ARCHIVÉ -  Transcription

 

 

 

 

 

 

              TRANSCRIPT OF PROCEEDINGS BEFORE

             THE CANADIAN RADIO‑TELEVISION AND

               TELECOMMUNICATIONS COMMISSION

 

 

 

 

             TRANSCRIPTION DES AUDIENCES AVANT

                CONSEIL DE LA RADIODIFFUSION

           ET DES TÉLÉCOMMUNICATIONS CANADIENNES

 

 

                          SUBJECT:

 

 

 

VARIOUS BROADCAST APPLICATIONS /

PLUSIEURS DEMANDES EN RADIODIFFUSION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HELD AT:                              TENUE À:

 

Best Western Charlottetown            Best Western Charlottetown

238 Grafton Street                    238, rue Grafton

Charlottetown, PEI                    Charlottetown (Î.-P.-É.)

 

 

October 4, 2005                       Le 4 octobre 2005

 

 

 

 

 

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 BROADCAST APPLICATIONS /

            PLUSIEURS DEMANDES EN RADIODIFFUSION

                             

 

 

 

 

BEFORE / DEVANT:

 

Stuart Langford                   Chairperson / Président

Andrée Noël                       Commissioner / Conseillère

Elizabeth Duncan                  Commissioner / Conseillère

Rita Cugini                       Commissioner / Conseillère

Barbara Cram                      Commissioner / Conseillère

 

 

ALSO PRESENT / AUSSI PRÉSENTS:

 

Chantal Boulet                    Secretary / Secrétaire

 

Anne-Marie Murphy                 Legal Counsel /

                                  Conseiller juridique

 

Joe Aguiar                        Hearing Manager /

                                  Gérant de l'audience

 

 

 

 

 

 

 

HELD AT:                          TENUE À:

 

Best Western Charlottetown        Best Western Charlottetown

238 Grafton Street                238, rue Grafton

Charlottetown, PEI                Charlottetown (Î.-P.-É.)

 

 

October 4, 2005                   Le 4 octobre 2005

 

           TABLE DES MATIÈRES / TABLE OF CONTENTS

 

 

                                                 PAGE / PARA

 

PHASE III

 

 

INTERVENTION BY / INTERVENTION PAR:

 

CIRPA                                             291 / 1914

 

 

 

PHASE IV

 

 

REPLY BY / RÉPLIQUE PAR:

 

Coast Broadcasting Limited                        309 / 2041

 

Maritime Broadcasting System Limited              313 / 2067

 

Newcap Inc.                                       316 / 2083

 

 

 

PHASE I

 

 

PRÉSENTATION PAR / PRESENTATION BY:

 

Astral Media Radio Atlantic Inc.                  319 / 2106

 

Atlantic Broadcasters Limited                     370 / 2499

 

Acadia Broadcasting Limited                       432 / 2808

 

Hector Broadcasting Company Limited               495 / 3219

 

 

 

PHASE IV

 

 

REPLY BY / RÉPLIQUE PAR:

 

Hector Broadcasting Company Limited               574 / 3771

 

Atlantic Broadcasters Limited                     583 / 3824

 

Astral Media Radio Atlantic Inc.                  598 / 3909

        Charlottetown, PEI / Charlottetown (Î.‑P.‑É.)

‑‑‑ Upon commencing on Tuesday, October 4, 2005

    at 0935 / L'audience débute le mardi

    4 octobre 2005 à 0935

1903             THE CHAIRPERSON:  Thank you for your patience.  I'm sorry, we are just a couple of minutes late this morning trying to get through some other side of our work.  The e‑mails keep coming on the telecom side, even while we are here doing broadcasting.

1904             Welcome to Day 2 here in Charlottetown.  We are going to start, I think, with some intervenors, at least one we have identified, and then move on to Phase IV and then the New Glasgow applications.

1905             Madame la secrétaire.

PHASE III

1906             THE SECRETARY:  Thank you, Mr. Chairman.

1907             We will now proceed to Phase III in which other parties appear in the order set out in the agenda to present their intervention.  I would now call upon Mr. Jack Kelly, Mayor of the Town of Cornwall, to present his intervention at this time.

1908             THE CHAIRPERSON:  I think what we are going to do is call each of the intervenors, unless we have been advised that they are not coming, just out of an abundance of caution.

1909             Not seeing, Mayor Kelly,. maybe we could carry on.

1910             THE SECRETARY:  We will proceed with Nos. 2, 3, 4 and 5, as the appearing interveners:  Sarah MacPhail, Jon Stubbs, Brent Cooper, Garnet Livingstone, if they would come up to present their intervention, if they are in the room.

1911             Then we will go on to Mr. Brian Chater, who is with the Canadian Independent Record Production Association, CIRPA, to present his interventions on the Charlottetown application as well as the New Glasgow applications.

1912             Mr. Chater, you will have 20 minutes to make your presentations on both.

1913             Thank you.

INTERVENTION

1914             MR. CHATER:  Good morning.

1915             THE CHAIRPERSON:  Whenever you are ready.

1916             Thank you, Mr. Chater.

1917             MR. CHATER:  Thank you.

1918             Good morning Chair and Commissioners.

1919             CIRPA appreciates the opportunity to appear before you today to expand upon our written intervention regarding various applications for a radio broadcasting licence.  I also appreciate the opportunity of doing this in Charlottetown, definitely one of my favourite Canadian cities.

1920             As you will have noted from our written intervention, CIRPA has major concerns with the lack of proposed finding for FACTOR as a proportion of the total funding proposed from all of the Applicants for licences.

1921             As the Commission is aware, the music industry has been facing major challenges and  restructuring over the last five years, and, with technological developments and changes there is no reason to expect that this will not continue, not just until the end of the decade but for several years beyond that.

1922             These changes are of course not restricted to the music industry.  They extend to the broadcasting industry as a whole in Canada and, indeed, as witness our recent interventions at the CRTC regarding mobile broadcasting and the Panel on the Future of Telecommunications, will expand to new and previously unforeseen areas.

1923             Given that we only have 10 minutes ‑‑ I understand it is 20, but we will do it in 10 ‑‑ to intervene today and the need is basically to highlight FACTOR issues and funding, it is extremely difficult to discuss the myriad issues that face the music and broadcast industries.  It is for this reason that CIRPA is of the opinion that the Commission must act upon its promise at the 1999 New Media hearings to hold a further review after a period of five years.

1924             This date has already passed by a year and, in CIRPA>s view, a New Media Hearing, as was promised in 1999, is of critical and vital importance to explore the tremendous number of diverse issues that can only be properly discussed, researched and evaluated at a Policy Hearing.

1925             This is to formally put on the public record the position of CIRPA that such a public policy hearing is not only promised but vitally necessary given the ongoing changes in many areas that are taking place and which, in our view, can no longer be delayed.

1926             Having made that general policy point, we would now like to return to the matter at hand, that of the commitments to FACTOR by licensees in the hearing process.

1927             Again, we could spend a tremendous amount of time on this as the issues are very complex and constantly evolving, but our allotted time is extremely brief so we will restrict ourselves to the highlights.

1928             First, what has FACTOR achieved to date?

1929             Just to give you a brief outline here are some of the FACTOR numbers.

1930             FACTOR‑funded sound recording projects have sold over 29 million copies worldwide, with a retail value in excess of $650 million.

1931             FACTOR funding has been distributed throughout all genres of music and funding has been distributed to all provinces and territories throughout Canada.

1932             Currently, due to the high demand on some of its programs and the need for significantly more money, there is a turn down rate of over 75 percent.  This is causing a great deal of problems for both the industry and for FACTOR.

1933             Additional funding to support these applicants would be of great value to the industry.

1934             For the past fiscal year FACTOR received 3,168 requests for funding, with a value of $38 million, and was able to approve 1,296, offering $14.3 million.

1935             The success of FACTOR continues, as witnessed by the fact that loan repayments once again increased 14.6 percent over the previous fiscal year. This trend has been continuing for some time and while the overall industry sales continue to decline FACTOR funded projects have increased sales.

1936             It is vital that the combination of private and public funding be continued and, indeed, expanded.  However, this is the success to date.  What about tomorrow's world?

1937             Again, in the interest of time we will not repeat what was said in our written intervention.  To highlight our concerns, the following are our key points.

1938             As we have clearly said, "The times they are a‑changing."  Nowhere is this more evident than in the effects wrought on the industry by technology and, in particular, the "P2P" world that currently exists that didn't five years ago.

1939             Also, the world of consumers and their attitudes has changed radically.  In this regard I'm sure the Commissioners have noted press reports of the speech and campaign outlined by Graham Henderson of CRIA late last week, and particularly the poll results on consumer attitudes and the many key points made therein.

1940             The music industry is under great pressure from technological reality and how this has changed sales patterns for the worse.  At the same time, as we said in our intervention, marketing costs have risen dramatically making the music industry a very different animal today from that of a few years ago.  When these two facts and that of the very small legitimate digital sales figures are combined, the music business has become an extremely difficult one in which to be successful.

1941             FACTOR, at the behest of its Board of Directors on which I sit, is currently undergoing a major review of its programs, activities and governance, with surveys and questionnaires from coast to coast.  We have just received from our consultants an Interim Report on these consultations which, incidentally, number in the thousands.

1942             We expect that from this review will come new and updated programs that are responsive to the needs expressed by the industry.  However, equally important and necessary is the need for appropriate and proper funding for FACTOR.

1943             In this regard I would just cite one point from the Interim Report that speaks to this.

1944             All of those surveyed from all sectors agreed that the staff are helpful and provide valuable and informed knowledge to all applicants.  CIRPA feels that this just backs up our point in the written intervention about the value of FACTOR programs as opposed to those put forward by various applicants that they would administer individually.

1945             Clearly the world is changing rapidly.  CIRPA is of the view that expertise and knowledge are  vital to ensure that monies are spent in the best possible way and that FACTOR clearly has these attributes.

1946             While this is a subject that clearly requires a great deal of detailed thought, research and discussion, the time constraints at this hearing do not allow this to happen and, therefore, to conclude, we would ask the Commission to take into account the issues we have raised both in writing and verbally and both general and specific.

1947             CIRPA looks forward with keen interest to the upcoming Review of Radio, that we understand will be announced shortly, and to being involved in detailed and lengthy policy discussions on the many, many issues that need to be addressed, researched and decided upon to ensure an effective and beneficial Canadian Broadcasting Policy for the future.

1948             Thank you.  I would be pleased to answer any questions you may have.

1949             THE CHAIRPERSON:  Thank you very much.

1950             We have read your written interventions and note as well your concern with what you characterize as the lack of CTD commitments going directly to FACTOR in this process.  There is some, but they are the exception rather than the rule.

1951             You are dead right when you say at the end of this we can't ‑‑ this isn't the forum in which to change the world.  We may change Charlottetown a little, and we may change New Glasgow a little, but we are not going to change ‑‑

1952             MR. CHATER:  I hope not too much.  They are very nice places.

‑‑‑ Laughter / Rires

1953             THE CHAIRPERSON:  But why do you think it is?  What is the weakness in FACTOR, to ask you a blunt question?

1954             MR. CHATER:  Yes.

1955             THE CHAIRPERSON:  What is the weakness in that organization which tends to make so many applicants, not just here but across the country, say, "No, I think I would rather give locally.  I don't want to just throw it into the pot"?

1956             MR. CHATER:  I think one of our problems, as you will see from the multicoloured package here which is the Interim Report, one of the things that has become very clear in the last year or two, given the realities of the business of both radio and music there are many, many things happening.  Times they are a‑changing, I just said that, and it is very, very true.

1957             The reality is, we have to do at FACTOR I think a much better job of publicizing the issue.  What we do internally, believe me, we spend a lot of time on it and the Board are very committed, as are the staff.  Judging from what we see here, people are generally ‑‑ I wouldn't say they are totally happy, but generally happy.

1958             However, what we are not doing, I think speaking personally, is we are not getting the message out.  This is an era, if you like, of PR, getting your information out, making sure it is done.  You don't have to just do the job, you have to be there and be seen to be doing it and be perceived to be doing it and be perceived to ‑‑ to use the much maligned phrase ‑‑ have added value.

1959             THE CHAIRPERSON:  Is there a perception, do you think, that if I am an applicant for a radio licence and I throw my $50,000 CTD into the FACTOR pot that it will just go off to Toronto somewhere or Vancouver and if I am applying in New Brunswick, say, it is not going to do any good there?

1960             Is that perception accurate?

1961             MR. CHATER:  I think, yes, there is some of that perception.  It think it is inaccurate both from where I see inside and how it actually works.

1962             Obviously the objectives of FACTOR from both the broadcasters and the public's mind are to achieve success.  That being said, it doesn't mean you just fund successful artists.  You fund a variety of artists.  You have literally, as we say, applicants who have been successful from coast to coast and the range of cities is unbelievable.

1963             However, that being said, we need to look at how we deal with that.

1964             The reality is that perception is out there.  As you know, in some cases applicants may or may not, as is their right, say "We want to put this money into doing something, whatever it may be.  FACTOR, you have to spend this money in" ‑‑ pick a place ‑‑ "in Saskatchewan doing country music", or whatever.  There is that option.

1965             The money is spent there first.  If there is any left over and it is not spent, then it goes back to pot.

1966             But the reality is ‑‑ I can speak from experience of FACTOR ‑‑ every time we have a Board meeting, for every one applicant we approve, there are three we don't, which obviously creates unhappiness.  Why wouldn't it?

1967             So it is very frustrating at times. There are things you would like to do as a director.  You say, "Well, if we do that, we take the money from that over there and move it", all you are doing is, to use the phrase, moving chairs on the Titanic.  It's not quite that bad, but you know what I mean.

1968             THE CHAIRPERSON:  I appreciate your candour and I think we all have some work to do.

1969             MR. CHATER:  Yes.

1970             THE CHAIRPERSON:  Some of the issues you raise in your intervention today, re‑looking at new media, let's not kid ourselves, a lot of people can look at it, but maybe only Singapore thinks they can actually regulate it, I don't know.

1971             MR. CHATER:  Yes.

1972             THE CHAIRPERSON:  We have the birth of satellite radio, which there are not walls high enough to protect our country's culture from ‑‑

1973             MR. CHATER:  As we have discussed on that very issue, there are many, many new parameters, new paradigms, but the reality is I think we have to have a serious discussion about where can we go with this, where it will end up, how can we best do it.  There is no perfect solution, let's be realistic.  There is no answer everybody is going to be happy with.

1974             THE CHAIRPERSON:  I think you are dead right.

1975             You are right to point to the upcoming Radio Policy Review which I think will give everybody a chance to roll up their sleeves.

