are in the no‑zone.  So there would be a very limited effect on CHRI‑FM listeners, which is in contrast to a lot of the other applicants who are setting up transmitters in more densely populated areas.  So we do not see a big issue there.

1708             The other advantage to Christian Hit Radio operating both frequencies is that we will accept complaint calls on one phone number for the two stations.  So when it comes time to resolve those issues, we will definitely hear about it and we will resolve them.

1709             But again, we don't anticipate a lot of problems.

1710             MR. GAGNON:  Thank you.

1711             THE CHAIRPERSON:  Gentlemen, thank you very much for your presentation this morning.

1712             We will take a 10‑minute break.  We will be back at 10 past 10:00.

1713             Thank you.

1714             MR. TURCOTTE:  Thank you, Mr. Chair.

‑‑‑ Upon recessing at 1000 / Suspension à 1000

‑‑‑ Upon resuming at 1015 / Reprise à 1015

1715             THE CHAIRPERSON:  Order, please.

1716             Madam Secretary.

1717             THE SECRETARY:  Thank you, Mr. Chairman.

1718             We will now proceed with Item 7, which is an application by Ottawa Media Inc. for a licence to operate an English‑language FM commercial radio programming undertaking in Ottawa and Gatineau.

1719             Please introduce yourself and your colleagues.  You will then have 20 minutes for your presentation.  Thank you.

PRESENTATION / PRÉSENTATION

1720             MR. EVANOV:  Thank you.  Bonjour, good morning, Chair Arpin, Commissioners and Commission Staff.  My name is Bill Evanov.  I am the President of Ottawa Media Inc.

1721             With me here today, on my right, is Carmela Laurignano, Vice‑President and Group Manager and part owner of Ottawa Media Inc.

1722             To Carmela's right is Valerie Hochschild.  Valerie has held positions with radio stations both in the United States and Canada.  Valerie has been instrumental in putting together our Triple A playlist and developing the program paradigm.

1723             To her right is Ky Joseph, Vice‑President of Sales, also a partner in Ottawa Media Inc., who will speak to you about the challenges associated with operating a stand‑alone station on a frequency that is severely restricted, both in terms of coverage of the Ottawa CMA and power.

1724             In the back row, seated to my left, on your right, is Jim Moltner, our Broadcast Engineer.

1725             Next to Jim is Rob Malcolmson, legal counsel from Goodmans.

1726             Beside Rob is Debra McLaughlin from Strategic Inc., who has authored our demand and economic studies.

1727             Finally, next to Debra is Sean Moreman, our in‑house legal counsel and former radio news director.

1728             In 2004 we appeared before you with an idea of how to serve people in Ottawa who were 45 years of age and older.  Our concept for a contemporary easy‑listening station, which is The Jewel, was the first of its kind at the time, and certainly novel in the market.  We are pleased to be before you once again with yet another innovative idea, accompanied by a first‑hand understanding of the complexities of the Ottawa‑Gatineau market.

1729             While on paper and overall it is a profitable radio market, Ottawa‑Gatineau is also highly competitive, and most of the competition comes in the form of large radio broadcast companies like Astral, Rogers, Corus, CTV/CHUM, each of whom operates multiple stations in and around the market.

1730             This market is dynamic, challenging, and complicated by the consumers.  Working in two official languages, Ottawa‑Gatineau is unique, and certainly not for the faint of heart.  Our new proposal embraces the opportunities created by this uniqueness and provides consumers with a new listening option through a creative approach to programming.

1731             I will now turn it over to my team to introduce you to ALICE.

1732             MS LAURIGNANO:  Sometimes ideas are a result of our own deliberations, and sometimes they are a result of the deliberations of others.  In the case of ALICE, it was the latter.  As early as 2004, when we were doing the research for The Jewel, we noticed an easily identifiable group of consumers in this market that were dissatisfied with radio.  They ranged in age from early twenties through to their mid‑fifties.  They were not happy with their choices, and cited the lack of variety in the music, the concentration of airplay for a few artists, and the inability to relate to spoken word programming as primary reasons.

1733             They described radio as lacking intelligence, both in terms of how it was programmed and the spoken word, and expressed a frustration at the growing lack of respect that they sensed in the language, humour and content choices.

1734             Our proposal for The Jewel directly dealt with all of these issues.  However, we knew at the time, and our subsequent research confirmed, that The Jewel could only address a portion of the disenfranchised audience.

1735             Over the years, as we have continued to research Ottawa‑Gatineau, a pattern has formed.  At first it was only apparent through the feedback we were receiving when we tested programming in the market.  Recently it has begun to show up in the tuning levels reported by BBM.  There has been a decline in the use of radio among persons between the ages of 35 to 54, and, in particular, among females 35 to 54.

1736             When we spoke to consumers who report using radio less than they used to, and consulted with people who report low levels of satisfaction with radio choices, a clear picture of who the majority of these people were emerged.

1737             Unlike the core 45‑plus listeners to a contemporary easy‑listening station, this consumer is not ready to trade in their rock music for a more mature sound.  Regardless of their chronological years, they still like to stay abreast of current music, have a high interest in new music and new artists, and refuse to be pigeon‑holed as a fan of any single genre of music.  They know the lyrics to current pop songs, and yet turn up the radio when Bruce Springsteen's "Born to Run" comes on.  Music is very important to them, and they wish for programming that talks to them and not down to or around them.

1738             While they come from a whole wide range of backgrounds, they do coalesce into a single consumer group, identifiable through their preferences.  They share a love of music, a disdain for being patronized, and hold their products and services to a higher standard.  They are, in fact, many of the people on the panel you see before you, and, I suspect, many in this room.  They are ALICE.

1739             MS McLAUGHLIN:  As Carmela has stated, ALICE was born of research.  Repeatedly, when we were testing music mixes in this market, there was a group of consumers who would report that, while they appreciated the variety being played on The Jewel, they felt the music was too sedate for their tastes.  They wanted something louder, more energetic, and something that could provide a blend of contemporary music styles.

1740             They complained of a high repetition of tracks on pop stations, which rendered these services unlistenable for any length of time.

1741             They were frustrated with the need to continually change stations to experience a variety of music styles, and they were convinced that stations in the market under‑represented Canadian artists.

1742             They readily provided a long list of performers and tracks that they could not hear on radio, and that they had to go to other sources to find.

1743             They felt that their choices in radio were limited, inasmuch as programming strategies followed dichotomies ‑‑ current versus older, rock versus soft, male perspective versus female, elitist versus adolescent, talk versus music.

1744             The consumers' interests lie in having a station that does not approach programming from these all‑or‑nothing angles.  They want something from each of these polarities, and a balance that better reflects their tastes, so we worked through a design with these consumers, and the net result was ALICE.

1745             It is a Triple A service.  This means a more expansive music mix that results in not just more artists, but more genres of music, a balance between current, recurrent and gold selections, and a wider representation of the repertoires of the musicians being played.

1746             The other important programming element was spoken word.  Women, in particular, had concerns over what they were hearing, and how they and others were being represented, and how the market was being reflected.

1747             Called into question was the relevance of the topics being discussed, the language chosen, and the basis for humour.  Women felt that minorities, gender and children suffered as a result of the current perspective, and they desired something more respectful.

1748             Specifically, they wanted adult dialogue and coverage of both mature and complex issues that held the potential to include all listeners.

1749             The manner in which topics should be covered ‑‑ seriously, respectfully, and without the goal of shocking or mocking ‑‑ was seen to be lacking in the market.

1750             Finally, they did not want to be marginalized by a woman's‑only format.

1751             Once the re‑design had been completed, the concepts and potential music mix was tested in a phone survey, and the results indicated that 76.4 percent of persons 25 to 54 would listen.

1752             MS HOCHSCHILD:  ALICE is a music station.  At the core of its design has been the consumer demand for greater variety, and the Triple A format, by definition, provides this.

1753             We are going to create greater diversity in music for Ottawa listeners through several means.  First, we will offer in this one station a greater range of music than is typically found on single‑format services.

1754             We will draw from a minimum of five music genres.  We will include genres not currently regularly heard on commercial radio.

1755             In addition to alternative, rock, pop and country, we will play music from the folk and blues categories.

1756             We will have a larger playlist.  According to BDS, the average English service in Ottawa has a playlist of 1,100 tracks.  ALICE will play 1,400.

1757             Contributing to this larger playlist will be a greater range of artists.  According to the same BDS study, the average playlist in Ottawa has 500 artists, while ALICE will have 700.

1758             We will also go deeper into artists' repertoires, providing fans with greater access to non‑hit music.  This alternative track representation is at the heart of the Triple A format.

1759             ALICE will have fewer repeats on any single track.  In Ottawa, the top 10 percent of the artists played represents 63 percent of the music spun.  The average spin on a top 10 track is 40.  On ALICE, a track will not receive more than 15 spins during a week.

1760             ALICE will also offer a more even balance between current and older eras of music.  Listeners complained that the repeat factor on pop stations is too high, and gold‑based stations have too little current, so ALICE will program one‑third of its playlist to current music, and the remainder will be to alternative and gold‑based cuts from pre‑2007.

1761             The listeners who are most unhappy with the current environment are also those most passionate about their music.  ALICE will feed this passion with less commercial interruption and more music.  We will offer shorter commercial breaks and reduced commercial content overall.

1762             A good portion of our spoken word will be music related, and we will provide background on the artists we play in our feature programming and in our Canadian showcase segment.

1763             ALICE, by request of the consumers with whom we spoke, will also have a higher representation of Canadian artists, and, if licensed, will be the service with the highest commitment to new and emerging artists in the market.

1764             If ALICE were licensed today, a single hour's music mix could include a track from the new "Death Cab for Cutie" album; a song performed live in 1985 by Bonnie Raitt and John Prine; "Cold Shoulder" from U.K. soul sensation Adele, who just got signed in North America several weeks ago; something from Bedouin Soundclash's debut; and three in a row from hometown heroine Kathleen Edwards, going back to her 2002 breakthrough for "Hockey Skates", and including the brand new songs "Buffalo" and "I Make the Dough, You Get the Glory".

1765             When we compare the proposed playlist for ALICE with what was being played in the market over the past four weeks, we find that 85 percent is currently not heard.  With a very small proportion of the music duplicated anywhere in the current spectrum, ALICE will provide a true music option for the disenfranchised music lover in the market.

1766             MS LAURIGNANO:  Music is only half the picture, however.  In response to consumer demand, ALICE has made a substantial commitment to spoken word, including news, information programming, features and announcer talk.  ALICE will provide listeners with over 34 hours of spoken word weekly.

1767             This represents a minimum commitment of over 27 percent of our schedule to keeping Ottawa informed, as well as entertained.

1768             ALICE's potential audience has noted that there has been a move toward shocking language in spoken word that challenges political correctness.  Their impression is that there is also a focus on the trivial and, in the words of our audience, the inane.

1769             While we agree that there is certainly a place for this, given the taste for edgy language, celebrity gossip and challenging the status quo, the appetite for this style of radio is not universally held by the fans of today's music.

1770             ALICE will offer more respectful language, and balanced, polite and more thorough discussion than is typically found on music radio.

1771             The ALICE listener wants the best of all worlds:  they want talk that they describe as relevant; they want music that they would choose to buy.

1772             They no longer feel like scanning through the radio dial, trying to create this listening experience by tuning intermittently to several services, so they are tuning out.

1773             ALICE can bring them back by mixing current, popular, energized music, with respectful, balanced and issue‑based spoken word.  We can provide useful information and background, while engaging them in today's recording artists and a greater variety of music from established and new performers.

1774             ALICE will focus spoken word on the topics that are of greatest interest to people ages 35 to 54.  Background on music and artists, and insights into production are very important to the passionate music fan.

1775             However, there was also an interest in other types of information.  Topics for discussion that were recommended include families and children, health and fitness, relationships and lifestyle, finances and fashion, travel and shopping, and primary and secondary careers.

1776             ALICE will marry these two compatible information streams, music and more general interest topics, to create a hybrid that provides intelligent, relevant, and local discussion.

1777             MR. EVANOV:  Key to ALICE's identity will be her local focus.  We will approach the coverage of the Ottawa market from a different perspective, one that is unique to ALICE.

1778             We will have a full complement of Ottawa‑based reporters, and estimate that 80 percent of our news coverage will be local based.

1779             While the headlines most often will not change, ALICE will present stories from a feminine perspective, and there is a decided difference.

1780             For example, one of the biggest headlines thus far this week has been the devastating loss of life due to the earthquake in China.  The key facts of what happened would be presented in the ALICE coverage, but we would also augment the story with details of the local fundraising efforts by the Chinese Community Association of Ottawa.

1781             We would profile the impact that this tragedy is having on local residents, such as Emily Wang.  Her family is living in one of the areas devastated by the quake.  While they are all fine, they have taken refuge in tents, and are now battling rain.

1782             Emily is one of the fundraisers engaged in finding constructive ways to handle her grief and worry, and ALICE would present this local and important aspect of the headline.

1783             The feminine perspective will also be evident in the stories selected.  The Ottawa Police will be holding its monthly recruiting session tonight.  While this is not necessarily a headline, the fact that the Police is actively seeking female recruits and hold women‑only information sessions on a regular basis is.

1784             The representation of women on the force, in combination with the challenges in finding female recruits, is a story of interest to ALICE listeners.

1785             In addition to expanding the coverage of stories and the perspective on headlines, ALICE will also provide more follow‑up on news stories through its information programming.

1786             Last week, Maria Merziotis from Hillcrest High School, here in Ottawa, won the BioTalent Challenge for flu glue.  While this made headlines across the city, ALICE would expand on this story in two ways.  Within the newscast we would give more details of the next steps in getting this product to market through an interview with a medical researcher from Ottawa U, and within the spoken word portion of our program we would have more in‑depth information on how it was discovered and who this remarkable 17‑year‑old is.

1787             ALICE will introduce a new group of reporters, resulting in a fresh voice, a new perspective, and alternative coverage of the Ottawa market.

1788             MS JOSEPH:  Now that we have told you why ALICE, let me review why licensing ALICE is necessary to Ottawa Media Inc.

1789             In 2004 the proposal for The Jewel was designed to meet an underserved segment of the population and provide service to a group largely ignored by mainstream media.  To the extent that satisfaction levels have increased among those aged 55‑plus since the licensing of The Jewel, the service has performed as promised.  However, the signal we applied for was the full market coverage of the 88.5 frequency.  The frequency we were assigned, 98.5, does not encompass the full market.

1790             As if this is not challenging enough, due to the issues of signal protection on either side of 98.5, we operate at 485 watts, while our competitors operate at powers of up to 100,000 watts.

1791             With reduced coverage and ineffective radiating power, The Jewel's ability to reach its audience is severely and permanently impaired.

1792             Simply put, a 485‑watt signal cannot penetrate brick and steel buildings, and 98.5 will never be able to cover the entire CMA.

1793             Radio works best when it can travel with a listener throughout his or her day.  From waking in the morning to the commute to and from work, and even while at work, consumers value the constancy that radio provides.  For many, The Jewel can never be this.

1794             Someone living in Kanata or Orleans cannot necessarily receive The Jewel at home.  People who work and/or live in the densely populated towers downtown cannot receive the station during the day, and someone travelling in a car across the city experiences periods where the signal simply disappears.

1795             This means that sustained tuning is not possible, and feedback from the programming focus groups for The Jewel confirmed that listeners like the format, but find the station's reception too unreliable to identify it as their primary service.

1796             While our recent shares have improved, if you look beyond the 12‑plus number, you will find that most of that tuning comes from the 60‑plus audience.  In fact, 70 percent of hours tuned comes from this group.

1797             These are not the most attractive demographics to many advertisers, and without a better representation of people under 60 years of age, we have not been able to attract many of the advertisers that our original business case for The Jewel contemplated.

1798             This, in turn, has negatively affected our bottom line.  In fact, our revenues are 35 percent lower than originally projected, and The Jewel has incurred cumulative costs that are double those originally forecasted.

1799             Consumer research completed for The Jewel application indicated a more balanced audience, with specific strengths in the 45 to 54 and 55 to 64 age groups.  It was even anticipated that there would be some tuning from persons 35 to 44.  However, despite continuing favourable results from ongoing music tests from within these younger demos, the under‑55 audience has not materialized because of a severely encumbered signal.

1800             If listeners cannot wake up to The Jewel or travel to work with the station, or if tuning is not available where they work, consumers tend to forget about the service.

1801             Advertisers have also noted the challenges of placing advertising on The Jewel.  When we pitch business, the first thing they do is tune in to see what we sound like.  We hear frequently that they cannot receive the signal.  While this may seem to be a highly subjective measure of the potential of The Jewel, it is, in fact, the one that is most commonly used.

1802             If advertisers can't hear their ads, they are not booking us.  This means that a portion of our potential advertising base is effectively unavailable to us.

1803             The licensing of ALICE would provide another revenue stream, reduce expenses through the sharing of some costs, contribute to promotional opportunities for The Jewel, and enhance the demographics that we can sell by adding the younger end of the population.

1804             ALICE's format, while also niche, is at the opposite end of the spectrum musically, and will allow us to address new advertisers and develop new revenues.

1805             MR. EVANOV:  The Jewel and ALICE can nicely co‑exist, developing distinctive audiences and separate unique brands, yet there are synergies that will serve to enhance the success of each.  The primary benefit of ALICE, however, is that she meets a consumer need and reflects a group not represented in all of its diversity in the system.

1806             ALICE is unique.  The niche we have identified serves a market that is important to radio.  People 35 to 64 have traditionally been heavy users of radio, and if their hours are lost to the system, it will have a large impact on the effectiveness of the medium overall, and the advertisers who consider using it.

1807             We have designed a service unique to this market.  Despite already being present in Ottawa‑Gatineau, through a full and completely new team of newspeople, we will offer a fresh perspective and unique voices.

1808             Our music selection will provide true diversity, expanding the genres, the playlists and the artists covered.  ALICE will create an improved exposure for Canadian artists, especially those identified as new and emerging.

1809             ALICE will assist The Jewel, a station that is permanently technically handicapped in terms of future growth.

1810             In short, licensing ALICE will serve two purposes:  it will fill a clear and identifiable gap in the programming spectrum with a local and market‑specific format, and it will assist a struggling incumbent service.

1811             The case for ALICE is undeniable, and our commitment to serve Ottawa unwavering.

1812             Thank you for your time and attention.  We would be pleased to answer any questions you have, and I will allow Carmela Laurignano to quarterback the session.

1813             THE CHAIRPERSON:  Thank you, Mr. Evanov.  Good morning, ladies.

1814             I would like to start with the engineering part of your application.  You have put a lot of content in your oral presentation regarding the impairment of The Jewel, but when you compare the coverage that you have with The Jewel with the one that you would get with the frequency you just applied for, what are the main differences that you see?  Would that frequency be much better for you than the one that The Jewel has?

1815             MS LAURIGNANO:  There are some very distinct differences, but let me begin by saying what The Jewel's problems on 98.5 are, generally speaking, and then I am sure that Mr. Moltner, who is an engineer, can give you more specifics.

1816             The two basic problems with the 98.5 signal are, one, that the signal does not cover geographically the whole CMA.  There is a big portion of it missing.  That is one problem.

1817             Then, within the contour areas which we do reach, because of the low power, which is 485 watts, we can't get satisfactory penetration to deliver a reliable signal.

1818             In comparison, the frequency that we are proposing to use for ALICE has 11,800 watts, which means that there would be a substantial difference.  Also, generally, for the CMA, it has greater coverage.

1819             Those are really the two primary differences.

1820             And unfortunately for The Jewel, as we mentioned, there is no solution because of the limitations that it faces to the east and the west, and other parts, and increasing power is not a solution, because that would infringe on those areas that are protected.

1821             I would ask Mr. Moltner if he has anything to add.

1822             MR. MOLTNER:  I think you have about covered it, Carmela.  I don't know if the Chairman wants me to ‑‑

1823             THE CHAIRPERSON:  I am not looking for more technical detail than you have provided, except to say that in 2004 that frequency was available for the market, but you ended up choosing 98.5 based on some considerations.

1824             Did you feel that it was less impaired at the time?

1825             Because 99.7 was available in 2004.

1826             MS LAURIGNANO:  In 2004, when we applied, we had applied for the use of 88.5.  Then, in its wisdom, the Commission awarded that to NewCap, and this particular ‑‑

1827             THE CHAIRPERSON:  And you had to find another ‑‑

1828             MS LAURIGNANO:  No, this frequency was already ‑‑ we had applied for it for a secondary service, which was for a youth format.  In fact, we had presented the Commission with two proposals at the time.  We had 88.5 as the service for the easy‑listening format, and we had proposed a youth alternative rock format, I believe, at the time, because it was a smaller signal, and because we thought we could do a little better with that format on this limited frequency.

1829             We had identified that at the time, and we did not go further at the time in terms of frequencies.

1830             THE CHAIRPERSON:  Okay.  Thank you.

1831             Let's talk about ALICE.  Obviously, I understand from your presentation that now we have BOB, JACK and DAVE, and they are heard, in some instances, all over North America, and in other instances they are only available here in Canada.

1832             Is ALICE, per se, a format that is available anywhere else, or are you going to be creating ALICE and will you try to market it elsewhere down the road?

1833             MS LAURIGNANO:  ALICE, as we propose, is not available anywhere that we know of.

1834             We know that there are female‑friendly, female‑skewed stations, but this is another set of consumers that we have identified.

1835             Certainly, the indications are ‑‑ and I will ask Ms McLaughlin to impart some of her wisdom, because she has a vast repertoire of research right across the country, and world‑wide, about what the trends are, but there certainly seems to be a demand, which is also evidenced by the number of applications that you will see for this format, in what we know already have been Gazetted, as well as, probably, in upcoming hearings.

1836             There is an evolution taking place, where this particular group is becoming in demand for advertising, because it is within a lucrative demographic, and I think that it's been identified as one that will embrace radio again if they have been disenfranchised and will tune in longer or even find this kind of programming if it's available to them.

1837             But I am going to ask Debra to see if she has some research background that can support what I have just said.

1838             MS MacLAUGHLIN:  The tuning trends in Ottawa‑Gatineau are not dissimilar to the trends that you find either nationally or in other markets.  In fact, in the recent Vancouver hearings there were several applicants there that were looking to create a service that spoke to the disenfranchised female listener.

1839             It's not to suggest that radio is not serving any female listeners.  There is a core of female listeners who like what they hear, the easy rocks, the softer music.  But there is a whole group that fall out of that spectrum currently.  They are the people who are secondarily an audience for rock stations and stations that skew to alternative music whether it's modern rock, alternative rock or whether it's just classic rock, and that's simply because they can't find the more progressive energy levels anywhere else on the spectrum.

1840             As we said in our presentation and in our filed documentation, part of what makes listening to those stations not an option for them is the entire slant of the programming including spoken word is actually directed to a more male audience, references ‑‑

1841             THE CHAIRPERSON:  But in the written submission you have identified them as being the listeners of the progressive and underground radio format of the late sixties who were really at the time skewed highly male.  Living in Montreal, CHOM FM surely ‑‑ during the days of that period of time was surely a male radio format, maybe.

1842             But what you are saying is that obviously there were some females listening to it and they are still interested by that music and they want it to be more tailored towards them and with obviously an oral content that is more in tune with their own profile.

1843             MS MacLAUGHLIN:  Yes, you know, that's exactly right because in the sixties ‑‑ I mean, women's roles have certainly evolved since then.  It was slightly different.  Now, you have women in the workforce.  You have women who are in all sorts of senior positions.  Those are different women than the women who were listening underground.  In fact, there is a larger number of them now.

1844             And as our presentation said, many of the people on this panel are not stereotypical female radio listeners.  We are the people listening to the rock stations and then having to skip out when we get to the usual discussion parts, that I won't go into detail on but are offensive.

1845             THE CHAIRPERSON:  And generally speaking, the radio format that is catering to that period is classic rock.  What you are saying here is that classic rock format; the current classic rock format doesn't meet their need?

1846             MS MacLAUGHLIN:  It doesn't meet their need because classic rock in some ways provides that edgier sound.

1847             But the internet hasn't just changed the way people use radio.  It's changed their expectations of what they should have from radio and these people are online.  They are finding other sources of music and they are investigating new artists, new tracks.  And as a result their demands and expectations have changed so classic rock doesn't cover it entirely.

1848             What they are looking for is a balance of new music, of older music and they also want alternative cuts.  So it's just not the gold base that you would find on classic rock.  That has too much repetition for them.

