ARCHIVED - Transcript, Hearing 8 November 2012
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Volume 2, 8 November 2012
TRANSCRIPTION OF PROCEEDINGS BEFORE THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION
To consider the broadcasting applications listed in Broadcasting Notice of Consultation CRTC 2012-475, 2012-475-1 and 2012-475-2, 2012-475-3, 2012-475-4 and 2012-475-5
140 Promenade du Portage
8 November 2012
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.
Canadian Radio-television and Telecommunications Commission
To consider the broadcasting applications listed in Broadcasting Notice of Consultation CRTC 2012-475, 2012-475-1 and 2012-475-2, 2012-475-3, 2012-475-4 and 2012-475-5
Romy Ochmann St-JeanLegal Counsel
François VézinaHearing Managers
140 Promenade du Portage
8 November 2012
- iv -
TABLE OF CONTENTS
PAGE / PARA
McBride Communications and Media Inc.318 / 2052
Umeek Human Resources Development Inc.322 / 2069
CHMZ-FM Radio Ltd.363 / 2329
Umeek Human Resources Development Inc.370 / 2374
--- Upon resuming on Thursday, November 8, 2012 at 1158
2042 THE CHAIRPERSON: Madam Secretary, could you call the next item? Thank you.
2043 THE SECRETARY: Thank you, Mr. Chairman.
2044 Good afternoon. Before beginning I would like to indicate for the record that the Commission has received three documents concerning the following item on the agenda.
2045 The first document is an executed copy of a Settlement and Release Agreement dated 23 October 2012 entered into by McBride Communications and Media Inc. and Umeek Human Resources Development Inc. Attached to this agreement is an Indemnity Agreement dated 20 October 2012 among McBride Communications and Media Inc., Umeek Human Resources Development Inc. and he shareholders of Umeek.
2046 The second document is a letter filed 26 October 2012, filed by Mr. McBride in response to Commission letter dated 7 September 2012.
2047 The third document is a letter filed by Umeek HRD Inc. on November 6 from Managing Director Nancy Atleo in response to a Commission letter dated 7 September 2012.
2048 The next documents will be placed on the public record, however we note that a response filed by Umeek Human Resources Development Inc. contains potentially confidential information and the Commission will file that document once we have confirmed with the licensee whether an abridged version is required.
2049 Now, Mr. Chairman, we will proceed with Phase I of item 3 on the Agenda, which is the presentations by the licensees concerning the assessment of CHMZ-FM's compliance with its regulatory obligations.
2050 We will begin with the presentation by McBride Communications Media Inc., followed by a presentation by Umeek Human Resources Development Inc., both licensees of CHMZ-FM as partners in West Island Radio Enterprises General Partnership.
2051 We will now begin with McBride Communications and Media Inc., Mr. Matthew McBride. You have 15 minutes to make your presentation.
2052 MR. McBRIDE: Thank you very much.
2053 Commissioners and CRTC staff, good afternoon. I am Matthew McBride, appearing here at the request of the Commission to respond to inquiries regarding the operation of radio station CHMZ-FM in Tofino, British Columbia.
2054 This station was licensed in 2005 to serve a community of 1,400 persons in one of the most westernmost regions of the country. The licence was issued to West Island Radio Enterprises, a partnership between Umeek Human Resources Ltd., and its principal, Shawn Atleo, and McBride Communications and Media Inc., and me as principal.
2055 After a brief period of operations of just under two years, Umeek moved to dissolve the partnership on June 1, 2007, in an action taken without notice to, or collaboration with, McBride Communications. At the same time, Umeek declared they would no longer be liable for any actions taken by McBride in relation to the partnership, and on June 1, 2007, Umeek closed the partnership bank account.
2056 At the time of this dissolution, the partnership had certain financial liabilities to address and the obligation to deal with those fell to me -- obligations which I have met fully -- under the notion that both partners were jointly and severally responsible. The question became how to deal with these financial issues while maintaining station operations during the process to transfer ownership and control.
2057 Shortly after the events of June 2007, I took steps to address the situation by way of an application to the CRTC to transfer the assets of the partnership into a new corporation. As the partnership bank account had been closed, this new corporation would, amongst other things, act as a vehicle to manage the outstanding obligations left behind from the partnership.
2058 In the Notice To Appear in Phase I of this procedure, the Commission has asked for responses to four questions:
2059 First, a failure to respond to Commission staff in a clarification letter of 7 September 2012, which 1 can confirm has indeed been responded to by both partners.
2060 Second, the apparent non-compliance with ownership and control of the station. It should be noted that both Umeek and McBride have engaged in ongoing discussions with the hope of reaching a solution, all the while continuing to seek approval of the Commission to transfer ownership and control. This process has been delayed as much by Commission-specific requirements regarding legal releases that meet the Commission's satisfaction, document which have, I understand, now been filed with the Commission.
2061 In response to section 10.1 of the Regulations regarding transmitter ownership, I very recently replaced the transmitter in question as it had deteriorated to the point of failure. This replacement occurred after reaching an agreement with Umeek and therefore the equipment currently installed is controlled by CHMZ-FM Radio Ltd.
2062 The condition of License No. 1 stating that the station shall be operated by the licensee is, in my opinion, still in play. While there is a desire to move away from the partnership, we have yet to receive approval to do so by the CRTC, and while there is another corporation in place to manage the financial aspects of the radio station it still falls under the control of the partners, albeit one more heavily involved.
2063 Item three addresses non-compliance with regard to the submission of annual reports, which has been previously addressed by me and for which I have taken full responsibility.
2064 In particular, I would challenge the failure to file financial statements. The Data Collection system used to file indicates that there are no further documents to be filed in this regard and does not allow me to re-file. As I recall attaching the statements in the original filing for Broadcast Year 2011, 1 would suggest that a technical error may be responsible, considering that I filed three other reports successfully during the same session.
2065 Item number four has been addressed and rectified and a receipt demonstrating payments to FACTOR for CCD contributions has been submitted to the Commission on August 31, 2011.
2066 I welcome any questions the Commission has at this time.
2067 THE SECRETARY: Thank you.
2068 We will now proceed with Umeek Human Resources Development Inc. Please introduce yourselves for the record and you will then have 15 minutes for your presentation.