1976             MR. CHATER:  Yes.

1977             THE CHAIRPERSON:  I don't know if my colleagues have questions.

1978             Yes, Commissioner Cugini.

1979             COMMISSIONER CUGINI:  Good morning.

1980             MR. CHATER:  Good morning.

1981             COMMISSIONER CUGINI:  Just for my own information, in your written intervention you talked about the specialized showcases that FACTOR does sponsor.

1982             MR. CHATER:  Yes.

1983             COMMISSIONER CUGINI:  Is that included in the $14.3 million?

1984             MR. CHATER:  Yes.

1985             COMMISSIONER CUGINI:  It is?

1986             MR. CHATER:  Yes.

1987             COMMISSIONER CUGINI:  What percentage of that $14.3 million is dedicated to these showcases?

1988             MR. CHATER:  A very good question.  I will have to get the answer and give it to you in writing.  Is that all right?  I don't know off the top of my head.

1989             COMMISSIONER CUGINI:  Okay.

1990             MR. CHATER:  I will find out for you and make sure you get the information.

1991             COMMISSIONER CUGINI:  Are these showcases across the country?

1992             MR. CHATER:  Yes.  Incidentally, they can be abroad.  They can be in Europe, they can be in the U.S., they can be in the Far East, they could be any ‑‑ if it is a showcase it is promoting ours, but it is internal and external.  So it's everywhere.

1993             COMMISSIONER CUGINI:  How many of these a year on average would FACTOR sponsor?

1994             MR. CHATER:  It's not much help, but quite a lot.  I can give you the exact numbers and where.  We can break it out, where, when, who, how it went, so you have a ‑‑

1995             Frankly, as I get older my memory goes and I can't remember those things.

1996             COMMISSIONER CUGINI:  So is mine.

‑‑‑ Laughter / Rires

1997             COMMISSIONER CUGINI:  Thank you very much.

1998             Those are my questions.

1999             MR. CHATER:  A pleasure.

2000             THE CHAIRPERSON:  Commissioner Cram.

2001             COMMISSIONER CRAM:  I don't know if you were here yesterday?

2002             MR. CHATER:  No, I was at a meeting in Toronto about copyright.  Oh joy, oh rapture.

2003             COMMISSIONER CRAM:  One of the parties, Coast, Mr. Newman, said that they didn't want to give money to FACTOR because:

                      "Tom Cochrane can afford to produce his next CD."

2004             MR. CHATER:  I'm sure he can.  Especially, as you know, now that he has the Toyota commercial on the U.S. networks this year.  So he can certainly afford it.

2005             COMMISSIONER CRAM:  I have to tell you, I am more into classical music so I am ‑‑

2006             MR. CHATER:  Actually, so am I, but it is my business to do this.

2007             COMMISSIONER CRAM:  Yes.  It's sort of mine too.

‑‑‑ Laughter / Rires

2008             COMMISSIONER CRAM:  I gather a couple of years ago Lorena McKenna, one of my favourite artists, declined to go to FACTOR because she thought she was successful enough.

2009             MR. CHATER:  Yes.

2010             COMMISSIONER CRAM:  It seems to me ‑‑ and this is just my thoughts ‑‑ that perhaps the money might be better spent with new and emerging artists.

2011             I know it would be hard to do a cutoff, but is there any thought of doing that, that after a while you have to grow up and flutter on your own?

2012             MR. CHATER:  In fact we do.  In fact, Tom Cochrane, to my knowledge, and I may be incorrect, certainly for a long, long time has never been funded by FACTOR, if ever.  He was signed by a major label to start with.

2013             Certainly I can't recall, and I have been a FACTOR director for an awfully long time, that we ever funded him.  We may have done, but not for much money.

2014             Lorena Mckenna, I agree she turned it down and good for her.

2015             The reality is, this is the proof in the pudding, if you like, where we are redesigning FACTOR to do exactly this.

2016             Part of this process is brought forward because the federal government has redesigned its programs, whereas before the money that the federal government gave went to FACTOR and to MusicAction in Quebec, now they have what they call a new program, the Music Entrepreneur component, which means that they give money in a separate fund to the bigger companies and, by definition, the bigger artists.

2017             Therefore FACTOR, as of April 1, 2006, will have access to basically the same amount of money, but will be able to spread it in different directions.

2018             As I said earlier to Mr. Langford, we have many, many applications we would like to fund but we can't just for lack of money.  This I think will make a substantive and substantial change next year.  You will see it quite a bit as these programs change.

2019             We have literally, I said thousands, around 4,000 consulting on this, where we should be going, what we should be doing, how we should be doing it.

2020             COMMISSIONER CRAM:  So for Mr. Newman of Coast, effective next year can I say the focus will be more on unsigned artists?

2021             MR. CHATER:  Not unsigned, they will be signed in some respect but there will be a combination of both.

2022             COMMISSIONER CRAM:  And there will be a cutoff of some ‑‑

2023             MR. CHATER:  Yes.  We do that now, frankly.  We rarely, if ever, fund what you might describe as a major successful artist.  It is very rare.  We just don't do that.

2024             COMMISSIONER CRAM:  But nothing prohibits you from doing it, though, right now, but next year it will?

2025             MR. CHATER:  No.  Obviously we don't regard it as your business, exactly the point you are making.  You obviously produce and develop new artists and bring them up to the level where they can succeed both nationally and internationally.

2026             So it would be counterproductive to give money to Shania Twain or Tom Cochrane, or whoever.  They certainly don't need it and we wouldn't give it to them.

2027             COMMISSIONER CRAM:  Thank you, sir.

2028             Thank you, Mr. Chair.

2029             MR. CHATER:  Thank you.

2030             THE CHAIRPERSON:  Thank you, sir.  Those are our questions and thank you very much for taking the time to join us here today.

2031             MR. CHATER:  Thank you.  I am very happy to be in Charlottetown.  I think it is a great excuse.

2032             THE CHAIRPERSON:  It is a beautiful day.  I envy you being able to get out into it.

2033             MR. CHATER:  I am about to do that.  Thank you.

2034             LE PRÉSIDENT:  Madame la secrétaire...?

2035             THE SECRETARY:  Thank you, Mr. Chairman.

2036             This completes the list of the appearing intervenors for the Charlottetown market application, therefore, Phase III.

2037             For the record, the interveners who did not appear and were listed on the agenda as appearing interveners will remain on the public record as non‑appearing interventions.

PHASE IV

2038             THE SECRETARY:  We will now move on to Phase IV, in which applicants can reply to all interventions submitted on their application.  Applicants appear in reverse order.

2039             We would then ask Coast Broadcasting Ltd. to respond to all of the interventions that were filed to their application.

2040             Gentlemen, you will have 10 minutes for your presentation.

REPLY / RÉPLIQUE

2041             MR. BELL:  Thank you.

2042             THE CHAIRPERSON:  Perhaps you could switch that microphone off.  There we go.

2043             MR. NEWMAN:  Just since it is on the public record, I have had the opportunity to be on the stage several times with Mr. Cochrane and I am a fan of his music.  I did use him as an example.

2044             Hanging up in my home office is a picture, a lithograph from FACTOR entitled "The Class of >94".  Included on the "Class of >94" were Lorena Mckenna, Kim Mitchell, Tom Cochrane, Gowan, K.D. Lang, the Tragically Hip, Blue Rodeo, and others.

2045             What has happened since 1994 I wouldn't comment on, but one would assume that those were all very viable artists in that year and I think that speaks to some of the very good work that FACTOR has done over the years and I wouldn't want to diminish in my comments the work that organization has done.

2046             I think Mr. Chater has pointed out that they require a bit of an internal review and we certainly welcome that.

2047             It is a concern for such a small organization as ours with relatively small dollars to allot to Canadian Talent Development in a market such as Charlottetown to have the money go into a pool that could conceivably be used to fund out of region artists.  It is  merely a concern that we would like to point out and we welcome certainly the review.

2048             It is important to note that when we wrote our application the landscape in Charlottetown was very ‑‑ and I will use the word ‑‑ vanilla.

2049             The LMA was just breaking up at the time, tuning was down across the marketplace, revenues were down, and our application, I guess on the outset, does appear to be a bit piranha‑like and opportunistic, but we did want to state the facts about the way the marketplace was.

2050             Obviously, the break of the LMAs changed that landscape, but the status quo we don't feel will do, not for the listeners, not for the advertisers and not for the owners.

2051             I just addressed the issues of the intervention of the Starmaker and the FACTOR funds.  If FACTOR is prepared to guarantee to us in writing that the money will stay in Prince Edward Island we would certainly consider offering our Canadian Talent Development initiative to them, but we would have to come with a strong guarantee that the money would reside in PEI and not end up in some type of general or administrative fund.

2052             MBS has a strong model.  They are concerned about increased competition.  They are currently operating two FMs in the province, one FM in the marketplace and one AM station.  We don't think giving them or not giving them their request to FM to flip CFCY will negatively impact them.

2053             CFCY is a heritage radio station with an incredible amount of hours tuned for an AM.  It is one of the legends in the Maritimes.

2054             Conversation about local people and our local programming.

2055             We are looking actually to put a local management team in place.  A local management team would likely bring with it an equity position and there is nothing better for an operation to have a management team that has a stake in the operation.

2056             We have put together some suggestions for what can be done on the issue of spectrum, I guess, maximization.  We have put forth an opportunity to use an additional frequency, which was one of MBS's concerns that the spectrum be used properly.

2057             We recognize that the Commission, given the nature of the crowded spectrum in the Maritimes, have some concerns, the possible implications of the spectrum in Charlottetown impacting an additional Halifax operation, but we are prepared to work with MBS and any of the other owners to come up with a suitable usage.

2058             Whether that involves us taking the larger Class C and the full 100,000 watts and covering the Island or MBS taking that, we certainly are prepared to work with our competitors on that.

2059             We are prepared to offer a compelling product to an audience that we feel is being largely ignored.

2060             Thank you.

2061             THE CHAIRPERSON:  No questions?

2062             Thank you very, very much and good luck.

2063             MR. NEWMAN:  Thank you.

2064             THE SECRETARY:  We would now call upon Maritime Broadcasting System to respond to all the interventions that were filed to their application.

2065             You have 10 minutes for your presentation.

2066             Thank you.

REPLY / RÉPLIQUE

2067             MR. PACE:  Good morning, Mr. Chairman.  I am still fighting a cold, so bear with me.

2068             Mr. Chairman, Members of the Commission, sometimes in the heat of the game we forget the goal is not about the players, it is about the fans; in this case, the listeners of Charlottetown.

2069             MBS came to this hearing looking for a conversion from CFCY‑AM to the FM dial.  This is an application that meets the criteria as set out by the CRTC.

2070             The issue of Summerside's Country FM has taken up some very valuable time and effort during the hearing.  As one lawyer to another, Mr. Chairman, trust me: Summerside is Summerside, Charlottetown is Charlottetown, and never the twain shall meet.

2071             A number of questions arose about the signal coverage of CJRW‑FM.  We would like to point out that CJRW Summerside is licensed as a directional signal.  This was originally put in place by the Commission to protect the Charlottetown market.  Yesterday the issue of spectrum management was discussed.  We would like to point out that Newcap's new FM application specifies frequency 89.9 as their desired frequency.  If 89.9 was licensed in Charlottetown, it would negate the opportunity for this frequency to be used in Halifax.  We point out this because there are no other frequency options in Halifax that are not subject to serious constraints.

2072             Simply put, Mr. Chairman, you were right.  There is a limited spectrum, particularly in Halifax, but there are certainly more options in Charlottetown.  On a number of occasions yesterday, Newcap Broadcasting made reference to the fact that if we were successful in our conversation CFCY‑AM, we would have three FMs in the Charlottetown market.  This is not true.

2073             We suggest this is an issue of convenience with Newcap.  On Newcap's own website leading up to this hearing, they solicited listener support in the form of a CRTC petition letter, which asks listening preferences in Charlottetown.  The stations they listed were the two CBC stations, CFCY‑AM, CHTN Oldies and CJLQ‑FM.  We find it curious they chose not to include CJRW Summerside FM.

2074             Mr. Chairman, Members of the Commission and staff, let us be clear.  CFCY‑AM is projected to lose money, as we indicated in our submitted financial projections.  So the move to FM is essential for CFCY to viable long term.  We firmly believe that Country music on FM in Charlottetown is a wise and prudent use of the spectrum.

2075             The listeners of CFCY‑AM in Charlottetown deserve the opportunity to hear their favourite music in the way it was meant to be:  high quality, in full colour rather than black and white.

2076             Thank you.

2077             THE CHAIRPERSON:  You might as well throw high definition digital in there, as well, and get it all done.

2078             Are there any questions from the Panel?  No.

2079             Thank you very much and good luck to you, sir.

2080             MR. PACE:  Thank you.

2081             THE SECRETARY:  We now ask Newcap Inc. to respond to all of the interventions that were filed to their application.

2082             You have ten minutes for your presentation.

REPLY / RÉPLIQUE

2083             MR. MAHEU:  Thank you very much.

2084             Good morning, Mr. Chair, Members of the Commission.  This won't take very long, just about 90 seconds.

2085             To re‑introduce, Rob Steele is the President and CEO of Newcap Radio.  I am Mark Maheu.  This is Jennifer Evans, our General Manager here in Charlottetown.

2086             Just to get on the record, responding to the intervention by CIRPA and Mr. Chater's comments this morning, we applaud FACTOR on the excellent work they have done.  Although our application in Charlottetown for the new Rock FM, Island FM, and our conversion of CHTN does not include funding for FACTOR this time around, it should be noted that over the past five years Newcap Radio as a company has contributed $1.7 million to FACTOR, paid out over the last five years.  This year alone, we will be writing them a cheque for $650,000, and we have commitments to FACTOR funding of $3.3 million over the next five years.

2087             So part of that annual budget Mr. Chater was referring to, a good amount of Newcap money makes up that budget presently.

2088             To reply to the interventions by some of our listeners and supporters, Jennifer Evans.

2089             MS EVANS:  Thanks, Mark, and good morning again.

2090             At this time I would like to thank the hundreds of Islanders who intervened in support of Newcap Charlottetown's applications.  It has been most rewarding to see the response from our listeners, our advertisers and the community at large in support of moving CHTN to the FM band and the prospect of a Rock radio station in PEI.

2091             On behalf of the entire 720 CHTN team, a sincere thank you to the 1500 listeners, business owners and community leaders that took the time to visit our website for the Island Rock FM, came to our open house and wrote letters in support of our applications.