1849             THE CHAIRPERSON:  Now, you have used in your research ‑‑ and CFUL‑FM from Calgary has a proxy.  At least that's what is stated ‑‑ and Calgary as well.  You use Calgary and CFUL as a proxy, I think, for good reason.  Calgary has about the same level of population.  It's at the top of page 3 of your written submission.

‑‑‑ Pause

1850             THE CHAIRPERSON:  You are saying:

1851                  "...by comparing the performance of popular formats with that of Triple A using CFUL in Calgary as a proxy."  (As read)

1852             THE CHAIRPERSON:  Now, I have been looking and that is interesting, but it is slowly moving me to your business plan.  Obviously, CFUL has not been on air for a long period of time. But when I am comparing the market share and the reach of CFUL in their last survey compared with your own marketing plan and the market share that you are contemplating, there are huge, huge differences.

1853             Why, if you say that you are using Calgary and CFUL as a proxy, are you arriving at so steep differences?

1854             MS MacLAUGHLIN:  The use of CFUL when it was a pure Triple A format was just to demonstrate the difference between the formats and how they play music, whether they have a higher or a lower repeat factor.  In fact, the Triple A from Calgary is a limited proxy and only for those purposes because that station skews as many Triple As do strictly to men.  So there is a much lower percentage of the audience that would be listening as women.

1855             In Ottawa we did quite a bit of research that has been ongoing.  I was in the market as recent as last week and I remain confident that the way in which we were proposing to represent the Triple A format, and that is in a different form with more emphasis towards women, will garner the shares that we put forward.

1856             But the shares again of Calgary are reflective of a Triple A format in a market that they have set up to be a largely male‑dominated station.

1857             THE CHAIRPERSON:  And why do you think here in Ottawa you will cater more to women rather than male?

1858             MS LAURIGNANO:  Okay.  We expect that the audience will be 60‑40 female versus male.

1859             THE CHAIRPERSON:  Yes.

1860             MS LAURIGNANO:  And that will be achieved basically through the spoken word that we have talked about and the sensibilities and the perspective of the women, which is going to be predominant but it's not to the exclusion of males.  We are not ‑‑ you know we don't intend to on purpose, by design or by accident or any other way alienate men.

1861             And in fact, the men in the survey, both in the focus groups and consumer demand by phone that we did there is a good percentage, and a large number of men up to 40 percent who would also listen to the station.

1862             THE CHAIRPERSON:  I'm sure that you will not forbid them to do that.  But as you are saying, you are of the view that ‑‑ is it because of the oral component that you are going to be drawing more attention to females than males or is it by the music?

1863             MS LAURIGNANO:  It's a combination of both and it's really a carefully‑crafted recipe because the music is both new ‑‑ you know there is a demand for new music.  There is a demand for a wide variety of music.  We have identified like five key genres of music that will be blended. And the spoken word which is heavy is also important.  So it's a whole package really.

1864             THE CHAIRPERSON:  Yes, obviously with up to 37 percent of the time dedicated to a verbal component it is a significant commitment.

1865             MS LAURIGNANO:  Yes, 27 percent, that's right.

1866             THE CHAIRPERSON:  Is it ‑‑

1867             MS LAURIGNANO:  27, yes, of 34 hours a week or 27 percent.

1868             THE CHAIRPERSON:  I thought they had written here 37, but anyhow.

1869             MS LAURIGNANO:  If we did ‑‑

1870             THE CHAIRPERSON:  I will take it for what you said.

1871             MS LAURIGNANO:  Yes, if we did it's a typo.  It is 27.

1872             THE CHAIRPERSON:  Okay.

1873             MS LAURIGNANO:  Because we have 16 hours and 40 minutes of news and then another 17 hours and, I think, 28 minutes of spoken ‑‑

1874             THE CHAIRPERSON:  While you were ‑‑ well, while you were reading it struck me.  Anyhow, 27 percent is also ‑‑

1875             MS LAURIGNANO:  It's substantial. Absolutely, we agree.

1876             THE CHAIRPERSON:  It is also a significant commitment.

1877             MS LAURIGNANO:  Yes.

1878             THE CHAIRPERSON:  Whatever you had said before, if you had said 27 obviously it is 27.  But what you are saying it's a base on having up to 27 percent of verbal component.

1879             And what is going to be the breakdown between ‑‑ and what type of content could we expect of that station?

1880             MS LAURIGNANO:  Of the spoken word?

1881             THE CHAIRPERSON:  Yes, the spoken word.

1882             MS LAURIGNANO:  Right, okay.

1883             The spoken word as we have said it's 27 percent of the whole schedule of the regular broadcast day, which is out of the 126 hours about 34 hours.  Of that 16 hours and 40 minutes are news programs which are in the form of five, seven and 10‑minute newscasts as well as a comprehensive news package at noon every single day.  And then the other 17 hours would be the programming, some programming features as well as the announcer talk that will fill in the rest of it.

1884             THE CHAIRPERSON:  And of your 16 hours and 40 minutes of news how much of it will be what I could qualify pure news and what is going to be the breakdown between local, regional, provincial, national and international?

1885             MS LAURIGNANO:  Okay.  The way it breaks down is some of the newscasts that I have described, the five, seven and 10‑minute newscasts, some of them will include some surveillance and sports and others will not because the surveillance and the sports and other are covered through that other talk.  So we expect that about 80 percent or 13 ‑‑ just over 13 hours of that 16 and a half roughly will be news.

1886             The breakdown in content we expect on an average that it will be at least 60 percent local, 20 percent national and 20 percent international.

1887             THE CHAIRPERSON:  And what kinds of staff will you have to do news, to collect news and broadcast and will you have reporters, stringers?  What are you contemplating and will they be working with your current news staff at the Jewel?

1888             MS LAURIGNANO:  ALICE will have its own separate news team.  Sean Moreman will guide us through what the staffing is, but the news will be gathered through a combination of ongoing services such as BN of course and other services that are available.  They will be done by the complement of the staff as well as the access that the community will have to get in touch with the station.

1889             We have an extremely aggressive internet strategy that will encourage, you know, news that may be relevant to be fed into the station that the news department and programming people will vet and eventually might make it through the station.  But Sean will just guide us what the newsroom will look like.

1890             And the station will have its own news director as well.

1891             MR. MOREMAN:  So just to reiterate that the newsroom will be independent from the newsroom at the Jewel and will be separate.

1892             We anticipate that the news director that Carmela has just mentioned will also read the morning news and there will also be an afternoon newsreader.  We are also going to have three stringers that will gather the news throughout Ottawa and the region.

1893             THE CHAIRPERSON:  And you are of the view that that will be enough people to feed the news for ‑‑ that amount of news over ‑‑ you will have news on everyday including the weekends, am I right?

1894             MS LAURIGNANO:  Yes.  So the newsroom will have five people that are working all the time in the newsroom throughout the week, but some of those big programs that I have talked about in the comprehensive package at 12 o'clock will be fed through the news ‑‑ sorry ‑‑ through that programming department will be put together by some of the programming people as well.

1895             And a lot of the information that for example is related to music, which is a very important topic and is part of the news coverage, that is covered through the talk or even in the newscast will also come from their programming so the two are not necessarily mutually exclusive in terms of production packaging and putting it together.  But the newsroom will have five people working on it.

1896             THE CHAIRPERSON:  Now, the other component of your spoken word will be made up of features of interviews, any open lines or what?

1897             MS LAURIGNANO:  Yes, there is ‑‑ do you want to walk through this?

1898             MS HOCHSCHILD:  Sure.  As for call‑in shows, that was tested to have details on that ‑‑ was tested among other features through focus groups and there we found very little demand for that kind of a feature.  As for the demand we have received from those females 35 to 54 we are intending on reaching, we found that they want to know more about Canadian artists.

1899             So we have something like Canadian Spotlight which is our 60 to 90‑second bit six times a day about artists and their creative process; stories or songs leading into a song by that artist, and also Notes From Home Saturdays and Wednesdays which goes into greater detail, kind of taking the approach of a journal or a blog so it's free to include interviews, analysis of trends, different themes of focus from show to show.

1900             The listeners also stated that they wanted a wide variety of styles.  And while that is being addressed during the course of the broadcast day in a broadcast week by the format itself, in terms of feature programming we have something like Showcase on the weekends which is dedicated each week to music of one genre or era or theme.  It can go from Motown to Reggae to other forms of world music to Lilith Fair artists or boy bands or anything pretty much in response to listener feedback.

1901             So while this also helps, you know, the listener unwind on the weekend by kind of settling into one kind of a concept of music, it also serves as a testing ground for possible styles that listeners may want more of during the week or may want to be explored in more detail.

1902             So in terms of music those are the features that we are presenting and they all started with what these under‑represented listeners want to have to get back into the market.

1903             MS LAURIGNANO:  In addition, there are other things.  One of the biggest things that came out was that this audience is looking for humour of a different brand than the BOBs and the JACKs and those, and some of that programming will be around that.  That's obviously spoken word programs.

1904             But to answer your question directly before, there is no open line programming per se.  But we certainly include and encourage interaction and feedback both through the internet, through other means and on air itself, in which case you know we would be sure that the comments are either pre‑recorded or that we work on a delay system to ensure that we are always in control.

1905             THE CHAIRPERSON:  In your written submission you are referring to a joke of the day where more humour was required especially at ‑‑ the respondents felt more humour was required especially at this time and then you are talking about the routine joke of the day.

1906             That being said, you also are saying that through your surveys you heard a lot of complaints about frat boy humour; boring, intellectually numbing.

‑‑‑ Laughter / Rires

1907             THE CHAIRPERSON:  How will you differentiate between what you call the need for more defined humour vis‑à‑vis what the audience is saying about what is their view about humour?

1908             MS LAURIGNANO:  Right.  Well, again, it's a combination of things.  One of them is a perspective.

1909             I think we are ‑‑ women and men are wired a little bit differently in some areas of the humour department so we will try to bring you know that forth.  I think we know as well that where it is coming from is very important, that if a female is delivering it versus some male in the locker room that's a different perspective all together.  And quite frankly, it's also one of the things that we are looking forward to.

1910             It's a challenge because it's not readily available and it's going to require that we be vigilant and creative.  Obviously, we have identified some areas already where we can get even established sources.  There are syndicated services that we have identified that could possibly help, you know, just in small little contents or whether it's recorded that can be put together.

1911             And then quite frankly we are going to go out and seek a lot of it.  We have some strategic partnerships with institutions like Yuk Yuks already established that we intend to tap into and, you know, we will find a way to bring that humour on the air.

1912             THE CHAIRPERSON:  Humour such as that I found in your oral presentation.  Well, the thing here is, "He makes the dough.  You get the glory"?

1913             MS LAURIGNANO:  The glory.

‑‑‑ Laughter / Rires

1914             THE CHAIRPERSON:  I wrote "Besides Bill".

‑‑‑ Laughter / Rires

1915             MS LAURIGNANO:  I think that's universal humour, Mr. Chairman.

1916             THE CHAIRPERSON:  While we were talking about news you said you are going to be doing some internet newsgathering.  How will you make sure that the information that is sent to you is appropriate and correct and true?

1917             MS LAURIGNANO:  Right.

1918             THE CHAIRPERSON:  What kinds of steps will you have to put in place to make sure that before putting it on air it is validated?

1919             MS LAURIGNANO:  Right.  Well, what we will do is ‑‑ to start with when the service ‑‑ before the service launches if we are lucky enough to have it, we would actually you know solicit and make contact with key organizations who are involved in women's groups and other organizations whether they be social, community, cultural organizations, to let them know that this venue is available to them and how to get the information to us.

1920             So we would do that initial step so when somebody comes back we would be able to recognize if it's a legitimate thing or not, including developing contacts, the people and all that.

1921             Second to that we will use the internet itself.  We will have a dedicated page to say ‑‑ you know encourage them to submit their news and provide a contact.  So that there would have to be a person submitted their phone numbers so that the news director and/or somebody from programming or the news reporter would be able to actually verify that.

1922             We would not arbitrarily just take anybody's word for it or anything like that, so all inquiries would be vetted whether through some preliminary steps or through you know subsequent steps.

1923             THE CHAIRPERSON:  In looking into your Canadian content development program we ended up having some questions regarding the support you ‑‑ the student supports that you intended to do through the Algonquin College broadcast radio program.

1924             Could you expand on what you ‑‑ and say to us what you are really planning to do to make sure that ‑‑ we want to make sure that it really complies with the definition of CCD.

1925             MS LAURIGNANO:  Right.  Okay, I will ask Sean to just give you an overview of the criteria that we employed in determining it and why we felt it qualified at the time.

1926             MR. MOREMAN:  Well, Algonquin College is a provincially‑regulated institution so it qualifies certainly on that front.  The program that we are aiming the money at is their radio broadcast program, that we believe that there is a journalism component in there.  On that front it would qualify in our opinion as a journalism scholarship.

1927             I believe the Commissioner's question is probably that it's a broadcasting program which on paper at least is disqualified, but we could ask Algonquin to focus the monies to people into the journalism program if that is amenable to the Commission.  Otherwise, we would be prepared to split the money to Algonquin between the University of Ottawa and Carleton.

1928             THE CHAIRPERSON:  Could you get a letter from Algonquin College and file it as soon as you can with the Commission ‑‑

1929             MR. MOREMAN:  Yes, we ‑‑

1930             THE CHAIRPERSON:  ‑‑ based on the reply you just gave me?

1931             MR. MOREMAN:  We will attempt to do that and depending what the answer that comes back then we will ‑‑

1932             THE CHAIRPERSON:  Well, obviously, yes.

1933             MR. MOREMAN:  ‑‑ let you know whether we are going to split or whether ‑‑

1934             THE CHAIRPERSON:  I am sure the registrar of the college will welcome an opportunity to get bursaries for students.  So the likelihood that they say no to send you a letter ‑‑ well, maybe.  You never know but I'm just saying, having given money before in another previous life it was easy to convince the registrar of an institution to get such a letter because they are always looking for funds.

1935             I might appear to come back to what we have previously discussed regarding your business plan but it has to do with the market and the competition in the market.

1936             There is some overlap between your format and what other stations in the market are currently doing.  I'm thinking about CHEZ; I'm thinking about Majic, BOB and so ‑‑ and BOB‑FM.

1937             What are the differentiating factors between your own, this application and what those broadcasters are currently doing?

1938             MS LAURIGNANO:  I think we will approach it from a research perspective first which is ‑‑

1939             THE CHAIRPERSON:  Absolutely.

1940             MS LAURIGNANO:  ‑‑ one of the key things that we considered in the business plan.

1941             MS MacLAUGHLIN:  I am sorry.  I just have to ask you to repeat the question because I was looking ahead to the answer for something else.

1942             THE CHAIRPERSON:  Okay.

1943             Well, what I'm saying is that currently Majic, CHEZ‑FM and BOB‑FM are already broadcasting some of the music that you are currently planning to do and I am asking you what are the differentiating factors between these stations and the one that you are proposing regarding the music component of your program?  Obviously, I can understand that the spoken word will be aimed mainly or somehow totally towards the women, which is not necessarily the case of all these stations.

1944             MS MacLAUGHLIN:  We did run a duplication analysis against our proposed playlist and the stations that you mentioned and we found very low levels of duplication.  I guess thematically I can see why you would conclude we are sort of going down the same path in terms of programming but the proposed list that we have is much higher in alternative cuts and it covers more genres.

1945             And I will ask Val to describe that but we didn't find anymore than 15 percent duplication.

1946             MS HOCHSCHILD:  Exactly, in running this and we mentioned earlier about approximately 15 percent duplication.

1947             Breaking that down a little bit I actually ‑‑ I actually checked and you are right in bringing up the stations that you have brought up.  But as far as duplication is concerned we found only a 4 percent duplication with BOB, a 4 percent duplication with Majic, a 3 percent duplication with Kiss and a 5 percent duplication with Live.  And they are the standouts and we are still well in single digits.

1948             I think that is because the nature of the Triple A format, which has its genesis in the progressive format from back in the day that you described earlier that we noted in the supplementary brief, it starts ‑‑ what really takes from that sort of format that you are remembering is the idea of alternate tracks, of going deeper into a band and artist catalogue whether it's now or from a little less recently and just expanding the tracks that are available to the listener because that is what they asked for, and also going into different genres which do incorporate pieces of the genres that are represented by the stations that you have noted but obviously to only a fairly miniscule extent.

1949             So I think those are the ways in which, in terms of exclusivity, we are distinguishing ourselves and it is actually very marked against the market.

1950             MS LAURIGNANO:  In fact there is no doubt that there is artist duplication, but when you actually come to the selections, the actual selection, they will be substantially different because this one is a non‑hit driven format because we are not just playing the covers.  It's a mix of the five music genres and it's not music that is stuck in one particular era that a lot of it will be current as well as some of it gold.

1951             So when the whole package is together the duplication overall that we found was only about 15 percent which ‑‑ again, when you spread it over a wide number of stations and over a broadcast week is really negligible.

1952             THE CHAIRPERSON:  There are other applicants in this proceeding that have not necessarily the same format but a fairly similar format, or fairly similar choice of music and are catering towards the same demographic.

1953             How do you differentiate yourself from the other applicants?

1954             MS LAURIGNANO:  Well, we differ in those areas that we've just talked about.

1955             But, for example, if I'm looking at, you know, Eve which is what Astral is proposing, whereas as I said, we looked at our duplication and we expect 15 per cent duplication.  When we compared their music list with what is currently in the market, we found that 86 per cent is duplicated.

1956             Then again the spoken word component, you know, because you have to look at the whole package, we're proposing for example 16 hours and 40 minutes of news, in their thing, they're 90 minutes a week, so there's a substantial difference there.

1957             And then another big difference that we noted, for example, with Astral is that they committed to 42 hours of local programming in a week and they confirm that in their deficiency as well, so that the other hours other than those 42 would not be local; wherein in our case we're a hundred per cent local.

1958             So, that's really the broad strokes of the difference.

1959             MS HOCHSCHILD:  If I can add one more stroke in terms of music.  Comparisons are inevitable with the Astral application in terms of the demo on paper and at least the idea of a mature lifestyle oriented spoken word to appeal to this demo, but really the comparison ends there.

1960             They're programming music that's ‑‑ they're hit driven many before the year 2000, but particularly soft in feel.  Their identifying term for Eve is comfort radio.

1961             And I think as evidenced by the exclusivity numbers, we think that the demographic females 35‑54 who want to be comforted in that way seem to be fairly well served in this market already and that's why we found Eve with 86 per cent duplication.

1962             We would rather engage the females 35‑54 with this mix of music and the elements that they have told us that they want that will bring them back to this market.

1963             So, we're serving as a counter point to the women's programming, programming for women that exists in this market right now, that Eve is actually a little bit closer to.

1964             THE CHAIRPERSON:  And when you compare yourself with the application by Mark Maheu...?

1965             MS HOCHSCHILD:  In terms of the project Capital ‑‑

1966             THE CHAIRPERSON:  Yes.

1967             MS HOCHSCHILD:  ‑‑ in the application.

1968             THE CHAIRPERSON:  Capital Radio, yes.

1969             MS HOCHSCHILD:  They're going for a younger and narrower core demo of 23‑35.  The skew is only slightly female and they're appealing to them with a mix of pop, alternative and urban, very hit based and from various eras with a little less current than could be expected.

1970             That's what we found in the Maheu application.

1971             THE CHAIRPERSON:  If the Commission was to use the two frequencies available to grant the licences, how many new English FM radio stations do you think the market will support?

1972             MS LAURIGNANO:  That's the million dollar question.

1973             Well, we ‑‑

1974             THE CHAIRPERSON:  I will guess, including yours.

1975             MS LAURIGNANO:  Of course.  As long as we're included ‑‑ no, I'm just...

1976             You know, really we think that the market is healthy enough to sustain as many as in your wisdom you want to award.  It's a healthy market.  I think that the biggest problem is, you know, the tightness on the spectrum and not the market itself.

1977             It is growing, there is, you know, housing starts and all kinds of, you know, good economic indicators that usually are good for our industry.

1978             So, we have no concerns about, you know, the economic impact of whether you licence one or two in the English side.

1979             MR. EVANOV:  The only thing I would add is as long as the format doesn't duplicate what we ourselves would be doing if we were licensed on 99.7, and particularly the Jewel, because we're sitting there with 480 watts versus 10,000, 50,000 watts and if Eve is licensed there's a major duplication on the Jewel.

1980             And, so, as long as it doesn't infringe and threaten the survival of that particular station, we would not be concerned.

1981             THE CHAIRPERSON:  Now, my last question has to do with the issue of third adjacent frequency and your own awareness of the issues that have been raised already by the various interveners or those who are currently operating radio stations in this market who are concerned about third adjacent.

1982             I am only asking you if you are well aware of the rules that Industry Canada, not only the ones that are in the current broadcast procedures, but the ones that they are currently looking at.

1983             So, in the eventuality that there was to be any impairment, you will have the responsibility to make all the necessary corrections.

1984             Only for the record I want to hear you saying what you want to say.

1985             MS LAURIGNANO:  Yes.  For the record, of course, we would, you know, cooperate and do our part.  If we could be part of any solution, recognizing, as I've just said, how tight the spectrum is and, you know, how we have to work together and if it's good for the industry, you know, that's okay.

1986             We certainly would be prepared to, you know, work with whatever and resolve to the best of our ability what we could.

1987             To that end, I might say that we met with CHRI just before because we understand that, you know, co‑location with either 98.5 or the frequency that we're proposing might solve some of their problems on their current situation and we have, you know, a standing offer for them that, you know, when they're ready and if they want we would be more than willing to co‑locate with them to help them along.

1988             THE CHAIRPERSON:  I will ask Commissioner Katz for any questions.

1989             COMMISSIONER KATZ:  I just have one question, and I hope I'm not beating a dead horse here.

1990             On page 18 of your remarks this morning you spoke to the Chairman earlier about the situation with the Jewel.

1991             You state in the last paragraph:

                      "ALICE will assist the Jewel, a station that is permanently technically handicapped in terms of future growth."  (As read)

1992             COMMISSIONER KATZ:  Now, we heard from an advertising perspective the market is vibrant, I guess we have heard you say you can't reach that market.

1993             I would have thought that there would be some synergies here that would allow you to offset some costs since what you are saying is you can't grow, and in the paragraph right above you are talking about a new news team, a revitalization of people and infrastructure.

1994             MS LAURIGNANO:  Mm‑hmm.

1995             COMMISSIONER KATZ:  I'm not sure how being awarded a licence for ALICE will necessarily help the Jewel if you are telling me the Jewel had been closed from a perspective of reach and audience.

1996             MS LAURIGNANO:  Right.  Okay, just to put it in simple terms from my perspective is, of the two ALICE will be the bigger sister, so, because of the better power that it has, even though the signal is still not, you know, equivalent to some of the other incumbents in the market, it is a smaller signal, because we will be able to put a lot of power out it will penetrate the area that it says it will because of the 11,800 watts versus the 485.

1997             So, that business plan is a lot more solid and we're very confident that we will deliver that because the Jewel has the dual problem; one, that the signal itself doesn't extend and then where the signal is it's not reliable because of the power.

1998             So, the synergies are definitely there and they will benefit to Jewel absolutely.  So, they're not reflected in the ALICE business model, but because we have a building already there, because we have some other infrastructure, it will help the Jewel meet its obligations and cut those losses or catch up, you know, as we go along.

1999             We have no question about that.

2000             And one other way that we're going to be doing this, we're going to be maximizing it from the sales end, from the revenue, not just is there a cost savings because of the synergies such as, you know, the studio location and that kind of thing, but in the sales there's going to be a substantial difference in how the Jewel will be affected.

2001             So, if you don't mind, I'm just going to ask Ky to elaborate just very briefly on that, how we see that happening.

2002             MS JOSEPH:  Thank you.

2003             In fact ALICE is crucial to the Jewel at this particular point.  From an advertiser point of view, we're very familiar with the advertiser demand in this market and the opportunity.  We have five sales reps out on the streets right now predominantly selling local advertising.  Out of the last hundred that we visited, specifically also talking about one going in and trying to sell the Jewel and also applying for this frequency at the same time, there were about 30 per cent of the advertisers who said, you know what, the Jewel sounds really interesting, let me listen and they couldn't hear it.

2004             Or, for example, a very specific occurrence happened with Carpet One in Kanata, Kanata Flooring.  They wouldn't buy the Jewel because they couldn't hear the station.  And, as a result, their store in Orleans didn't buy us because Orleans and Kanata split their advertising budget and they needed the efficiencies of targeting two different ‑‑ using that advertising budget to offset their costs over the two stores.