2069 MR. ATLEO: Thank you, Mr. Chair.
2070 Good afternoon, Commissioners, Commission staff. I want to introduce myself, Shawn Atleo, joined by Nancy Atleo, my spouse and fellow Director of Umeek. It's a Nuu-chah-nulth word, Umeek, how it's pronounced, and we are prepared to make the following remarks.
2071 First, to pick up on what you have just heard, that we would like to advise that after making -- as was already articulated -- efforts to reach an agreement on this matter dating back to June 1, 2007 that an agreement has now been concluded between Mr. McBride as MCMI and all four Directors of Umeek Human Resource Development on October 23, 2012 to resolve all issues regarding the WIRE general partnership.
2072 So, therefore, today I think it goes that we express our intention to remove our intervention to transfer the application.
2073 The pursuit of this radio licence was very important to us to because it's broadcast area is within the territory of my people, the Nuu-chah-nulth nation, as well as, of course, non-aboriginal people living in what is known as the Pacific Rim area.
2074 In addition to original interest in the business aspect, we also sought to utilize this communication medium as a way to educate, of course entertain, but particularly to bridge differences between communities and between people.
2075 In addition, I should note, it was recently very obvious to everyone in the listening area of CHMZ-FM -- the the listeners that radio broadcasting in our area is so very much needed because of the threat of the tsunami from the earthquake that happened off of Haida Gwaii.
2076 So we are prepared, Commissioners, to respond to any questions and that's the statement we would like to offer up.
2077 THE CHAIRPERSON: Thank you.
2078 I wish we weren't having this discussion here in Gatineau today. You know, it was mentioned that there are people served by these radio undertakings and it is certainly the case that we want to make sure that those communities continue to be served.
2079 I understand, Mr. McBride, that you want us to consider this transfer of assets, which we will deal with in a moment in the next phase, but before we get there we unfortunately have to deal with very serious matters.
2080 You see, a broadcasting licence is a privilege, it is something that we don't hand out without due diligence on our part and the part of the Commission, precisely because of the comment that was made earlier that, you know, these stations are there to serve communities because the public airwaves belong to the public, they don't belong to you, they don't belong to me, they are entrusted to us so that they serve Canadians across the country. So we are in a very serious situation.
2081 We issued the original licences a number of years ago and at the time the applicant was West Island General Partnership. Now, as you know, in law partnership doesn't have a legal entity, so the actual licence is held by the partners, so both McBride Communication Media Inc. And Umeek Human Resources Development are the licensees and, according to us, have been the licensees for a number of years and therefore had a number of obligations.
2082 So we are here today to consider a number of things and not very happy to have to do this because, you know, you can imagine how much all this costs in public money to hold a hearing like this, to go back and forth to get clarification over a number of years and, frankly, we should have probably gotten on with the job of actually providing services to the communities.
2083 So here today, you know, we can develop a record and one of the options in front of us can be to issue a mandatory order that would require you to respect certain obligations that you have as licensees -- and that's both of you -- under the licence. We register that in the Federal Court, it becomes an Order of the Federal Court and could lead to contempt proceedings, with all the consequences of that.
2084 It is also possible for us to suspend the licence, which would mean that you would have to immediately stop broadcasting.
2085 Or we could actually revoke the licence.
2086 So you have a pretty steep curve to convince us not to do any of those things.
2087 I am conscious of the service these radio stations provide to the listeners right now, we would rather not do that, but I think we need to have some better explanations as to exactly why we should continue to entrust you with that privilege of holding a broadcasting licence going forward.
2088 So before we go any further, I hope you understand the seriousness of the discussion we are having this morning.
--- No response
2089 THE CHAIRPERSON: That's a yes for the record?
2090 MR. McBRIDE: For the record, that's a yes.
2091 THE CHAIRPERSON: You are also a licensee right now, do you understand the seriousness?
--- No response
2092 THE CHAIRPERSON: Yes?
2093 Now, pursuant to the Radio Regulations, as I said earlier, you are both licensees. In June 2007 the assets were transferred, as I understand it, from the current licensees to CHMZ-FM Radio Ltd. Now, section 11(4) of the Radio Regulations requires the Commission's prior approval to do any transfer of assets.
2094 Could you help me understand why, in light of that clear breach, we shouldn't take one of the three recourses that is available towards us, whether it's a mandatory order, a suspension or a revocation of the licence?
2095 MR. McBRIDE: I'm not quite sure that a transfer actually occurred. We certainly made the attempt to do that through the regulatory process, but were never given authority to proceed, so in effect we found ourselves in kind of a limbo with a partnership that both of us wished to have dissolved and an application before the Commission to carry that out and transfer the assets, but that was never approved.
2096 So how can we possibly have transferred assets without approval? I would question whether or not that has actually occurred.
2097 THE CHAIRPERSON: So it's your view that despite that agreement of June 7, 2007, that there wasn't actually a transfer of the assets?
2098 MR. McBRIDE: It has never been executed and so I would say no, it hasn't happened.
2099 The formulation of a corporation CHMZ was formed in order to acquire those assets and at that time there was no bank account to handle the finances of the organization. Now, there were still debts paid, owing from the partnership to Canada Revenue Agency, to creditors, to a number of people, and there had to be an instrument in order to handle that money and it certainly couldn't be my personal bank account.
2100 So I used CHMZ to effect that, but we have been in limbo for this amount of time without having a transfer of licence because it hasn't been approved by the Commission.
2101 THE CHAIRPERSON: So who has been operating the station since 2007?
2102 MR. McBRIDE: I have been the operating partner for the station from the beginning of the initial application.
2103 THE CHAIRPERSON: As I said earlier, there are actually two licensees.
2104 What has been, Mr. Atleo, your involvement in running this operation?
2105 MR. ATLEO: Mr. President, I can appreciate the seriousness of the issues as you have articulated them, and the responsibilities that the Commissioners have to reflect on the choices and decisions that have to be made now.
2106 The path that we have come since the inception of this concept, the original conversations between Mr. McBride and I, his experience with radio in the North, First Nations in that case, community radio as a non-business radio licence, the interest that I had expressed in my opening statement was one of seeking to see this communication medium brought to our territories.
2107 I certainly entered into this conversation with -- well, neither of us, without any direct experience or understanding about broadcasting, nor of licence and CRTC processes. The limited knowledge that I had was of a previously operated licence that was operated by the Central Region First Nations of Nuu-chah-nulth on the West Coast and, unfortunately, that was the partnership that dissolved.