2092             They certainly reinforced in our minds that there is the demand for CHTN Classic Hits on FM and the continued demand for a Rock FM station in PEI.

2093             We are very excited about the opportunities ahead for radio in Prince Edward Island and for Newcap Radio.

2094             I thank you for your consideration of our applications, and we would be happy to answer any questions you may have.

2095             THE CHAIRPERSON:  I think we have enough information, which shows how naive we are.  We think we have enough information, but wait until we get back to Ottawa and start sifting through it.

2096             Thank you very much and good luck.

2097             MR. MAHEU:  Thank you.

2098             THE CHAIRPERSON:  I think we can carry on with the first applicant.  They have been very patient and they are ready to go.

PHASE I

2099             THE SECRETARY:  Mr. Chairman, this completes the consideration of Items 1 to 4 on the agenda.

2100             We will now proceed with Items 5 to 8 on the agenda, which are the competing applications to operate English language commercial radio programming undertakings in New Glasgow.

2101             We will begin with Item 5, which is an application by Astral Media Radio Atlantic Incorporated.

2102             The application by Astral Media Radio Atlantic Incorporated is for a licence to operate an English language FM commercial radio programming undertaking in New Glasgow.  The new station would operate on Frequency 94.1 MHz, Channel 231B, with an effective radiated power of 8,000 watts.

2103             Appearing for the applicant is Mr. John Eddy.  Mr. Eddy will introduce his colleagues, and then you will have 20 minutes for your presentation.

2104             Thank you.

2105             THE CHAIRPERSON:  Whenever you are ready, ladies and gentlemen, we are ready for you.

PRESENTATION / PRÉSENTATION

2106             MR. EDDY:  Good morning, Mr. Chair, Members of the Commission and Commission staff.  My name is John Eddy and I am Executive Vice‑President of Astral Media Radio Atlantic.

2107             Commissioners, we are pleased to appear before you today to present our proposal for Max 94.1, a Hot AC station to serve Pictou County.

2108             Before we begin our presentation, I would like to introduce our panel.

2109             Starting in the front row to my left is Tom Blizzard, Group Program Director.  To my right is Jennifer Cox, Director of Marketing and Promotions.

2110             In the second row, starting at the left, is Garry Barker, a former senior broadcast executive responsible for 24 stations in the region; and Claude Laflamme, Vice‑President, Corporate and Regulatory Affairs, Astral Media Radio.

2111             We are seeking your approval for what we believe is a highly beneficial and local approach to the opportunity presented by the Pictou County radio market.  Our application draws upon our extensive experience and our success in small markets.  We will be building on our history of community involvement and on our track record of support for Canadian talent at the local level.  We have the resources and the expertise to provide relevant, top quality radio service to the citizens of Pictou County and to make an important contribution to the broadcasting system in the process.

2112             As you know, Astral Media Radio Atlantic is a regional broadcaster.  We are headquartered in Fredericton with six radio stations in New Brunswick and two in Nova Scotia.  All of our radio services are known for being essential partners to the audiences they serve and relevant voices in their communities.  We are committed to quality radio and to Atlantic Canada.

2113             Pictou County is an opportunity that we are very excited about.  The county is growing.  It has a great mix of small towns and rural communities, including New Glasgow, Stellarton, Westville, Trenton and Pictou.  There is a strong base in retail, agriculture, forestry and manufacturing.

2114             In addition, Pictou County is host to numerous festivals and home to 15 local museums and historic sites.  In other words, Pictou County is a delightful area with a varied and vibrant economy.  The population is now more than 45,000 people and it has had only one local radio station for over 50 years.  We believe the introduction of radio competition to Pictou County is long overdue.

2115             While we respect CKEC and its history of service, the needs of more than 45,000 people in Pictou County are simply beyond the capacity of any single radio station to meet, no matter the quality of the service.

2116             Since we filed our application, overall radio listening in Pictou County has declined by 20 percent, to a level far below either provincial or national averages.  More striking is a 47 percent drop in radio listening among adults 25‑to‑54 in Pictou County.

2117             The most recent BBM results show that CKEC has 39 percent of the tuning.  It is traditionally most popular with listeners 55‑plus, but over 60 percent of the radio audience is tuned to out‑of‑market stations, including ours.

2118             So while we have some presence in Pictou County, we do not presume to know it in any way remotely close to the depth and extent of our knowledge of the markets it is our primary mandate to serve.  Our presence in Pictou County today is because there is no other local alternative.

2119             We are proposing a fresh, new, vibrant format alternative for listeners in Pictou County.  This Hot Adult Contemporary radio station will feature an up‑tempo mix of new rock and pop music along with the best from the last 10 to 15 years.

2120             We will bring with us the same standards of excellence, the same energy, knowledge, resources and commitment to be as unique and successful in Pictou County as we are in each of the other five small Maritime markets we are licensed to serve.

2121             We would like to tell you how our music, spoken word programming and talent development initiatives would uniquely reflect Pictou County.

2122             Tom.

2123             MR. BLIZZARD:  Thank you, John.

2124             We began work on this application by asking what music people in Pictou County wanted that was also distinct from the other radio stations they listened to.  We hired Synovate Research to test formats.  Hot AC came out on top.  It has the highest combined score for the appeal of its music and its distinctiveness.  This format appeals significantly to under‑served younger listeners and at the same time minimally impacts CKEC's older audience.

2125             We are committed to 40 percent Canadian content.  We believe we can make a strong commitment to new music within that 40 percent and to showcasing regional artists.  Max will play regional favourites like Gordie Sampson, Mir, Dave Gunning and recent Rock Star INXS winner, JD Fortune, along with artists like Rob Thomas, Black Eyed Peas and Kelly Clarkson.

2126             Some of the featured programming includes:

2127             The Max Campfire Concert.  This is an acoustic on‑air concert performed by a local or regional artist.  We will welcome local and regional artists into our studio for an interview and preview of their latest project.  This will be followed by the really special part:  an unplugged mini‑concert live in the studio.  One of our Fredericton stations, the Fox, has treated its listeners to at least ten of these ‑‑ we call them "live in the fox hole concerts" ‑‑ in the last year.

2128             Max East Coast Sunday.  Twice every Sunday we will devote an hour to music, news and interviews focussed on musicians from the Atlantic Canada scene.  We have had great experience at doing this.  Our station Capital FM has produced an East Coast music show for over ten years now, and for the last three years in a row it has been nominated for an East Coast Music Award as Best East Coast Show.

2129             We will also post samples of new music featured on our Max East Coast Sunday following the show.  We will put these on our website in order to give listeners an opportunity to express their opinion on the music's appeal.

2130             Top 40 Countdown.  This is a weekly show to be aired on Saturday and Sunday evenings, featuring the top 40 songs along with a detailed profile of a Nova Scotia artist.  We have a reputation for artist support and new music appreciation, and we plan on bringing that to Pictou County.

2131             Max Facts is a radio greeting card.  It is for listeners celebrating birthdays or anniversaries, and best wishes will be voiced not by the announcers but by family and friends of those celebrating.  They will be aired as a montage during the Breakfast Show and Afternoon Drive, as well as middays on weekends.

2132             Pictou's Most Wanted:  This will unwind weekdays following the "News at 5", with instant requests until 6:00, featuring the listener as a music presenter.

2133             Top 9 at 9:  This is the top nine requested songs of the day, as determined by local listeners.  They will be counted down each weekday evening at 9 o'clock.

2134             Local reflection will be a priority at Max.  It is the key to good radio, and it will certainly be the key to winning back listeners tuning to out‑of‑town stations.  We plan to be plugged into the rhythm of Pictou County.  Everything we play or say will originate in our local studios, although we would like the flexibility to air up to a maximum of ten hours per week of syndication if the quality and circumstances warrant.

2135             We are going to be a high energy focussed music station, but we will take news seriously.  We will be professional, accurate, immediate, relevant, and most importantly, local.  And we are committed to being the most reliable source of immediate news and information in the event of an emergency in the community.

2136             MAX will reflect the interests of Pictou County with substantial local news and information.  We will deliver the news hourly between 6:00 a.m. and 6:00 p.m. weekdays, as well as providing updates on the half hour during the "Breakfast Show". Weekends will feature hourly newscasts from 6:00 until noon.  Max will be there at town council meetings, hospital boards, briefings and press conferences.

2137             In addition, we plan the "Max Community Focus Bulletin" which will air three times a day, seven days a week.  It is an extensive service and will go well beyond the bulletin board listings and will incorporate many personal interviews.

2138             For example, instead of simply promoting a Blood Donor Clinic over in Stellarton, we will contact the organizers and put them live on the air so that they can give further details:  location, hours, what to expect; my favourite part of the clinic, what's for dessert.

2139             For events such as River John's "Read by the Sea Festival", musical performances, or new exhibits at the Nova Scotia Museum of Industry in Stellarton, we will put the organizers on the air to provide the highlights.

2140             We will do the same thing for local town council meetings, road closures, weather conditions, and so on.  The community's voices, enthusiasms, causes and concerns will be heard on our station.

2141             Our local programming will also reflect the area's cultural diversity, from the traditions and celebrations of founding nations and first immigrants to those of the newer multicultural groups.  Scottish heritage abounds in Pictou County, but there are also events like the First Nations PowWow at Pictou Landing that give a broader context to area cultures.

2142             We plan a Local Advisory Board to help guide us in this area.  It will:

2143             (1) help ensure that the programming and station activities reflect Pictou County's communities and are a positive force in the region;

2144             (2) provide input on local issues, spoken word content and public service campaigns; and

2145             (3) the Advisory Board will also recommend coverage of community events and traditions that tell the story of our area's cultural diversity.

2146             John.

2147             MR. EDDY:  Thank you, Tom.

2148             We have taken our local focus and applied it to Canadian Talent Development too.  Here is Jennifer Cox to tell you about our proposed direct spending in Pictou County.

2149             MS COX:  We promise to spend $700,000 in Canadian Talent Development benefits over seven years.  This is all cash to qualified third parties and three times the amount of the next highest applicant. It will be distributed as follows;

2150             The New Glasgow Riverfront Jubilee, which is the County's premier musical event, will receive $10,000 each year as performance fees to compensate Canadian artists appearing at the festival.

2151             A key component of The Riverfront Jubilee Society's mission is to showcase local and regional talent in order to assist development of the music industry and its export potential from Nova Scotia.  The Jubilee is a four‑day outdoor music festival in New Glasgow with a reputation that is growing every year.  In fact, the Music Industry Association of Nova Scotia has named the Jubilee "Music Event of the Year" three times.

2152             This summer the talent line‑up included Lennie Gallant, Bruce Guthro, the Jimmy Swift Band, Seven Nations, Melanie Doane and lots of Pictou County's own talent, such as George Canyon, Dave Gunning, and Steven Bowers.

2153             Max has also committed $65,000 each year for a new Astral Jubilee Music Competition with prizes of studio recording time, musical instruments and equipment.  The competition will be created and managed by the New Glasgow Riverfront Jubilee.

2154             We have pledged $25,000 a year to FACTOR (again three times the amount of the next highest applicant), with the stipulation that all of the money be directed to Nova Scotia musicians.  We are proud to offer a total of $175,000 to Nova Scotia artists through FACTOR.  These funds will assist Canadian recording artists and songwriters in having their material produced and their videos created.  They provide support for domestic and international touring as well.

2155             Our comprehensive Canadian Talent Development program has a strong focus on community and the region and meets the needs of young artists for exposure to broader audiences, promotion and recording opportunities.  Our proposal appropriately reflects our strong commitment to Atlantic Canada and its artists.

2156             MR. BLIZZARD:  We also plan a full slate of indirect, on‑air support for local, regional and Canadian artists.  It starts with our 40 percent Canadian content and a format with a home for new music, but it doesn't end there.

2157             Our direct contributions to the New Glasgow Jubilee will be amplified by free promotional coverage, creating interest in both the festival and the artists themselves.  We will make a special recording of performances at the Jubilee, play it on our eight of our Astral Atlantic stations, and also offer it to other Atlantic radio stations at no cost.

2158             MR. EDDY:  Commissioners, we are proposing a realistic business case based on first‑hand knowledge of this market.  We believe this market will support two FM stations.

2159             We will create and fill 15 full‑time jobs in the community and we will spend over $900,000 in capital expenditures to build studios, transmitter facilities and offices to operate in New Glasgow.

2160             CKEC will not suffer undue impact.  In fact, based on CKEC's recent financial disclosure, the impact will be less than previously anticipated.

2161             Our commitment is long‑term and realistic.  We intend to run a first class operation in Pictou County.  We have the financial resources to make this investment and to create and sustain a top quality radio service.

2162             There are six reasons why Max 94.1 is the right radio station for Pictou County and we are the right applicant to serve this community:

2163             The addition of Max will create diversity, doubling local radio choices and news voices, adding a new, highly popular format our research shows is in strong demand.

2164             Our commitment to community reflection is demonstrated by virtually 100 percent local programming, strong local news and community programming with extensive promotion of activities that are important to Pictou County, including coverage of local events that reflect the area's cultural diversity.  A local Advisory Board will further ensure that we are responsive to the region's communities.

2165             We promise 40 percent Canadian content and great exposure of local artists through our programming.

2166             We propose a comprehensive $700,000 program for the development of local and regional Canadian talent.  We respond to the real needs of emerging artists with our initiatives,  Our contribution to the New Glasgow Riverfront Jubilee gives it stable long‑term funding and a mechanism to encourage and reward emerging artists.  And we have pledged $175,000 to FACTOR, exclusively for Nova Scotia artists.

2167             We have a realistic business plan, based on first hand knowledge of the region and of small market radio, supported by professional research.

2168             Finally, we will re‑energize radio and repatriate alienated listeners.  We bring increased ownership diversity and competition to the local radio market.  Pictonians will benefit from choice, and local businesses will be able to reach more listeners and a younger demographic through local radio.  Community groups will gain a second outlet to air their issues and announcements.

2169             Commissioners, this proposal meets the needs of the under‑served Pictou County radio audience that is clearly in search of a new local radio choice.  We are committed to the Maritimes and we will build on our Atlantic roots and draw on the strength of Astral Media Radio Atlantic to deliver top quality local programming to Pictou County.  We submit this application fully meets your licensing criteria and contributes to the objectives of the Broadcasting Act.

2170             Mr. Chair, Members of the Commission, we look forward to responding to whatever questions you may have.

2171             THE CHAIRPERSON:  Thank you very much.

2172             Commissioner Noël.

2173             CONSEILLÈRE NOËL:  Bonjour, Madame et Messieurs Eddy, Blizzard et Baker.  Ce matin nous allons approfondir quelques aspects de votre demande pour compléter le dossier.