2005             Inter‑Health Laser Clinic, their ‑‑

2006             COMMISSIONER KATZ:  I'm still missing something here.  How will having a licence for ALICE and being able to sell advertising on ALICE help you increase your revenues on the Jewel?

2007             Carpet One in Kanata is still not going to want to broadcast on the Jewel because it can't, is what you are saying.

2008             MS JOSEPH:  Well, actually the comboing effort that we have mentioned in our application, we're in a sea of big boys here in this Ottawa market and they have an opportunity to combo with discounting based on buying a number of radio stations and we don't have that opportunity.

2009             So, certainly that, and this is something that we've researched from a local advertising point of view and that is very crucial to our business plan.

2010             MS LAURIGNANO:  Typically an easy listening format such as Jewel and a reliable signal will draw an audience which is 45 plus and even go as low as 35 plus.

2011             Because of the impairments that we have, we have not been able to attract the lower end of the demographic.  So, the tuning, as we said before, is really very much in the high end, 70 per cent of hours tuned for the Jewel right now are in the 60 plus category.

2012             This format here through the reliable signal and through the uniqueness of the programming will attract the lower of the demographic.  So, we ‑‑ because the core dem was 35‑54, we will be able to attract very good numbers for that demo which we can then combine as a full demo for 35 plus and sell the two stations together.

2013             Plus, the other thing is that it's always great when you can product cross‑promote as well, so that it will be good to remind people that the Jewel is there, both from like an advertiser and even a listener point of view.

2014             MR. EVANOV:  The only thing I'd like to add is right now we're suffering because we're missing budgets because people can't reach ‑‑ hear the signal, but if they can hear the signal of Alice then we're not going to miss that budget.

2015             If we're not going to get it all, we have a chance to get a portion of it and that's the big difference.

2016             In addition, the cost savings at the station in terms of some marketing, administrative and basic rent, studios, engineering, et cetera.

2017             THE CHAIRPERSON:  Legal counsel.

2018             MR. GAGNON:  Thank you.  I would just like to clarify something regarding the percentage of local news.

2019             I think you've indicated that you would have 13 hours of pure news, but in the application it was stated that 50 per cent would be local and in the presentation it's 80 per cent.

2020             MS LAURIGNANO:  Okay.  In the presentation it's a minimum, that's what we've said, but we're ‑‑ it's always a bare minimum over the licence term, but it is our intention and ‑‑ but we're delivering those numbers across all our other properties, so, 60 per cent will be local for this.

2021             MR. GAGNON:  So, it will be 60 per cent?

2022             MS LAURIGNANO:  We can accept 60 per cent, yes.

2023             MR. GAGNON:  Okay.

2024             MS LAURIGNANO:  Or a 50 per cent minimum.

2025             MR. GAGNON:  Okay.  Now, you've undertook to provide a letter from Algonquin College.  Would that be possible to provide it within one week?

2026             MS LAURIGNANO:  We believe so.  We'll try to do it as fast as possible, we'll make the call right away.

2027             MR. GAGNON:  Thank you.

2028             THE CHAIRPERSON:  Well, thank you very much for your presentation.

2029             We will hear the oral presentation of the next applicant and then we will break for lunch and come back for the interrogatory.

2030             Ms Secretary.

2031             THE SECRETARY:  Thank you, Mr. Chairman.

2032             So, we will now proceed with Item 8 which is an application by Astral Media Radio Inc. for a licence to operate an English language FM commercial radio programming undertaking in Ottawa and Gatineau.

‑‑‑ Pause

2033             THE SECRETARY:  Please introduce yourself and your colleagues and you will then have 20 minutes for your presentation.

2034             Thank you.

PRESENTATION / PRÉSENTATION

2035             MR. PARISIEN:  Good morning, Mr. Chair, members of the Commission and Commission staff.

2036             My name is Jacques Parisien and I am President of Astral Media Radio.  I am particularly pleased to appear before you today to present what we strongly believe is the best proposal for a new FM station in the Ottawa market.

2037             Before we begin our presentation, I would like to introduce our panel.

2038             Starting in the front row on my right is Eric Stafford.  Eric is the Vice‑President and General Manager Ottawa/Pembroke.  He has more than 29 years experience in radio broadcasting and has been with The Bear in Ottawa for over 10 years.  If our application is approved, Eric will become the general manager of Eve‑FM.

2039             To his right is Ross Davies.  Ross is Vice‑President Programming Astral Media Radio GP.

2040             Beside him is Kath Thompson, Assistant Program Director and Music Director of The Bear.  Kath will oversee the programming of Eve‑FM if our application is approved.

2041             To my left is Claude Laflamme, Vice‑President Corporate and Regulatory Affairs at Astral Media Radio.

2042             Next to her is Rob Braide, Vice‑President Branding, Communications and Industry Relations for Astral Media Radio and also Canadian Content Development Coordinator for the group.

2043             On the second row from my left to my right are Julie Charest, Research Director for Astral Media Radio and David Béland, Senior Consultant of CARAT, a media buying agency and research firm that developed our market analysis.

2044             Beside David is Gary Perrin, General Sales Manager of The Bear, Andy Boyd, Vice‑President Finance Astral Media Radio GP and Wally Lennox, Vice‑President Engineering Ontario.

2045             Finally, we are proud to have Sue McGarvie with us today.  Sue is a very experienced therapist and a well‑known broadcaster in the Ottawa market.  She will host our evening show, "Behind Closed Doors".

2046             We will now begin our presentation.

2047             Mr. Chair and Commissioners, as you can see we have assembled a substantial and experienced team.  Each member brings his or her own unique insight to the table and together we represent the expertise and resources that will contribute to Eve‑FM project.

2048             With the acquisition of Standard, Astral now has one English language station in Ottawa and we're keen to increase our presence in this market by providing this exciting new service dedicated to women.

2049             Approval of the Eve‑FM application would allow us to create a more level playing field with those players already in the market with multiple stations.  Astral's goal is still to make the Canadian radio industry more dynamic and very equipped to face the increasing competition from other media and new platforms, while continuing to be the music industry's best ally.

2050             We believe we can achieve these goals because we're passionate about radio and music, we are supporting new Canadian talent in many different ways including through the substantial CCD initiatives we have proposed which are unmatched by any other applicant.

2051             Because we are convinced that radio is, by essence, a local medium, so we are extremely sensitive to the needs and aspirations of our local listeners and we are deeply involved in every community we serve, because we have created a compelling and up‑to‑date radio concept and we have the resources to make it happen.

2052             Astral is indeed a strong and stable broadcaster with sound human and financial resources and is well known for respecting all of its commitments.

2053             Today we introduce you to a very carefully designed radio station called Eve‑FM which reflects our commitment to community involvement and our intimate knowledge of the female audiences.

2054             Our dream is to bring this high quality radio service to the English‑speaking women of Ottawa.

2055             We hope that every woman listening will find a part of herself reflected in the programming of Eve‑FM.

2056             To give you a feeling of the station in a concrete way, we invite you to watch and listen to a short video.

‑‑‑ Video presentation / présentation vidéo

2057             MR. STAFFORD:  Eve‑FM is a brand new radio concept, a unique fusion of relevant spoken word components and soft contemporary music designed to cater to women between the ages of 35 and 64.

2058             Let me start by explaining the process that led to the choice of our format and target audience.

2059             First we took into account today's reality that consumers have lots of other choices to find their particular form of audio entertainment.  We now live in a world where you can find virtually every type of music produced to suit your taste, whether it's your iPod, iPhone, Wi‑Fi, Internet, satellite radio, technology today is changing the way people live and radio needs to change too.

2060             For terrestrial radio to succeed, it needs to acknowledge and embrace this reality.  It needs to take a page out of these audio services and to create compelling and appealing new formats, particularly in a highly competitive market such as Ottawa.

2061             It needs to find innovative ways to use and promote music while developing exclusive high quality spoken word components that will be locally relevant and strongly rooted in this community.

2062             Our market study shows women between 35 and 64 are an important and rapidly growing demographic in the Ottawa central market.  It also demonstrates that their listening is below average compared to Ontario and Canada, indicating that this demographic is not well served by radio offerings here in Ottawa and elsewhere.

2063             This is also a demographic we serve with great success in other markets across the country.  The fit for Astral is perfect.  This is our audience.

2064             Our study demonstrates that women age 35 to 64 are very responsive to the soft music AC format.  They're 51 per cent more likely to listen to this format than the general population.

2065             Finally, our research indicates that most women in this age group have very active lifestyles.  They race to and from work, struggling the demands of careers, couple time, growing children and aging parents.  They're looking for relief, and dominant trends for today's women include the pursuit of physical and psychological comfort, quest for wellness and a search for new ways to simplify her life.

2066             We created and developed Eve‑FM in light of all of this information.  We want it to be unlike any other station in the Ottawa market.

2067             As the map in front of you shows, we believe we've succeeded in achieving this.

2068             Eve‑FM will clearly fill a niche that's not being served by existing radio stations.  It would compliment rather than compete with programming currently available in the Ottawa market.

2069             But Eve‑FM will go well beyond that.  It will not simply be another radio station, it will be an entirely new environmental experience.

2070             Ross and Kath will explain why.

2071             MR. DAVIES:  Thank you, Eric.

2072             Eve‑FM will be the radio equivalent of magazines like "Real Simple" or "Chatelaine" and television shows like "Oprah" and "The View" that have built their success with a lifestyle orientation focused on wellness, family, independence and women exchanging ideas and opinions.

2073             It's now time for radio to catch up and to go beyond and Astral wants to lead the way in that direction.

2074             On the spoken word side, Eve‑FM will offer lifestyle oriented programming integrated throughout the day designed to enrich the lives of women in the Ottawa area.  Our approach will be informative, engaging and affirmative.

2075             From early morning to late night, Eve‑FM will speak directly to women and give them the opportunity to share experiences, views and passions.

2076             The day will start with our innovative morning show, "Breakfast at Eve's", a special blend of music and spoken word where women will be able to get in touch with a wide array of specialists including a nutritionist, an esthetician, a financial advisor, a psychologist or a life coach like Deanna Rutherford to help them deal with their day‑to‑day concerns, to discuss about time management and personal growth or exchange opinions about new films, television shows or books.

2077             And once a week "Breakfast at Eve's" will broadcast live from a mobile studio station where the action is, whether it be the Byward Market, the site of a music festival or a social event, putting Eve face‑to‑face with her audience.

2078             The same kind of features will be integrated into our mid‑day more music oriented show and to our afternoon drive show "Home Sweet Home" which will be designed to help women start to decompress and move towards a more relaxing mood after another busy day.

2079             And the day will close with our evening program, "Behind Closed Doors", which will focus on all kinds of relationships hosted by the well‑known Ottawa therapist and broadcaster Sue McGarvie.

2080             Throughout the entire broadcast week Eve will offer top quality, relevant and concise local, national and international news and also regular coverage and promotion of local events and causes that are important to the daily lives of Ottawa women.

2081             Finally, through our station website, we will provide our audience with free access to all of our specialists and other meaningful information, as well as a community network to gather, exchange and share.

2082             Like a trusted friend, Eve will talk heart‑to‑heart to her listeners.  She will offer women compelling ideas, good sense, good taste and a good time.  She will speak and connect to women in a way that no other radio station ever has.

2083             MS THOMPSON:  Eve‑FM has been designed as an integrated concept where music and the spoken word really blends seamlessly throughout the day to create an environmental audio experience that embraces the expectations of our target audience.

2084             Eve‑FM is going to be about women creating a community through their shared listening experience.  It will be a destination point for women.  It will be soft and warm and friendly and relaxing.  It will be intelligent and caring, sensitive and emotional.  It will soothe the souls of Ottawa women, become their loyal friend and offer them a place to escape.

2085             Our music will be carefully selected to achieve these objectives and to contribute to the mood of the station.  Eve‑FM will be a new and refreshing kind of soft adult station.  Eve will draw her blend of soft music from a wide range of sources from the 1970s right through to the present, and the songs are going to be selected based on the feelings that they evoke, not only on their hit status.  They are going to connect with women.  They will be comforting as well as inspirational.

2086             Our library will be deeper and more extensive than a regular AC station.  The key word in selecting songs will be emotion.

2087             As an example, we may not play the lead single of a newly released album but decide instead to play a few other songs from that album which better suit the spirit of our station, songs that will not otherwise get any airplay in the market.  In doing so, we will increase the diversity of the musical offering while enriching the environmental audio experience that we want to create.

2088             We will feature 40 per cent Canadian music, including new artists, as well as favourite artists with new releases and old favourites.  We will also celebrate Ottawa's multiculturalism with worldbeat music on the weekends, and we will look forward to discovering great emerging Canadian talents and I'm hoping we will especially find some right here in the Ottawa region.

2089             MS McGARVIE:  As a broadcaster, a lifetime resident, a mother, community leader in Ottawa, I am very excited to be associated with Eve‑FM.  As the Past Chair of the Canadian Women in Communications, I know that women have struggled at times to find their own voice in broadcasting.

2090             Eve‑FM is not only a great project but it is a needed project.  It is the kind of radio station that a lot of Ottawa's women are looking for.

2091             I have long thought that women were underserved in this market, especially as it relates to talk.  I believe that women have a need to congregate and to share with each other the trials and celebrations of our lives.  It is my hope that Eve‑FM will be there to rectify this void in the Ottawa radio landscape.

2092             My evening show Behind Closed Doors will be about relationships.  It can be described as romance with a sassy edge, a show for women who appreciate a glass of wine and for whom dust bunnies are part of the family.  We won't be talking about scrap booking, more about love, lust, lipstick, marriage coaching, menopause and why hockey players are sexy.  It is the mystery of relationships, being single again, great loves, dealing with our adolescents and aging parents and how to flirt with lots of laughs and loads of cheek.  It is about why kindness matters, along with great mood music, guest experts, interactive texting and comedians commenting on relationships.

2093             Above all, it is keeping it local, with that overriding sense of community.  Taking calls from Ottawa women about what is going on in their bedrooms, boardrooms, living rooms and any other rooms in their lives is what will make the connections authentic.

2094             Behind Closed Doors is what I describe as chewy, meaning real women, complete with stretch marks, talking to each other in Ottawa.

2095             MS LAFLAMME:  Eve‑FM is committed to being an integral part of the community it will serve.  Eve‑FM will be a distinctive Ottawa radio station providing mostly local live and exclusive programming during the broadcast week.

2096             Eve‑FM will also reflect Ottawa's cultural diversity in its programming, in its workforce and on‑air.  Astral will mandate its Cultural Diversity Committee to identify best practices and to ensure that our staff and on‑air employees represent the diverse communities living in Ottawa.

2097             We will also implement Astral's successful employment equity programs.

2098             With the help of our mobile broadcasting studio and our promotional activities, we will make sure that our listeners are aware and well‑informed about all the local festivals, cultural, philanthropic and social events, including events from the multicultural community.

2099             Local reflection will be an essential element of Eve‑FM's desire to be plugged into the rhythm and fabric of women's lives and to participate in the community as a partner.

2100             With the addition of this new station, Astral will be in a position to improve its already deep involvement in the Ottawa community.  Over the last decade, Astral's Ottawa radio station, The Bear, has raised nearly $2.5 million for important local charities, including The Children's Hospital of Eastern Ontario, the Muscular Dystrophy Gala, the Kids Help Phone and United Way.

2101             We were honoured with the Founder's Award for top radiothon in North America by the Children's Miracle Network.  For each dollar raised we have committed an equal value of airtime to support and promote these and many other local charities and social causes in Ottawa.

2102             MR. BRAIDE:  We are extremely proud to offer $6 million in Canadian Content Development initiatives over seven years, which would be an enormous benefit to the artistic community in Ottawa and mostly for young and emerging artists.

2103             Our CCD commitments were specifically designed to be an integral part of our unique and specialized format, to appeal to our listeners' sensibilities and to support their talented daughters, sons, nieces, nephews and friends to whom these initiatives are directed.

2104             We will contribute to Canadian Talent Development in the following ways.

2105             First, we will give FACTOR a total of more than $1.3 million over the seven‑year licence term to assist talented Canadians with support for recording and marketing.

2106             Second, we will spend more than $2.3 million over seven years on an exciting new initiative called "My First NAC", which will discover young Canadian singer/songwriters who have never played in front of more than a hundred people before and give them the opportunity to perform onstage at the National Arts Centre.  This is our marquee initiative.

2107             It will support true Canadian emerging artists while encouraging our listeners to bring out their family and friends to participate in amazing opportunity for new talent.

2108             Third, we will contribute more than $1 million over seven years to another new talent initiative, the new Canadian female talent in blues and roots.  It will help Canadian emerging female artists to proudly take their place in the genre of blues and roots that is still overwhelmingly dominated by men.

2109             Fourth, we have created a total budget of a quarter of $1 million over seven years to provide cash scholarships to assist students studying music or journalism.

2110             Fifth, we are pleased to propose a continuation of our efforts to support two non‑profit radio organizations that bring diversity to the national and local radio landscapes: Aboriginal Voices Radio and Radio Enfant, which were received half $1 million each over seven years.

2111             We want to be an important part of celebrating Canadian talent and we have created an integrated approach to these initiatives, which includes our listeners and encourages their participation.  We strongly believe that the $6 million CCD initiatives package is worthy and relevant.

2112             MR. PARISIEN:  Mr. Chair and Commissioners, there are many reasons why we believe Eve‑FM is the right service and we are the right applicant.

2113             We propose an innovative radio concept that will offer relevant lifestyle programming to Ottawa's women, while expanding their musical choices.  We propose a high quality spoken word features created specifically to answer the needs and reflect the local community.  We propose 40 per cent Canadian musical content and $6 million of CCD initiatives with a clear emphasis on emerging artists.  We have the financial strength to deliver what we promise, as well as the relevant knowledge and expertise to bring Eve‑FM to success.

2114             Approval of our application will represent the best use of the radio spectrum, both in terms of population coverage and smallest interference with existing stations.

2115             Approval of our application will also contribute to greater competitive balance in the Ottawa market without causing undue harm to incumbent broadcasters.

2116             For all these reasons, we firmly believe that our application best meets the Commission's licensing criteria and strongly contributes to the objective of the Broadcasting Act.

2117             We thank you for your time and attention and look forward to the question period.

2118             THE CHAIRPERSON:  Thank you very much, Mr. Parisien.

2119             As I stated earlier, we will break for lunch and come back at quarter past 1:00.

2120             The record shows that your CCD commitments is $5,866,900.  I understand that you have brought it up to $6 million only for the sake of probably the oral presentation, but during the question period we will want to make sure that the amount total is $5,866,900.

2121             So I am giving you the lunch break to adjust your presentation.

2122             Thank you very much.

2123             MR. PARISIEN:  It is going to be an expensive lunch.

‑‑‑ Laughter / Rires

2124             THE CHAIRPERSON:  Some savings!

‑‑‑ Upon recessing at 1156 / Suspension à 1156

‑‑‑ Upon resuming at 1316 / Reprise à 1316

2125             LE PRÉSIDENT :  Re‑bonjour.  On va passer par la phase interrogatoire.

2126             We go to the first questions and they will be asked by Commissioner Morin.

2127             CONSEILLER MORIN :  Bon après‑midi.  My first question will be perhaps about this graphic.

2128             How will your Eve‑FM station be different from the ones operating in the Ottawa/Gatineau market?

2129             MR. PARISIEN:  Well, we think that the concept of Eve‑FM is unique in the Gatineau market, in the English market of Ottawa and that it is exclusive.  It is the only concept of its sort, relying on soft music lifestyle, spoken words, the only one that is niched towards women of that demographic.

2130             I will let those who have participated more in the elaboration of the concept address your question, if you don't mind.

2131             MR. DAVIES:  Commissioner Morin, if I may, one of the things that I think radio has to do today in order to compete in the marketplace, given the advent of new media, Internet radio, satellite radio, and the already availability of the mass formats here in Ottawa, we have to be unique and special.

2132             One of the things that I learned when I spent a couple of years in satellite radio is that there were channels of destination.  And that was one of the key things.  You knew exactly where you could go to for jazz or soft jazz or blues or what I like to call chill music.  There was a channel all about chill music.

2133             And that is exactly what we have created here, is this unique format that has never been heard before in terrestrial radio.  It is all about soft, relaxing music.  And there is no one in this market that does that.

2134             I would suggest that to the extent that we are positioning the station with soft music, I don't think there are too many stations around Canada that are doing that.  It is truly unique.

2135             So the music is the one component that will set us apart right off the bat.

2136             In addition to that, we have created kind of a unique blend of spoken word elements to integrate with the music of the station targeted towards the female demographic that we are going after.  These will be spoken word elements that will be of particular relevance to their lifestyles and the issues that they have to face every day, whether it is children or family or marriage or, you know, trying to deal with their jobs and family life and things like that.  That will be integrated throughout the programming.

2137             So those are two things ‑‑ and that is throughout the day.

2138             Then we also have a couple of things that I think are pretty special and I like to call this as our signature show, which is "Behind Closed Doors".  In all the preparations we have had over the last few weeks and when we discussed this show, I think we are all kind of anxious to hear it on the air because it really is going to be a unique, compelling and I think truly rewarding and enriching show:  a combination of music, sensual music, soft music and spoken word components interactive with the women here in Ottawa.

2139             So I think that is something that is also going to set us apart.

2140             We have the Worldbeat Music Show that we are going to be doing on weekends.

2141             The general theme throughout the day will just be this soft and relaxing music.  Again, it is not like a typical AC radio station that you would hear in Ottawa.

2142             COMMISSIONER MORIN:  How have you determined the blend between the spoken word and the music?

2143             MR. DAVIES:  I'm sorry, how do I...?

2144             COMMISSIONER MORIN:  How have you determined the share of the spoken word with the music?

2145             MR. DAVIES:  It will be balanced.  For example, the show I was just talking about which will run between 9:00 p.m. ‑‑ it will actually run ‑‑ it will start at 7:00 p.m. and then at 9:00 p.m. it will get into the spoken word element more so because of the substance of the subject matter of that show.

2146             But that show will be probably a blend of perhaps 50 per cent music and 50 per cent spoken word in that particular case.

2147             Our morning show will be not like your typical morning show that you would have here say in Ottawa, where it is a lot of music with spoken word features and jokes put in.  We kind of look at our morning show as almost like a TV show, like "Canada AM" on radio.  So it will be a lot of features with spoken word elements intertwined with the music.

2148             So you could have in a particular one‑hour morning show a combination of maybe six songs and perhaps, you know, a feature that would be in every 20 minutes of that morning show of relevance to that particular segment of that time of the morning.

2149             And then during the day we will schedule these features, if you will, throughout the broadcast day in with the music.  So sometimes it will be small segments, sometimes it will be larger segments.

2150             COMMISSIONER MORIN:  So this is why you are saying your programming will resemble a specialty television channel?

2151             MR. DAVIES:  I think the morning show concept will be like that.  When you see shows like Ellen DeGeneres and Oprah where you have people around talking about things of interest to them, that's how we see our morning show "Breakfast at Eve's", in that concept.

2152             But the rest of the day, this is a music radio station, so from 9 o'clock on we are going to concentrate on music with some of these small features then put in.

2153             So in other words, after 9 o'clock it won't just become solid music; it will be interspersed with these spoken word features.

2154             COMMISSIONER MORIN:  You say that your station will have a minimal impact on existing stations in the region.

2155             Could you explain more what you are saying?

2156             MR. DAVIES:  I think ‑‑ and I might suggest that we have our research people follow up on this.

2157             But as you see by the map over there on the wall where we have identified an area that is clearly unserved in the market, we looked at that and realized that there was an opportunity for us to target a radio station that no one is currently living in.

2158             So that is the way we designed this format.

2159             I will ask David and Julie perhaps to embellish on that for you.

2160             MR. BÉLAND:  Well, first, women 35 to 64 in the Ottawa/Gatineau market do not listen to only one station in this market.  They listen to more than one station.  So this is the reason why we believe that the impact of Eve‑FM on the incumbent stations will be spread throughout not only one but multiple stations in this market.

2161             Also, the fact that that segment of the population is increasing rapidly so there are more and more listeners within that demographic group and that also helps to dilute the impact on incumbent stations.

2162             COMMISSIONER MORIN:  You have some numbers about the impact on different radio stations?

2163             MR. BÉLAND:  Yes.  In order to take subjectivity away from our assumptions, we spread the impact of Eve‑FM's tuning level accordingly to the existing stations' share in the women 35 to 64 demographic group.

2164             So the most impact of the station would be Majic.  There is also the CBC Radio One station that has a higher share among that demographic group, and to a lesser extent CFRA and also CHEZ, but to a much lesser extent.