2108 So, on first meeting Mr. McBride, knowing that he had licence and radio operation experience, we entered into conversations about seeking a licence and supporting him to be the lead operator under which we would provide support.
2109 We had original conversations about establishing operations in our home at the time in Nanaimo and ramping up and becoming more involved in the day-to-day operations. I would take time to be in the studio when we set up in Tofino on Reserve in Clayoquot territories.
2110 We talked about programming and content, and particularly the interest that I have herein described.
2111 But I think I just want to respectfully reflect as well that a conversation about the original conversations, the first striking up of the partnership, the original operation of the radio, and now our concluded agreement, that this has been a relationship that we have been seeking to find some agreement to move away from for some time, that we have not concluded that.
2112 And so we also reflect back to the Commissioners and to yourself for help and understanding that to look at every element of this would necessarily bring back and include judgments about -- value judgments about decisions that were made or were not made. And somehow, I think in reflecting this discussion, we want to make very clear two aspects.
2113 Number one, that there was an understanding that Mr. McBride brought expertise with him and that he would be principally responsible for day-to-day operations and that we would provide whatever support was required, both whether it was financial, or other kinds of support, to make sure that it was successful. Given that the relationship -- we were unable to come to agreement, we then began to have conversations about how we might move away from that.
2114 I don't think that any time we had said that we didn't want to see radio happening, nor did we want to see, you know, the work of radio stopped in our territories and on the West Coast. I think, you know, as you have said at the outset, it's a privilege, we have carefully recognized that throughout this, and it has been a challenging time for us with good intentions going in and coming to this moment here.
2115 As I articulated, we are not interested in -- we are certainly willing to -- as is our responsibility -- to both be held accountable and reflect back on the events that occurred, but we also want to make it very clear, as we have made in our statement, that any efforts that we might have expressed to intervene on the licence going forward, that if at all possible we are seeking to be removed or extracted from that element of it and to leave those decisions up to the CRTC.
2116 There's plenty of lessons in this for me, including becoming much more aware of the CRTC process, which perhaps there is conversations on another day on another matter that I can bring these lessons learned, but I wish to make no value judgments against our former business partner, first of all, and, second of all, respect that there is a difficult decision and to that extent we would be happy to sort of unfurl and look at the events that have occurred over the past number of years.
2117 But it is a long chunk of time now that has been -- you know, that we have undergone and many, many things that have occurred going back to 2007 and my comments that I would otherwise have are probably more brought for policy in general for CRTC, then they are for this particular instance. The stuff that I cared about in the very beginning about why we wanted to do this I still care about. And I won't make, you know, any value judgments unless you ask me specific questions that pertain to moments in time.
2118 But I guess I'm asking for the Commissioners understanding about that element of this as well, that it has been a long and difficult journey and it's something we have taken very seriously and it has been very challenging.
2119 So I don't know if that helps the --
2120 THE CHAIRPERSON: That certainly helps.
2121 Perhaps you can both help me clarify where we are, because we are still having a bit of difficulty understanding who owns what, who operates what.
2122 So does the partnership still exist?
--- No response
2123 THE CHAIRPERSON: Yes.
2124 MR. ATLEO: So the partnership, no, does not exist as of October 23rd.
2125 Secondly, the issues that were being raised around non-compliance, I just heard Mr. McBride accept full responsibility for. So we heard what he had to say about that. Because the challenges is that as we are seeking to disconnect the business relationship, that clearly there are implications, as you said at the outset, for the full partnership of which we are partner.
2126 So we hear and agree with Mr. McBride's assertion that he accepts full responsibility for those issues and, I guess in parallel, we also are not interested in standing in the way of decisions that the CRTC takes about either the continuance or discontinuance of this particular licence or its operations.
2127 But I said at the outset how I feel about the fact that -- the principal objective was always to have radio at home and that's what we have. To the balance of it, how it's been operated or how it should operate going forward, those are elements that we are happy to answer questions about where we have come from, but wish to pull back and be extracted, if so permitted, from discussions about where it is heading from here on in.
2128 THE CHAIRPERSON: I understand.
2129 Mr. McBride, do you agree that the partnership no longer exists?
2130 MR. McBRIDE: The partnership no longer exists. We formalized that as of the 23rd of October.
2131 THE CHAIRPERSON: Okay.
2132 MR. McBRIDE: The partners still exist. And so --
2133 THE CHAIRPERSON: Yes. Well, that brings us to the second point.
2134 MR. McBRIDE: Okay.
2135 THE CHAIRPERSON: I believe that you are both still licensees, whether the partnership is there or not.
2136 MR. McBRIDE: The partnership doesn't exist; we still exist, yes.
2137 THE CHAIRPERSON: Okay.
2138 Which brings me to the second area I would like to clarify and that's, you know, we requested answers in a letter dated 7 September 2012, I have heard your comments about, you know, difficulties, perhaps meeting deadlines that we set, we have a record on that, but what strikes me is that, for instance, on the ownership transmitters -- as you know, under the Radio Regulations licensees -- and you are both licensees -- have to own and operate their transmitters.
2139 So, Mr. McBride, you answered the 7 September letter by saying the transmitters are owned by CHMZ-FM Radio Ltd., and also operated by that entity, whereas Umeek has said that they are owned and operated by McBride Communications and Media, Inc. and Umeek Human Resource Development.
2140 I'm trying to figure out what's the truth here.
2141 MR. McBRIDE: They are both right.
2142 On August 31st, 2012, the transmitter that had been the property of the partnership suffered a complete failure. It's a harsh environment out there, and electronics deteriorate. It's a strong marine environment, and it just shut down completely.
2143 Rather than leaving the station off the air for whatever length of time it would take, I put in another transmitter that I own, and installed it, and we were off the air for only 12 hours, as opposed to, potentially, 12 weeks.
2144 The original transmitter is in the repair shop, it's still not fixed.
2145 So the letter that Atleo submitted to you is, in fact, correct. The letter that I submitted to you occurred after the swap-out of the transmitter. So that is correct, as well.
2146 If you are asking what is the status today --
2147 THE CHAIRPERSON: Yes, that's my question.
2148 MR. McBRIDE: The transmitter owned by the partnership is in the care of a broadcast technician in Vancouver, being repaired. The current transmitter, up on the top of Barr Mountain in Tofino, belongs to me.