2174             Don't worry, I'm switching.  I saw the desperate looks in your eyes.

‑‑‑ Laughter / Rires

2175             COMMISSIONER NOËL:  We will review programming synergies, if any, with your Truro stations, impact on the market, repatriation of out of market tuning and technical matters.

2176             As usual, you will have about two minutes to tell us why your application is the best.

2177             Let's start with programming.

2178             In your application you state that all of your proposed station's programming will be produced locally except for ‑‑ and you have repeated that in your presentation this morning; that you want to have the flexibility to have ten hours per week of syndicated programming that would air on weekends.

2179             Could you tell us what would be the content of that programming.  Will it be music, spoken word, other types of programs?  Will it be Canadian or will it be syndicated from other sources?

2180             Could you give us an idea of what that could be.

2181             MR. EDDY:  Yes.  I will make a couple of comments and then pass it over to Tom, who is really the expert in this area.

2182             First, we are seeking permission to have the flexibility to do this kind of programming on a limited basis should the circumstances warrant.  We don't have in mind spoken word programming.  We don't have in mind open line show programming.  What we have in mind is the kind of thing that would be associated with fund raising for victims of typhoons or hurricanes, that sort of thing, which we could patch into if the program was suitable.

2183             Tom would have some additional kinds of comments.

2184             MR. BLIZZARD:  It would be nice to have that permission in your back pocket.  I have mentioned this to John and my other colleagues that "Live Aid", which was a worldwide benefit to raise awareness for poverty in Africa, as well as around the world, was made available to radio stations earlier this year.  When something like that comes along or a hurricane blows through the Gulf Coast and there are benefit shows made available to radio, I view it as syndication.  I would like to be able to make that judgment.  It usually comes along in a moment's notice.  That is programming that we should be carrying.

2185             COMMISSIONER NOËL:  It is not 10 hours a week every week.  It is occasionally.

2186             MR. BLIZZARD:  I don't think that we are saying necessarily that.

2187             COMMISSIONER NOËL:   You want the flexibility.

2188             MR. BLIZZARD:  We want the flexibility.  It could be a specialty show for Christmas, maybe two or three hours at Christmastime that we would like to play for our audience just for added variety on the air.

2189             At this point in time we have nothing under consideration.

2190             COMMISSIONER NOËL:  Okay.  And you cannot tell us either if it is going to be Canadian produced or foreign produced.

2191             MR. BLIZZARD:  I would anticipate it being Canadian programming, yes.

2192             COMMISSIONER NOËL:  You would?

2193             MR. BLIZZARD:  Yes.

2194             COMMISSIONER NOËL:  All right.

2195             Still in programming, let's talk about your news, weather, sports.  Your plan is offering six hours and 20 minutes per week of news, sports and weather, as well as some daily community focus features.

2196             Could you tell us how much time in hours and minutes will be devoted to the total spoken word programming during each broadcast week.

2197             MR. BLIZZARD:  Eleven hours.  It should be a minimum of 11 hours.

2198             COMMISSIONER NOËL:  Eleven hours including the news.

2199             MR. BLIZZARD:  That includes the news, yes.

2200             COMMISSIONER NOËL:  And the news part would be six hours and 20 minutes.  So it would be about four hours and 40 minutes, if I still know how to calculate.

2201             MR. BLIZZARD:  I will leave the numbers to you.

2202             COMMISSIONER NOËL:  Of other spoken word.

2203             MR. BLIZZARD:  Yes.

2204             COMMISSIONER NOËL:  That would be relevant to the community.

2205             MR. BLIZZARD:  Yes, ma'am.

2206             COMMISSIONER NOËL:  You did a market study, the Carat market study, and you decided that the Hot AC music format ‑‑ and you describe it as "containing a significant amount of new rock and pop releases".

2207             Could you tell us how your proposed format is different from that being proposed by the others that are applying for a licence in the same market?  How is it different from the applications of Acadia, Atlantic and Hector?  Well, Hector is a flip.

2208             MR. EDDY:  There are at least two or three components to this question.

2209             From my perspective, the first issue has to do with the quality of the research, and I will ask Mr. Barker to comment on that.

2210             The second issue I think has to do with the differentiation of our proposed product from that of the others, and I will ask Tom to comment on that.

2211             Perhaps we can deal with the specifics of the product first and then the research second.

2212             MR. BLIZZARD:  The easiest application to differentiate ours from would be Classic Rock.  Classic Rock is based essentially in the 1970s through the 1980s, sprinkling into the 1960s and a sprinkling of the 1990s, as proposed by Acadia.

2213             I would anticipate perhaps a 10 percent overlap.  This is primarily due to duplication of artists.  Classic Rock includes names like U2, Santana, Rod Stewart, Eric Clapton.  The careers of many of these artists span such a wide era, part of the rock era, that they began as rockers but as their careers continued and they brought new influences into the type of music that they record, I think some of their songs nowadays, their newer material, is more of interest to consumer of Hot AC, of Pop radio, than to Rock radio.

2214             In that sense, I would anticipate our station overlapping Classic Rock by around 10 percent.  But this would be artist overlap, certainly not song overlap.

2215             With CKEC, the incumbent, we would share some contemporary titles.  Their format is very wide.  It runs from Contemporary.  They block mainstream Country through a portion of their broadcast week.  They play Oldies.  Some of their music, according to my monitors, even goes prior to the Rock era.

2216             In sharing programming or sharing music duplication and artist duplication, it would be minimal.

2217             With Atlantic Broadcasters' applications, their proposed music format probably has the highest amount of duplication for what we are proposing, in that they play many contemporary artists in their suggested format.

2218             However, their seventies Gold and Classic Rock titles, I think, are the distinguishing mark or mark of differentiation between the applications.

2219             MR. EDDY:  Perhaps I could just add to what Tom has said?

2220             COMMISSIONER NOËL:  Yes.

2221             MR. EDDY:  I think, in summary, the Classic Rock proposal is a pure Classic Rock proposal.  They are not going to play anything newer than 2000, and 90 percent of the music is going to be between the 1970s and the 1990s.  So there is virtually no overlap with us.

2222             To the extent that their music is of that age, it obviously has substantial appeal to an older audience and so therefore is far more impactful on CKEC than it would be on anybody else.

2223             With respect to Atlantic's proposal, as Tom said, it is closest to ours but for the components which are seventies and eighties which are not contained in our play list.  So to the extent that they are going to be playing seventies and eighties music, that too is duplicative of CKEC but not of us.  That, too, would be injurious to CKEC's audience.

2224             So in that respect, ours are differentiated.

2225             I will ask Garry to comment on the research.

2226             M. BARKER:  Merci, John.

2227             Bonjour, Andrée.  Bienvenue à l'Îsle du Prince Edouard.

2228             I don't mean to confuse the translators.  That is the extent of my French knowledge.

2229             The research that Synovate conducted was what I believed to be by far the most extensive in terms of determining the listener preferences in Pictou County.  Our research was the only research that actually played the musical choices to the respondents.  Thus our average interview with a respondent was 17 minutes.

2230             So I believe that we were in a much stronger position in terms of determining the air balance of the radio station and the overall essence of the radio station relative to our other competitors.

2231             The other thing that I found was that clearly in terms of a threat to the existing CKEC audience, ours was the least threat.  Merci.      COMMISSIONER NOËL:  Thank you.

2232             Let's talk about this ‑‑ you don't mention any synergies in your supplementary brief, but would there be synergies between the proposed new FM in New Glasgow and your two Truro stations, which are about what, 60 kilometres apart?

2233             MR. EDDY:  Yes.  There is one synergy which Tom can refer to on the programming side.

2234             We have an initiative where we are going to be producing at our expense CD recordings, and we have committed to make that available to our other Astral radio Atlantic stations and play it on those stations, as well as make it available in the wider broadcast community.

2235             So there is that positive synergy.

2236             Insofar as you are referring to negative synergies, there are none.  We expect that all of our programming will be produced locally in Pictou County for Pictonians by our staff there.

2237             COMMISSIONER NOËL:  So you will not share staff with the Truro stations.

2238             MR. EDDY:  None whatsoever.

2239             COMMISSIONER NOËL:  And only head office functions.

2240             MR. EDDY:  Well, yes, but that is just ‑‑

2241             COMMISSIONER NOËL:  In Fredericton.

2242             MR. EDDY:  Exactly.

2243             COMMISSIONER NOËL:  Or in Montreal, as the case may be.

2244             MR. EDDY:  Yes.

2245             COMMISSIONER NOËL:  No synergies in programming except for the CD production.  No synergies in management either.

2246             MR. BLIZZARD:  None.

2247             COMMISSIONER NOËL:  Thank you.

2248             Now if we turn to your financial projections, you indicate a strong local advertising component of 85 percent of local revenues ‑‑ 85 percent of total revenues would come from local advertising.

2249             The normal split is 80 local, 20 national.  Could you comment on your belief that this market is more locally driven from a revenue perspective than the average, which is 80:20.

2250             MR. EDDY:  Yes.  The average of 80:20 is just that:  it is an average.  Our experience is the larger the market, the bigger the national component.  And that is really a function of whether the market gets on the buy.

2251             It would be true, for example, of Fredericton, that it is more or less 80:20, but in Bathurst and Woodstock and Grand Falls and smaller markets, it is certainly not 80:20.

2252             COMMISSIONER NOËL:  So your experience is the smaller the market, the higher the local revenues as opposed to national revenues.

2253             MR. EDDY:  Yes.

2254             COMMISSIONER NOËL:  With a very high percentage, 85 percent of your revenues would be local,.how is it that your projected financial impact is only 30 percent on CKEC?

2255             I've seen the Carat study, but I would like you to emphasize on that.

2256             MR. EDDY:  Well, the beginning point is our acceptance of and belief in the Carat estimate of the value of the market to begin with, as confirmed by our own experience, in not only Truro but in other markets in the region.

2257             So we are persuaded that the market is of a value of $1.8 million at least.  We think that is a reasonable and conservative number.

2258             The Carat research, and us as well, assumed that as a standalone operator with a 43 share at the time in that market, CKEC's revenue base would be substantially higher than their figures now show.  We assumed that it was in the range of 1.3 to $1.5 million.  That was a reasonable estimate for us, based on our experience in other markets and based on the research and based on the simple multiple that you would have seen in Carat's research of 0033 times Nova Scotia's radio revenue.

2259             What has since happened is two things.  One; there has been a huge decrease in radio listening in Pictou County.  It is also evident that that huge decrease in radio listening in Pictou County has not affected significantly CKEC's revenues.

2260             So what has happened is that CKEC's revenues have neither grown nor fallen.

2261             Our conclusion is that there is a very substantial level of support for CKEC's revenues at the million dollar mark.

2262             From our point of view, you have a $1.8 million dollar market, with the incumbent radio station doing a million dollars.  So there is $800,000 worth of revenue in that market that is basically unaccounted for.

2263             What we initially thought would be $240,000, roughly, of impact on CKEC, we now think there is going to be substantially less than that.

2264             COMMISSIONER NOËL:  When you talk about $1.8 million, you are only talking radio advertising.

2265             MR. EDDY:  Yes.

2266             COMMISSIONER NOËL:  And not print.

2267             MR. EDDY:  No, no, just radio.

2268             COMMISSIONER NOËL:  Just radio.  Thank you.

2269             The Carat expert study also mentions that 40 percent of your revenues would be taken away from the print business.

2270             Could you tell us how you believe or how you came to that assumption that 40 percent of your revenues for the proposed stations would be taken out of print.

2271             MR. EDDY:  Again, we are quite confident in that number, based on our experience in other markets.

2272             New Glasgow, interestingly, has a daily newspaper as well as a couple of weeklies.  Our experience with respect to local newspapers everywhere is that they are declining rapidly in terms of editorial content and local content.  They are increasingly advertising flyer delivery systems.

2273             COMMISSIONER NOËL:  I gather this isn't a transcontinental newspaper.

2274             MR. EDDY:  There you go, yes.  So our experience has been that we have had a great deal of success in competing against newspaper, and particularly in circumstances where the radio market is excited by reason of competition.

2275             So we have done extremely well in all of our markets where those circumstances obtain.

2276             MR. LAFLAMME:  John, if I might add, one of the difficulties in terms of advertising in Pictou County, according to the research, were advertisers that were targeting younger demographics or simply even 25‑to‑49 with the preponderance of older listeners to CKEC.

2277             So we believe that print has been winning some advertising dollars by default at the expense of radio.

2278             COMMISSIONER NOËL:  Do you think that being an evening newspaper, it has a problem reaching its target?

2279             MR. LAFLAMME:  I think it is a combination not so much ‑‑ I would never want to pretend that a daily newspaper is going to be stealing teenage dollars.  On the other hand, when you consider the weekly publications and the various other forms of print advertising available within Pictou County, we do believe, as is evidenced even in the hotels here in Charlottetown in terms of a publication called "The Buzz", which is clearly targeted significantly younger ‑‑ there are publications similar to that in Pictou County as well.

2280             COMMISSIONER NOËL:  Thank you.

2281             Now I will take you to page 5, and we will go back a bit to your Truro stations.

2282             I gather that these figures might not be the lattest because your application was filed in the fall of 2003, if I am correct.

2283             At that time you indicated on page 5 of your supplementary brief that the out‑of‑market tuning to your stations, your two Truro stations, totalled 30.2 percent of the total listening in the New Glasgow area or in Pictou County.

2284             MR. EDDY:  Yes.

2285             COMMISSIONER NOËL:  Before we go any further, New Glasgow is here.  What is the relative size of Pictou County as opposed to New Glasgow per se, in terms of people?

2286             MR. EDDY:  I think that the county population is something in excess of 45 now, and I think the town of New Glasgow is in the 15‑20 range.

2287             COMMISSIONER NOËL:  And you mentioned that the county is growing, but according to StatsCan, New Glasgow is recorded at a 3.5 percent decline in population between the 1996 and the 2001 census.

2288             Could you tell us how you reconcile those two facts: New Glasgow down and you say in your presentation of this morning, at page 2, that the county is growing.

2289             MR. EDDY:  We would be relying on Canadian market facts and Carat for that statement.

2290             I can double‑check it but I don't have the resource material at hand.

2291             COMMISSIONER NOËL:  You don't have the facts.  I am puzzled a bit because we have StatsCan telling us that ‑‑ of course, it is not the same thing.  It is New Glasgow per se and you are talking about Pictou County in your presentation, which would be growing as opposed to New Glasgow, which is declining.