2165             COMMISSIONER MORIN:  So how will your format be different from those radio stations you are talking about?  What is the percentage of overlap between you and these stations like The Jewel and Majic?

2166             MR. DAVIES:  I'm going to let Kath Thompson answer that question specifically, Commissioner Morin.

2167             MS THOMPSON:  Mr. Commissioner, when we did the comparison between our proposed Eve‑FM and also Majic, what we see when we look at Majic is a classic example of an AC station.  It is very up‑tempo and it relies on a high repeat on the hit songs.

2168             So for Eve‑FM we are going to be a vibe station, a very chill vibe station.  It is all about mood.

2169             And what we want to do, as we mentioned in our presentation, is really we don't want to go with just hits.  We want to sit there when a new album comes in, listen to it all the way through, and identify the tracks that really suit the mood of the station that we are trying to create.

2170             I did do comparisons in the existing playlist that we submitted with our application and samples of Majic, and 31 per cent would be where I estimated the share of the artists' crossover, much lower on the actual songs because we are going to be going with largely non‑hits from those artists.

2171             Compared to The Jewel, again a six‑hour sample, 20 per cent in artist similarity in the six‑hour sample, and again much lower if you are looking on a specific title by title thing.

2172             Now, the thing about The Jewel is it is a standard station.  It is aimed at an audience 55 and over, and their average listener is 65 years old.  So lots of Bing Crosby, Frank Sinatra, lots of instrumental music, and that is definitely not the area for Eve‑FM.

2173             MR. DAVIES:  Commissioner Morin, if I may just add, as far as The Jewel is concerned, Kath is right about that.

2174             And then in terms of a typical AC format ‑‑ and you would probably call Majic here in Ottawa that ‑‑ those formats are ideally targeted 60:40 female to male.  They play the hits of the 80s, 90s and today.  They are a soft, medium and up‑tempo presentation to their music.  It is mostly music.  There is some spoken word, but it is really ‑‑ you know, they concentrate on playing a lot of music.

2175             The difference between ourselves and those would be that we are going to be 80 per cent targeted towards women.  Our music will not be up‑tempo.  It might be lucky if it is medium.  It is going to be soft and mellow and chill, like I was saying before.

2176             And as Kath was saying, our library is going to be a lot deeper because we are not relying on the hits that the AC stations have to do.  We are going to go a lot deeper.

2177             So if their typical library might be anywhere between 500 and 600 titles, I would suggest ours is going to be double that.

2178             And then the last thing is that we are going to have a significant amount of these spoken word elements interwoven throughout the show, like the "Behind Closed Doors" thing that I was talking about earlier, and I think that really does separate us a lot from the existing market.

2179             COMMISSIONER MORIN:  How many hours will be allocated to local programming?

2180             MR. DAVIES:  It will be 100 per cent local programming during the week.  On the weekend we don't anticipate having any non‑local shows.  There might be a syndicated show that comes along, but we don't anticipate that right now.

2181             So the answer to your question would be 100 per cent local.

2182             COMMISSIONER MORIN:  Could you confirm that 42 hours of local programming would be produced per week?

2183             MR. DAVIES:  That is a minimum requirement as set out in the Regulations and we put that in our application as the minimum level.  But as the Commission may know, we like to under commit and over perform, and it will be 100 per cent local.

2184             COMMISSIONER MORIN:  So if you compare with the other radio stations, how will you provide a real benefit to the community, a service that meets the needs and interests of the group you plan to serve?

2185             MR. STAFFORD:  Commissioner, first I would like to say that I have lived in Ottawa about 11 years now so certainly I have had a tremendous amount of experience working with local charities, working with local community partners.

2186             I can say to you that we are unmatched in Ottawa in terms of our charity support and giving back.  I think we illustrated to you this morning a few of our charitable partners:  CHEO, The Children's Hospital of Ontario.  The Bear Children's Fund is another very important charity to us, that over these last 10 years or so $500,000 has been raised doing all kinds of different charities; The Kids Help Phone, Muscular Dystrophy, United Way, about $2.5 million in actual cash dollars and equal airtime to support that.

2187             As a stand‑alone we are very proud of that.

2188             You know, I guess the other point I try to make is our radiothons that we started just a few years ago certainly happen in different markets.  Here, though, we started as a stand‑alone rock station talking to a lot of guys and in our first year were awarded the Founder's Award which is for top radiothon in North America.  We are very proud of that.

2189             Then recently another award this past year.  This past fall I was very humbled to get an award personally from CHEO for service to the hospital.

2190             So, you know, we are really in touch with this community.  We know that we give back in the community we work with.

2191             MS THOMPSON:  I would also like to add that one of our great new community partners has been Citizen Advocacy, which is one that we have really championed.  I was so delighted that they picked us as their partner in all of their things with this, so that has been great as well.

2192             We really do help with the music community as well with the work at The Bear.  I have to say that we do provide airtime for Ottawa artists every single day.

2193             We are a resource for TARA, which is a recording arts program here in the Nation's Capital.  We participate in the national songwriting contest and I am pleased to say that we hire students from the Algonquin broadcasting program, and two of them are our main on‑air people with us right now.  So that is fantastic.

2194             I would hope that if we have the opportunity to put Eve‑FM on air we get a chance to really put some women broadcasters and start to develop that as well.

2195             I have to say that my dream for Eve‑FM is really to have a strong female morning show host.  There isn't one in private radio in Ottawa right now in the main chair and I think that would be really exciting, and seeing as it is radio for women let's have some women talking to women.  I think that the publication world has seen that and certainly TV, and it would be great to create this new sound for the Ottawa market.

2196             As specifically to your question as to how we benefit Ottawa and bring all kinds of new listening features to the airwaves, you know what, it is just such a rich, rich city.  There are so many fascinating people that live here and as we have been developing this, we have been finding some great people.

2197             For example, Deanna Rutherford, who I think you will hear from tomorrow, she is a businesswoman and a life coach, and to be able to put this person on air and bring her knowledge and wisdom into the community is fantastic.

2198             Sue McGarvie is just the most amazing resource, and while we are going to have her on air in the evening, I'm telling you, we will make sure that we get her on in the day as well to share some of her advice.

2199             We are also going to be finding people from within our community who can give us sound medical advice and legal advice, any of the things ‑‑ gardening.  You know, it can be as serious as what is this lump to what do I do in my garden in May.  But we want to draw these people from the community and share them with our listeners and hope that they will also interact with us ‑‑ women do like to talk ‑‑ and we're going to make sure we back it up with our online component where all of these people that we are putting together are also going to be able to be contactable online.

2200             As a final point, I would like to say we want to have a mobile broadcast facility.  We are joking around whether it should be half mobile vehicle and coffee bar, but now we are thinking maybe half mobile vehicle and half spa.  I don't know, we are working on that.

2201             But we are going to take it out into the community, not just with our main hosts, but we're going to bring the gang.  We are going to bring the gang.  We might be in the Byward Market, we might be at your house, but we are bringing the gang and it's going to be a lot of talk, a lot of laughs, and a really great soundtrack for all of that.

2202             MR. BRAIDE:  Commissioner Morin, if I may, another aspect of what we are bringing to the Ottawa market is a couple of really ground‑breaking Canadian talent development initiatives that have been done elsewhere.

2203             Well, actually, "My First NAC" has been turned into an expert project in Montreal with "Ma première Place des Arts".

2204             The idea is we are giving the NAC and its related agencies almost $2 million over seven years.  Imagine the blast of a little ‑‑ you know, a young kid, a developing artist, musician/songwriter/singer, who is going to have an opportunity to invite friends and family to watch him perform on the stage at the NAC.  These will be kids who have not performed before more than 100 people before.  That really brings it to the street.

2205             You know, the other one is the almost $1 million we are giving to the Ottawa Blues Festival to develop female talent in blues and roots music.  Again, these will be young women who have some kind of a degree program or some kind of certificate in music.

2206             Most of the blues players are men.  Well, we are going to try to find a whole bunch of them here in Ottawa that are females.

2207             Our CTD program reaches deeply into the community.

2208             COMMISSIONER MORIN:  I have three simple questions.

2209             What will be the total hours of spoken word material broadcast per broadcast week?

2210             What is the total number of hours of pure news to be broadcast per broadcast week?  Pure news excludes surveillance material, sports, weather, et cetera.

2211             And what percentage of the news will be devoted to local news stories?

2212             MR. DAVIES:  Commissioner Morin, on your spoken word there will be 24.5 hours per week of spoken word, roughly 19.5 per cent.

2213             In news there will be 91 minutes of pure news, not weather, not sports, 91 minutes spread out over the full week, including weekends, 55 newscasts in total.

2214             The percentage breakout would be approximately 60 per cent local, 30 per cent national and 10 per cent international.

2215             COMMISSIONER MORIN:  You project that your average annual growth in advertising revenues will be 28 per cent from year one to year five.  Usually news radio stations growth stabilizes by their third year of operation.

2216             In your model the growth will stabilize at 4 per cent at year six instead of at year three.

2217             So how do you explain your 28 per cent average annual growth from year one to year five?

2218             MR. BÉLAND:  Your reflection is that revenue from year one up to year seven, the difference between these two numbers represents an average annual increase of...?

2219             COMMISSIONER MORIN:  Of 28 per cent.

2220             MR. PARISIEN:  I think that is the total compound increase over a seven‑year period.

2221             COMMISSIONER MORIN:  Yes.

2222             MR. PARISIEN:  It still reflects normal growth in a dynamic market like Ottawa is.  It is not 28 per cent every year.

2223             COMMISSIONER MORIN:  Okay.

2224             In the first year 80 per cent or $2,186,383 will come from incumbent radio stations.  How have you determined that the revenue impacts will be spread between the incumbent radio stations according to the listening share with women aged 35 to 64 years old?

2225             MR. BÉLAND:  Because these stations will have slightly more impact with respect to tuning, that will also be reflected in the advertising revenue as well.

2226             But we believe it is somewhat realistic to assume that the largest share ‑‑ the majority of advertising revenue for a new station in the Ottawa market will come from the existing stations, because radio is an already well established media in this market and the radio advertising market is also well developed.

2227             As we note in our market study, after the Calgary market, the Ottawa/Gatineau English market is the market in Canada that has the highest amount of radio advertising revenue per capita.  So this is a clear indicator for us that it is an already developed market.

2228             You also add to that that when an advertiser selects the media types or the types of media he will want to use to get his message to the consumer, his personal marketing and communication objectives determine what medias he will use, not only the media offering that is getting to him.

2229             So this is why we think that most of the revenue will come indeed from radio.  These are two indicators that help us say that.

2230             COMMISSIONER MORIN:  How many new commercial radio undertakings can the Ottawa market support?

2231             MR. STAFFORD:  We believe, Commissioner, two English stations.  One of course would be our application and then in the Commission's wisdom a second licence, English.

2232             COMMISSIONER MORIN:  Thank you very much.

2233             C'était ma dernière question.

2234             THE CHAIRPERSON:  I just want to come back not to the last question but the one before last where Mr. Béland spoke about the strength of the advertising market in the Ottawa region.

2235             I know from tabulations that were made by the Conference Board that the radio advertising revenue per thousand dollars of retail sales equates to $5.96.

2236             Now, comparable markets in Canada, such as Calgary where we see strong, strong, strong growth, is only at $4.00 dollars, and Edmonton also, where there is strong growth the trend every month shows double‑digit increase in these two markets, is $3.50.

2237             Why do you think the $5.96 will remain sustainable and, in the long run, will allow you to make up for the revenues that you have put in your applications?

2238             MR. BÉLAND:  In the past five years advertising revenue, radio advertising revenue, increased on an average annual rate of 8.7 per cent in the Ottawa/Gatineau English market.  But I think it also includes the addition in that five years of a new station that is now part of the Ottawa/Gatineau reporting units for the Ottawa/Gatineau English market.

2239             But we think that an average annual growth rate of 4 per cent for radio advertising over the next seven years is somewhat a little lower than what we saw during the past five years.  So we feel that the level of advertising increase we forecast is someone realist compared to what the past five years were economically and to the forthcoming seven.

2240             THE CHAIRPERSON:  In relation with Calgary and Edmonton where the level of advertising per $100,000 retail sales is somehow quite much lower, at least by 20 per cent, 25 per cent, why do you think Ottawa will remain at that level and will not somehow plateau or diminish?

2241             What are your assumptions to sustain that in Calgary it is much lower and even if it delivers very, very strong numbers month after month and there are new players also that have come on the air over the last couple of years, and it is a comparable market in terms of size ‑‑ it is about the same number of potential listeners, and at least in the case of Calgary all in the English language ‑‑

2242             MR. STAFFORD:  Mr. Chairman, could I say that the population of Ottawa is growing first off.  I can tell you that the three pillars of economic growth here in Ottawa, the federal government, high tech, tourism, retail spending, but we know the market is very, very stable and we know that the population base is growing at a good level year in, year out.

2243             MR. BÉLAND:  Another point, just to add to that, is that the Ottawa/Gatineau English market is within the top markets in Canada.  So this in our mind makes the fact that it will remain within the top markets in Canada, therefore an important target for also national advertisers who will continue to buy this market and to put money in there, because national advertisers buy a list of markets and the Ottawa/Gatineau English market is always on the market list.

2244             THE CHAIRPERSON:  Mr. Davies, you stated that ‑‑ and I'm only asking the questions for the sake of having a complete file.

2245             You stated that your programming will be locally 100 per cent of the time while you have made a commitment of 42 hours.

2246             I am asking myself:  Are you amending your application?  And if it is the case, I cannot accept it.

2247             MS LAFLAMME:  If I may start the answer, we are not amending the application.

2248             If you go into the deficiency letter ‑‑ I have to find it.  Where's the first one?  I will find it.

2249             So in the deficiency letter, that I will find later, we had been asked a question about that and we answered that the 42 hours was the number of hours that the policy requires as a commitment, and we said that mostly all of our programming would be local; that the grid was not finalized yet and most of our programming would be ‑‑ the majority of the programming would be locally produced.

2250             So it's more than 42 hours.  Forty‑two hours represents a third of the programming and we are talking about the majority of the programming.

2251             THE CHAIRPERSON:  So it is a matter of interpretation?

2252             MS LAFLAMME:  Well majority, from my perspective, is more than 50 per cent.

2253             THE CHAIRPERSON:  How many hours will be voicetracked as opposed to live programming?

2254             MR. DAVIES:  I think during the week, during the broadcast week Monday to Friday, zero.  I think there may be the occasion on the weekends in off prime hours that there may be some, which is why I said it may be, you know ‑‑ it is probably maybe less than 5 per cent on the weekends.

2255             So it is primarily going to be a live radio service throughout the week.

2256             THE CHAIRPERSON:  I made a statement just before we broke for lunch regarding CCD.  I don't know if you had an opportunity to review the numbers and if you are able to comment on my statement.

2257             MR. PARISIEN:  Well, I won't comment on the statement.  I will just confirm, sir, that it is $6 million that we have committed to.

2258             We spent all of our lunch time going through the 700 pages in our file, and in our deficiency letter we have confirmed that and we will supply details to Madam Laurier‑Guy in due course, as she asked for.

2259             MR. BRAIDE:  Just to put it on the record, it is the deficiency response to deficiency of February 7th, 2008 to Madam Kathryn Blais, at page 3.  The table is clear at $857,000 per year consistently through seven years, for a total of $6 million.

2260             THE CHAIRPERSON:  Are you ready to accept the conditions of licence regarding contributions to FACTOR?

2261             MS LAFLAMME:  Yes, we are.

2262             THE CHAIRPERSON:  And for the over and above commitments over the seven‑year period that you are looking to devote to CCD, are you ready to accept a condition of licence in that regard?

2263             MS LAFLAMME:  Absolutely.

2264             HE CHAIRPERSON:  Thank you.

2265             I know that Commissioner Katz has some questions.

2266             COMMISSIONER KATZ:  I have one question and I am going to need some help here.

2267             Perhaps you were in the room this morning when Ottawa Media Inc. were here.  I know you addressed the issue of the overlap between your proposed radio station and theirs.  They were very concerned with Eve, obviously, and they singled out Eve as being a station that would certainly have a major, major impact on their business operations in light of the fact that they also have a frequency that is hindered as well.

2268             I noticed that they are in the same quadrant as you are.  And clearly from what you have put up there, they are in an older age group and probably less women, but that is all for interpretation.  They are already in the space right now and obviously they are concerned that if you were awarded the licence and they were not, they would be basically even further impaired.  And we do know that they are having trouble right now as well.

2269             How do you see us responding to that situation?

2270             MR. DAVIES:  Commissioner Katz, if you are referring first of all to The Jewel in that quadrant ‑‑ and you can see them in the upper part of that mapping over there.

2271             COMMISSIONER KATZ:  Yes.

2272             MR. DAVIES:  They are a 55‑plus targeted radio station and I think their average age is 65 years old.  That clearly is not the same radio station as Eve.  So there is a clear point of differentiation there.

2273             COMMISSIONER KATZ:  So you think they are actually going after a 65‑year‑old age group?

2274             MR. DAVIES:  That is their average age right now based on BBM tuning, 65 years old.

2275             COMMISSIONER KATZ:  But do you think that is their target audience?  Is that what they are getting right now given their situation?

2276             MR. DAVIES:  I think they are targeting 55‑plus is what I saw in their brief for The Jewel.  That is what they have said.

2277             And that is what typically an adult standards radio station format would target, would be the older demographic.  So that is The Jewel.

2278             So virtually there is very little differences ‑‑ very little similarities between the two.

2279             I will ask Kath here.  She can talk about some of the music changes.  I think she referenced those earlier, you know, the Frank Sinatras and things like that.

2280             COMMISSIONER KATZ:  No, she did reference it and I don't think she has to repeat it again.

2281             MR. DAVIES:  Okay.

2282             COMMISSIONER KATZ:  I actually wrote it down here in fact as well.  But they did indicate ‑‑

2283             MR. DAVIES:  Yes.

2284             COMMISSIONER KATZ:  ‑‑ that if Eve was licensed that The Jewel would be majorly impacted, particularly because they can't reach the people they reach.

2285             MR. DAVIES:  I appreciate that and that may be a function of their frequency difficulties and the fact that their format is skewing older.

2286             But I want to make sure that there is a clear understanding, these are two distinctly different formats.  This is a soft music format, a mood format with spoken word targeted to women younger than The Jewel's target audience.  They might say that they think Eve is going to be a virtual duplication.  I would choose to disagree with that.

2287             Now, in terms of Alice ‑‑ do you want me to comment on their proposed new format here as well, Commissioner Katz?

2288             COMMISSIONER KATZ:  If you would like to.

2289             MR. DAVIES:  Well, I think that they are targeting I guess what they are referring to as a AAA radio station.  I think they said it was 60:40 women to men and, as we said, we are 80 per cent women.  We are going to be purely ‑‑ we are going to be a niche format here.  So they are going to be a little bit more 60:40, more balance between men and women.

2290             They are going to be playing a wide variety of music types.  You heard them talk about that this morning, from rock to blues to folk, jazz, alternative country.  They said this morning they are going to be playing Death Cab For Cutie.  I can tell you that we won't be playing anything close to Death Cab for Cutie on Eve.

2291             So again it is going to come down to a little bit of interpretation between the two formats, but I think there is a wide difference between Eve and their proposed Alice format.

2292             MR. BÉLAND:  If I may add just two little details to that, like they mentioned this morning most of their listeners are aged 65‑plus.  In fact, more than half of the hours tuned to this station come from adults 65‑plus and that is the top barrier of Eve‑FM, where the target stops at 64.

2293             We evaluate that The Jewel would be the eighth station.  Even though it is in the same quadrant, it would be the eighth station that would be the less impacted of the incumbent stations.

2294             That is on Table 16 in our market study, if you have to refer to that.

‑‑‑ Pause

2295             THE CHAIRPERSON:  Legal counsel...?

2296             MR. GAGNON:  Thank you.  Just a quick follow‑up.

2297             The CCD breakdown, do you think you could be providing it tomorrow?

2298             MS LAFLAMME:  Yes, certainly, tomorrow morning.

2299             MR. GAGNON:  Thank you.

2300             THE CHAIRPERSON:  Gentlemen, thank you very much for your presentation.

2301             We will now move to the next application.

2302             THE SECRETARY:  We will now proceed with Item 9, which is an application by Frank Torres, on behalf of a corporation to be incorporated, for a licence to operate an English‑language FM commercial radio programming undertaking in Ottawa.

‑‑‑ Pause

2303             THE CHAIRPERSON:  Madam Secretary...?

2304             THE SECRETARY:  Please introduce yourself and your colleagues and you will then have 20 minutes for your presentation.

2305             Thank you.

PRESENTATION / PRÉSENTATION

2306             MR. ED TORRES:  Good afternoon, Mr. Chair, Members of the Commission and Commission staff.  My name is Ed Torres, I am the President and Cofounder of Skywords Radio.

2307             I would like to begin by thanking the Commission for entertaining our application for a new blues format FM radio licence.

2308             I would like to take a moment to introduce our panel.

2309             Seated to my right is my brother Frank Torres.  Frank is the Chief Operations Officer at Skywords.  Together we founded Skywards in 1991.  Today it is a national radio company with offices in five Canadian major markets, including Edmonton, Halifax, Markham and Ottawa.  Our company has operated in Ottawa and Gatineau since 1994.

2310             To my left is Yves Trottier.  Yves is a former Operations Director at Couleur FM in Gatineau.  He has held various PD positions prior to joining Skywords as the General Manager of Québec operations.

2311             Beside Yves is Robyn Metcalfe.  Robyn is the Vice‑President of Programming at Skywords and part owner in this application.

2312             Todd Bernard, to the far right of the front row, is a resident of Ottawa.  He served as the General Manager of Ottawa Operations for Skyword since we launched here in 1994.  He is also part of the ownership group for our proposed licence.

2313             In the second row, to your far right, is Nicole Levac.  Nicole has held various broadcast sales positions, including Director of National Sales for Radio Nord.  She is currently the Director of Québec Sales for Skywords.

2314             Beside Nicole, Aubrey Clarke is the Director of Business Development at Skywords and former sales manager.

2315             To his right, blues musicologist and President of the Ottawa Blues Society, Liz Sykes.

2316             And at the end of the second row we are fortunate to have one of the country's best blues guitarists, according to the Globe and Mail, J.W. Jones.

2317             The blues is what this application is all about.  Our presentation today will illustrate that Ottawa/Gatineau can sustain two or three additional entrants into the market; that we will increase the plurality and provide the only other independent news voice on mainstream English‑language radio in the market; that our local ownership and roots in this community, having lived here continuously and having served the radio market for 14 years, will ensure the success of our operation; that we will provide a missing radio option to the capital region listeners; and that our format will help launch and break new Canadian blues artists through commercial airplay of their music on FM airwaves.

2318             We have received over 1200 letters of support for our blues radio station applications, over 500 individual letters of support for this application alone, including letters from Dan Aykroyd; Jack de Keyzer, blues artist; Tom Lavin of the Powder Blues; Richard Cross, the general sales manager of Mark Motors in Ottawa; Eli El‑Chantiry, Ottawa city councillor; Mark Bureau, the mayor of Gatineau, and in his letter ‑‑ and I will ask Nicole to quote:

2319             MME LEVAC:  Nous sommes persuadés que les citoyennes et citoyens de Gatineau et de l'Outaouais devraient pouvoir syntoniser une radio qui présente de la musiques blues.  Ce genre musical a tout intérêt a être représenté par les stations radiophoniques actuelles au Canada.  Dans la régoin, une nouvelle station de format blues est très attendu par les adeptes et nous sommes d'avis qu'elle doit voir le jour.

2320             MR. ED TORRES:  We have commissioned extensive formal research by independent third party research firms into the viability of our proposed format in 10 markets across Canada.  To supplement our formal research, we have created an online survey at "bluesincanada.com", a website that we own, which has generated hundreds of responses.

2321             Overwhelmingly, we have found in our research that the blues is a first music choice for up to 30 to 60 percent of people, and it is almost universally accepted as a second choice.

2322             In Ottawa, the blues scene is vibrant.  The Ottawa Blues Society actively promotes blues music and artists.

2323             The Ottawa Bluesfest is North America's largest premiere blues festival.  Ottawa is passionate about the blues and the Canadian artists that perform it.

2324             MS SYKES:  I have been the President of the Ottawa Blues Society for the last five and a half years, and I have attended numerous blues festivals and visited blues venues in both Canada and the United States.

2325             In Canada, there are hundreds of locally and regionally based blues bands and performers, a relatively small number of whom have achieved national or international prominence.