2149 THE CHAIRPERSON: You see, we don't see a transmitter as being a piece of equipment that can be moved around. It is the equipment that is actually transmitting.
2150 There can only be one transmitter, so the piece of equipment that failed, it is no longer a transmitter because it's not transmitting. It's whatever is actually sending out the signals into the ether which is your transmitter.
2151 MR. McBRIDE: If you are referring to the entire transmitting system, there is a transmitter attached to it which I own. The entire system still belongs to the partnership, and that system includes the sound processing equipment and the antenna system, and the feed lines that connect it all together.
2152 I apologize, but when I see the word "transmitter", it has a very specific meaning to me.
2153 THE CHAIRPERSON: The logic behind the regulation is to make sure that the licensee operates the very essence of the undertaking, which is that set of equipment that allows you to actually send the signal to the listening public. That, to us, is at the heart of the undertaking, and that is why we have always required the licensees to own and operate that.
2154 So, right now, I have two pieces of correspondence, and you will understand that it is very hard for us to figure out who the licensee is and who has the situation.
2155 And I realize that there is a long and tortured past to this.
2156 MR. McBRIDE: Well, we are both partners in this, jointly and severally.
2157 The partnership may not exist, but the partners are still here, and the transmitter is owned by a partner.
2158 And I wanted to be as factual as I could be with this request.
2159 Now, if this letter had been answered three weeks earlier, the response would have been different. But the fact is that the current transmitter up there is a replacement piece, while the previous transmitter is being repaired.
2160 THE CHAIRPERSON: So --
2161 MR. McBRIDE: So, who owns it?
2162 THE CHAIRPERSON: Mr. Atleo, do you agree with Mr. McBride's attempt to reconcile what, on the face of it, seems to be a contradiction of the two letters you have sent in, each individually?
2163 MR. ATLEO: Could you repeat that question? It wasn't very clear.
2164 THE CHAIRPERSON: I am trying to reconcile, as I said -- section 10.1 of the Radio Regulations requires the licensees, at all times -- and you are both licensees -- to own and operate the transmitter, and Mr. McBride is saying that, in his view, you take it that, although he put in a new piece of equipment, you are still both owners of the transmission facilities -- the transmitter -- currently.
2165 Your arrangement would, of course, change that going forward, but right now you are both operating it.
2166 In the answer you gave to the 7 September letter, you actually do say that you both own it, which would be consistent with what I have just said. It is Mr. McBride who is, in a sense, adding additional information to his answer, by saying, yes, he may have put in that new piece of equipment, but I think what he just said is that you still both own and operate the transmitter, both as licensees.
2167 MR. ATLEO: Thank you, that helps.
2168 Yes, we are both owners and operators.
2169 THE CHAIRPERSON: Perhaps, if we see our way through this first part, maybe we will be able to clarify that going forward, so that we won't have to talk about this again.
2170 You did submit the two requests late. We have issues of annual returns being filed late. I hear you about perhaps information having been sent on financial statements, but there seems to be a pattern of activity, or inactivity, to meet regulatory obligations, and that is a concern to us.
2171 And I understand that you want us to put the past behind us.
2172 What gives us confidence that we won't be facing similar problems going forward?
2173 MR. McBRIDE: I don't think that Shawn has any obligation to answer that question, I think it should be mine.
2174 I acknowledge that I have filed an annual return late -- two, I think -- and I take full responsibility and I don't have an excuse for that. I simply got lost in the paperwork. There is a lot of paperwork that comes up at the end of the year. There is fiscal year end stuff, there are CRTC filings, and it all happens within a three-month period, and I missed the target. It's as simple as that.
2175 I am quite aware of the obligation. I'm pretty sure that I'm not going to miss that target again, because of the importance of it.
2176 The filing of the financial statements -- I have had difficulty with the data collection system, I have had difficulty with epass in the past, multiple filings of documents.
2177 The data collection system right now will simply not allow you to re-file a document, and it told me that all of my documents had been successfully filed for CHMZ on November 30th of 2011, which I believe is the subject in question regarding financial statements.
2178 How can I reconcile that when the system tells me that it has been filed, and the Commission says it hasn't?
2179 THE CHAIRPERSON: Are you able to provide us a copy of that --
2180 MR. McBRIDE: I provided it with the submission today, the two financial statements --
2181 THE CHAIRPERSON: Okay, so it's there.
2182 MR. McBRIDE: Yes.
2183 THE CHAIRPERSON: So that is the document --
2184 MR. McBRIDE: Two sets of financial statements. The one you are looking for is the second set, dated Broadcast Year 2011.
2185 THE CHAIRPERSON: Okay. I can understand that sometimes there may be difficulties in the transmission of data, particularly in remote areas. I understand that, but we now have the documents.
2186 Is that correct?
2187 MR. McBRIDE: Difficulties is an understatement.
2188 THE CHAIRPERSON: Yes, I know. I am trying to be generous. I know that the whole communications system is not always serving Canadians in every region of the country.
2189 MR. McBRIDE: We often lose our communications for weeks at a time out there.
2190 THE CHAIRPERSON: Give us some time and we will try to fix that.
2191 MR. McBRIDE: Thank you.
2192 THE CHAIRPERSON: In essence, you are saying that there were problems in the past, there was a lot of confusion, there was, I think, a lack of responsiveness to Commission questions, and requests for clarification.
2193 Is that not correct?
2194 MR. McBRIDE: Let me temper that fairly accurate judgment, or statement, by saying that there has been confusion on our part about who should be responding.
2195 I think that we have clarified that over time, about who should be doing the response, but, yes, there has been confusion about who should be responding.
2196 THE CHAIRPERSON: And, going forward, why should we --
2197 Because it comes down to a question of trust. Why should we think, going forward, that this past conduct would not continue?
2198 MR. McBRIDE: Because there will be one less party on our part to get confused, and there will be only one person expecting to respond, and that would be me.
2199 THE CHAIRPERSON: One less party to get confused doesn't suggest there won't be any confusion; however, I think you mean that it would be easier to be responsive to our requests.