2292             MR. LAFLAMME:  I believe there is also another definition that could be used, which is New Glasgow CMA, and that is even different.  That shows, I believe, approximately 37,000.

2293             Our understanding, based on Statistics Canada, was that for Pictou County relative to population, that there has been population growth.

2294             COMMISSIONER NOËL:  Thank you.

2295             I will ask Madam Murphy to ask you for a specific undertaking to give us the statistics that you based your assertion on.  And of course we are talking three years apart, two years apart at least between your application and the time of this hearing.

2296             Let's take the figures that you have in your supplementary brief.  It gives you a 30.2 percent share of the New Glasgow market through your two Truro stations, and the total out of market tuning, according to the Carat expert study is 57 percent.  So you would have more than half of the out of market tuning in the New Glasgow area.

2297             Aren't you worried that the proposed station would cannibalize your market share in New Glasgow and your revenues in Truro?

2298             MR. EDDY:  Two things, Madam Commissioner.

2299             First, I think the most recent numbers are that the out of market tuning is about 60 percent and our share is 26.

2300             COMMISSIONER NOËL:  So your share has reduced a bit.

2301             MR. EDDY:  Slightly.

2302             COMMISSIONER NOËL:  While the others increased.  But it is still high numbers.

2303             MR. EDDY:  Absolutely.  So I am not  detracting from you point.  I just wanted to update the record.

2304             That is my understanding of the numbers per BBM fall 2004/spring 2005 reach.

2305             Having said that, in answer to your question, of course our Truro stations will be the first victim of our being licensed in Pictou.  We expect that.  We will be working diligently to ensure that that comes about as rapidly as possible.  That is our objective.

2306             COMMISSIONER NOËL:  You are not worried ‑‑

2307             MR. EDDY:  Not at all

2308             COMMISSIONER NOËL:  ‑‑ that you would lose revenues.

2309             Do you sell advertising in the New Glasgow market?

2310             MR. EDDY:  Yes, we do.

2311             COMMISSIONER NOËL:  You do.  So you would also cannibalize your revenue side.

2312             MR. EDDY:  We expect it to diminish in relatively short order and disappear.

2313             COMMISSIONER NOËL:  Thank you.

2314             Now we are going to go to technical.  I have a couple of questions.

2315             MR. EDDY:  Where is my engineer?

‑‑‑ Laughter / Rires

2316             COMMISSIONER NOËL:  What surprises me is the power of your antenna.  The power is 8,000 watts.

2317             MR. EDDY:  Yes.

2318             COMMISSIONER NOËL:  8K.

2319             MR. EDDY:  Yes.

2320             COMMISSIONER NOËL:  The coverage of course is smaller.  I have been told that the proper word here is "timbits" or "munchkins", depending on your supplier of choice, as opposed to a full doughnut.

2321             Could you tell us why you are going after such a small market.

2322             Of course, there could be some impact on your Truro stations.  That could be one of the reasons.

2323             I would like you to tell me more about your choice of an 8,000 watt, almost a low power station.

2324             MR. EDDY:  Yes, impact on our Truro stations was of no consideration whatsoever, never considered, never discussed; not relevant to us at all.

2325             As far as we are concerned technically, the power choice was decided by what the requirements were for coverage of Pictou County based on the height of the antenna.  That's it as far as I am concerned.

2326             COMMISSIONER NOËL:  And it is the best use of the frequency?

2327             MR. EDDY:  As far as we are concerned, yes, it is.  Through the deficiency process we have identified two other frequencies that are available, neither of which ‑‑

2328             COMMISSIONER NOËL:  Yes.  I am aware of 90.9, but what about the other one?

2329             MR. EDDY:  There is another one.  I am not sure of the number off the top of my head.

2330             Claude would have it.

2331             MS COX:  97.9.

2332             COMMISSIONER NOËL:  97.9.  So there are two alternative frequencies in that market.

2333             MS COX:  At least two, maybe others.

2334             COMMISSIONER NOËL:  Maybe more than two?

2335             MS COX:  Well, the comments from our engineers, we have at least those two that we mentioned and there could be some others.

2336             COMMISSIONER NOËL:  And none of that would affect your business plan, because all applications are on the same frequency; that is, if we were to accept the flip, there would be alternatives to your proposition.

2337             MS COX:  Yes.

2338             MR. EDDY:  Yes, ma'am.  And it will not affect our business plan.

2339             COMMISSIONER NOËL:  You went faster than I did on that one.

2340             I guess this is about all of my questions.  I will just zoom through this morning's presentation to see if I missed anything.

2341             To make sure, your Canadian Talent Development is all third party.  None of it is indirect.  It is all direct Canadian Talent Development acceptable?

2342             MR. EDDY:  To qualified third parties, yes, ma'am.

2343             COMMISSIONER NOËL:  Yes. So the recording would be with third party studios.

2344             MR. EDDY:  All of it, yes.

2345             COMMISSIONER NOËL:  Thank you,

2346             I guess those are my questions.  Thank you very much.

2347             THE CHAIRPERSON:  Thank you, Commissioner Noël.

2348             If you do want to look further, there are two of your colleagues with questions.

2349             COMMISSIONER NOËL:  No.  I was just going through my little marks here to make sure.

2350             Oh, I have one additional one: voice track.  It was a big subject yesterday.

2351             THE CHAIRPERSON:  Go ahead.

2352             COMMISSIONER NOËL:  Thank you.

2353             Do you do any voice track?  Do you propose any voice track or will it be all live radio?

2354             MR. EDDY:  No.  We will do voice tracking.  Our proposal calls for us to be live 6:00 a.m. to midnight.

2355             COMMISSIONER NOËL:  Six to midnight?

2356             MR. EDDY:  Yes.

2357             COMMISSIONER NOËL:  Every day?

2358             MR. EDDY:  Yes.

2359             COMMISSIONER NOËL:  Including weekends?

2360             MR. EDDY:  No, Monday through Friday.

2361             COMMISSIONER NOËL:  Six to midnight, Monday through Friday.  And weekends?

2362             MR. BLIZZARD:  Live on weekends: from 9:00 until 3:00 on Saturday, and from 10:00 until 3:00 on Sunday.

2363             The reason for the difference is because our "East Coast Sunday Show" is on the air at 9:00 on Sunday morning.

2364             We will have live news from 6:00 until noon on both of those days.  So as far as there being a body in the radio station, probably 5:00 a.m. on both Saturday and Sunday.

2365             COMMISSIONER NOËL:  Thank you.

2366             MR. BLIZZARD:  You are welcome.

2367             THE CHAIRPERSON:  Thank you, Commissioner Noël.

2368             Commissioner Cugini.

2369             COMMISSIONER CUGINI:  Good morning.  I have just a couple of things.

2370             Mr. Blizzard, you talked about some of the CTD commitments and in particular the New Glasgow River Front Jubilee and the commitment to produce the CD.

2371             Are the production costs of that CD included in your contribution to the Jubilee, or are they on top of?

2372             MR. BLIZZARD:  If you don't mind, I will refer to Jennifer for that.

2373             MS COX:  The CD production is not included in the cost in the CTD.  We will do that ourselves as an indirect.

2374             COMMISSIONER CUGINI:  Will that be a yearly commitment to produce that CD?

2375             MS COX:  Yes.

2376             COMMISSIONER CUGINI:  In the area of the syndicated programming, you mentioned "Live Aid" and "Hurricane Relief", but those are special occasions.  They are not things that happen on a regular basis and yet you have asked for up to 10 hours a week.

2377             Do you intend on purchasing syndicated programming, syndicated radio programming from other sources, as well as those special events?

2378             MR. BLIZZARD:  There is nothing under consideration right now.  The reason it is in there is just based on things that have come along during my experience in radio.  If I wasn't able to use that program, whether it is a Christmas special, a special on the Daytona 500, perhaps, because we have identified that stock car racing interest is at its peak right now ‑‑ if you want it, need it, gotta have it without asking for special permission, I would like to be able to grab that program, when warranted.

2379             COMMISSIONER CUGINI:  Do you have any plans on producing any syndicated programming?  Is Astral Radio going to get into the syndicated radio programming business?

2380             MR. BLIZZARD:  No.

2381             COMMISSIONER CUGINI:  So it would just be for purchase.

2382             MR. BLIZZARD:  Yes; barter.

2383             COMMISSIONER CUGINI:  For barter?

2384             MR. BLIZZARD:  Yes.

2385             COMMISSIONER CUGINI:  Thank you very much.

2386             THE CHAIRPERSON:  Thank you.

2387             Commissioner Cram.

2388             COMMISSIONER CRAM:  Thank you.

2389             On page 5, when Commissioner Noël referred to the fall‑spring BBM, Astral's two Truro stations are Nos. 2 and 3 in the New Glasgow market.

2390             Has that changed?

2391             You have given us new numbers, Mr. Eddy, of 26 percent.  Are you still No. 2 and 3?

2392             MR. EDDY:  Yes, not counting ‑‑ well, in commercial radio, yes.

2393             COMMISSIONER CRAM:  In monetized radio.

2394             MR. EDDY:  Yes.  And I think the shares are 14 and 12?

2395             MR. LAFLAMME:  Yes.  And CBC out of Halifax is also a 12 share, 12‑plus.

2396             COMMISSIONER CRAM:  That might change.

2397             MR. LAFLAMME:  It might improve next week.

2398             COMMISSIONER CRAM:  So tell me, in terms of your Truro stations what percentage of your gross revenues come from New Glasgow?

2399             MR. EDDY:  Roughly 10 percent.

2400             COMMISSIONER CRAM:  And based on  your New Glasgow gross revenue numbers ‑‑ you were talking about $1.8 million, I think ‑‑ what is Astral's present share of those total numbers?

2401             MR. EDDY:  In straight dollar terms, $200,000.

2402             COMMISSIONER CRAM:  And your projections after five years, should you be licensed on this application?

2403             The percentage of total gross radio revenues in New Glasgow?

2404             MR. EDDY:  Insignificant.

2405             COMMISSIONER CRAM:  No change?

2406             MR. EDDY:  No, insignificant.  The number will be insignificantly low.  The number will be minimal.

2407             There would be no reason for New Glasgow advertisers to use our service, or far less reason than there is now.  So we expect that if we do our job in New Glasgow, New Glasgow advertisers, who now use our service for two reasons ‑‑ Reason No. 1 would be to attract the attention of either Truro or Colchester County people to New Glasgow, because it is a retail centre, or, alternatively, to attract the attention of Pictou County residents, whom they believe tune to the Colchester County radio stations.

2408             With respect to the latter group, they would have no interest at all, after we are licensed in Pictou, in advertising in Truro.  It would be of no use to them.

2409             COMMISSIONER CRAM:  So the Truro stations, you believe, would have a minimal share in ‑‑

2410             MR. EDDY:  Minimal.

2411             COMMISSIONER CRAM:  ‑‑ New Glasgow.

2412             MR. EDDY:  We would expect it to virtually disappear.

2413             COMMISSIONER CRAM:  Notwithstanding the format difference.

2414             MR. EDDY:  Notwithstanding the format difference.

2415             In fact, to be fair about it, the two formats in Truro are rock‑based AC and a country station.  There is more than one country station that gets into Pictou County now.  We are one of them.  In addition to which, CKEC is, to some extent, country, or plays country.

2416             We just see it as an irrelevancy.

2417             COMMISSIONER CRAM:  What you are saying is, you would lose the No. 2 and No. 3 share ‑‑

2418             MR. EDDY:  Yes.

2419             COMMISSIONER CRAM:  Your Truro stations would simply lose the No. 2 and No. 3 share, and you would simply have the 2 share ‑‑ the second spot in share ‑‑ in the New Glasgow market.

2420             MR. EDDY:  I don't know what our spot would be, but I understand your question to be, what is going to happen to our revenue ‑‑

2421             COMMISSIONER CRAM:  Yes.

2422             MR. EDDY:  ‑‑ the existing revenue that we take from New Glasgow.

2423             My answer is, we expect it to virtually disappear over time.

2424             COMMISSIONER CRAM:  The Truro stations, but then New Glasgow would make up for it.

2425             MR. EDDY:  Absolutely.

2426             COMMISSIONER CRAM:  I am having problems.  Why would we license you in New Glasgow when you are not really going to be a new voice in New Glasgow, and you are not going to be a new choice in New Glasgow, because you are already there in a fairly dominant share?

2427             We look for diversity, and we don't deal with diversity of formats, because you could change tomorrow.

2428             What are you giving us in New Glasgow?

2429             MR. EDDY:  I think that opting for us, in fact, is opting for diversity.  Here is why.

2430             We are, among the applicants, the only one that is proposing a format which is targeted at the completely under‑served younger demographic in Pictou County.  The station that we would put on the air to do that would be a Pictou County originating radio station.

2431             Secondly, our proposed radio station, in terms of news and spoken word, is designed to be entirely complementary to the music format and to the interests of that under‑served demographic.

2432             So in terms of diversity, in the context of the New Glasgow market, or the Pictou County market, and these radio applications, we are the choice for diversity.

2433             Pictou County already is characterized by massive amounts of spoken word and news programming.  What we are proposing is to devote the same resources to spoken word and news programming, but in a way that is complementary to the format, in a way that sells music, which is what the people want, in a way that presents the news and information between the records, instead of the records.

2434             So, from our point of view, what the other applicants in this process are proposing to do is duplicative of what is there, and is more likely to be injurious to CKEC's interests there, both in terms of spoken word and news, which is their specialty, and their music programming.

2435             What we are seeking beyond that is the opportunity to be local in Pictou, the opportunity to make a difference in that community, the opportunity to do there what we do everywhere else.

2436             In a way, what we are saying is, why should Pictonians be penalized for liking the way we do what we do in Colchester?  Why should they not have the benefit for themselves in their own market?

2437             To an extent you are right, they have already voted for us.  They give us a 30 share combined, almost ‑‑ a 26 share ‑‑ half of the out‑of‑market tuning is to us.  They like how we do what we do.

2438             What we are saying is, give us the opportunity to do it there.

2439             COMMISSIONER CRAM:  Thank you.

2440             I recognize your intention to benefit Nova Scotia artists in your FACTOR presentation.  Have you discussed with them the two issues that habitually concern us regional commissioners ‑‑ No. 1, that it would appear the money is not incremental to that otherwise spent on Nova Scotia, unless it is required by the person giving the money?

2441             In other words, if they would have allocated to Nova Scotia $10,000 a year, they would simply replace your $25,000 a year and skip the 10 they would otherwise pay.  It is not incremental.