2326             Unfortunately, most of these exceedingly talented musicians receive little or no airplay on Canadian commercial radio.  We must rely on satellite radio and/or cable services to hear only a few of our national blues artists, and local and regional blues artists get virtually no airplay at all.

2327             There is some coverage on satellite radio, but because it originates from the United States, Canadian artists get minimal airplay.

2328             For example, the Ottawa Blues Society blues artists' directory contains over 45 local bands and performers, many of whom have released excellent CDs, which we have reviewed in our newsletter.  Very little of this music is played on commercial radio stations.

2329             Of the 45 bands, only three are heard from time to time on Sirius or XM Radio.

2330             A blues‑oriented FM radio station will go a long way toward providing the exposure that our Canadian blues musicians deserve.

2331             Canada has provided the world with excellent blues artists ‑‑ the Downchild Blues Band, Sue Foley, JW‑Jones, Tony D, Colin James, the late Dutch Mason, and the late Jeff Healey, and, of course, Dan Aykroyd of Blues Brothers fame ‑‑ but there are hundreds of blues performers in Canada, 45 to 50 in Ottawa alone, who are pleading for exposure.

2332             In addition to benefiting our musicians, there are three major Canadian blues labels that will also benefit.  NorthernBlues Music and Electro‑Fi Records, both based in Toronto, and Stony Plain Records, based in Edmonton, have many Canadian blues artists under contract.

2333             How extensive is blues in Canada?  There are approximately 25 blues societies in Canada, at least 10 in Ontario.

2334             The Maple Blues Awards held their 11th annual event in January of this year, and over 115 Canadian blues artists were eligible.

2335             Three biennial blues summits have been sponsored jointly by the Toronto, Montreal and Ottawa blues societies.  The most recent, held in January 2007, resulted in the formation of the Canadian Blues Alliance, a fledgling national organization of blues societies and festivals, artists and presenters, whose common interest in the blues drew them together.

2336             Each year there are countless blues festivals that take place across the country ‑‑ the Cisco Ottawa Bluesfest here in Ottawa, the Mont Tremblant International Blues Festival in Mont Tremblant, Quebec, the Limestone City Blues Festival in Kingston, and the Waterfront Blues Festival in Toronto, to name but a few.

2337             There are blues venues in all major cities and towns in Canada, with upwards of 100 in Ontario alone.  What is missing is a blues‑oriented FM station to promote the wealth of blues artists and events that exist in the Ottawa‑Gatineau region.

2338             MR. JONES:  My name is JW‑Jones.  I have a blues band that has been on the scene for over a decade.  I cannot emphasize enough how important it is to have the blues genre broadcast and made available on FM to various demographics.

2339             These days there are virtually no outlets for blues to be broadcast on FM or AM radio in this area, except for the odd one‑hour special or one day a week on a university or community radio station.  CBC does a couple of hours every Saturday.

2340             My band has recorded five albums, one of which led us to winning the Electric Act of the Year at the national Maple Blues Awards.

2341             We were the first ever signed to NorthernBlues Music in 2001, and we have played in 13 countries and four continents.

2342             I have also been very fortunate to sit down with legends like B.B. King, play with top acts such as the legendary Hubert Sumlin, Rod Piazza & The Mighty Flyers, Anson Funderburgh & The Rockets, and The Fabulous Thunderbirds.

2343             I have also had wonderful guests on my recordings, such as Kim Wilson, Colin James, Ray Charles' sax player David Fathead Newman, Little Charlie from The Night Cats, and Junior Watson.

2344             Plus, we have had a lot of support from Hollywood celebrity and friend Elwood Blues, a.k.a. Dan Aykroyd, who wrote the liner notes for our new CD "Blue Listed".

2345             Although we are well‑travelled, we all desperately need more exposure in Canada, and FM radio play would certainly help in this regard.

2346             There are many clubs and festivals in the Ottawa area that we have played in the past, such as The Rainbow Bistro and the Cisco Systems Ottawa Bluesfest, which have many fans and patrons who would support commercial blues radio.

2347             I believe that this application will address the importance of blues radio in this area, and bring more support to local blues artists and this important genre of music.  It is the root of all popular music.  I like to say that blues is what all other forms of pop music hope to be when they grow up.

2348             Blues is a very general category of music, which includes many varied music styles as sub‑genres.  Of course, everyone has heard of rock blues, the style made popular by The Rolling Stones, Hendrix, ZZ Top, et cetera, characterized by loud, raunchy guitar.

2349             There are many other styles of blues, however, such as jump blues, which employs the big horn section and has a swing‑type beat to it.  It is very popular with swing and jive dancers.

2350             In Canada, the Downchild Blues Band, the Powder Blues and Colin James typify that style.

2351             People may think that blues is one‑dimensional.  You have heard it before, "My baby left me.  I don't have a job," crying and whining blues.  On the contrary, it can be, and usually is, uptempo, fun, danceable, and a celebration of vitality and life.  This station will demonstrate all of the permutations and facets of good blues music.

2352             M. TROTTIER:  Sûrement que plusieurs d'entre vous connaissez le très populaire film * Les Blues Brothers + mais avez‑vous regardé la liste des chansons sur la trame sonore ?  Elle ne contient aucune chanson blues traditionelles.  La trame sonore regorge de chansons de Ray Charles, Aretha Franklin et d'autres artistes Rhythm and Blues.

2353             Et oui, il, s'agit bien de blues et vous n'avez peut‑être même pas réalisé à quel point vous aimiez ce genre de musique.

2354             Le blues est un format musical sur lequel nous avons travaill au cours de la dernière année et il ne fait aucun doute que nous continuerons de l'améliorer au cours de la prochaine décennie.

2355             Tout au long de nos recherches, nous nous sommes aperçus que les amateurs de blues ne se limitaient pas à l'écoute d'un style station de radio en particulier.  C'est pourquoi nous croyons que notre arrivée dans le marché ne nuira pas à une station en particulier mais, un peu, à chacune d'entre elles répartissant ainsi l'impact négatif qu'il pourrait y avoir.

2356             Une station blues doit refléter toutes les tendances de cette musique.  En conséquence, nous avons planifié et budgété des séances d'écoute pour le lancement de chucune de nos stations.  Au cours de ces séances, nous ferons écouter une centaine de chansons à notre public cible pour nous assurer que nous sommes sur la bonne voie.

2357             Nous leur ferons aussi écouter des identifications de station et différents messages promotionnels pour peaufiner notre marque et l'identification blues des stations.

2358             En ce qui a trait à la musique, prenons l'exemple de Norah Jones.  Norah Jones est une artiste blues qui a développé son propre son au cours de sa carrière.  Elle ne joue pas sur les stations rock mais elle est une des artistes les plus populaires sur les ondes des stations adultes.  Parmi tous ses titres, nous choisirons les chansons, non pas sur la base de leurs succès au palmarès mais sur leur compatibilitén avec les autres titres de notre répertoire blues comme la chanson * What Am I to You? +

2359             MR. BERNARD:  In September of 1994 I launched the Ottawa division of Skywords Radio, and I have resided here in the capital region since that time.

2360             I can recall from my thousands of hours spent traffic reporting above our city from our Skywords aircraft how the capital region has grown.  When we first began providing our broadcast services to our affiliate radio stations, traffic rush hours would typically run from about 7:30 to 8:45 a.m., and again from 4:00 until 5:30 p.m. in the afternoon.

2361             Now, as we all know, our city streets and highways are packed with commuters in the morning from about 6:30 to 9:00, and again from 3:00 until 6:00 p.m. in the afternoon.

2362             Clearly, our city is growing.

2363             During this period of Ottawa's growth we have been busy growing our local market knowledge as well.  Through our sales efforts at Skywords Radio we have become known to the business communities in both Ottawa and Gatineau, as evidenced by the many letters of support for this application that we have collected from our business partners here in the capital.

2364             As well, our longevity in this highly competitive radio market shows that we are in tune with the region's advertisers, as many of our first clients are still supporting us today, entrusting us with their hard‑earned advertising dollars.

2365             I would now like to speak briefly about the market research that we have conducted, which we believe shows that the residents of Ottawa‑Gatineau are ready to support a blues format radio station here in the nation's capital.

2366             In July and August of 2007, we commissioned the PR Exchange Group to conduct a comprehensive market study and analysis to research the need for a new format choice in the region.  The goal was to determine the viability and acceptance of a new blues format in Ottawa‑Gatineau on the FM dial, and to understand the listening habits of the audience that would be reached by our signal.

2367             Some highlights from the results we got back are as follows.

2368             Respondents who answered that they were likely to listen to a blues station show a primary target demographic of 45 to 54 years, with a strong 25 to 34 secondary demographic.

2369             In our target demographic of 35 to 54 years, 53 percent of respondents indicated that they would likely listen to the station.

2370             When asked if they would listen to the station based on a selection of artists that we would play, 43 percent responded that they would likely listen to the station.

2371             In addition to the survey conducted by the PR Exchange Group, we began an online survey and market research initiative at "bluesincanada.com".  The survey asks internet users 19 questions, based on the same research questions put forward by the PR Group.

2372             When asked the question, "If an all‑blues format radio station existed in your area, would you increase your time listening to the radio," 89 percent of internet respondents aged 25‑plus indicated that, yes, they would increase their time tuned.

2373             To further augment the formal research and our internet research, we hit the streets and talked to people ourselves, one‑on‑one.  Particularly, we visited the region's blues establishments, including the Westport Inn, the Thirsty Moose, Irene's Pub, and, of course, Tucson's and The Rainbow.  We were hopeful that we would be warmly received, but were surprised at how emphatic and enthusiastic the support in favour of a blues station actually turned out to be.

2374             And we didn't stop at verbal support.  At these venues we received, from the patrons, approximately 250 letters of support for our blues station.

2375             We also found that the word was out.  On several occasions when we approached a patron for support, they indicated that they had already provided a letter of support either from our website, "bluesincanada.com", or from one of the other venues where we had done the same thing.

2376             This showed us that, in a relatively short period of time, we had created a significant buzz amongst the region's live music fans, and they are indeed ready to support a blues format radio station here in the nation's capital.

2377             MS METCALFE:  DAWG FM will be a positive and enjoyable workplace.  As a programmer, I look for people with a passion for radio, a team mentality that will work together to come up with great products and amazing radio.

2378             The station's people are key to building community connection, and will partner with the community to create a radio station that is locally focused.

2379             But how will we be different from a rock station?

2380             DAWG FM's bark is worse than its bite.  No AC/DC, no Pink Floyd, no Van Halen.  In its place you might find Marvin Gaye or Aretha Franklin, Ray Charles or Muddy Waters.

2381             Our morning and drive periods will have a rock‑blues edge, to get you up for the day, or to give you that energy you need to feed the kids and get them ready for hockey after you get home.

2382             The days will be on the softer side of blues, more R&B, swing, some big band possibly, as we try to be your office companion.

2383             Overnight, dim the lights.  Venus Flytrap is going to get you through the night shift by laying down some R&B groove all night long.  That's right, live overnight announcers as part of our commitment to 24/7 staffing.

2384             We like to say that we aren't "the big dawg on the block, but we have attitude."  Our radio station will have a brand, and it will have a feel.  The feel is blues, and I would like to play you a sample of our feel.

‑‑‑ Audio clip / Clip audio

2385             MS METCALFE:  Perhaps to highlight the fact that our station will be a good corporate citizen, engaged and connected with our community, and environmentally responsible ‑‑ yes, the blues are green ‑‑ we take pride in proposing that DAWG FM will be the first carbon‑neutral broadcaster in Canada.

2386             DAWG FM promotions will be different.  Instead of a week in Mexico on a beach, listeners will win a blues tour of Chicago, Memphis or New Orleans.  Ratings promotions will see listeners whisked away on a cruise, but not just any cruise ‑‑ you are going on a blues cruise, with bands on every level of the ship, playing into the late hours.

2387             MR. FRANK TORRES:  Our research shows that our target listener is very interested in news and information.  While other stations shy away from using spoken word, DAWG FM embraces it.

2388             Our background as a leader in the production of spoken word content means that DAWG FM will provide listeners in the capital region with high quality news, weather and sports in our packages.

2389             Business reports will air three times a day, with real‑time market numbers.

2390             School bus cancellations and snowmobile trail condition reports will air seasonally.

2391             In addition, our commitment to 24/7 staffing will ensure that when news breaks or emergencies occur, they can relay important information to our listeners.

2392             DAWG FM will take the leadership position in terms of traffic reports by reintroducing live, airborne, traffic aircraft surveillance in morning and afternoon drive, a critical service to the public that was grounded due to consolidation in the radio market in Ottawa.

2393             The capital region has limited camera surveillance of the 417, and virtually no coverage on the major routes through Gatineau.  DAWG FM will provide the most accurate, up‑to‑the‑minute reports available if licensed.

2394             MME LEVAC : Au cours des sept premières années de son existence, DAWG FM donnera $ 750 000 pour la promotion de talents canadiens.  Notre plan de développement du talent canadien a été élaboré en collaboration avec deux des plus grands promoteurs de talents et de musiciens canadiens.

2395             FACTOR recevra annuellement $ 64 286, somme qui sera versée dans un fonds destiné aux artistes de Blues.  Il s'agit d'un aide substantiel dans le but de lancer les carrières d'artistes émergeants.

2396             Un montant de $ 34 000 sera versé annuellement dans le cadre de la Semaine de la Musique canadienne, la Canadian Music Week.  Ce montant servira à la commandite de l'artiste ou du duo de Blues de l'année lors de la tenue des INDES, le gala de la musique indépendante.

2397             Dans le cadre de cet événement, ils créeront également trois nouvelles séries de concert Blues, en plus d'allouer des bourses aux musiciens locaux pour poursuivre leur perfectionnement et leur permettre d'assister à diverses conférences.

2398             Faisant partie intégrante de notre engagement à promouvoir et à diffuser la musique Blues et ses artistes, DAWG FM donnera cinq bourses à des étudiants de Gatineau‑Ottawa pour leur permettre de participer au programme The Blues in the School.  Il s'agit d'un programme éducatif pour promouvoir, préserver et perpétuer l'art, la culture et l'héritage de la musique Blues.

2399             En se familiarisant ainsi avec l'histoire de la musique Blues, les étudiants sont sensibilisés au phénomène du racisme.  La contribution annuelle pour ce programme est de $ 4 500.

2400             DAWG FM contribuera également à la promotion de la musique Blues en s'associant à Mac Philbin pour créer des émissions syndiquées pour diffusion au travers le Canada et partout dans le reste de la planète.  DAWG FM donner $ 2 358 par année pour la production et la promotion de ces émissions consacrées aux Blues.

2401             Nous encourageons également la Ottawa Blues Society en commanditant le Blues Heart Award pour une somme de $ 2 000 par année.  Cette récompense est remise habituellement à un individu ou à une organisation qui s'est particulièrement distingué de par sa passion et son dévouement pour le Blues.

2402             Now I will ask Ed to walk this doggie home.

2403             MR. ED TORRES:  The approval of this application will accrue substantial benefits to the public and, as such, in the best interests of the public, we are the public's best friend.

2404             DAWG FM will provide a format that is not currently available on conventional over‑the‑air radio.  It will repatriate listeners that tune to out‑of‑market stations or satellite or internet for their desired programming.  It will benefit the Canadian blues industry, artists, promoters, and the like.  It will add diversity to the ownership of the Canadian broadcast system, and encourage participation of minorities and women.

2405             Our local ownership and our 17 years of radio sales and broadcasting experience in this market, as well as our ability to function in both of Canada's official languages, will ensure the success of DAWG FM.

2406             We ask that over the May long weekend, when you have time to reflect, and possibly when your best furry friend is at the end of a leash enjoying the morning or evening walk, that you think of our application favourably.

2407             We mentioned at the London hearings that you would see us a number of times in the new year, and here we are again, continuing our efforts to give the blues in Canada a commercial voice on radio.

2408             We will close this presentation with our tag line:  After all, we are on a mission from DAWG.

2409             We look forward to your questions.

2410             THE CHAIRPERSON:  Thank you very much.

2411             Before asking Commissioner Katz to ask the first questions, I want to refer you to page 17 of your presentation, where you say that DAWG FM will be the first carbon‑neutral broadcaster in Canada.

2412             What do you mean?  Do you mean that you are going to run electric cars, and you will not use coal or oil or fuel?

2413             MR. ED TORRES:  We are going to run the Fred Flintstone car, with feet.

‑‑‑ Laughter / Rires

2414             MR. ED TORRES:  I will ask Robyn to expand on this, because she has set up the recycling program at Skywords.

2415             Basically, what we wanted to do was lead in terms of the environment.  So, yes, that means, possibly, using a hybrid vehicle for a community cruiser.

2416             It means sourcing power that is green and puts back into the grid ‑‑ you know, recycling programs and things of the like.

2417             There is also a zero‑carbon footprint calculator, and I think that Robyn would have more knowledge of that and how it works.

2418             MS METCALFE:  Basically, there are non‑profit organizations that have come together to start to help people produce a zero‑carbon footprint.  You would calculate how much carbon you would be using ‑‑ say that you are using 15 kilowatts a month, or something like that.  They would calculate it, and then you would give them money, and they would use that money for environmentally sound projects.  Then you are paying back to the environment for the carbon you are using.

2419             MR. FRANK TORRES:  We have already started that process in our current business.  We have started to transfer our fleet vehicles to ethanol‑burning mixed vehicles, which are friendlier to the environment.

2420             The fact is that no business, and not even an individual can exist without creating some sort of carbon footprint.  Wherever we can't physically reduce the amount of carbon, we will pay back into the system to have the system financially reduce it somewhere else.

2421             THE CHAIRPERSON:  You want, at the same time, to become a broadcaster and operate a carbon exchange?

‑‑‑ Laughter / Rires

2422             MR. ED TORRES:  No, we are going to stick to broadcasting.  That's what we know, and it's what we are good at.

2423             THE CHAIRPERSON:  Okay, fine.

2424             Commissioner Katz.

2425             COMMISSIONER KATZ:  Thank you very much, Mr. Chairman.

2426             I am going to continue on the topic of your heritage, Skywords.  I am intrigued by what you do, and maybe it's because I don't come from your industry.

2427             On page 10 of your evidence you say that Skywords produces traffic reports, business and market reports, weather reports, music programming, newscasts, snowmobile trail reports, entertainment reports, and other services as required by its affiliate stations from Halifax to Vancouver.

2428             How do you do that?

2429             MR. ED TORRES:  We started our company in 1991 to provide traffic reports, initially, to radio stations who, increasingly, were getting out of the flying business because it was expensive and there was a huge cost associated.

2430             So we became the outsource to the radio station, and we provided a service to the radio station, and we sponsored it.

2431             We came to the general manager, who, all of a sudden, couldn't afford an aircraft and was looking at losing a competitive edge in the market, and we said, "We have the airplane, and it's not going to cost you any dollars off your bottom line.  We are going to sponsor that traffic tag."

2432             So we sell 10 seconds, and we make all of our money selling the 10 seconds at the end.

2433             Then we grew the business.  We started with one affiliate, The Fan in Toronto, when it flipped to all sports in 1993, and then, by the end of 1993, we were on seven radio stations, including Q‑107, and then, shortly after, we opened our Vancouver office and our Ottawa office.

2434             Then we responded to what the affiliates asked us for.

2435             Beyond that list, we now provide news, because we had an affiliate that was having a problem managing the reports that it had to send to the CRTC with respect to its local and regional news, so we took that burden from the radio station.  Again, we don't charge the radio station, we sell the sponsorships.

2436             Frank, I don't know if you want to add to my comments.

2437             MR. FRANK TORRES:  Our expansion basically took two forms, there were the affiliates that demanded our product, and then there were also the sponsors that demanded markets and regions.

2438             We would have a sponsor who was very happy with the value proposition that we afforded them, say, giving them traffic reports in Toronto, and they said:  It would be fantastic if you had a similar service in Thunder Bay.

2439             We probably wouldn't report traffic congestion in Thunder Bay, so we would create other products that might be valuable in that market.  Something like snowmobile trail condition reports is a valuable commodity to northern Ontario radio stations.  We couldn't put traffic reports on there, so we would do the same thing, we would create a program, acquire our own sponsorship, which would cover the cost of it, increase the value to the station, increase the value proposition to the advertiser, and, obviously, through all of that, increase value to the listeners.

2440             COMMISSIONER KATZ:  And where do you do this from?

2441             Let's take the Thunder Bay example.  Do you have arms and legs in Thunder Bay, or is it done remotely?

2442             MR. ED TORRES:  It depends on which regional office is best adept at the market.

2443             Thunder Bay is an example where we use a business report.  That comes out of our Toronto office, again because it's centralized.  We have our business reporters there.  It is the economic heart of Canada.

2444             Our energy report, which is a report that just focuses on the business of the oil and gas sector of Alberta, is also generated out of our Toronto office, but with input from our Edmonton office.

2445             COMMISSIONER KATZ:  But where you physically need to have a presence for traffic, for weather ‑‑ I guess that weather you could get from Environment Canada, but for traffic and for congestion and those types of things ‑‑ snowmobile trails ‑‑ you must have ‑‑

2446             Do you have a helicopter in Edmonton, and do you have a helicopter in Halifax?

2447             I am assuming that you have a traffic report in Halifax.

2448             Do you have arms and legs in each of those cities on contract?

2449             MR. ED TORRES:  No, they are our employees.

2450             In some cases we own the aircraft, and in some cases we lease the aircraft, depending on the market.

2451             To answer your question, traffic is very labour intensive, and that's why it is the bulk of our business.  It is the majority of our business.  It takes a lot of resources to source traffic, and you can't really present an Ottawa traffic report if you are sitting in Toronto.  You have to be in the market.  You have to have the pulse of the market.

2452             Around some of our other products, you don't have to be as entrenched.

2453             COMMISSIONER KATZ:  When you say newscasts here, am I to assume that this is more regional or national news, as opposed to local news?

2454             MR. ED TORRES:  Local news.

2455             COMMISSIONER KATZ:  This would be local news, as well.

2456             MR. ED TORRES:  Yes, we create local newscasts for affiliates, but they include regional and national, again depending on the station's requirements.  But we do produce local newscasts.

2457             MR. FRANK TORRES:  An example of where local legs come in handy is in our partnership with the snowmobile trail condition reports.  It is really a localized product and a localized phenomenon that can vary from one kilometre to the next.

2458             What we did in that case was, we formed a partnership with the Ontario Federation of Snowmobile Clubs, and we actually contact every one of the clubs on every day of the week that we produce the reports.  We take their actual groomers, straight from their machines, via cell phone, and put them on the air with live, as‑they‑are conditions.

2459             COMMISSIONER KATZ:  So these local radio stations, which we license to undertake local initiatives, then sub‑contract them?

2460             They sell them out to you in return for advertising space, which you then generate revenue from.

2461             MR. ED TORRES:  Yes, you license the radio stations, and then we perform a pretty valuable outsource service.

2462             The radio stations are happy to be free of the cumbersome work of sourcing traffic information, and we are providing content that they probably wouldn't put on the air if it weren't for the fact that we produce it ‑‑ business reports, snowmobile trail condition reports.  For the majority of our affiliates, those products don't exist, until we show up and say:  We have a pre‑packaged, professionally produced vignette.  You can now sell the front end, and they sell the back end.

2463             Really, what we are doing is, we are increasing the amount of spoken word that is on Canadian radio.  We are providing products to the station that they normally don't have the resources to generate, and they are taking it and creating a sales opportunity around it.

2464             COMMISSIONER KATZ:  Do you provide them with a tape, or do they actually dub it and read it into the mic themselves?

2465             MR. ED TORRES:  Again, because we want to be as user friendly as possible, we developed in the early 2000s a file transfer protocol that is proprietary and what it is, is HTP‑based and all of our affiliants have a log in and they all go there and they can pull any information that they want and they can pull it any time.

2466             COMMISSIONER KATZ:  Okay.

2467             And so in return for all that you then are in the business of selling minutes, advertising minutes?

2468             MR. ED TORRES:  Yes.

2469             COMMISSIONER KATZ:  And so your expertise, one of your expertises obviously is monetizing those minutes because that's what keeps you in business.

2470             MR. ED TORRES:  Yes, 90 percent of our revenue is in the sales of local, regional and national airtime.

2471             COMMISSIONER KATZ:  Okay, got it.

2472             One of the things you said as well and it's on page 6 of your evidence, is in terms of the impact of the market.  You believe you have:

                      "...the ability to pull listeners to conventional radio from the internet and satellite radio."  (As read)

2473             COMMISSIONER KATZ:  And you have mentioned as we have touched on it here as well, I think you are the first people that said you can actually migrate people, especially young people from the internet back to the radio.