2200 Is that correct?
2201 MR. McBRIDE: Yes.
2202 THE CHAIRPERSON: Thank you.
2203 Vice-Chair Pentefountas will have questions for you.
2204 COMMISSIONER PENTEFOUNTAS: Thank you, Mr. Chairman.
2205 Just briefly, on the transmitter, Mr. McBride, did you file technical specifications when you changed the transmitter, or replaced it temporarily?
2206 MR. McBRIDE: I didn't, because I expect to have that transmitter replaced in very short order.
2207 They are identical units, they are Broadcast Electronics 100s.
2208 COMMISSIONER PENTEFOUNTAS: They are identical, okay.
2209 And in short order -- it has been going on for weeks and weeks now. When would you think that the transmitter would be ready to go?
2210 MR. McBRIDE: I pulled it out on August 31st. My broadcast engineer is currently installing another transmitting system, and will address this at the end of this week. I expect it to be up next week.
2211 COMMISSIONER PENTEFOUNTAS: There is a cost to that. There is a value to that transmitter.
2212 MR. McBRIDE: Yes --
2213 COMMISSIONER PENTEFOUNTAS: I see you chuckling --
2214 MR. McBRIDE: -- there is a cost.
2215 COMMISSIONER PENTEFOUNTAS: -- but what would you estimate that value to be?
2216 MR. McBRIDE: It's $6,750.
2217 COMMISSIONER PENTEFOUNTAS: And how many watts of power are you transmitting at?
2218 MR. McBRIDE: We put 100 up the pole, and it comes out as 158.
2219 COMMISSIONER PENTEFOUNTAS: About 158, okay.
2220 And it's not more than $6,700 for that transmitter?
2221 MR. McBRIDE: Oh, to replace -- a new one is $6,750. To repair it, it's going to cost about $1,200.
2222 It's quite an old machine. It has been exposed to the elements for some time now. I am trying to salvage it, but, as of today, I don't have a definitive decision, and if it's a replacement, it will come in at a few dollars.
2223 COMMISSIONER PENTEFOUNTAS: At the end of the day -- and I guess this question could apply to both of you. It just seems that when you have sort of repetitive cases of non-compliance -- and it touches on the Chair's point. I may not be as eloquent in posing the question, but, you know, it seems to be an environment where you sort of have a free-for-all.
2224 I know it's the far west, and I know that it's wild country out there, but there are certain fundamental, basic rules that have to be followed, and the Chair made mention of that.
2225 It's a privilege. It's public airwaves for private purposes, if you will.
2226 How do we justify allowing you to continue running your business as you have in the past? How do we square that off, and how can we be consistent and coherent with other broadcasters that have to follow rules, and how do we justify that with respect to the public interest?
2227 MR. McBRIDE: That's a tough question, because all we really have is our word, which I have submitted in the past to the Commission.
2228 I understand that we have missed deadlines, and I will endeavour to not miss those deadlines. That's a personal undertaking of mine.
2229 I am not sure what else can be offered, you know. It all does come down to trust and responsibility, and that is something that I am undertaking to address.
2230 COMMISSIONER PENTEFOUNTAS: Mr. Atleo, would you like to comment on that?
2231 MR. ATLEO: Only as it might pertain to the very point that you made about where a station like this and a business like this would operate, and the Commission's ability, through its policies, to ensure that operations are in compliance and are operating in a manner that meets expectations.
2232 It's only a broad comment about policy, in general, that overlaps with the kind of interest that a person like me would bring from a place like Ahousaht, very focused on what I said at the outset, that given the deep gap between First Nations and the rest of the country, I really saw -- still see -- these sorts of efforts to hold great promise for facilitating, understanding and dialogue between peoples, so much more than just a business.
2233 So, if it is that, and if it carries those sorts of obligations, as well as opportunities, then perhaps there could be some reflection about how to support efforts to accomplish those sorts of objectives.
2234 Yes, there are, from what I understand, community-based licences that perhaps are more focused on having that kind of outcome, but --
2235 This is starting to draw me into the work that draws attention for me every single day, and that is a more broad social interest, I guess, if I could put it that way.
2236 I think that because we don't have an interest, with the support of the Commissioners, and being involved in this -- as we have articulated, we have dissolved this particular relationship -- I really can only comment about the go forward reality; that is, we would not be interested in seeking to be a part of this particular venture going forward. We made that clear in the concluding agreement that we have.
2237 But it's not an isolated issue, just in communications. We can find these sorts of challenges across a wide variety of policy areas, where you have a very remote territory like this one, and you have strong local interests that were originally expressed in a licence that you would have issued to the Central Region First Nations in Tofino.
2238 And the Commissioners may recall, or maybe you don't have the information about a previous partnership that also went sideways.
2239 So it's not just a pattern, maybe, as you were describing it, in an initial experience. Perhaps there is something that goes back further.
2240 But, again, the question you are asking is delving into areas that, as I said earlier, perhaps are more to value judgments; that, you know, we recognize that is your responsibility, and as we are asked directly, we would be pleased to respond.
2241 But, going forward, I think that there are bigger policy questions, and in the interim, the objective that we had, albeit being full partners, and with full involvement of achieving a radio station in our area, that has been achieved.
2242 And, for that, we are thankful.
2243 Especially, like I said, most recently, when our daughter was home in Ahousaht, and we have the communications systems like we do now with this radio, it's -- in these cases, it did become life and death, you know. We just don't know when a major traumatic event like that happens.
2244 We are in Ottawa, and we know that our daughter is at home in Ahousaht and --
2245 So that was always the original vision and the original concept.
2246 I can only speak at a very broad level, unless, you know, I am asked very direct questions, which I am asking the Commission to understand, and to respect sort of where we have come from, and it has been a long and difficult and arduous journey that, you know, we would like to, with your support, be able to move on in some way, for our part of it.
2247 COMMISSIONER PENTEFOUNTAS: Thank you.
2248 Thank you, Mr. Chairman.
2249 THE CHAIRPERSON: Perhaps one final question before I pass it on to our legal counsel, who may have some follow-up for you.
2250 When we decide whether or not to issue a mandatory order, whether or not to suspend the licence, or whether or not to simply revoke it, we will balance it in terms of the public interest, and the public interest, obviously, includes the listeners.
2251 Could you describe to me the impact of that worst scenario, the suspension or revocation to the community currently being served by this service?