2442             Have you addressed that issue with FACTOR in your discussions about this proposed allocation?

2443             MR. EDDY:  I don't think so, no.

2444             COMMISSIONER CRAM:  No. 2, it would appear that ‑‑

2445             MR. EDDY:  We should do that.

2446             COMMISSIONER CRAM:  No. 2, it would also appear, as a result of the hearings we had in Edmonton a year or two ago, that although the money is allocated to a specific place, if it is not spent within the year within which it is allocated, it rolls back into the general funds of FACTOR.

2447             MR. EDDY:  I heard that this morning.

2448             COMMISSIONER CRAM:  Have you discussed that with FACTOR?

2449             MR. EDDY:  No.

2450             COMMISSIONER CRAM:  Counsel can discuss the timing, but perhaps you would like to discuss both of those issues with FACTOR ‑‑

2451             MR. EDDY:  Absolutely.

2452             COMMISSIONER CRAM:  ‑‑ and perhaps fortify your concern for Nova Scotia artists in terms of the proposed donation.

2453             MR. EDDY:  Yes.

2454             COMMISSIONER CRAM:  Thank you very much.

2455             Thank you, Mr. Chair.

2456             THE CHAIRPERSON:  Thank you, Commissioner Cram.

2457             Counsel, I believe you have some questions.

2458             MS MURPHY:  Yes.  Thank you, Mr. Chair.

2459             I would like to review some of the undertakings.

2460             First, to clarify the statistics with respect to the population level and growth relating to New Glasgow, New Glasgow CMA, and Pictou County, providing references for the source of information.

2461             Second, confirmation in writing of your discussions with FACTOR with respect to your proposed CTD contribution.

2462             Will you be able to provide this information by October 12th?

2463             MR. EDDY:  We think so, yes.

2464             MS MURPHY:  Consistent with the process that was established for the Charlottetown applications, all written submissions are to be filed with the Commission before October 12th, serving copies on all other applicants.  Other applicants will have the opportunity to comment on the submissions no later than October 19th, and the opportunity to file reply comments will be no later than October 24th.

2465             Those are my questions.

2466             THE CHAIRPERSON:  Thank you, counsel.

2467             I wonder if I could complicate all of your lives a little more.  Do you have available contour maps of your Truro stations?

2468             MR. EDDY:  Yes, I think we do.

2469             We can provide them to you.

2470             THE CHAIRPERSON:  If you have them ‑‑

2471             COMMISSIONER NOËL:  There is one in the reply.

2472             MR. EDDY:  There is, yes.

2473             THE CHAIRPERSON:  Of both?

2474             MR. EDDY:  I don't think of both, but there is one with the interference zones noted on it which make the signals sort of less than market grade, which I don't have here.

2475             THE CHAIRPERSON:  Perhaps, out of an abundance of caution, if you have them available, as part of the same undertaking by the 12th, you could give us copies, as clear as you have them?

2476             MR. EDDY:  No problem.

2477             THE CHAIRPERSON:  That would be helpful for us to get a sense of the desperation levels here in New Glasgow, and how strong a signal they are willing to listen to.  It is difficult in the abstract.

2478             Thank you very much.  You now have two minutes to sum up and tell us why you are the berries.

2479             Oh, excuse me.  Commissioner Noël.

2480             COMMISSIONER NOËL:  Just prior to giving you your two minutes, could you tell us if, in your opinion, there is room for more than one new licence in that market?  And take it as a hypothesis that we would accept the flip of Hector.

2481             MR. EDDY:  No.

2482             COMMISSIONER NOËL:  Thank you.  You have your two minutes.

2483             MR. EDDY:  As I was saying a moment ago, Commissioners, I believe that our application represents a vote for diversity in this market.  I say that in the context of the radio market as it now exists, and in the context of these applications.

2484             Our application is unique and different, in addition to the reasons I gave you, for our commitment to new music, for our commitment to regional music, and for our underpinning of that commitment with a CTD program that is unmatched in these proceedings by any applicant.

2485             Beyond that, I would say that the programming we have put together, and the opportunities that we have provided for new talent to grow and nurture in this area, are unmatched by any other applicant.

2486             Beyond that, I believe that we have the expertise, and we have a track record of success in this market.  We have the corporate strength to meet the commitments we have made, and we think that, all in all, we have the capacity to put together a radio station that Pictou County will be very proud of, that this Commission will be very proud of, and that will do credit to the broadcasting community of Canada.  Thank you.

2487             THE CHAIRPERSON:  Thank you very much, ladies and gentlemen.  That was a very clear presentation.

2488             I think we would like to take a 15‑minute break, and then we will proceed with Atlantic Broadcasters.

2489             I think we can probably do one more before lunch, and then the other two this afternoon.

2490             Does that work for you, Madam Secretary?

2491             THE SECRETARY:  That's fine.

2492             THE CHAIRPERSON:  Excellent.

2493             We will see you in 15 minutes.

‑‑‑ Upon recessing at 1115 / Suspension à 1115

‑‑‑ Upon resuming at 1135 / Reprise à 1135

2494             THE CHAIRPERSON:  Madam Secretary.

2495             THE SECRETARY:  Thank you, Mr. Chairman.

2496             We will now proceed with Item 6 on the agenda, which is an application by Atlantic Broadcasters Limited for a licence to operate an English‑language commercial FM radio programming undertaking in New Glasgow.

2497             The new station would operate on Frequency 94.1 Mhz, Channel 231B, with an effective radiated power of 6,000 watts.

2498             Appearing for the Applicant is Mr. David MacLean.  Mr. MacLean will introduce his colleagues, after which he will have 20 minutes for the presentation.  Thank you.

PRESENTATION / PRÉSENTATION

2499             MR. MacLEAN:  Thank you very much.

2500             Before I begin the formal part of my presentation, I would like to introduce two of my colleagues.  To the Commissioners' left, and to my far right, is Andrea Bowers, who is our Assistant General Manager and the Corporate Secretary of Atlantic Broadcasters Limited.

2501             Ms Bowers deals with our day‑to‑day operations at CJFX Radio, including Human Resource issues and sales.

2502             To my immediate right is Barry MacKinnon, the Program Director of CJFX Radio.  He is a 25‑year radio veteran, with strong firsthand knowledge of the music business.

2503             To my left is Noreen Nunn.  She is our Vice‑President for Atlantic Broadcasters Limited, as well as the St. Francis Xavier University representative on the Board of Atlantic Broadcasters.  She has an extensive career as a former broadcaster.

2504             Behind me we have, to my far right, Roxanne MacDougall, who is our Executive Assistant, and who has come to CJFX with a diploma in marketing.  She works in both the creative and front office capacities.

2505             Beside her is Scott MacLeod, who is our Chief Engineer.  He has been with CJFX for 15 years, and he has been involved with broadcasting for 28 years, starting with Radio CFME, in Egypt, back in 1977.

2506             Next to Scott MacLeod is Duggie McPherson, who is the Director of Atlantic Broadcasters Limited.  Mr. McPherson is a lifelong resident of Pictou County, and he is a former Stellarton town councillor.

2507             Beside him is Jennifer Grace, who has been a Senior Research Analyst at Focal Research Consultants, which is a professional marketing research firm in Halifax.  She was with Focal for more than 15 years, and has been the Account Manager for Research Projects with CJFX radio since 2001.

2508             Mr. Chairman and Commissioners, Atlantic Broadcasters Limited is excited to appear before you today seeking approval of our FM initiative, which, if licensed, will introduce a dynamic new era of radio programming excellence and listener choice to Pictou County's more than 47,000 residents.

2509             Today is both a proud and an historic occasion for Atlantic Broadcasters ‑‑ proud in that CJFX first introduced private commercial AM radio to Pictou County 62 years ago; historic in the sense that we are now seeking to introduce the first FM service to all of Pictou County on the Frequency of 94.1 Mhz.

2510             After serving Pictou County for over six decades as a near‑distant signal from Antigonish, Atlantic Broadcasters' comprehensive new first FM service will serve Pictou County from Pictou County like it has never been served before.

2511             Approval of our proposed Hot AC/Pop Radio mix on 94.1 will result in many key public benefits accruing to the diverse array of rural and urban communities throughout Pictou County, the broader 18 to 54 year‑old vastly under‑served demographic components, the equally under‑served business communities of Pictou County, local Canadian talent, many supportive cultural and arts organizations, Pictou County and Nova Scotia's private/commercial radio sector, and the Canadian broadcasting system as a whole.

2512             If licensed, 94.1 FM will add significant musical and spoken word programming diversity to Pictou County's deprived local radio listenership.

2513             Mr. Chairman and Commissioners, Pictou County's only local radio station was licensed by the Board of Broadcast Governors 52 years ago, which was a full decade after CJFX introduced a primary AM programming service to the region.

2514             Over the past five decades, the Pictou County market has changed dramatically in terms of its size, its continuing growth, its service infrastructure, and its overall economic prosperity.  Yet, the local radio component of the market has remained dormant in terms of adding new services to keep pace with the region's ongoing growth and development.

2515             Pictonians have paid the price for such dormancy, as they hold the dubious distinction of being the most under‑served population within any radio market of comparable size in Canada.

2516             The net effect of one local radio station trying to serve a rural/urban population of 47,000 people is that large segments of the listening public remain under‑served and, hence, tune to out‑of‑market stations in search of alternative listening choices.

2517             In this regard, the 18 to 54 year‑old age group, which does represent some 66 percent of the adult population of Pictou County, is under‑served to the point where 75 percent of them spend virtually all of their radio listening time tuned to out‑of‑market stations.

2518             As such, 94.1 FM, with its Hot AC/Pop mix musical format, will play a major role in repatriating those 18 to 54 year‑old listeners who currently find it necessary to tune to the out‑of‑market stations for their radio choices.

2519             The repatriation of the 18 to 54 year‑olds tuning to distant stations, coupled with former listeners attracted back to radio by 94.1 FM's Hot AC/Pop mix format, will translate into new listeners, increased hours of local tuning, and an overall strengthening of the Pictou County radio market.

2520             MS NUNN:  Mr. Chairman, when we responded to the Call for Applications, we went beyond our own ongoing research and our knowledge of the Pictou County market and commissioned an extensive consumer demand study to further ascertain the radio listening needs and preferences of Pictonians.

2521             The consumer demand study, conducted by Focal Research of Halifax, identified the missing programming components that listeners aged 18 to 54 want most from a local radio station, and also revealed their level of dissatisfaction with the current choice of radio services available.

2522             Focal's research, for example, shows that 83 percent of listeners aged 18 to 54 agree that they would listen to the radio more often if the programming they preferred were available.

2523             Further, the study revealed that only 13 percent of Pictou County adults aged 18 to 34, and only 10 percent of those in the 35 to 54 age demographic, are very satisfied with the choice of radio stations now available in the area.

2524             Based on these results, coupled with the 75 percent out‑of‑market tuning factor by the 18 to 54 year‑olds, it is obvious to Atlantic Broadcasters that radio services in Pictou County fall well short of meeting demand.

2525             Focal's consumer demand study underlined that first among the missing programming components that Pictonians aged 18 to 54 want most from their new FM station is a large variety of music, and lots of it, all the time.

2526             The second major missing programming element identified by this same group is their thirst for intelligent and informative spoken word programming.

2527             Focal's study notes that 82 percent of respondents in the 18 to 54 age group place great importance on programming that will provide them with local and regional news and information relative to those events and activities that shape their communities and impact on their daily lives.

2528             Through incorporating the key findings of the consumer demand study, our own market knowledge, and a deep‑rooted sense of community, Atlantic Broadcasters has created a first FM service that will have a profoundly beneficial impact on Pictou County, its communities and its people for generations to come.

2529             Mr. Chairman and Commissioners, service to the local community has always been at the heart of Atlantic Broadcasters' corporate culture, above all other objectives.  From our perspective, the essential role of a radio station is to provide life, nourishment and support to the community and its many parts.  That strong commitment to community has often been the fuel that has kept CJFX, a small Antigonish‑based radio station, going in fulfilling its extended service mandate to many small communities across eastern Nova Scotia, communities that would otherwise go unserved.

2530             It is that same sense of community that has brought Atlantic Broadcasters to the realization that in order to effectively serve the daily programming needs of the largely under‑served 18 to 54 year‑olds, we must physically serve Pictou County from Pictou County.

2531             Given the spread‑out nature of Pictou County's population, Atlantic Broadcasters' task in establishing a first FM service will be to provide locally relevant, community‑driven programming to the rural and urban communities whose collective populations are quite evenly divided.  In providing such a service, Atlantic Broadcasters has developed an inclusive broadcast plan.  We will reach out to rural and urban communities across Pictou County and effectively bring the station to the communities by equipping them with the technical means to have direct input into the regular daily programming schedule.

2532             Essentially under the inclusive broadcast plan, 94.1 FM will establish its main studio facilities in the New Glasgow area, with a sub‑studio facility in the Town of Pictou, and satellite drop‑in facilities with live broadcast capabilities in each of the towns of Stellarton, Trenton and Westville.

2533             Further, Atlantic Broadcasters will also provide the station with two fully equipped mobile vans with remote broadcast facilities to cover news, community events, and various other activities across rural Pictou County.

2534             In opting to de‑centralize a portion of 94.1 FM's daily broadcast activities to other locales throughout the region, Atlantic Broadcasters is better able to keep its finger on the pulse of Pictou County's rural and urban communities and their listening needs and priorities.

2535             With the technical infrastructure in place, it then becomes a matter of creating the locally relevant, community‑driven programming that Pictonians have been telling us is missing from their lives.

2536             MR. MacKINNON:  Mr. Chairman, from a musical perspective, Pictonians within the 18 to 54 year‑old age group currently have little choice but to tune to distant stations in search of their musical preferences beyond country music, which they can get locally from CKEC.

2537             As reflected in Focal's consumer demand research, the 18 to 54 year‑olds find themselves scanning up to nine out‑of‑market stations in search of their broadly based music preferences.

2538             The demand study by Focal presented respondents with a 19‑item battery of music genres, prior to any discussion of format or station concept, in an effort to determine their musical tastes and preferences, and to find out how frequently they listen to each style of music on the radio, CDs, MP3s, tapes, or via the internet.

2539             The tabulated results of the Focal study indicated that one‑half to three‑quarters of Pictonians aged 18 to 54 are listening to one or more of the following types of music:  seventies pop rock, pop music, hot AC, Top 40 pop, classic rock, retro pop eighties and nineties, modern rock and East Coast.

2540             In stating their musical preferences, Focal notes that there are significant commonalities between the 18 to 34 and the 35 to 54 age groups in a number of the musical genres that were tested.