2474             Have you got any evidence to support or substantiate that?

2475             MR. ED TORRES:  We have got ‑‑ and I will ask maybe J.W.  He is a little closer to that younger demographic than probably anyone at the table to maybe comment on this.  It was something that we were talking about at lunch.

2476             The evidence is in now 10 surveys that we have completed across the country, professional surveys which show that there is a very strong secondary demographic between 25 and 34 that this music appeals to.  So the evidence, one, is in our hard research.  Our online research backs that up as well.

2477             And then we have seen it ‑‑ we have done the ground‑level research so we have been to all the clubs and we have been to the bars and it's a tough job but we had to do it to find out who was the demographic.  It's not just 45 to 54.  There is a very young group.  J.W. was just telling us about an experience at the L Hotel.

2478             MR. JONES:  I was just in Vancouver at the L Hotel on Friday and Saturday night playing.  And at one point I looked up and we had a packed house and the dance floor was full of younger people and I realized right then that these people are dancing to blues music and I actually broke the band down and got them to play a little bit quieter.

2479             And I said to them, "I want you to look around because there is a lot of people here from 19 years old to, you know, 25‑28 and there they are.  They are dancing on the dance floor to blues music and they don't even realize they like blues music until they are there, they hear it and they are exposed to it".

2480             So it all comes down to exposure.  If younger people can be exposed to blues music they will find that they, you know, enjoy it.

2481             COMMISSIONER KATZ:  There is all sorts of genres of music formats of music that are on the radio that are also on satellite radio as well.  So they are there today.

2482             Now, obviously you are saying that blues is not endemic to mainstream radio, FM radio right now, and you are going to bring it in.  But that doesn't necessarily mean that you are going to attract those people that have left radio back in just because you are offering blues radio music, because it is available somewhere else and they are getting it somewhere else as well.

2483             MR. ED TORRES:  I don't think ‑‑ and Liz maybe you can help me with this one because, again, it goes to personal experience.

2484             Certainly, in the surveys that we have received and the responses ‑‑ and we talked about our Blues in Canada website that we built to support our applications and I get that linked to my PDA.  So anytime a survey is filled in, and we get about 20 of them a week, I get the results.

2485             So people are saying, "Look, I'm not going to give up my XM but when is your station going to be on the air and when can I listen to it on the internet" if they are out of market.

2486             So Liz is a diehard XM subscriber.  And Liz, are you going to be listening?

2487             MS SYKES:  I think that what I see from the people that I talk to and the people that are on the internet blues lists that I am on and that I correspond with, if they could get blues on regular radio they wouldn't go to XM or Sirius.

2488             I listen to nothing but Sirius except for my morning news.  I would love to get my morning news from commercial radio but I listen to CBC.  But I would love to get my music there too.

2489             I don't suppose I will abandon it but I might, and it's a monetary thing.  It's costing people $15 a month to listen to XM.  If they can listen to DAWG and it doesn't cost them $15 a month in today's world that's adding up.

2490             MR. FRANK TORRES:  I think another couple of really interesting things that we found in our surveys; one we kind of expected, which was that people want to look to radio for their local content.  And although blues lovers enjoy their satellite radios because of their content of blues, they miss out on as Liz was saying, what is going on in our community.  And that's something you know that as spoken word specialists that we think we are really good at and we don't lose sight of it.

2491             But I think the most unique and most eye‑opening thing that we found in our surveys was that, you know, satellite radio is only available to the people that can afford it.  So what we are doing in essence is we are robbing a segment of our society that maybe can't put out the, you know, $50 for the unit and 15 bucks a month to pay for the subscription.  We are robbing them of that particular brand of music.

2492             COMMISSIONER KATZ:  I just want to confirm the demographics.  In your September 23rd submission you said your target was 25 to 54.  Your brief says 35 to 54 and I think you mentioned 35 to 54 as well, and one of them is obviously a typo.

2493             MR. FRANK TORRES:  Yes, and we found you know lots of different types of demos; core, general target.

2494             So to clarify for the record, our general target demographic is 25 to 54; our core target demographic is a high disposable income 40‑year old, married, employed homeowner and our medium demographic is an adult 40.

2495             COMMISSIONER KATZ:  Okay.

2496             You identified local syndicated programming as one of the sources of programming and I guess what we would like to know is what local syndication means.

2497             Where is it actually produced and in fact from our perspective, should we classify it as being truly local and bumping your 110 hours to 120 hours or not?  So perhaps you can expand upon the whole theme of local syndication?

2498             MR. ED TORRES:  Sure.  Our original idea was that we create syndicated programs through DAWG FM and we would have them ready for syndication nationwide and internationally as well, because again that's what we do.  We syndicate a music program currently.  So that was the intent of the 10 hours.  Really, though, they are going to be locally produced in the station.

2499             So you know whether you view it as 120 hours with six hours of syndication or whether you view that as 120 hours, really it could be looked at both ways.

2500             COMMISSIONER KATZ:  Okay.  But those 10 hours will be produced locally by local people in the local station?

2501             MR. ED TORRES:  Absolutely, yes.  But they will be syndication ready.  So we will syndicate them in the brand and we will syndicate them into any one, any radio station that wants a four hour or a one hour or a two hour show.

2502             COMMISSIONER KATZ:  Okay.  Well, presumably that station from where the show originates will get the benefit of the localness of it and the other ones will not.

2503             MR. ED TORRES:  Exactly, so you know realistically the local programming will then account for 120 hours.

2504             COMMISSIONER KATZ:  Okay.

2505             MR. ED TORRES:  And we have corrected that in subsequent applications.

2506             COMMISSIONER KATZ:  Okay.  With regard to news and surveillance and the interstitial spoken word there is, I guess, some information you filed with us.  What we are trying to grapple with is what component of that is pure news.

2507             Perhaps you can enlighten us as to out of the 13 hours, 47 minutes of spoken word, I think you are saying that 5 hours and 45 minutes are news content which isn't necessarily pure news, and then there is another 8 hours and 2 minutes if my math is correct, of unidentified spoken word as well.

2508             MR. ED TORRES:  Okay.  We have cleaned that up and Yves has got the laundry list here of how it works out.

2509             CONSEILLER KATZ : Yves, si tu veux parler en français, parlez en français.

2510             M. TROTTIER : Oui.  Bien, j'ai fait les calculs, et puis...

2511             LE PRÉSIDENT : Pouvez‑vous ouvrir votre micro, s'il vous plaît?

2512             M. TROTTIER : Je m'excuse.

2513             Alors, oui, on a fait les calculs pour les nouvelles, seulement les nouvelles, et ça nous donnait 3 heures 54 minutes de pures nouvelles, 3 heures 54 minutes par semaine.

2514             CONSEILLER KATZ : Et le 8 heures et 2 minutes qui étaient...

2515             M. TROTTIER : En fait, c'est complété par le sport, la météo, le trafic.  On a aussi " A Great Minute ", " Dawg Days ", " Community Cruiser ".  On a des " Business Report ", " Entertainment ".  En tout et partout, on a le nombre de minutes qu'on a mentionné, 13 heures 47 minutes.

2516             CONSEILLER KATZ : Et qu'est‑ce qu'il y a dans le 5 heures et 45 minutes?

2517             M. TROTTIER : Ça, c'est les nouvelles, sports et météo.

2518             CONSEILLER KATZ : D'accord.  Merci.

2519             I am not sure if I should be asking this question in French or English.  I will start in English.

‑‑‑ Laughter / Rires

2520             COMMISSIONER KATZ:  Your commitment to live‑to‑air, voice‑tracked and automated programming as well, can you elaborate perhaps on that commitment?

2521             M. TROTTIER : C'est très facile.  On sera 24 heures sur 24 en direct.  Il n'y aura pas de pre‑tape, qu'on peut dire.  Il y aura un animateur tout le temps en direct sur nos ondes.

2522             CONSEILLER KATZ : O.K.  D'accord.

2523             M. TROTTIER : Le seul moment, si je peux ajouter, c'est quand on aura nos émissions syndiquées, comme, par exemple, le " Blues in Quebec ", que vous avez pu voir dans nos...  Évidemment, l'animateur ne sera pas en direct.  Mais pour ce qui est du reste de la programmation, ça sera en direct.

2524             COMMISSIONER KATZ:  Okay.  Your source of financing and the availability of financing you filed some information with us.  You also have some very bold aspirations.  How flexible are you, I guess, if I can call it that, given that you know there is a situation with third adjacent frequencies and perhaps the need to modify your infrastructure with some added costs as well?

2525             MR. ED TORRES:  The financials that we have crafted we think that they are on the conservative side.

2526             We have also ‑‑ again, we have looked at the different frequencies that are available and we have looked at ‑‑ we have actually worked through a couple of cases where if we are not awarded one frequency we get the other.  You know, they don't significantly impact the business plan.

2527             COMMISSIONER KATZ:  So should you not achieve your early revenue targets you don't think there would be an impairment to the quality of the service and the programming that you would be broadcasting?

2528             MR. ED TORRES:  I think that that is a self‑fulfilling prophecy.  I think that, you know, we have heard other examples of cutting programming or switching out of the format.

2529             You know I think that we have to plan that it's going to take a while for the format to grab hold.  And we have made those ‑‑ we have made financial commitments based on that as well.  We have included almost $450,000 as part of a launch promotion to get people and make them aware of the radio station.

2530             So you know we have been in this market for 17 years and we are not going away anytime soon.

2531             COMMISSIONER KATZ:  You are making some very bold projections and I guess you are looking at a three‑year turnaround to profitability with some pretty aggressive forecasts.  You are the only ones in Canada, as I understand it, that are all blues as opposed to some folks that have gone in with a blues/jazz hybrid format as well.

2532             So I guess you are taking a risk here as well and you are not coming from an infrastructure of a major corporation with major deep pockets behind you as well.  So we just want to sort of ascertain your ability to make the right decisions and stick by it as well.

2533             MR. ED TORRES:  Sure.  And I will start and then maybe, Yves, you want to.

2534             Because of course Yves was the program director of a jazz station and we think that maybe part of the problem is that some of those radio stations have tried to   their formats, and that's the problem.  We are very ‑‑ we believe strongly that if we create a brand and we promote the brand that we can create a niche for ourselves.  I think that we would be in much worse shape if we showed up here and told you that we wanted to be a Triple A format that's going to play the exact same music that is already being played by two or three stations in the market.

2535             So for us to be successful we have to fill a niche where we see that one exists.  But we didn't just come up with the idea.  I mean we have done a lot of research.  We have done ‑‑ we have spent upwards of $100,000 researching this format across the country and we wouldn't make that investment if the results of that research wasn't coming back extremely positive.

2536             Yves, maybe you can talk to the format?

2537             M. TROTTIER : Oui.  Il faut comprendre aussi que c'est une station de Catégorie 2 qu'on demande.  Il y a beaucoup de chansons qui vont jouer sur nos ondes qui seront déjà très connues au départ.  Donc, la station comme telle, le son de la station sera beaucoup plus accessible qu'une station de Catégorie 3, Jazz, par exemple.

2538             Une station de Catégorie 3, d'ailleurs, en Classique et en Jazz, le nom anglais me vient, demographic, c'est‑à‑dire que l'audience cible est plus élevée que la nôtre.

2539             Et le gros problème avec les stations de Catégorie 3, actuellement, n'est pas nécessairement un problème d'écoute.  Elles ont habituellement de très bonnes écoutes.  Le problème, c'est de ventes, à cause de la démographie, les auditeurs qui sont 55 ans et plus, notamment, dans la musique Classique, tandis que notre station, dans le Blues, c'est 34‑45, et 34‑45, ça se vend très bien.

2540             C'est ça la grosse différence entre une station de Catégorie 2 comme la nôtre, plus accessible qu'une station de Catégorie 3.

2541             Il faut comprendre qu'on va jouer Eric Clapton, on va jouer Ray Charles.  C'est des artistes très connus déjà.  Ce n'est pas comme si on partait avec une Catégorie 3, avec des artistes dont il faut faire connaître.

2542             Oui, on va faire connaître les artistes Blues, mais à travers des artistes déjà connus.  Donc, on part avec une longueur d'avance sur les autres stations de Catégorie 3 comme de musique Classique, par exemple, ou de musique Jazz.

2543             MR. ED TORRES:  And I guess just to follow up on that the fallback is always our national company.  And you know it's a going concern and it's going to be there to pick it up.  It's a company that is entirely related.

2544             So we are not going into a different venture.  We are sale professionals.  We are members of BBM.  We are members of CAB.  So you know we know the market quite well.

2545             COMMISSIONER KATZ:  There was a change to our policy, our radio policy in 2006 which I think is coming into force very shortly if it already hasn't with regard to 20 percent weekly minimum for jazz and blues.

2546             Would you be prepared to sign up to a condition of licence?

2547             M. TROTTIER : Oui, il n'y a pas de problème.  Même, on pense jouer 40 pour cent de musique canadienne dans notre diffusion de Catégorie 3.

2548             COMMISSIONER KATZ:  Okay.

2549             M. TROTTIER : Notre playlist, actuellement, a été constitué de 40 pour cent de chansons canadiennes dans la Catégorie 2 et 40 pour cent de chansons canadiennes dans la Catégorie 3.

2550             COMMISSIONER KATZ:  Okay.  I also noticed that you are going to have some French‑language vocal music as well.  I think you call it Life in Quebec.

2551             M. TROTTIER : Oui.  Il faut comprendre qu'on aura peut‑être une pièce ou deux par semaine des chansons en français.  Notre but n'est pas de jouer des chansons Blues en français sur nos ondes.  D'ailleurs, les artistes Blues québécois, dans la grande majorité...  Il y a quelques exceptions, mais dans la grande majorité, les artistes Blues au Québec chantent en anglais, même s'ils sont francophones.

2552             Donc, quand on a fait le playlist, pour commencer, de cette émission‑là, on a placé des chansons qui nous venaient tout de suite en tête, des classiques qu'on pourrait dire québécois comme Offenbach, " Mes blues passent pu dans porte. "  Je pense que les Québécois connaissent cette chanson‑là.

2553             Mais la grande majorité des artistes Blues québécois chantent en anglais.  Si vous allez voir sur les albums qui étaient en nomination au Lys d'Or ‑‑ c'est le gala des artistes de Blues du Québec ‑‑ je pense que la quasi‑totalité des albums, ce sont des albums en anglais.

2554             Donc, il est possible, quand même, qu'on joue une ou deux chansons en français dans le cadre de cette émission‑là en particulier.

2555             COMMISSIONER KATZ:  Is there any blues festivals in Quebec that you would be at as well where you bring out French‑Canadian blues performers?

2556             M. TROTTIER : J'ai été moi‑même animateur de festival de Blues quand je demeurais à Valleyfield.  Alors, il y a des festivals de Blues au Québec.  Au Mont Tremblant, on l'a mentionné dans la présentation.  Il y a aussi une scène Blues au Festival de Jazz à Montréal.  Il y a un gros festival de Blues à Valleyfield.  Il y en a un, je crois, à Sherbrooke.

2557             Il y a une tournée de festivals Blues qui existe au Québec.  Ces artistes‑là gagnent leur vie.  Malheureusement, ils n'ont pas d'écoute.  Ils n'ont pas d'endroit où ils peuvent se faire entendre.

2558             L'exemple, tout de suite, qui me vient en tête, vous m'excuserez si j'insiste sur ça, mais je trouve ça un peu inquiétant de voir que Bob Walsh, un artiste québécois reconnu internationalement, donne des concerts en Europe, soit si peu connu au Canada anglais.  Pourtant, c'est un anglophone du Québec, et il ne donne pas de concert ailleurs au Canada.

2559             Si on fait jouer la musique d'un artiste comme Bob Walsh sur une station comme the DAWG, ici ou à Vancouver, il y a des chances que Bob Walsh puisse avoir une carrière à l'échelle canadienne et pas seulement qu'au Québec.

2560             COMMISSIONER KATZ:  Mr. Torres, I think you mentioned in your documentation this afternoon that you presented to us that you had done research in 10 different cities across Canada.  Obviously one of them was Ottawa and one of them was London but there were eight others as well.  Obviously you have found different results in different cities.

2561             MR. ED TORRES:  Yes, generally the results are local to the market.

2562             COMMISSIONER KATZ:  And some markets were deemed to be non‑viable for blues or did you find that all 10 of them are strong markets for blues?

2563             MR. ED TORRES:  Yes, we found that again the medium runs anywhere between 30 and 60 percent who would be described P1 listeners.  I mean 30 percent is high, but again we have looked at the certain markets that we have researched where the incumbents in the markets were ‑‑ you know, just the odds were stacked against a new independent going in there.  The business plan that we worked out, you know, it was going to be a hard go.  So we have selected our markets strategically.

2564             COMMISSIONER KATZ:  I want to move on to CCD.

2565             And in a series of correspondences between yourself and the CRTC there seems to be perhaps a need for clarification on the overall CCD because there is a basic component and then there is over‑and‑above, I guess as we call it, and what we are looking at is two sets of numbers.  One is 107,000 over seven years, the other is 107,144; one may be rounded, one maybe not.

2566             But for the purposes of your application I need to know what the exact number is and I need to know whether that number, be it one or the other of those two numbers, includes the basic obligation which is tied to a percent of revenues over a certain threshold or whether it's all encompassing.

2567             MR. ED TORRES:  And I believe that ‑‑ and Frank, you can correct me on this, but I believe those are over‑and‑above numbers, so the total numbers.

2568             Those are total numbers then.  So the basic would be included in those.

2569             COMMISSIONER KATZ:  Okay.

2570             And is the correct number 107,144 or is it 107,000 that you want us to use for the application purposes?

2571             MR. ED TORRES:  107,144.

2572             COMMISSIONER KATZ:  Okay.

2573             There are some of the eligibility that you had targeted for the funding that we need to take a look at as well; Blues in the Schools, Starboard Communications being two of them and the question is whether they do or do not qualify for a category.

2574             I guess the question is if they would not qualify would you be prepared to reallocate their funds somewhere else?

2575             MR. ED TORRES:  Yes, we would if the CRTC found that those initiatives didn't qualify.  What we would like to do is we have held discussions with some non‑profit radio groups and we would, I guess, undertake to re‑file our CCD with the same numbers, reallocate it to groups that did qualify, for example a non‑profit radio group like a community or campus station.

2576             COMMISSIONER KATZ:  With regard to Starboard Communications would the programming that would be funded through that be broadcast on your station or would it not be?

2577             MR. ED TORRES:  It likely would not be.  Again, Starboard what we do with them right now is a partnership.  We create a music show which we syndicate to other radio stations across the country.

2578             So our idea behind the Starboard CCD was to create spoken word but not only spoken word but Canadian syndicated programs to compete with some of the American programming like the Rick Dees or the John Tesh that comes in.  We wanted to create an '80s‑based show again that would keep the revenue here in Canada as opposed to sending it abroad.

2579             So that's ‑‑ it may; it may not end up airing on the radio station.

2580             COMMISSIONER KATZ:  Okay, because if it would air on the radio station it would not qualify, I guess is the issue.  It would just be the cost of programming for you.  So that becomes the distinguishing factor as to whether it does or does not qualify.

2581             MR. ED TORRES:  That's understood and the general manager of a radio station would ultimately decide on whether he was going to take that or not.  So if we are disqualifying it based on the fact that he may then we are prepared to live with that.

2582             COMMISSIONER KATZ:  Okay.

2583             And with regard to Blues in the Schools we are looking for additional detail to show how these initiatives contribute to the support, promotion, training and development of Canadian musical and spoken word talent.

2584             MR. ED TORRES:  Sure, and Blues in the Schools is a great program.  Maybe Liz can talk about it more and maybe I will round off the answer if we need to.

2585             MS SYKES:  I think really what I want to do is hand it over to J.W. because he has just been part of a Blues in the Schools initiative that is run by the Ottawa Bluesfest and he can give you some sort of specifics about what that program accomplishes.

2586             MR. JONES:  What I experienced with Blues in the Schools was that we would go ‑‑ we are paired up usually with an American artist or it can be two Canadians.  You go into an elementary school or high school, and I was actually doing grades 4 and 5s.  You teach them about blues music and you give them the idea that ‑‑ well, not just the idea but the fact that it's an empowering music and it's about a celebration of life and how you feel and emotions, all those things.  Then you help them write songs. And this is developing young potential artists.

2587             What is also great about the program you teach them all these things.  They are having fun with blues music and it's exciting for them.  But at the end you pick out a few students.  This is part of the program, and you offer them eight ‑‑ I believe it is eight lessons free, free of charge so there is no financial burden to the parents.  And you take potential artists and give them the opportunity to learn an instrument and later on, you know, that could come back to be a blues artist that's featured on DAWG FM and a potential Canadian blues artist.

2588             COMMISSIONER KATZ:  Thank you.

2589             I want to move onto your revenue forecast and everybody seems to find new sources of revenue that haven't been extracted yet from the marketplace.  And I guess one of the things that you are saying here is 45 percent of your revenues would come from new and non‑traditional radio advertising.

2590             Did that come about through your market research or was that when you went to the bars and found out that people who are in bars drink a lot of beer and you can get the beer companies to fund and support some of this initiative?

2591             MR. ED TORRES:  I guess it is multi‑prong, the answer.

2592             Part of it has to do with our experience as a content provider.  We certainly can't be a content provider to a radio station and then compete directly with their source of revenue, right?  So we can't go to the local car dealer because the radio station has been there.  So we have to find emerging advertisers.

2593             So we have to go to print.  We have to find the coffee news.  We have to find the people that are buying the small print ads in the Ottawa Sun and we have to identify them and target them.  Generally, the response that we get is, "I can't afford radio because it's too expensive" and we tell them, "You can't afford not to be on radio".

2594             Aubrey does a lot of work in business development and sales for us and he can probably fill in the rest of the picture on how we derive that money from the new advertisers.

2595             MR. CLARKE:  Right.  Our whole business model at Skywords is built on finding new advertisers like Ed said.  We can't go into Ottawa or Bellville and sell locally.  So strategically we target companies like, for instance, I will give you an example of viewit.ca which is in every market but they have no storefront, right, and they need to advertise to every market.  And that's one of my biggest clients, right?

2596             So we have companies who have committed already that when DAWG goes on air that they will support us.

2597             COMMISSIONER KATZ:  Interesting.

2598             You have an online survey going and I think you said in your evidence and your testimony that it's still ongoing as well and at some point you will roll it up and provide us with a summary of the status of the results?

2599             MR. ED TORRES:  Yes, we certainly could do that when we see you in Edmonton.  It's very interesting.

2600             Also, the survey gives the respondent a chance to interact and give us feedback.  Just this morning I received one from Montreal.  "When are we getting our DAWG in Montreal?"  They wanted to know.

2601             So they come in from across the country and, certainly, you know you will see a number of responses that Frank has talked about briefly, and it was one thing that struck us when we went into this venture was the number of people that say, "I can't afford Sirius", right, and to us it's ‑‑ you know, $19, $20 a month we don't really give that a second thought.  But a large number of those respondents have indicated that you know they don't want to shell out ‑‑ they can't shell out the money to get those receivers.

2602             COMMISSIONER KATZ:  I was hoping you would provide us with some results not in Edmonton but tomorrow when you do your Phase III.  Is that what it is, Phase III ‑‑ Phase IV response.

2603             MR. ED TORRES:  Sure.

2604             COMMISSIONER KATZ:  And get us a sense for what the findings are.

2605             MR. ED TORRES:  All right.

2606             There is a lot of raw data in there but we can provide something for you.

2607             COMMISSIONER KATZ:  And just bring it up to a higher level.

‑‑‑ Laughter / Rires

2608             COMMISSIONER KATZ:  Those are my questions, Mr. Chairman.

2609             THE CHAIRPERSON:  Thank you very much.

2610             Commissioner Morin.

2611             CONSEILLER MORIN : Merci, Monsieur le Président.

2612             Vous dites à la page 4 de votre mémoire que la région d'Ottawa‑Gatineau :

                      "...can sustain two or three additional entrants to the market." (Tel que lu)

2613             Est‑ce que vous encourageriez le Conseil, parce que vous dites " ou ", à accorder trois licences plutôt que deux?

2614             MR. ED TORRES:  Two or three was what we said in the brief, and I guess it has to do with the permutation that the Commission would see fit.

2615             Certainly I think if you were to licence three of the specialty entrants I think that the market could sustain it.  I think that realistically the market can sustain two English and possibly ‑‑ I think two English is possibly the maximum stations that the market would support.  But again it depends on the combination.