2252 Is it the only radio service available in the area?
2253 MR. McBRIDE: The area is served by CBC, but the response time for critical issues is dramatic.
2254 And you are taking a little bit away from my next presentation, but the most recent example, which is fresh in our minds, is the tsunami of two weeks ago, when a major national television company was reporting a sea surge of 30 feet coming directly at Tofino, when, in fact, it was 30 centimetres, or about 15 inches.
2255 This did cause panic in the community. The community did evacuate. The only source of reliable information was our radio station, which we staff with on-call, 24-hour, seven-day-a-week personnel, directly linked to the Provincial Emergency Program, to respond to precisely this type of issue.
2256 We respond to tsunami alerts about five or six times a year that you never hear of. The most recent one was at 9 o'clock, Ottawa time, last night, where a 6.6 Richter earthquake occurred 100 kilometres west of Port Alice, and a tsunami warning was issued.
2257 Again, last night, not only were my staff, but I was working on this, making sure we had accurate information for the community.
2258 So the impact can be significant.
2259 THE CHAIRPERSON: How many listeners -- unfortunately, when you are a small radio station, you don't make it into the BBMs, and we are trying to estimate. So how many people would you say are your listeners, on a regular basis?
2260 MR. McBRIDE: Our service out there, in total, is going to reach about 4,000 people, both inside the community of Tofino, but as Shawn Atleo has indicated, there are a number of First Nations communities out there that have zero access to outside information other than the radio station.
2261 THE CHAIRPERSON: How many employees do you have?
2262 MR. McBRIDE: One full, three half.
2263 THE CHAIRPERSON: So what would you say your contribution to the economic health of the area is?
2264 MR. McBRIDE: We generate a known number of revenue dollars that circulate within the community. I leave them all in the community, because we don't make much money out there. There is very little profit, so the money has to stay in the community.
2265 Our direct impact, of course, is our business licence payments. We also have payroll staff. I do pay the one full-time fellow pretty well, and the part-time staff. So we circulate payroll revenues out there, as well.
2266 We support aggressively -- and this will come up in my next presentation -- the artistic and social aspects of the community, as well.
2267 THE CHAIRPERSON: Thank you.
2268 Commissioner Patrone...
2269 COMMISSIONER PATRONE: Thank you, Mr. Chairman.
2270 Thank you for your presentation this afternoon.
2271 I have, basically, one stream of questioning.
2272 Mr. Atleo, I believe you mentioned that your group had offered to make financial and any other kind of support available for Mr. McBride when the partnership was basically functioning, and that that offer of help had been ongoing.
2273 Did I hear you correctly, sir?
2274 MR. ATLEO: Yes, that's right. That included pursuing funding through our Nuu-chah-nulth Economic Development Corporation. We were able to secure $30,000 in the beginning.
2275 So, yes.
2276 COMMISSIONER PATRONE: Was there any sense leading up to the compliance issues that are now before us that Mr. McBride had approached you with concerns about being overwhelmed with paperwork and being unable to perhaps meet the obligations that were before him?
2277 MR. ATLEO: I think that particular issue, and the expression, as you say, of being overwhelmed, probably can be one of many of the partnership challenges, of the lack of shared understanding, an inability to achieve a shared expectation, that has characterized the efforts going back to `07, to seek a separation of the partnership agreement, while making every effort not to unduly adversely impact the listeners.
2278 Because I had seen what had happened previously, and it had caused quite a bit of distress to the community when the previous licence had been dissolved and the partnership fell apart.
2279 So I hope -- I want to both respect and acknowledge that sense that Mr. McBride had offered, and as was perhaps characterized earlier, temper it with the broad context. That is one of many items or issues that, I think, we could put into a category of there being an inability, though perhaps many efforts, to arrive at a better sense of shared expectations.
2280 We were living in Nanaimo and I had, I think, around that time been working -- no, I was at that time working as Regional Chief of British Columbia.
2281 So efforts, you know, that I referred to before both financial as well as operational, we were unable to really achieve some of the original concepts that we had talked about and so I recognize that there was express challenges around the overwhelming paperwork.
2282 COMMISSIONER PATRONE: Okay. So did you know that ahead of the compliance issues that would eventually become a problem? Did he come to you and say, "I can't deal with this. I need help"?
2283 And if there was ever an agreement on your part to provide that help, I would like to know about that because that speaks to Mr. McBride's ability to communicate to his partners and help me going forward with a degree of confidence that those issues around being overwhelmed with paperwork can be dealt with because that same pile of paperwork may very well be available going forward because it wasn't passed.
2284 So did he come to you and say, "I can't deal with this mess. I need help"?
2285 MR. ATLEO: Well, not having a recording of every conversation that we've had, he may have come to us about being challenged with issues relating to meeting compliance. And as such we would -- Nancy and I in particular would join in expressing a share of responsibility for not achieving the required obligations for compliance.
2286 COMMISSIONER PATRONE: Well, he accepted responsibility. Now, I'm hearing you say that you accept some of the responsibility now.
2287 MR. ATLEO: Right, so let me make it clear, because you're asking whether or not he had -- or there is an inference here about his effective communication to us.
2288 COMMISSIONER PATRONE: Yeah, I'd like to know if a communications took place and what you did about it if in fact it did take place.
2289 MR. ATLEO: And so like the balance of our working or non-working partnership or relationship, it was full of misunderstandings and full of a lack, as I said before, a shared understanding about what the obligations were and the actions were. There was not a shared sense of expectation from each of the parties about obligations to achieve compliance.
2290 And so while there may have very well been expressed concern on the part of Mr. McBride which we can recall that doesn't mean that there was a joint and shared sense of full understanding and shared expectation about what would be done about it.
2291 COMMISSIONER PATRONE: So he came to you and said, "I can't deal with this mess" and somewhere between in that conversation or series of conversations you decided either you take care of it or I'll take care of it, but that didn't happen?
2292 There was a communication breakdown when he came to you and asked -- and told you about his inability to process the mountain of paperwork that was before him.
2293 MR. ATLEO: In light of that he just said he accepted full responsibility, yes. As the principal operator it was always the original understanding that there would be a growing awareness and understanding on our part about the business and the industry and the CRTC regulations and compliance.
2294 Going back to '07 you can clearly reflect that the relationship at that time was not one where there was, as I said and will continue to repeat, a shared understanding of what the expectations were and how they would be achieved.