2541             For example, the two demo groups were relatively close in their common interest in seventies pop rock, pop music, classic rock, retro pop eighties and nineties, hot AC and East Coast music.

2542             Focal concludes that a first FM service with a music format covering pop rock/adult contemporary, with a strong retro component of hits from the seventies, eighties and nineties, would address the musical preferences of 93 percent of the 18 to 54 year‑old age group in Pictou County.

2543             Mr. Chairman, in terms of spoken word programming, Atlantic Broadcasters, through its inclusive broadcast plan, its regular staff and its network of local community‑based correspondents and contributors, will meet the stated needs and expectations of Pictonians in a highly professional and comprehensive fashion.

2544             94.1 FM will cover Pictou County council sessions and all local town council meetings, school board meetings, as well as activities related to such bodies as the Chamber of Commerce, the Industrial Commission and other groups.

2545             Throughout 94.1 FM's daily program schedule, community events will be highlighted every hour, keeping Pictonians abreast of current and upcoming events and activities of interest to them and their communities.

2546             At midday on Monday, Wednesday and Friday of each week, the regularly scheduled program "Community Spotlight" will feature live broadcasts from the satellite drop‑in facilities in Stellarton, Trenton and Westville, each of which will provide a package of local news and information on events and activities relative to their area.

2547             In response to clearly identified interests in public affairs and being kept abreast of industrial and commercial development within the region, 94.1 FM will produce two 30‑minute programs ‑‑ "Community Focus", which will run on Sunday at 9:00 a.m., followed by "Business Beat" at 9:30 a.m.

2548             Essentially, "Community Focus" will concentrate on current issues facing Pictou County, with appropriate guests invited to the studios to discuss the issues.  A portion of the program will be open to members of the public to phone in and interact with studio guests.

2549             "Business Beat" will feature in‑studio interviews with a broad cross‑section of business and industry leaders from across the region who will keep listeners up to date on the latest developments.

2550             Through Focal's consumer demand study, 77 percent of respondents expressed a strong interest in having Pictou County's cultural heritage reflected in 94.1 FM's programming.  In response, Atlantic Broadcasters would underline the fact that this will be an ongoing daily programming objective that will be achieved musically and through spoken word.

2551             Given the time constraints of this presentation, we have barely touched on the many spoken word initiatives that respond directly to the expressed needs and listening preferences of Pictonians.  A detailed list and description, however, is provided in our application's supplementary brief.

2552             Atlantic Broadcasters would again underline that 94.1 FM, through its broadly based musical and spoken word programming initiatives, coupled with its unique broadcast distribution system and community outreach, will inform, reflect and entertain the residents of Pictou County and their communities as never before.

2553             MR. MacLEAN:  Mr. Chairman, Atlantic Broadcasters, as our record across the decades will bear out, is a talent‑supportive, talent‑friendly broadcast company, which has launched many of Canada's finest artists on national and international music careers.

2554             We have been successful in doing so through a balanced approach, which combines on‑air exposure and airplay with direct and indirect expenditures and other supportive measures that artists need at various stages in their careers.

2555             To Atlantic Broadcasters, Canadian talent development is more of a science as opposed to simply applying copious amounts of money to a project.  As a small‑market broadcaster, we simply don't have the luxury of playing that game.

2556             Again, from our perspective, the most valuable currency that any broadcaster can offer to an aspiring Canadian artist is on‑air exposure and airplay of their music.

2557             In formulating our Canadian talent initiatives for 94.1 FM and Pictou County, again we have opted for a balanced approach that will offer the most meaningful assistance to local Canadian artists at the various levels in their career development.

2558             Given the time constraints that we are under, Atlantic Broadcasters would briefly note that, beginning with Canadian content levels, we have committed to a minimum of 40 percent CanCon.

2559             That having been said, we hasten to add that our programming staff will always strive for a higher level, as evidenced by the 43.8 percent figure achieved within the playlists submitted as part of our application.

2560             Next, we have committed to a minimum of $100,100 in direct expenditures, and a minimum of $350,000 in indirect on‑air expenditures, for a combined total of $450,100 on Canadian talent development over the initial licence term.

2561             Added to this, 94.1 FM will produce three dedicated weekly music programs, totalling four and half hours, that will profile local and established Canadian talent and play their music.

2562             The three in‑house produced specialty shows include "The Spotlight", which will run on Wednesdays at 10:00 p.m. for 51 weeks a year, the "East Coast Music Show", running on Saturdays from 4:00 to 6:00 p.m. 51 weeks a year, and "The Celtic Music Show", running on Sunday, 51 weeks a year, between 4:00 and 6:00 p.m.

2563             Atlantic Broadcasters would add that its direct costs for studio time and producer/host costs for the three shows is conservatively expensed at about $16,447 annually.

2564             In the final analysis, Atlantic Broadcasters feels that its commitment to Canadian talent is credible, affordable, and will yield meaningful results to local Canadian talent in Pictou County and beyond.

2565             The five direct‑expenditure Canadian talent initiatives ‑‑ the CAD/FACTOR grant, King's College journalism scholarships, the St. Francis Xavier University music scholarships, the business and music seminars, and the New Glasgow music festival bursaries ‑‑ will each serve their recipients well, both in the near and the longer term.

2566             Mr. Chairman, again, in response to the Commission's call, Atlantic Broadcasters engaged nationally known Bay Consulting Group to conduct a study of the current radio market in Pictou County and to prepare projections relative to the potential for a first FM service for the area.

2567             Based on its findings, accruing from a broad set of market criteria and other professional reference materials, and interviews with potential advertisers, Bay Consulting stated:

                      "In integrating the Pictou County radio market research results, including the key findings presented in this report, we have to conclude that this market is ready for an FM station."

2568             BCG also did a comparison of the number of residents per private radio stations in typical small to mid‑sized markets across Canada, which showed that the Pictou County Census agglomeration has a much higher ratio than any of the other radio markets in the study.

2569             By way of example, Brandon, Manitoba, with its population of 41,000 in its central area, has four private radio stations, for an average number of residents per station of 10,259.

2570             In comparison, Pictou County's CA, with a population of 46,965, is currently served by one private station, for an average number of residents per station of 46,965.

2571             BCG noted that Atlantic Broadcasters' proposed FM station will draw its advertising dollars from a variety of sources, thereby minimizing the impact on the existing local AM operator's revenues to about 10 percent.

2572             It is also equally important to underline the fact that adding a second station to Pictou County's local radio spectrum will not cause undue harm or dislocation to the local AM operation.  In fact, the impact on CKEC will be minimal.

2573             The BCG economic viability study clearly shows that Pictou County's market economy is healthy and expanding, and also growing impatient over the long wait for alternative local radio services.

2574             In reality, as one of the most under‑served radio markets in Canada, time and progress and consumer demand have caught up with the Pictou County radio market after more than 50 years of dormancy.

2575             While this from a competitive perspective may arguably have been a good thing for the existing player, it has been less than positive from the radio consumer's point of view.  They have been long denied the radio programming choices that much smaller markets have been enjoying for years.

2576             Mr. Chairman, Atlantic Broadcasters has set out in considerable detail in our supplementary brief our views on why any potential impact on CKEC would be minimal.  As such, I would conclude by saying that a little competition should not hurt any station that has been established for 52 years.

2577             We firmly believe that the elements contained within our application will contribute to the achievement of the objectives of the Broadcasting Act, as outlined in the Commission's commercial radio policy of 1998, and meet all of the criteria and expectations that the Commission establishes when evaluating applications for a new radio station.

2578             It is for these reasons, among the many other important considerations mentioned in our application, and fully detailed in our supplementary brief, that Atlantic Broadcasters believes that approval of this application would be in the public interest.  As such, we respectfully ask the Commission for its approval of our proposal for the Frequency 94.1 FM.

2579             In closing, Mr. Chairman, on behalf of Atlantic Broadcasters, I would like to thank you deeply, as well as your colleagues, for this opportunity to appear and to present our application.

2580             My associates and I would be very pleased to respond to any questions you may have.  Thank you.

2581             THE CHAIRPERSON:  Thank you very much, ladies and gentlemen.

2582             To me falls the great pleasure of questioning you.  My colleagues said that I had to do some work.  It wasn't enough that I sat up here foisting it off on them.

2583             I have a question, which probably will only serve to establish that I am very much outside your demographic, and it isn't on the 17 year‑old end, so I have obviously read something incorrectly, despite the fact, as you point out, that you have a very, very complete application, and a spectacularly complete supplementary brief.  Yet, it is the nature of the regulatory beast to find confusion everywhere.  That seems to be what we do.  At least I find it easier as days go by to be confused.

‑‑‑ Laughter / Rires

2584             THE CHAIRPERSON:  My question is this.  You said this morning in your opening remarks ‑‑ and then I will get back on track with the questions I wanted to ask ‑‑ that you would have 40 percent Canadian content.  For some reason I was under the impression ‑‑ and you were watching me scramble through the paper here looking for it ‑‑ that you had committed to 35 percent in your initial application.

2585             MR. MacLEAN:  I don't believe that there was a specific number.  The commitment, I think, you would have to see in the description of the proposed playlists which were laid out.

2586             When we developed the playlists ‑‑ and I could ask Barry MacKinnon to comment on them ‑‑ we just automatically assumed that we would be going for 40 percent, and actually we wound up higher than that number.

2587             MR. MacKINNON:  We developed a sample broadcast day.  I think we included in the supplementary brief, or in the original application, the Wednesday programming day.  If you break it down hour‑by‑hour, 78 of the 178 selections are CanCon, actually totalling up to 43.8 percent, excluding the 10 o'clock half‑hour "Spotlight" show, which would actually bring it up even more.

2588             THE CHAIRPERSON:  So what you are saying is, nowhere in all of this paper ‑‑ and this is not a criticism, I just want to make sure ‑‑ nowhere in this paper did you put a percentage figure.  It is up to us, then, to kind of cull it out of, as you say, the typical broadcast day playlist.

2589             Nowhere in the application or in the supplementary brief is there a figure.

2590             MR. MacKINNON:  No.

2591             THE CHAIRPERSON:  That clears that up.

2592             I suppose, having not seen one, I probably just assumed that you would stick with the standard set by the Commission in the last radio review.  But it is 40 percent, and you suspect higher, if you are keeping in line with your performance in Antigonish.

2593             MR. MacLEAN:  Yes.

2594             THE CHAIRPERSON:  All right.  Thank you for clearing that up.

2595             To get back to my script, in a sense, in my own mind, what I would like to begin with is a slightly unorthodox question.  Could you, in a minute or two, tell me a little bit about your corporate structure ‑‑ your ownership structure?

2596             I am aware that the ghost of Father Cody is sitting somewhere at this table, and we are all, as Canadians, aware of what that spirit means, but it is a very different ownership make‑up, so perhaps you could tell us a little bit about it.

2597             MR. MacLEAN:  Certainly.  The company goes back to its initial foundings in the late 1930s, when the Diocese of Antigonish was concerned that the people throughout eastern Nova Scotia, regardless of religion or background, did not have access to a vehicle of communication that would help to tie the region together.

2598             Radio was a new‑found vehicle.  It was an instrument which the founders of our company saw as being an educational vehicle, as being a way in which they could reach out to the communities ‑‑ the fishing community, the forestry community ‑‑ and be an educational tool.

2599             As a matter of fact, you said the ghost of Dr. Cody.  Indeed, his name is on the signature of the incorporating documents of our company.

2600             He was very much involved in the programming.  A program called "The People's School", which aired for years, targeted the fishermen, the coal miners, the people working in the steel mills, and the people of Pictou County.  We have many of those transcripts and we would be delighted to share them with you.

2601             To my left is Noreen Nunn.  She is, of course, a direct descendant of one of the founders of the company, and she has an important element to explain to you.

2602             MS NUNN:  My father was J. Clyde Nunn, and he was one of the people who went out when they decided that they wanted to set up this unique radio station.  They went out selling shares, actually, at $100 apiece.

2603             You have to understand that this was back in the early forties and this was a very economically depressed community, so it was a huge challenge and a tremendous undertaking that they went out to sell these shares.

2604             They sold 500 shares at $100 apiece.

2605             Before I finish that story, I am going to hand off to our other shareholder who is here, and also on the Board, to tell you a very unique story as to just what a challenge it was for these people to come up with that money.

2606             Duggie.

2607             MR. MacPHERSON:  Mr. Chairman, my father was also a founding shareholder in Atlantic Broadcasters.  He was also a coal miner at the Allan Shaft Coal Mine in Stellarton.  He was paid 15 cents a ton to dig coal with a pick and shovel.

2608             Prior to 1943, the only radio signal coming into Pictou County was from CFCY here in Charlottetown.

2609             When Atlantic Broadcasters was being formed to bring radio to Pictou County, he found $100 to buy a share.  To cover that expenditure, to give you an example, he had to dig 800 tons of coal.

2610             The founding shareholders came from all walks of life.  There were fishermen, there were farmers, there were foresters, there were teachers, there were small‑business owners.  They are gone today, but their spirit and sense of community still lives within our present shareholders, because 85 percent of them are descendants ‑‑ they are family members of the original founders.

2611             I would like to point out that to know where you are going, you have to know where you came from, and we know where we came from.  If our application is successful, we know where we are going.

2612             MS NUNN:  I think it is important to note that story, because Atlantic Broadcasters does have a different corporate philosophy.  It is not bottom‑line driven.

2613             I have worked for the private chains, and I have worked for the public broadcaster.  Atlantic Broadcasters is a unique company in the broadcasting community.  It is still a community‑driven programmer.  That is its bottom line.  All of its profits, outside of a small dividend for those loyal shareholders, are driven back into this broadcasting entity.  That is how this company is run.

2614             So when it says that it is community driven, it truly means it.  It actually stands for it.

2615             I was interested in following the hearings today with the emphasis on Canadian talent development, which I think is a fabulous idea, and I am glad to see the Commission focusing on that.

2616             CJFX has been focusing on that for 62 years.  It has created the careers of many of the east coast industry musicians, who have come along from Inverness County, from Cheticamp.  It placed them on the air years ago and developed their careers.

2617             Looking at some of our alumni ‑‑ John Allan Cameron, who many local entertainers down our way would call the grandfather of east coast music, got his start at CJFX Radio.

2618             Hollywood movie producer Danny Petry, who went from CJFX to New York and then on to Hollywood to produce award‑winning films, got his start at CJFX Radio.