2616             CONSEILLER MORIN : Dans votre part de marché, vous prévoyez, la première année, 2.5 pour cent, et la septième année, 8.8 pour cent, et vous êtes rentable dès la troisième année.

2617             Est‑ce que c'est sur la base de projection quand même assez optimiste, 8.8 pour cent, que vous pouvez affirmer, en ce qui vous concerne, que le marché d'Ottawa, en tout cas pour les stations de radio anglophones, pourrait supporter au moins deux stations de radio?

2618             MR. ED TORRES:  The share ‑‑ I think I have got us projecting a share of 5.5 by year seven.

2619             But as the share relates to is that why I think that the market can support two, I think that it's not just about the share but the growth of the market, the growth of the market that we have seen over the past 14 years.  There is no sign of slowdown.  You know, immigration continues to ‑‑ the population continues to expand in Ottawa.  The economic sectors that generate and drive the economy here are stable.  We are not talking about manufacturing where there could be, you know, an ebb and flow.

2620             So we think that the market is strong and it's healthy.  We have seen it ourselves and we think that from a 2.5 to a 5.5 share which is what we have projected, those are fairly conservative numbers.

2621             MR. FRANK TORRES:  We also had the opportunity to examine the last licensee that was awarded an English FM here in the market and we observed how their projections in their application compared to their real findings and we found that their share has exceeded their ‑‑ to this point at least in year three, has exceeded their estimates and that is again a very healthy sign.  Although our predictions remain on the conservative side it's still a sign that the market is healthier than even it was predicted a couple of years ago.

2622             COMMISSIONER MORIN:  Thank you.

2623             THE CHAIRPERSON:  I want only one question, I think.

2624             In your programming, the program that you have called "Live from Quebec," will the animation around it be in English or in French?

2625             MR. TROTTIER:  In English.

2626             THE CHAIRPERSON:  In English.

2627             So there won't be any French component obviously, except the singers?

2628             MR. TROTTIER:  No, it's an English radio station.  Everybody is going to speak in English on the radio station but sometimes, maybe two or three times a week, we are going to have a French chanson.

2629             THE CHAIRPERSON:  Like Gerry Boulet et puis...

2630             M. TROTTIER : Gerry Boulet.  Comme j'ai dit...

2631             LE PRÉSIDENT : ...Lucien Francoeur, et puis...

2632             M. TROTTIER : Offenbach, et même Plume Latraverse, qui a fait de très bons Blues, un peu cru, mais disons que...

2633             LE PRÉSIDENT : Oui, et qui, pour l'auditoire anglophone, ils ne les comprendront pas, de toute façon.

2634             M. TROTTIER : C'est ça.

‑‑‑ Rires / Laughter

2635             M. TROTTIER : On va les choisir, disons, si on en joue.

2636             LE PRÉSIDENT : Radio‑Canada nous joue encore Bobépine.

2637             M. TROTTIER : Oui, oui.  Oui, oui.  Mais Bobépine, c'est plus un pug, je dirais là.

2638             LE PRÉSIDENT : Oui, effectivement.

2639             Donc, je vous remercie.  Thank you very much for your presentation.  We will take a 15‑minute break.

‑‑‑ Upon recessing at 1506 / Suspension à 1506

‑‑‑ Upon resuming at 1521 / Reprise à 1521

2640             THE SECRETARY:  Please take your seat.

2641             THE CHAIRPERSON:  Ms Secretary.

2642             THE SECRETARY:  We will now proceed with Item 10 which is an application by Mark Steven Maheu on behalf of a corporation to be incorporated for a licence to operate an English language FM commercial radio programming undertaking in Ottawa.

2643             Please introduce your colleagues and then you will have 20 minutes to make your presentation.

2644             Thank you.

PRESENTATION / PRÉSENTATION

2645             MR. MAHEU:  Thank you, Madam Secretary.

2646             Good afternoon, Mr. Chair, Commissioners.  It's my pleasure to be here today to present you with my dream, a new radio station to serve Ottawa, the city I have called home for the past 16 years.

2647             Before we present our idea for a new radio station, I would like to introduce our panel.

2648             My name is Mark Maheu and I'm the controlling shareholder of the company to be incorporated that will hold the licence for the new station that we have named Capital‑FM.

2649             I have over 29 years experience in the radio business starting as a part‑time overnight announcer in my home town and working in practically every job there is in the radio business.

2650             I was the Vice‑President and General Manager of CHUM's four radio stations right here in Ottawa.  I also spent three years as the Executive Vice‑President and Chief Operating Officer of Newcap Radio, the company which owns Hot 89.9 and Live 88.5 here in Ottawa.

2651             To my immediate left is Brad Boechler.  Brad and his family have lived in Ottawa for 19 years.  He too has a long career in the radio business, 28 years, primarily in sales.

2652             Highlights include his nine years as national sales manager for the Rawlco Radio chain and six years as the general sales manager of the CHUM group radio stations here in Ottawa.  Most recently he was the Vice‑President of Sales for Newcap Radio.  This year Brad launched his own sales consulting business, he has clients throughout the country.

2653             To Brad's left is Sherwin Pagtakhan.  You might notice Sherwin's a little younger than us and, therefore, he has fewer years in radio.  When I first met him, he's a sharp guy, when we hired him as the promotions director at Hot 89.9 here in Ottawa.  At present Sherwin is a very accomplished marketing and media consultant in Ottawa.

2654             And to my right is Howard Kroeger, a research and programming consultant.  Howard is the President of Winnipeg‑based Kroeger Media Inc.  Howard is best known for the discovery and launch of the Bob‑FM classic hits brand and the Hank‑FM alternative country format in Canada and the United States.

2655             Howard's company Kroeger Media Inc. was commissioned to do a complete and comprehensive perceptual research study in order to determine the best format opportunity here in the Ottawa marketplace.

2656             And now to the reason we are here this afternoon, to present to you our idea.

2657             Because at the end of the day what this hearing is all about is finding the very best idea for a new station to serve the Ottawa marketplace, we believe that we have a winning formula with our approach.  Capital‑FM is the culmination of extensive in‑depth research to discover the largest unserved format opportunity in our community.

2658             At a time when some would have you believe that radio faces grave problems, we believe that radio has multiple opportunities built on a commitment to do what radio does best, target market, local service, live connection.

2659             The first step in getting here was to review the economic capacity of the Ottawa market to absorb a new radio station and I'd like to ask Brad Boechler to briefly sketch out why we believe that this is possible.

2660             Brad.

2661             MR. BOECHLER:  Thank you, Mark.

2662             Good afternoon, Commissioners.

2663             You have already heard from the many applicants before us of the details that make us confident that the National Capital region can support Capital‑FM.  I would just like to recap or highlight just a few of the economic facts.

2664             According to the Conference Board Ottawa's population has been growing at about one per cent per year and will continue to grow at the same rate.

2665             Ottawa has a diversified economy anchored by a large public service.  The result is a solid base of income and spending.

2666             FP Markets reported in 2007 that the average income in Ottawa/Gatineau skewed a full 20 points higher than the national average.  They project that by 2009 total income in the market will have grown by an additional 10 per cent.

2667             Retail sales are projected to increase from $13.8‑billion this year to $15.1‑billion next year and that's an increase of about 10 per cent.

2668             In Ottawa, radio revenues grew at an average annual growth rate of 8.5 per cent between 2001 and 2006.

2669             For the first six months of the radio fiscal year 2007‑2008, radio advertising sales in Ottawa have increased another five per cent.

2670             Radio profits were $6‑million higher in 2006 than in 2002, despite the launch of seven new radio stations over a five‑year period and the 2006 PBIT margin for the market was much higher than the national average.

2671             Mark and I were directly involved in the management of two of the city's radio groups and the launch of several radio stations and it's clear to us that a new radio station in this market means new advertising dollars with enough growth for both existing radio stations to retain their margins and for new entrants to be successful.

2672             Of course, for a new entrant in a consolidated market to succeed, they need the right team, the right execution and the right idea.

2673             To describe how we arrived at the right idea is Howard Kroeger.

2674             MR. KROEGER:  Thanks, Brad.

2675             And good afternoon, Commissioners.

2676             My experience in research and programming clearly demonstrates to me that new ideas and new approaches can give birth to some tremendous opportunities.

2677             I was fortunate to be part of the team that developed and launched the first of its kind adult hits format, a station called Bob‑FM in Winnipeg in March of 2002.  The station was an immediate success which was repeated again later with the launch of 93.9 Bob‑FM here in the Nation's capital.

2678             A similar reaction met Jack‑FM in Vancouver, and you have to ask how did all this happen?  A combination of art and science.

2679             The science came from painstaking research into listener habits, degree of satisfaction and dissatisfaction and preferences.

2680             We examined seven formats, several not currently available in Ottawa and for each format group that we tested, we constructed a seven‑song audio montage comprised of music that best exemplified the format choices we were trying to present.

2681             All of these new format options were evaluated by a statistically representative sample of the population of Ottawa.

2682             The results were very revealing.  We found that the largest interest in a new format based on the number who said that they would listen often was what we had termed female pop alternative at 33 per cent.  This was closely followed by adult album alternative or Triple A at 32 per cent.

2683             There's a number of factors that led us to choose the female pop alternative over Triple A and others.  A large number, 51 per cent of those who indicated that they would listen often, also said that a female pop alternative station could become their favourite.

2684             And also, the core listeners to this format told us that it was not available to them to a much greater extent than the other formats including Triple A.

2685             Capital‑FM will provide a variety‑based format drawing from multiple genres of music including pop, rock, hip‑hop and alternative, both past and present.  The station will attract more women than men, more than two thirds of the audience will be women and the key age demographics are 25‑44 years old with 25 to 34‑year‑olds making up 40 per cent of the core audience and 35 to 44‑year‑olds making up 32 per cent of the audience.

2686             The listeners to this format have a very eclectic taste for hit music.  They don't see hip‑hop and rock as opposites, rather they like the best of both styles of music.

2687             And while the stereotype is that women might prefer softer AC and men hard rock, really neither is true.  Lots of women like rock as well as pop and hip‑hop, dance and other styles of popular music.

2688             What they don't appear to like is the steady diet of pop divas and middle‑of‑the‑road songs.  These people are adventurous listeners, willing to hear new music along with their familiar favourites.

2689             MR. MAHEU:  This willingness to try listening to new types of music is why we believe that we can make a strong commitment to new and emerging artists.

2690             Ottawa has a strong music scene and we believe that most of our five per cent commitment to new and emerging artists for air play will be filled with local Ottawa‑centric music from the likes of 12:34, Loudlove and Eric Eggleston.

2691             Capital‑FM will have the widest playlist in Ottawa radio with the fewest number of repeats.  Always fresh, often familiar and always live.

2692             And now to give you a better sense of what Capital‑FM's musical sound will be like, we prepared a brief audio sample for you to listen to.

‑‑‑ Audio presentation / présentation audio

2693             MR. MAHEU:  Radio is still a very great business but it's facing a number of challenges.  The biggest may be the amount of time people are spending with the radio continues to decline.

2694             Most research on this problem indicates that the decline in listenership is tied directly to a listener's inability to find a radio station that delivers programming geared to their tastes.  In other words, the better job radio does of giving people what they want, the better our chance as an industry of repatriating listeners back to the medium of radio and keeping them with us longer.

2695             That is what the idea of Capital‑FM is all about.  It goes without saying that a big part of a great idea is getting the music right, but in a world where you can listen to your favourite songs, and even radio stations from around the globe on your cell phone, download songs to your Ipod, listen to individual songs or CD on your Sony PlayStation and have the whole radio universe available right on your lap top, we need to make radio compelling, particularly to the media savvy living now in an on‑demand world.

2696             Capital‑FM will succeed because we will do what radio does best, deliver on our promise of relevant local news and information, present talented people who know how to speak with their audiences and interact with listeners one‑on‑one and, oh yes, do this all live in real time all of the time.

2697             Capital‑FM will meet this 21st century challenge by using some of the concepts that first made radio a first choice medium.  In its hay day the radio connected people by providing entertaining and engaging programs, news and local information of interest to listeners.

2698             Capital‑FM plans a new millennium approach to bringing back some of what made radio famous.  To begin with, Capital‑FM will be live and local all the time, even overnight, no voice tracking at all.

2699             No need for pagers to bring people into the loop when an emergency happens or when big news breaks, we'll have someone in the studio 24‑7 able to react immediately.

2700             We'll also make extensive use of existing and new technologies to interact with our audience, including instant messaging, text messaging, e‑mail, social networking and broadcast to cell phones and other devices.

2701             But all of this begins with making a connection with listeners.  We propose to do this by creating new content and radio programming that is original and hard to duplicate, and we believe that's the key.

2702             News and information is a big part of this original content commitment.  We'll provide a full news service with four full‑time news reporter/announcers, with 76 newscasts each week totalling six hours and 33 minutes and with over 75 per cent of that news being local.  We'll blanket the city.  And to borrow a famous TV network's idea, we're going to be everywhere.

2703             And here's where some of the  technological break‑throughs will be helpful for Capital‑FM to make connections with more listeners.  New remote and digital broadcast technologies are relatively inexpensive and easy to deploy today.  This will allow Capital‑FM to do live remote news broadcasts from all over Ottawa when needed or warranted.

2704             For example, we can be live on Elgin Street during the next Senator's Cup run and we're confident that will happen some time in the near future, from LaBreton Flats during Blues Fest, from the Canal during the Tulip Festival or Winterlude, or from Victoria Island on National Aboriginal Day.

2705             We believe it's good business to be where the action is and where our listeners are.

2706             Our information connection goes beyond the regular newscast as well.  We will provide a number of daily features that make the National Capital residents' concerns and interests Capital‑FM's bread and butter.

2707             We'll be talking to kids about their next great idea, show casing the efforts of the volunteers who make this such a great place to live, connecting to experts on a wide variety of topics that our audience tells us are of concern, and show casing community organizations, service club activities and charities.

2708             My 29 years of radio experience have taught me one thing and that's that people who work at a radio station are the difference between winning and losing.

2709             I'm personally committed to finding, recruiting, hiring, training and developing great people from both within our industry and new people coming into the business.  The new employees will bring a renewed enthusiasm and diversity to the radio business of Ottawa.

2710             The face of Ottawa, as we all know, continues to change.  Capital‑FM is committed to ensure that our staff off the air and on the air is a true reflection of the multicultural make‑up of the National Capital region.

2711             We believe this diversity will enhance the sound of Capital‑FM and help make connections with listeners of all backgrounds quickly.

2712             We intend to be a strong part of the community through our grass roots connection and through our Canadian Content Development as well.

2713             And here to explain our approach in that area is Sherwin Pagtakhan.

2714             MR. PAGTAKHAN:  Thanks, Mark.

2715             We have put together a package of CCD initiatives above and beyond the basic requirements.  Many young talented musicians have been given financial assists and have gone on to contribute to the Canadian music scene.

2716             On the local level much of our money will be spent at this very early stage of talent development.  Ottawa is blessed with a fine school focused on the arts, Canterbury High School.  We will provide a total $210,000 to the music program at Canterbury with the money going to two streams.

2717             Each year six students who are going on in music studies will be awarded a $3,500 scholarship.  The remaining money will be directed to the purchase of instruments for deserving students who cannot afford them and other musical supports.

2718             At the next level of music study the University of Ottawa has an excellent music program with many of their professors holding down chairs in the National Arts Centre Orchestra.  We will provide a total of $350,000 over the course of the licence resulting in 10 scholarships of $5,000 each year for music students.

2719             The fastest growing demographic segment in our population is Aboriginal people, but our industry does not yet reflect this growth.  We decided we would try to make a meaningful effort to expand this presence through several initiatives.

2720             Ottawa benefits from two fantastic schools of journalism, one at Algonquin College and the other at Carlton University.  Through this initiative we will contribute $350,000 over the seven years to the schools for Aboriginal and First Nation students in broadcast journalism.

2721             Each year four students will receive comprehensive scholarships valued at $12,500 each and we will work closely with the schools in order to seek out deserving students.

2722             We hope that at the end of the first term of licence 28 new broadcast journalists will have benefitted.  We believe this will ensure an ongoing supply of new talent for the broadcasting industry, new talent that will understand events from the perspective of our First Nations, Inuit and Metis people.

2723             We will also look to provide a summer internship for at least one of the scholarship winners and use our contacts in the industry to help ensure placement for the other three.

2724             Our commitment to young Aboriginal students does not stop there.  We will contribute a further $350,000 over the seven years to a scholarship fund for the Native Women's Association of Canada, aimed at developing talent of female Aboriginal students in both journalism and music.

2725             In addition, we will work with the Ottawa Blues Fest to support new independent artists.  Blues Fest has stretched the boundaries of blues to include artists as varied as Bob Dylan, Steeley Dan, James Taylor and Donna Summer.  This stretch of definition has also meant much larger crowds.

2726             We want to help emerging artists benefit from this exposure, so we will fund a new Indy stage of Blues Fest to the tune of $420,000 over the term of the licence.

2727             On a national level, we will contribute to Factor.  Over the seven years we will contribute $420,000 and we will ask them to earmark those monies to new and emerging artists from the National Capital region.

2728             In all, Capital‑FM will inject $2.1‑million into the development of Canadian talent.

2729             And now to sum up, here is Mark once again.

2730             MR. MAHEU:  Thank you, Sherwin.

2731             I hope that you agree that we have a great new idea that will inject a new sound and dynamism into the Ottawa/Gatineau radio landscape.

2732             The second part of a great idea is always putting it into practice and, as noted at the beginning of our remarks, I have a wide range of programming and managerial experience within the radio industry and I have a good knowledge and experience of the Ottawa radio business in particular.  I have been involved with six of the existing radio stations and all of them have been successful.

2733             I think you will agree that the four CHUM stations are strong in the community and provide great radio service.  Brad and I are proud to have been associated with that success and we are equally proud of our strong association with Hot 89.9 and Live 88.5, diverse radio stations with a strong connection to their audiences and great support of artists.

2734             We intend to bring that same type of commitment to what will be our own radio station.  The energy and enthusiasm that we brought to the big picture of over 70 stations with Newcap will be focused on only one station, Capital‑FM.

2735             I intend personally to be all over this station, a resident, hands‑on owner and manager.  I know how to hire good talent and will reach out into the industry for committed professionals and I will combine the veteran skills of the established with the enthusiasm of new people coming into our industry to ensure a great new radio station, Capital‑FM.

2736             We'd like to thank you very much for your time and attention.  We'd be pleased to answer any questions you may have.

2737             THE CHAIRPERSON:  Thank you, Mr. Maheu.

2738             First you have covered a lot of ground in your oral presentation and you probably have answered most of the questions that we have.

2739             For the record, I see that you have appended the key facts about Capital‑FM.  I am taking for granted that they are coming now from your application, there is no new information in this table?

2740             MR. MAHEU:  No, that was more of a convenience for the staff and the Commissioners as a quick reference point to what was in the application.

2741             THE CHAIRPERSON:  So, thank you again for putting it together.  It is very helpful.

2742             Now, my first line of questions has to do with the following appendix which is the montage that we heard and also the survey that you have conducted to come up with, and I know that you stated that you did a music test to do your survey so in order to identify what was the best format interest.

2743             Were any of the songs in this list, that were used in the montage, for the survey?

2744             MR. MAHEU:  Yes, several of the songs that you heard in the montage did appear in the montage that we used to craft the ideal sound for what we call a female pop alternative station.

2745             THE CHAIRPERSON:  Now, you stated that the result was that your planned format became No. 1 and then you stated here in ‑‑ so, the pop alternative was the first one that got the attention and the second one ‑‑ let me find out.

2746             MR. MAHEU:  It was Triple A.

2747             THE CHAIRPERSON:  Triple A.  And do you remember, because in your application at least you didn't go through the rating of all those, were there some formats that didn't draw any interest whatsoever?

2748             MR. MAHEU:  I'm going to start to answer your question on the first part and then I think I'll turn it over to Howard to kind of give you some of the specifics.

2749             When we were looking for what the opportunities were in the Ottawa marketplace ‑‑ and by the way, Mr. Chair, the complete research study, the results of which are on file as part of our application, so all the raw data and so on is there.

2750             But when we go back to the idea when there was a call for applications in Ottawa, I have a lot of experience with new radio station start‑ups, both with my work with CHUM Radio and with my work with Newcap, and I've learned a lot over many years of experience.

2751             One of the things I've learned is that when you're looking at what the opportunities might be in a marketplace it's always best to take a look at as many opportunities as you possibly can because if you go in with a pre‑conceived notion of what I as a radio person or my friends think would be a good idea, or a small group of like‑minded people, you end up maybe only looking at one or two ideas and if you don't ask the right questions you're not going to get the answers.

2752             So, what I've learned and what we employed in this particular approach was to try to look at as many format ideas as possible.  And you may notice from our research that we looked at several formats that already existed in the market, but then we ‑‑ my charge to Howard and I'll have him explain ‑‑ was to come up with some variance on themes that are not being done in the marketplace and let's see if we can find something new out there that nobody's doing right now but could potentially attract an audience big enough to be a business.  And if there's a need out there.

2753             And really what it is, is a listener‑focused approach to finding out what the need of the market is.  It's not radio's job to come to a market and say, this is what we think the market needs, the best results always tend to come from consumers when you go and you do real research, asking questions to a statistically representative group of people to get their feedback.

2754             And through that research the science, as we described it, we were able to define what these consumer needs and wants are and then craft a product for them.

2755             So, Howard, if I can I'd like you to maybe address specifically the Chair's question about the relationship between female pop alternative and then the close second choice which was Triple A and why we went the way we did.

2756             MR. KROEGER:  Well, first of all, my experience throughout various format studies and research studies is that more than ever in the last few years, you know, people really are looking at variety as a niche or, you know, you really have to look no further than the amount of variety that people have access to on their Ipods, people listen to satellite radio, they listen to streaming Internet radio and peer‑to‑peer file sharing is also really done a jilt to people's taste buds.

2757             And I think, as Mark was saying, as we look at this whole thing with most of the musical formats being sliced and diced into very narrow servings, I mean you'll have classic rock, you'll have modern rock, you'll have soft rock and you have different variations of adult contemporary and so forth, there comes an opportunity for a variety‑based format that ends up actually becoming a niche in itself.

2758             And when we looked at the opportunities that we wanted to get a really good feel on, you know, a lot of this comes from the arts side as well because I know from my experience as a programmer that certain sounds and certain styles go together with other certain sounds and styles to create new ones that appeal to listeners.

2759             And this is the experience that we drew on to come up with our different versions of Triple A, our versions of female pop alternative and format rap, new rock format that we looked at as well.  That's where that approach was taken.

2760             And did you want me to walk through the actual how we were able to get these people all into a room?

2761             THE CHAIRPERSON:  No, I think I may cross it anyhow through my next line of questions.

2762             MR. KROEGER:  Okay.

2763             THE CHAIRPERSON:  Because so far today, well I think you are the third applicant that is talking to us about the need for a more female‑driven type of radio station and the three of you are coming with different formats, or at least different tones to the programming or the music that is of interest.

2764             Since you are the last one, I will allow you to make comment on where you see yourself vis‑a‑vis the two others that we have heard today?

2765             MR. MAHEU:  Well, we're very different and I've heard everybody talk about their differences and I think that's important that whatever is licensed is differentiated from existing services in the market.

2766             That's part of the mandate I gave Howard when I hired Kroeger Media Research to do the study.  There were pretty simple marching orders to Howard to, first of all, I'm not interested in applying for and owning a radio station that is a knock‑off or a duplicate of somebody else in the market.

2767             This is a consolidated market, it's well run, it's well managed, the service is decent in this marketplace and the last thing I'd want to do is go up against CTV or Astral or Rogers, I would be beaten to a pulp trying to knock off a classic rock format or something else.

2768             So, I said to Howard, we're going to have to find something that's original and unique and we're going to have to find a constituency that's not being served.

2769             Now, if I may, Mr. Chair, just in how we are different from the other two proposals that are targeted a little bit towards women, I think it's important to note that how we came to our particular idea was the result of a lot of research.

2770             I took a look at the research that other applicants have done and I think there is some ‑‑ you know, something to be said that when you look at many different types or several different opportunities or genres in the marketplace and you go to consumers and you get their feedback and you do the science part of it and add it up, you've got something to make the basis of a pretty good or educated guess on what the market share could be and the type of listenership you could have.

2771             When you go to the marketplace to do research and you only have one choice for consumers, you know, we're thinking of doing this type of format, what do you think?  There's nothing really to compare it to.