2295 So as such, fast forward to this moment, we are unable to say unequivocally that there was a shared understanding at all of what the expectations were or how to achieve compliance.
2296 COMMISSIONER PATRONE: All right. It sounds like you were just punting back and forth at the responsibility of which you spoke and that normally the types of things that are hammered out prior to any kind of agreement apparently failed to happen.
2297 I mean in any partnership you agree to obligations towards work and responsibilities going forward. Either that didn't happen or there was a breakdown in communication. I can't really understand which one it was.
2298 But the reason why I asked my question earlier is that one of the things I recall you saying was that you made it clear to Mr. McBride early on that if there was issues that you had made help available to him if he required it, that there was financial -- there were resources that would be made available to Mr. McBride going forward if he needed them. You said that, correct?
2299 MR. ATLEO: Yes.
2300 COMMISSIONER PATRONE: And yet when he came to you and asked for help and made it clear to you that he couldn't deal with the bureaucratic issues that he was facing, something happened there in which either you didn't understand what he was trying to tell you or he didn't understand what you were trying to tell him.
2301 The reason why I ask those questions is that I guess I'm looking for some clarity as to what happened in order to have some degree of confidence going forward that those issues are going to be resolved.
2302 MR. ATLEO: Well, let me take, if I may, another run at a response.
2303 First of all, in your remarks I agree that under normal circumstances when a partnership enters into an agreement and pursues a venture that if the relationship remains stable, balanced and there is a shared understanding and expectations and you are working through your challenges that those expectations normally are met.
2304 But not all relationships do proceed in that fashion and there was absolutely -- and that's what we share and accept our share of the responsibility for the breakdown in a business relationship, the inability to have shared expectations for just one example, compliance issues with the CRTC. That is an element that we absolutely share responsibility for.
2305 I don't know how I could respond or reflect any other way because the issue that you are asking about is only one of any number of issues that we weren't able to achieve a shared understanding around. So that's the reason why we have been pursuing a separation of the partnership and why we have sought and have now come to that conclusion October 23rd.
2306 COMMISSIONER PATRONE: I think, Mr. McBride, you had something to add to this. And after I have that answer then, yeah, I will probably allow the Chairman to proceed with this hearing. But did you have anything to say then?
2307 MR. McBRIDE: I do feel the line of questioning is a little strong on Mr. Atleo. I would be as responsible as anybody for effective communication. I just want to make sure that that's clear.
2308 COMMISSIONER PATRONE: Yeah.
2309 MR. McBRIDE: He's not standing alone on this one.
2310 COMMISSIONER PATRONE: I understand that. He's the one who mentioned earlier that he made resources available to you, so I need to understand if we're going to allow you to continue whether or not there was a problem with you going to him for help after he had already made it clear to you that resources would be made available.
2311 So you know any degree of confidence that I might have in you, sir, would be predicated on your ability to communicate to your partner as to whether or not you needed help regarding the bureaucratic -- the paperwork that you were unable to deal with earlier.
2312 MR. McBRIDE: I'm comfortable I communicated it. How it was received is another question but I'm comfortable with my communication skills. I think it's important to note that going forward there won't be a second person to communicate with.
2313 COMMISSIONER PATRONE: Yeah, meaning you'll have to deal with the stuff yourself.
2314 MR. McBRIDE: I've become much better at it in the intervening years. It's been a long and curious learning process.
2315 COMMISSIONER PATRONE: Okay, thank you very much.
2316 Thank you, Mr. Chairman.
2317 THE CHAIRPERSON: Yes, Commissioner Lamarre?
2318 COMMISSIONER LAMARRE: Merci, Monsieur le president.
2319 Mr. McBride, just one point of clarification. With the backup transmitter that you have installed are you currently operating at your licence power or below?
2320 MR. McBRIDE: Licence power.
2321 COMMISSIONER LAMARRE: Okay, thank you. That's it.
2322 THE CHAIRPERSON: Don't move. We are going to take a short break to consult among ourselves and our legal counsel.
2323 We'll be right back. We're still in Phase I, so about a five minute break.
--- Upon recessing at 1258
--- Upon resuming at 1309
THE CHAIRPERSON: À l'ordre, s'il vous plaît. Order please.
2324 So we believe that we have enough of a record on Item 1 so that concludes Phase I of the hearing.
2325 I'll ask the Secretary to do Phase II now. Thank you.
2326 THE SECRETARY: Thank you, Mr. Chairman.
2327 So we will now proceed to Phase II for this item which is an application by CHMZ-FM Radio Ltd. for authority to acquire the assets of the English-language commercial radio programming undertaking CHMZ-FM Tofino, British Columbia, from McBride Communications & Media Inc. and Umeek Human Resources Development Inc., partners in West Island Radio Enterprises General Partnership, and for a new licence to continue the operation of CHMZ-FM under the same terms and conditions of licence as those in effect under the current licence, which expires on 31 December 2012.
2328 Mr. Matthew McBride, you have 10 minutes for your presentation.
2329 MR. McBRIDE: Thank you.
2330 Mr. President, Commissioners, I am here today to seek approval to transfer the assets of West Island Radio Enterprises to CHMZ-FM Radio Ltd. requested in Application 2011-1071-7.
2331 This application resolves the challenges faced by West Island Radio and is an agreed- upon action by both partners in West Island Radio, Umeek Human Resources Ltd., and its principal, Shawn Atleo, and McBride Communications and Media Inc., and myself, Matthew McBride as principal.
2332 I have been the operating partner in CHMZ-FM Tofino since the original application was submitted. This radio station has experienced many challenges both in operations and in economics since its inception.
2333 It has taken much patience and care to continue to operate this station in a way that serves the community in a fashion one would expect from a licensee.
2334 The Commission seeks to answer the question of whether it is in the public interest to approve this application.
2335 The district of Tofino has previously experienced a failed exercise in broadcasting, where station CHOO-FM was launched in the late nineties and failed to meet its first term of licence, eventually going dark when one of the ownership groups seized the station's equipment and effectively shuttered the business.
2336 It is desirable that the community not experience such an event twice, and through many difficult occasions CHMZ-FM has managed to not only stay in operations but to build a strong and positive relationship with Tofino and the surrounding isolated communities that have come to rely on CHMZ-FM not only for entertainment, but for vital services as well.