2772             So, I don't really know how they've kind of come up with some of their numbers in terms of appeal and so on, but I can tell you with ours we did go the extra mile, we spent the money, we did the homework and we did the research to try to find out what the needs and wants of listeners were in the market and how those needs and wants differed.

2773             How our proposal is different from the other two is pretty clear.  The proposal for the softer AC format from Astral, and I believe I heard them talk about the target there is pretty much 80 per cent women and it's a very soft, low key background station with a good commitment to spoken word and very female‑oriented spoken word.

2774             Our radio station is musically quite different.  Where they, Mr. Davies I believe was speaking about, you know, the intensity of the station being kind of on the medium ebb to a lower than medium ebb, our station largely is lively, up tempo.

2775             The music genres we draw from our very different.  Theirs are pretty much from the AC and soft AC genre, we're pulling our music from the alternative rock, hip‑hop and pop genres.  So, the musical sound is totally different.

2776             We're also different from the Triple A proposal made by the Evanov Group where our music will be a little more hit oriented and main stream than theirs.

2777             Their music is also pretty wide because the targeting for that station, I think I recall, was ‑‑ I think in their application was 35‑64 and that's kind of a mother/daughter kind of age break which is rather wide.  Ours is much narrower and the focus is a little more targeted on the music of our station.

2778             So, in terms of the overlap there would be very little.

2779             We do know though, and I can say with a great degree of confidence to you and the Commission, that we took a long, hard look at the feedback we got in the research and we are very confident with this decision.

2780             We feel it has the least amount of duplication with other existing formats, it has the highest opportunity for growth in the marketplace for the station to establish a market share and to sustain that market share with a minimum amount of overlap or damage to others.

2781             And the nice part about it is it's a format that listeners are telling us through the research they want and it is available.  They're telling us also that there's a hole big enough that it's not being served up to them.  Little bits and pieces they're getting from a number of stations, but they've got to punch around a lot to get a steady diet of what they want.

2782             What we're doing with Capital‑FM is kind of bringing everything that they want all into one location.

2783             THE CHAIRPERSON:  Notwithstanding that you are applying for a frequency that also has been applied for by any of the two other applicants, are you saying that your format could withstand competition of either Evanov or Astral?

2784             MR. MAHEU:  If the ‑‑

2785             THE CHAIRPERSON:  In terms of compatibility because they seem to be at the opposite edge to yours?

2786             MR. MAHEU:  Yeah, that's correct.  In other words, if the Commission were to licence Capital‑FM and one of the other two proposals that you just mentioned, it would not ‑‑ it certainly wouldn't encumber us to any great degree to, you know, fulfil our business plan and do what we need to do.

2787             Those formats, especially the soft AC is kind of way out there on the right hand fringe of what we would do and it wouldn't affect us at all.  The target demographically is very different.

2788             And with the Evanov proposal, at least according to their research, the effective appeal of that radio station really begins about where ours ends, you know, their appeal begins at about 35 and ours starts to taper off quite a bit at 35.

2789             So, there's very little overlap there.

2790             THE CHAIRPERSON:  Now, let's now talk more about spoken word.  Well, say, first deal with news and in your appendix you are saying that you will have 76 newscasts scheduled per week with a running time of six hours and 20 (sic) minutes.

2791             Now, will that be pure news or will that include the surveillance, and if it does include surveillance and other related spoken word, how much of the allocated time will be really news?

2792             MR. MAHEU:  The newscasts are five minutes in total and of that four minutes is news, 30 seconds is sports updates or reports, sports news and 30 seconds will be weather news.

2793             So, if you're talking about, you know, "true news", it would be four of the five minutes.  So, to determine the total amount of news, 76 newscasts, you would subtract 76 minutes off of that total and that would give you the true news total.

2794             THE CHAIRPERSON:  Okay.

2795             MR. MAHEU:  And ‑‑

2796             THE CHAIRPERSON:  We'll do the math.

2797             MR. MAHEU:  Okay, thank you.

2798             THE CHAIRPERSON:  And regarding other spoken word programming, what are you having in mind regarding the content of those spoken word?

2799             MR. MAHEU:  Well, I'm glad you asked about that because we are pretty excited about it and as we kind of alluded to in our opening remarks, Mr. Chair, we think that spoken word ‑‑ the music obviously is going to bring people to us, but spoken word is going to keep people with our radio station.

2800             We talk about radio having a hard time keeping listeners and when there's so many choices out there for music, being a local radio station, I think we need to do a lot more than just be a juke box.

2801             And I think a lot of broadcasters, not just me, but I think there's a lot of inspired broadcasters working for companies all over Canada that are starting to come to the same realization I am is that, you know, maybe during the 90s and consolidation and everything else and the focus on margins we probably started to cut a little bit more than we really could have or should have.

2802             And not knowing the technological revolution that was waiting around the corner in the year 2000 and how things were going to change with how people consume music, how people listen to radio, and part of that nasty expense of spoken word and people that we as an industry tried to start to cut through the late 80s, through the recession and then in the 90s that it never came back.  It just fell to the bottom line and hasn't been restored.

2803             I know from my experience looking at it ‑‑ and I think I have mentioned it to you before in other hearings and I am putting it on the table now as an independent private applicant ‑‑ I think that is money well spent.  I think we need to put money into people and people who could go on the radio, make a connection and speak with people.

2804             These people are also going to be creating programs, some of them for Capital FM.  We have a thing called Capital Ideas.  We have Capital Ideas, we have the Capital Volunteer Showcase and we have Capital Connections and those features are all going to be created in‑house.  They are going to run four times a day.  They are 90 seconds each.  They are not 30 seconds.  These are long form, almost going back to the days of foreground and mosaic programming.  These are long form vignettes that really can take the time to tell a story.

2805             And we don't look at them as a tune out.  We look at them as one of those velcro strips, so to speak, that is going to keep listeners bound to our radio station, make them want to come back.

2806             Capital Ideas ‑‑ and by the way, that is 164 minutes a week of original programming that we are going to create that airs on our radio stations through Capital Ideas, Volunteer Showcase and Capital Connections.

2807             Not to take up too much of your time, but Capital Ideas is going to be a daily 90‑second vignette that is going to run four times throughout the day, once in each day part; once in the morning, midday, afternoon and evening.

2808             What we are going to do is we are going to have our news folks and our personalities go out in the marketplace.  And it is all focused on children, children between the ages of five and 12.  Capital Ideas is all about what is going on in the minds of children.  What are they thinking about?  What do they think the future is going to be like?

2809             Many of these children are the children of our listeners.  And it is very interesting when you talk to kids about what they think about the future.  You know, one of the questions we will ask them is:  You know, you are five years old or you are seven years old now.  Do you think in 50 years there will still be cars driving around?

2810             It's wonderful to hear children's imagination of where they think things will go.

2811             You know, do you think there is life on other planets?  Do you think they will ever come here?  What will happen if they do?

2812             I know it sounds a little ‑‑ I don't want to use the word corny, but I'm a parent and I have children.  I have heard these kinds of things and parents like me have heard them as well, and they are very interesting.  I think it engages adults to start thinking about what the possibilities are.  I think it is good community programming, it's local.

2813             So we are going to do things like that.

2814             Volunteer Showcase is another thing where there are people who give freely of their time every day.  They don't ask for any recognition; they don't expect it.  But the contributions they make to our community are unbelievable and they don't get very many pats on the back.

2815             One of the things we are going to do with Capital FM ‑‑ and this is something I have always wanted to do with the radio station ‑‑ is to put together a program every day, a vignette that picks out one person and talks about the contribution they have made as a volunteer; you know, the woman who for the past 24 years every Friday shows up at the Salvation Army Thrift Shop as a volunteer and helps the homeless and sells the stuff that raises the money that makes a contribution.

2816             You know, there are lots of people like that out there and I think a radio station ‑‑ this is our way of kind of giving back in connecting.

2817             So those types of programs and those types of spoken word endeavours I believe can be the difference between a jukebox radio station that could be switched off for an iPod or a real breathing, live engaged radio station that is connecting with listeners.

2818             I think that's how we built partisanship, I think that's how we build loyalty and I think that is how we keep people with us and get people talking about this.

2819             THE CHAIRPERSON:  Now, in order to do that you need staff.

2820             MR. MAHEU:  Yes.

2821             THE CHAIRPERSON:  The more you do, the more you need staff.  You need sometimes researchers, you need editors, you need people to voice the material.  So let's talk about staff for a few minutes.

2822             MR. MAHEU:  Sure.

2823             THE CHAIRPERSON:  I see from your list that you are looking at having four fulltime news reporters and anchors.  But in order to develop your vignette ‑‑ and I know that you mentioned that some of them could be done by the news reporter.  But when they are doing the vignette, they are not doing the news.  And you have a fairly substantial of amount of newscasts over the week period.

2824             MR. MAHEU:  Yes, we do.

2825             THE CHAIRPERSON:  How will it be managed?

2826             MR. MAHEU:  It kind of goes back to something I mentioned in the opening remarks.  My experience has been that people make the difference and who you hire can make a huge difference on how successful you are.

2827             When I talk about that, what I mean is not just hiring people with experience, but certain kinds of people, people that can multitask, people that have more than one skill, people that want to work, you know, past 5 o'clock and make a contribution to something.  Those people are out there.

2828             As a start‑up we have to be responsible.  We have a budget that we have to live within, and we have to make that budget go as far as we can.

2829             As a local independent operator, obviously I want $1.50 value for every $1.00 that we spend if we can make that work.  I think that comes with hiring sharp people.

2830             Virtually everybody on our staff, virtually everybody on our staff has to have more than one skill.  You know, you are going to need to do double duty.  That's not uncommon in start‑up situations and in smaller operations.  A lot of us got our start in those types of situations where you were an overnight announcer one day and then you were producing commercials the next day because that is what you needed to learn how to do because the guy was away or sick.

2831             Most of the people that are going to work at Capital FM are going to have multiple skillsets, so that if you are doing a four or five‑hour midday shift, you know, there is time for you and we build that time into your day, where we know that we have asked this volunteer that is going to be featured a week from next Tuesday on the Volunteer Showcase to come down to the radio station when you are off at 3 o'clock.  Part of your responsibility is to interview them and provide that tape to the production department to be edited or whomever we assign to do that.

2832             So we need to have people able to do more than one thing.  I think there is some benefit to that, too, because when everybody is making a contribution in a number of different areas, and I think other broadcasters have been through this where you have a small committed team of people kind of working hard and doing things, things start to happen.

2833             We will continue to grow as we hit our benchmarks and our business continues to grow.  We will obviously add people as the business requires it.

2834             But to answer your question, it is going to be people that know how to do more than one thing.

2835             THE CHAIRPERSON:  Only in the programming arena, how many of them have you budgeted for in the first year?

2836             MR. MAHEU:  In the first year, we have budgeted for, if I can find my notes ‑‑ one, two, three, four, five, six, seven, because we are going to be live around the clock.

2837             THE CHAIRPERSON:  Yes.

2838             MR. MAHEU:  That is more than enough people to be able to, you know, do what we need to do to get these programs and this content on the air.

2839             THE CHAIRPERSON:  I'm sure that you have done the math regarding the total spoken word.  How many hours will it be you are going to end up having on a weekly basis?

2840             MR. MAHEU:  Well, with the spoken word, Mr. Chair, with the news, sports and weather, it's six hours, 6.33 hours.

2841             THE CHAIRPERSON:  Yes.

2842             MR. MAHEU:  With the long‑form vignettes that I was speaking about earlier, it is two hours and 44 minutes a week.

2843             And then I have taken an average, some hours more, some hours less, but on an average regular surveillance material, spoken word outside of regularly scheduled newscasts, and personality spoken word, interaction with listeners, talking about what is going on in the community, et cetera, six minutes each hour.

2844             If you take that on an 18‑hour day, it is 12 hours and 36 minutes a week.

2845             THE CHAIRPERSON:  Thank you very much.

2846             We discussed regarding the two other women‑driven applications, but the existing, the incumbent stations, some of them are already playing some of the material and I want to have your views regarding the overlap with your proposal with CILV, even the Christian stations, Majic, The Bear and Kiss.

2847             Is there any overlap in your format between what they have and what you are planning to do?

2848             MR. MAHEU:  There is some, but not very much surprisingly.  That is another reason why we believe that this format showed up so well in the research because of the type of music that we propose to play.

2849             Before we filed, we did a BDS study of the stations you mentioned and the stations we looked at specifically were Majic 100, Kiss, Hot 89.9, Live 88.5 and The Bear, those kind of big five that kind of all have a little piece of what this radio station sounds like.

2850             We found that the highest duplication of any of the stations ‑‑ we compared a 12‑hour BDS monitor on a Thursday of every song that these stations played and we compared it against a 12‑hour playlist of what we thought our radio station would sound like, and we were really surprised, and encouraged actually, that the highest repetition between any station was 22 per cent.

2851             So at most, any station we only played 20 per cent of their music.  And when you aggregated them all together, it was only about just over 30 per cent.

2852             So virtually 70 per cent of the music that you would hear on Capital FM is not being played on those radio stations.

2853             And that's why we're thinking it is showing up in the research.  We are playing those songs that they dropped long ago.  As Howard mentioned earlier ‑‑ and maybe I can get you just to touch on that, Howard ‑‑ radio stations continue to narrow and niche out their formats and as they do that, songs fall by the wayside.

2854             That was part of what happened, gave rise to the Bob FM format; that a lot of these songs had been forgotten and all of a sudden when you put them all in one place, there was this explosion of popularity.

2855             I think we're looking at something similar here.

2856             MR. KROEGER:  Yes.  Fans of this format, this female pop alternative format, they are living somewhere right now because there is no station playing those types of songs.  When you look at all of the various formats that we researched, the down the middle, AAA, the female pop alternative, if you look at them, you know, you see all the stations.  On the female pop alternative format, you will see Hot on top of the hill, this BUMP‑FM, you will see Hot on top of the hill, on the 60s, 70s and 80s you will see Majic on top of the hill.

2857             What I'm saying is that these listeners are going to come from somewhere.

2858             One of the stations that shows up on the top of ‑‑ I think four of the format hills that we examined was, for example, Hot 89.9, which is a CHR radio station that in a lot of cases is second choice.  CHR is a second choice format for a lot of people and this female pop format it will be, you know, pulling a point here and a point there.

2859             Basically it will be ‑‑ I guess I would call it in a positive way a viral format in that it does, it kind of pulls a bit from everybody; not a whole lot to hurt anybody, but just it pulls a point here and it pulls a point there.

2860             THE CHAIRPERSON:  That will eventually total a share of six point‑something ‑‑

2861             MR. KROEGER:  Yes.

2862             THE CHAIRPERSON:  ‑‑ which somehow could appear to be aggressive, particularly in the first year because you were starting fairly ‑‑ when you go on air, you are really ready.  So I guess in order to achieve that goal, you will need to have significant marketing strength and marketing budgets.

2863             MR. MAHEU:  Yes, you are right, Mr. Chair.  It is not so much budget.  You certainly need budget and we are going to spend money to market.

2864             THE CHAIRPERSON:  Well, since you don't have any other media outlets in the market, you probably will need money.

2865             MR. MAHEU:  Exactly.  And in that area cash is king.  We will certainly spend money on marketing because we are going to have to be competitive.

2866             But it is interesting how things are changing, and this is reflected in media in general and advertising in general; that there are other alternatives and new ways to reach people, and we are going to employ as many of them as we possibly can.

2867             You know, viral marketing will be a big part of getting the word out about this radio station.  Facebook has opened up all sorts of opportunities to get the word out about a product.

2868             You know, we had lots of reaction to our website when we put it up when we proposed this station, had people come and listen.

2869             We are going to certainly have to buy some traditional media.  The idea is to make every buck we spend deliver $1.50 worth of value, be smart about it.  That is one of the things that I think I bring to this endeavour in the fact that I have been doing this for a long time in this market.  I know and I have a good sense of what works, what doesn't work, where the hidden values in some of the marketing and advertising opportunities are and we will certainly take advantage of those.

2870             I think, if I could go a step further, what you might be implying is the fact that we have projected we are going to do a six‑something share, a 6.8, and that's a pretty aggressive share.  We have put together a business plan and we have put together what our projected share will be, and these things all connect when you look at an application.

2871             But even if we debuted with a 10 share, our first year forecast for revenue probably wouldn't change very much because how you sell in the first year is very different from how you sell in years three and four in terms of building relationships with clients longer‑term.  Many of them won't buy the ratings.

2872             Maybe I will ask Brad if he could just touch on that because he is certainly an expert in that area.

2873             But regardless of what your debut share is for your first couple of BBMs, there are other obstacles in your way that you don't get full value for that market share right away.

2874             MR. BOECHLER:  Thank you, Mark.

2875             Mr. Chair, the history that I have, in particular to Ottawa on this exact example, is I was the original Sales Manager when we launched Majic 100 in 1991.  At that time Majic shot out of the gate with a huge book, and that first year I think we did about $2.5 million in retail.

2876             It took us ‑‑ I'm going by memory now, but it was about 3‑1/2 years in business before the revenues were starting to catch up with the audience share.  In other words, for the first three years as we trained our people and developed our people, established business relationships in Ottawa, we under‑performed as a sales organization to the audience we delivered for the revenues we received.  That is just a natural growth.

2877             In all the experiences that Mark and I have had at Newcap and at CHUM you can push it any way you want.  It is going to take you three to five to make that happen.

2878             I hope that answers your question.

2879             THE CHAIRPERSON:  Yes.  I note that in the source of revenues that you have planned, you are saying that at least 40 per cent of that will come from new radio advertisers.

2880             Both of you have been involved in the running of operation in this market.  Who the hell is not able to sell those ads so that there is that much money left over?

‑‑‑ Laughter / Rires

2881             MR. MAHEU:  I'm going to let Brad comment on it.

2882             I have heard this question be asked to a number of applicants and it is always a good question, because if I was sitting where you are, too, I would say:  Well, where is this 45 per cent coming from?  Where are these people today?  Why aren't they buying radio?

2883             And it is a good question.

2884             You know, in a market ‑‑ Ottawa for instance, or any market, even with existing radio advertisers, there is attrition every year.  There are great radio advertisers that just go out of business.  New competition comes in and they decide not to use radio any more and they move into TV or outdoor or print.

2885             So, you know, those advertisers, even when you don't license radio stations ‑‑ because you don't do it every year ‑‑ are replaced by new radio advertisers.

2886             I will let Brad talk about that, but I will give you one anecdote that is very close to my heart and it is very real.

2887             My wife owns a retail store ‑‑ I guess we both own it, but it is her store.  She owns it, she runs it and does a very good job.  She has been in business for 4‑1/2 years.  And it's a good business in home decorating and gifts.

2888             Never had a radio person come call on her, ever.

2889             THE CHAIRPERSON:  Not even from Newcap?

2890             MR. MAHEU:  No.  I kept church and state separate on that.

‑‑‑ Laughter / Rires

2891             MR. MAHEU:  Because if she said no to them, I didn't want to have to get in the middle of it.

2892             But it is interesting because here is a retail business that was a local, independent business, well‑known.  It was in a mall for a long time.  It has moved to a new location.  It expanded, it's bigger.  Never had a radio rep come in, knock on the door, make a phone call, can I come and see you and talk to you about your advertising needs?

2893             And I know that there are a lot of businesses, most of them small to medium‑sized, that aren't getting calls and there is a lot of low hanging fruit in a market this big that is growing well above the national average.  Radio stations get pretty satisfied with the margins ‑‑ and I know this from experience ‑‑ and not everybody is getting called on.

2894             So I can tell you with a great degree of certainty and honesty that I might even have been conservative in terms of, you know, new money from non‑radio advertisers; that there is money out there.

2895             Brad, have you anything to add to that?

2896             MR. BOECHLER:  Actually, Mr. Chair, I did offer his wife a rate and he turned it down because he thought we were too expensive.

2897             One of the things when we were thinking about the business plan and launching the stations, having experienced ‑‑ and in this market, running a large cluster, et cetera, one thing I do know as a stand‑alone going head‑to‑head with the clusters, we will get killed.  We must go down a road less travelled.

2898             If I can have a heading on it, I want our people to stop selling against a media and start selling for a client.

2899             The reason attrition happens and the reason people leave a particular media is not because of ratings or prices in the media or the number of radio stations, it is because of the price they paid versus the value they received.

2900             What we want to do is there will be a sign in the sales department that says the definition of a satisfied customer is one who perceives lack of a better alternative.

2901             What we need to do ‑‑ and this is something I have learned from Mark over the years ‑‑ is we don't want every single car dealer on the air.  That's not our goal.  Our goal is to find a few good partners to understand the value of partnership in good times and in bad times that will be perceived ‑‑ they will receive great value for their money committed to us, because we know how to measure effective response rates.

2902             Capital FM will earn a reputation for the customer first creative department.

2903             We are going to exploit as many cross‑platform opportunities as we can, because our audience is younger and they do research products before they purchase, more now than they ever have before, and they do that on the Internet.

2904             In my experience in Ottawa, and some of the clients I consult now, when you ask them, Mr. or Ms Jones, how much time do you really think about your advertising and marketing for your business in any given week, the average is under 3 per cent.

2905             So the reason any media loses customers is lack of satisfaction for money paid.

2906             It is not going to be our short little red line in a rank or report going against the clusters.  We will get killed.

2907             So in a nutshell that is what we are going to be doing.

2908             THE CHAIRPERSON:  I have a few questions regarding ownership.  Obviously you are not yet incorporated and so I want to get some statement out of you.

2909             The first one, as you know, there is a direction that says in order to be eligible, it has to be owned by Canadians.

2910             So you intend at all times to adhere to that direction?

2911             MR. MAHEU:  Yes.

2912             THE CHAIRPERSON:  If you are granted a licence, it will be conditional on filing all the executed documents, bylaws and everything.

2913             MR. MAHEU:  Yes.

2914             THE CHAIRPERSON:  And can we expect to have them very quickly after being granted the licence?

2915             MR. MAHEU:  Yes, you would.  I didn't want to go through the expense, basically the expense and the time to put together a bylaw shareholders agreement and everything else for this corporation unless there was something to put into it.

2916             Everything is set ready to go, that if I was awarded a licence that would be done virtually immediately and be filed with the Commission.

2917             THE CHAIRPERSON:  I have heard in your oral presentation that you said that you will be the controlling shareholder.  While I was reading your application, I didn't notice that you had partners.

2918             MR. MAHEU:  I am the shareholder.

2919             THE CHAIRPERSON:  You are the shareholder?

2920             MR. MAHEU:  Yes.

2921             THE CHAIRPERSON:  And you intend to remain the shareholder at least for the time being?

2922             MR. MAHEU:  If I were awarded a licence, I am considering giving an opportunity for a very small minority stake on an earn‑in basis to key people that would be in from the beginning, almost on a sweat equity basis.

2923             The details of that would be in a shareholder agreement that would be part of what I would file with the Commission.

2924             But I would not anticipate that to be a materially large percentage of the business at all.  It would be mine.

2925             I just think that when you can make some of your key people partners in the business and they have some skin in the game, it makes us much more ready to do the job at hand and I would like them to enjoy some of the upside in the future of doing so.

2926             THE CHAIRPERSON:  Now, my last round of questions has to do with technical.

2927             Obviously the frequency that you have applied for is not perfect.

2928             MR. MAHEU:  No.

2929             THE CHAIRPERSON:  I want to make sure that you understand all the limitations that are associated with third adjacency frequencies and also the potential solution that you may be required to make in order to come up to an acceptable solution, including shutting down.

2930             MR. MAHEU:  Well, that prospect is certainly not a good one, but anything is possible.

2931             Mr. Chair, we are going into this with our eyes wide open.  This is not an ideal frequency, but it is what it is.  We knew that going in; that the frequency would be somewhat impaired and would not be of the same standard as some of the existing radio stations in the city.

2932             We know that the signal has the potential, at least according to the technical brief that we received from DEML and our discussions with them, that it will put a city grade quality signal over the areas that it needs to go.

2933             We also factored that into our start‑up costs as well.  You might notice in the application I put $500,000 into the transmitter antenna portion, which for a rooftop transmitter and antenna set‑up is a lot of money.  But we anticipate that there is going to be additional technical issues, charges and potential solutions we are going to have to pay for.

2934             So we made sure we put money in there for that because we know what's coming.

2935             We know what we have to do and we are confident that we can make this work and not infringe on any other broadcaster's frequency and satisfy those broadcasters that we are adjacent to and Industry Canada.

2936             THE CHAIRPERSON:  Well, Mr. Maheu, those were the questions from the Commission.

2937             I thank you very much, you and your team.