2337 The commitment to serve the community transcends any difficulties between Umeek and McBride.
2338 The station has survived some significant external threats to operations such as the 2008 global financial crisis which greatly affected local tourism and, by extension, local revenues.
2339 The implementation of the Harmonized Sales Tax in B.C. produced an immediate 7 percent increase in cost to advertisers, creating further financial challenges. Only by deep commitment to the station and community has this venture managed to survive.
2340 The key tactic in station success in tough times has been the concept of true community service. CHMZ-FM in Tofino is directly linked to the Provincial Emergency Program and acts as first warning, along tsunami sirens when earthquakes occur.
2341 This was recently experienced in October when CHMZ reported accurate sea-height information in comparison to some very incorrect and near-panic inducing reporting by major TV stations. Our crew was in action as little as 18 hours ago, (as was I last night) following another 6.6 earthquake off the coast of northern Vancouver Island.
2342 In fact, CHMZ-FM maintains 24 hours, seven days per week on-call staff to handle exactly these types of events; and has responded at all hours of the day and night to multiple earthquake and tsunami alerts, search and rescue volunteer callouts, and urgent weather information.
2343 CHMZ-FM has raised more than $20,000 in funds for the Tofino Hospice Society via the annual Christn1as Radio-thon. It makes extensive use of ren1ote broadcasting for public events including live beachside coverage of international surfing competitions and has a promotional policy of interviewing and supporting virtually every live performance at the local venues.
2344 The station is popular enough to boast more than 30,000 listeners every month via online streaming which is more than 20 times the total local population.
2345 This little station on the very edge of the country has fought, struggled and slugged its way through many challenging situations and deserves to continue in this manner under an ownership structure that can allow it to face the future with confidence.
2346 I welcome your questions.
2347 THE CHAIRPERSON: Thank you, Mr. McBride, but for the item previously this sort of transfer would have been dealt with quite administratively so putting that apart -- aside -- we probably don't have a lot of questions for you if any.
2348 I'm looking at legal counsel whether we have questions on that front. Perhaps, but normally these are dealt through a paper process. So don't be surprised if we're not asking any questions because normally we would not do it at an oral hearing for the size of transaction like this.
2349 So legal counsel...?
2350 MR. DOUGHERTY: Thank you, Mr. Chair.
2351 My only question in regards to the application itself being transferred from West Island Radio Partnership to CHMZ Inc. at the moment, from what I understand West Island Partnership is no longer in existence. Is that correct?
2352 MR. MCBRIDE: At the time of the filing of this application we had not reached a settlement agreement but we have now.
2353 MR. DOUGHERTY: But is West Island Radio Partnership -- does it still exist?
2354 MR. McBRIDE: No, we've signed off on that. Yes.
2355 MR. DOUGHERTY: So who is currently in control of the radio undertaking?
2356 MR. McBRIDE: The partners.
2357 MR. DOUGHERTY: The partners as individuals?
2358 MR. McBRIDE: Yes.
MR. DOUGHERTY: So then the transfer is in fact from the partners to CHMZ?
2359 MR. McBRIDE: Correct.
2360 MR. DOUGHERTY: Okay, thank you very much.
2361 THE CHAIRPERSON: Thank you for that clarification.
2362 And if we get through that first item we talked about, Mr. McBride, and the Commission sees to give you approval to the second application, I hope you will be able to continue to serve the community of Tofino including members of Mr. Atleo's First Nation community in the area. Hopefully, hopefully we will see a very compliant in every respect licensee going forward.
2363 I point out to you as well that, you know, before things fall apart we have through our website a group of folks that can be contacted, a single point of contact for small undertakings to help you meet your obligations. You'll find a 1-800 -- a 1-866 number, sorry, on our website that will help you comply if indeed we get in that area of approving a second transfer going forward.
2364 So we really have no other questions on that unless you want to add something in conclusion.
2365 MR. McBRIDE: No, I appreciate the Commission's time in hearing us out and their patience and understanding for the challenges that we have faced in the past. I look forward to reconciling them in the future.
2366 THE CHAIRPERSON: Okay. Now, I understand -- okay?
MR. DOUGHERTY: The only question would be whether the Panel wishes to continue on to Phase III.
2367 THE CHAIRPERSON: Yes, I was going to call Phase III now. Don't worry. I saw the list.
2368 So we'll just quickly move on to Phase III of the Application.
2369 So Madam Secretary...?
2370 THE SECRETARY: Thank you. We'll proceed to Phase III for this item which is a presentation by the intervener Umeek Human Resources Development Inc.
2371 Please reintroduce yourselves and you will then have 10 minutes for your presentation. Thank you.
2372 THE CHAIRPERSON: It's all right. You don't have to reintroduce yourself. I think the transcript -- the stenographer will pick up who is speaking as you go forward.
2373 Thanks. Go ahead, yes, please, Mr. Atleo.
2374 MR. ATLEO: Well, just to state for the record no presentation except to express that an agreement has been concluded between Mr. McBride as MCMI and all four directors of Umeek Human Resources Development on October 23rd, 2012 to resolve all issues regarding the WIRE General Partnership.
2375 Therefore, we remove our intervention.
2376 THE CHAIRPERSON: Okay. Well, that's good. It closes the file from the perspective and we thank you for that.
2377 So Phase IV now which provides Mr. McBride, if he wishes, to provide us with a final reply to close the file.
2378 MR. MCBRIDE: I have no further comment or response. Thank you.
2379 THE CHAIRPERSON: Okay. Thank you very much.
2380 I appreciate your presence here today. I think we've cleared up a situation that has not been to the advantage of Canadians and continued service to Canadians. So I thank you for your participation and that ends the hearing.
2381 I wish you safe travel home. Thank you very much.
2382 Oh, sorry. Yes, for the other items on the Agenda -- no, no, you're done. You can step -- we have some formalities to do for the transcript. So thank you very much.
2383 So Madam Secretary...?
2384 THE SECRETARY: Thank you, Mr. Chairman.
2385 For the record there are also non-appearing applications on the Agenda of this public Hearing. Interventions were received on some of these applications. The Panel will consider these interventions along with the applications and decisions will be rendered at a little bit later date.
2386 Thank you, Mr. Chairman.
2387 THE CHAIRPERSON: Thank you very much.
2388 That ends the hearing. Merci beaucoup.
--- Whereupon the hearing concluded at 1320
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