2619             Senator Al Graham got his start at CJFX.  He hasn't stopped talking since.

‑‑‑ Laughter / Rires

2620             MS NUNN:  Deputy Prime Minister Allan J. MacEachen got his start at CJFX Radio.

2621             Probably our most famous alumnist ‑‑ and we will be happy when the public broadcaster gets back on the air ‑‑ would be Hockey Night in Canada's Danny Gallivan.  He got his start at CJFX.

2622             THE CHAIRPERSON:  Did Mulroney never get his voice on air?

‑‑‑ Laughter / Rires

2623             MS NUNN:  He made it through StFX.  He did make a stop at CJFX.

2624             THE CHAIRPERSON:  Thank you for that.

2625             I have one question.  It seems, and logically so, your centre of operations being Antigonish ‑‑ and I did have your list of ‑‑ are we calling them shareholders, or are they limited partners?

2626             I'm not sure how a co‑operative works exactly, but I have your list that you provided.

2627             How many of your shareholders live closer to New Glasgow?  At least, is there a significant number of them that call another part of Pictou County, other than Antigonish, home?

2628             MS NUNN:  I think we have 15 to 18 ‑‑ 15 shareholders, is it, Dave ‑‑ in Pictou County.

2629             The majority of our shareholders, actually, are not even in the Antigonish area.  They are spread out through the coverage area that we have, which is quite large.

2630             THE CHAIRPERSON:  How many shareholders?  Are there 700 or 750?

2631             MS NUNN:  Three hundred.

2632             The interesting part of the company is that it doesn't matter how many shares you have, you have one vote.

2633             THE CHAIRPERSON:  I missed that.  So the university, with whatever it has, 100 shares or something, still only has one vote.

2634             MS NUNN:  That's correct.

2635             THE CHAIRPERSON:  Amazing.

2636             MS NUNN:  I think when you mine 800 tons of coal, your voice should count.

2637             THE CHAIRPERSON:  Yes, I suppose so.  If you are swishing around in a cassock teaching Latin, maybe you shouldn't get any more votes than the guy on the end of the shovel.  You're right.  I can't argue with that.

‑‑‑ Laughter / Rires

2638             THE CHAIRPERSON:  All right.  Let's get on with the meat and potatoes.  We have given you some easy questions, maybe they will toughen up a bit.

2639             One of the things I want to focus on is your format.  As you know, we don't regulate format.  You can have whatever format you want, within reason.  If you start to get into religion and things like that, we start to cast a bit of a different eye on it, but musical formats are up to you.

2640             You have chosen a format which, to my mind, may have some problems.  The reason we look at it is because it may then indicate something to do with your business success and your financial success.

2641             The problem I see with your music, or a possible problem ‑‑ no one will know until you go to air ‑‑ is that you have cut off too big a demographic group.  You spoke eloquently today about the results of your Focal study, but I question them.

2642             I have an 18 year‑old, and I am close to 54 years old, and we have very different musical tastes.  I wonder, really, how realistic it is for you to try to program a station that will appeal to such a wide spectrum of listeners.

2643             Who is your programmer?

2644             MR. MacLEAN:  Mr. MacKinnon.

2645             THE CHAIRPERSON:  Over to you, Mr. MacKinnon.

2646             MR. MacKINNON:  We believe that what we have come up with is truly unique.  It is a diversified format, a broad‑based approach to programming, encompassing two demographics, the 18 to 34 and 35 to 54 year‑old demos.

2647             In our research via Focal in Halifax ‑‑ and Jennifer is here and she may speak about it ‑‑ we found that there are some similarities between the two demographics that bring them together.  For example, seventies pop.  Your daughter may like something from the seventies that you like as well.  That is one of the areas that skewed high in those two demos.

2648             We have identified six genres of music that we would like to consider in the Hot AC/Pop mix format that we have proposed.  Each one, or more, of those types rated very high with our consumer demand study.  Listeners were listening to one or more of those genres of music, and were looking for more of it.

2649             THE CHAIRPERSON:  How do you intend to reach this wide diversity?  Are you going to break it up, with one hour of the 18 to 34 demo, and then an hour of the 35 to 54, or are you just going to mix the whole thing up and hope that people will listen through their less favoured and keep their fingers crossed and wait for a more favoured hit to come?

2650             MR. MacKINNON:  I think we have identified that there are some artists that people in both demographics enjoy, artists like Sheryl Crowe, Rod Stewart.  Music is constantly reinventing itself.  Rod Stewart and the "Great American Songbook".

2651             There is a 20‑something year‑old crooner out there, Michael Buble, singing Frank Sinatra.

2652             Melissa Etheridge is redoing Tom Petty's "Refugee".

2653             There are always changes.  There is always something that brings it around full circle that is bringing it back.

2654             Paul Anka is doing today's music now.

2655             There are always these different examples where it is bringing it around full circle.

2656             THE CHAIRPERSON:  Paul Anka does reinvent himself, doesn't he?

2657             MR. MacKINNON:  He did it his way.

‑‑‑ Laughter / Rires

2658             THE CHAIRPERSON:  I suppose he did.

2659             So you are not going to split it up, you are going to mix it up and pray.

2660             How do you image yourself?  Everyone talks about image these days, or branding and whatnot.  It's very popular.  People want to bond to a station.  The same people who drink beer, perhaps, don't drink Courvoisier.  People have a different sense of where they belong on the scale.

2661             If you were here yesterday, the folks from Coast described their listener almost right down to her Ferragamo pumps.

2662             How are you going to brand this station?  How are you going to image it so that it appeals to the 20 year‑old and the 50 year‑old?

2663             MR. MacKINNON:  We actually haven't talked about branding or imaging at this point.  Just off the top, it could be called "The Music of Your Life", because of those six genres.  Chances are there is something in there that was relative in your life, or the 18 year‑old and the seventies resurgence.

2664             THE CHAIRPERSON:  That doesn't sound very snappy, actually, but that is just my view.  "Music of Your Life".  It sounds like a memorial service to me, actually.

‑‑‑ Laughter / Rires

2665             THE CHAIRPERSON:  I don't want to be negative, but I think you could do better.

2666             Let me ask the same sort of question about your spoken word, because, again, one of the themes that we hear from so many applicants ‑‑ and it is almost a universal theme ‑‑ is that we will pitch our news and information to our listening audience.

2667             Obviously, if World War III breaks out, everybody gets that news, but when you drill down a little deeper to the more local, the more regional news, there are ways to pitch it, and, unfortunately, the same news that might appeal to your father, with his pick and shovel, would not appeal to my daughter, with her iPod.

2668             How do you pitch your spoken word and news and information programming to so broad a spectrum of listeners?

2669             MR. MacKINNON:  I would like to give this question to our General Manager, who, on a regular basis, still reads the news.  I think he has a great perspective on it.

2670             MR. MacLEAN:  One of the elements, certainly, that we discovered in the research ‑‑ and we weren't terribly surprised to find it in the research ‑‑ was a very high level of interest in news and information programming.

2671             When I say news and information, I think we have to appreciate that that covers the full spectrum.  It is not just the council meeting, it is not just the school board meeting, it is everything.  It is accidents, it is entertainment news, it is sports news.  The whole thing is important.

2672             Perhaps I would ask our researcher, Jennifer Grace, to comment on findings in that area and the demographic spectrum that is particularly interested in getting that information.

2673             MS GRACE:  Mr. Chairman, we measured the importance of 23 various factors on listening preferences in the region.  We grouped them in several categories, and one of them was the several types of news, as David mentioned.

2674             News was more important to the older demographic, only relative, though, to the value placed on music for the younger group.  So we will strike a good balance with that.

2675             News from around the world and news from local communities was important across the board.  There was particular interest in things like school boards, road conditions, school bus updates, and things like that, among the younger group, but also, in the 35 to 54 year‑old age category, with road conditions, and everything with local events and community activities that are going on.

2676             So that would serve to inform that large demographic about what is going on in their community in terms of news.

2677             THE CHAIRPERSON:  Maybe it is an impossible question to answer.  What you have given me is interesting.  And I am not trying to be negative about it.  All information adds to the record, and it is interesting, but I don't hear precisely how you would manage to attract the attention of both groups.

2678             Fine, you have a figure ‑‑ 83 percent of respondents would listen to more radio if it was more appealing.  Of course.  Yes, the figure may be true, but it is probably true everywhere on Earth.  "If you could have more of what you want, would you listen to it?"  "Yes, I would."  "Okay."

2679             But how do you give two disparate groups like that what they want when, in fact, each part of the group may want ‑‑ and you may even be able to break it into three to make it a real horror show for you ‑‑ may want totally different things?

2680             You have reasonably short newscasts.  You may have a lot of them, but you have short ones.  How do you tune that to give the 50 year‑old and the 18 year‑old something they want, something they will feel a relationship with?

2681             MR. MacLEAN:  One of the things that we noticed, which we found quite interesting in the research that came out, was that the particular demographic that we have been talking about, 18 right through to 54 ‑‑ one of the reasons they would tend to tune to a radio station ‑‑ for instance, the local station in New Glasgow ‑‑ and they obviously did, because it showed up in the research ‑‑ the reason they did that was because they were interested in finding sources of information that were relative to their day‑to‑day activities.

2682             I assume that when they got the information they wanted, then they went to the out‑of‑market stations, because that certainly seems to be what has been happening.

2683             The challenge for any programmer, of course, is to incorporate that information in a manner that is going to attract that wider demographic, without, let's say, offending any of the others.  That has been a challenge that we have been dealing with for years, and I think we have been able to deal with it effectively.

2684             I recognize your point on the differences between the demographic and that was a challenge that we certainly looked at.  In the process of looking at that, one of the ways that it could possibly be addressed would be by focusing on a narrow demographic, a much narrower target group.  For instance, one of the other applicants does have a targeted program initiative as a part of the application.  However, we really didn't believe that for our purposes and the type of service that we have been offering over the years and I am the first one to say we have had to reinvent ourselves a number of times in the course of the past 60 years plus and we have done it, we have done it successfully, we have done it because we have listened to the people that we serve.  We recognize that the challenge is there but we are committed to approaching it in a very professional manner and I am absolutely confident that we will be able to bring those groups together and meet the target.

2685             THE CHAIRPERSON:  Well, I appreciate that.  Just to stay on it for just one more question if I may.  In a sense, you have almost fallen into or possibly have left yourself open to falling into or through a trap of your present position, kind of being the only game in town.  But you won't be the only game in town in a sense.  You know, the challenge facing the incumbent as the only game in town now is to appeal to everybody and, of course, it is difficult.  And your own survey says ‑‑ though he has very respectable audience share ‑‑ there is still people out there who are feeling a little marginalized and would like something different.  Well poor Mr. Hector, you know, he can't do it all, there just isn't enough time in a day.

2686             In a sense you have almost created a duplication of what he is doing.  It is a very similar ‑‑ it is an almost identical demographic, similar type of mix of music trying to appeal to everybody, similar emphasis on local news and programming, which he does well.  Do you think perhaps it might have been a better business case to pick a narrower niche and say well we are going to differentiate ourselves from the only game in town because now there will be two games?

2687             I mean, in a sense, are you just duplicating ‑‑ in a large way duplicating what already exists?

2688             MR. MacKINNON:  Mr. Chairman, we feel a narrow cast or niche formatting is small to mid‑size market such as New Glasgow would not work as well as our broad base format. Pictou County is a small to mid‑size market, I as I have told you, and we don't have the luxury of narrow casting.  For example, if classic rock is chosen, we still see that 75 percent of adults and that 18 to 54 year old demographic remaining underserved.  The out‑of‑market tuning would continue, we feel it is important to repatriate those listeners, those 18 to 54 year olds that make‑up 66 percent of Pictou County's population, currently 75 percent tuning out the market.

2689             THE CHAIRPERSON:  I read that figure and I don't want to challenge ‑‑ you are an expert, I am not an expert in this area ‑‑ but it does not seem to align with the BBM results that we have.  We don't have anything as high as 75 percent tuning out of market.  Are you positive on that figure or can you give me a little more information on how you got to it?

2690             MR. MacKINNON:  Yes, Jennifer would be pleased to deal with that.

2691             THE CHAIRPERSON:  Out of all the figures in your study that one jumped out at us I must say.

2692             MS GRACE:  What we did was conduct a random representative sample of adults in all of Pictou County.  We took great care with our sampling technique and ensured that we did get representation by achieving a 68 percent response rate.  So we are very confident that the numbers that came out do represent the opinions and the behaviours of the adults in the county.

2693             We had asked all participants to name the radio stations that they listened to within the past week and, of those, which stations they spent the most time listening too.  Given that CKAC is the only local station, we see within 34 to 54 year olds age category there is only 24 percent of adults in that group who spent most of their time listening to CKAC within the last week, so that is where our 75 percent figure comes from.  When you combine the 18 to 54 demographic there is at least 75 percent who are tuning more often to any combination of out of market stations.

2694             THE CHAIRPERSON:  Well, I take your figures as filed, but I only suggest to you that perhaps in discussing they are tuning in a narrative form.  They didn't reflect an identical result that we get from statistics, but we know what Mark Twain said about statistics or was it Disraeli who talked about statistics?  Lies, damn lies, it is statistics, somebody help me out with that one, Disraeli perhaps was it?  I am not sure, Mark Twain, Disraeli, what is the difference?

2695             MS NUNN:  Could I just interject here one moment.  When you started your question you indicated that Atlantic Broadcasters was operating on its own with a broad base format and, in fact, we do have competition in our market with a radio station in Port Hawkesbury.

2696             THE CHAIRPERSON:  That is right and that is why as soon as I saw your face I realized I had misspoken.  What I meant to stay was what I tried to steer it to at the end, that the Hector is operating on their own and you are sort of coming in with a plan that could be viewed as a kind of standalone type of approach because it is so broad.  But I take your point on Port Hawkesbury, thank you very much.

2697             I think we can move reasonably quickly.  I have one more general question and then some specifics on synergies with your existing station, possible synergies.  But the general question I have is I don't understand frankly this 2 o'clock to 6 o'clock switch.  If I am reading your supplementary brief and your sample Wednesday broadcast day correctly, things are coming happily out of the New Glasgow studio until 2 o'clock and then something I am just not capable of quite understanding from an engineering point of view, something happens at 2 o'clock and the broadcasts start coming from Stellarton and Trenton and one other place ‑‑ sorry it has slipped my mind.

2698             MS NUNN:  Westville.

2699             THE CHAIRPERSON:  Westville is it?  Plus there are satellite trucks running around doing things as well.  Can you just help me with this?  I don't quite ‑‑ I have never seen anything quite like it and I don't understand how it works to be frank.

2700             MR. MacLEAN:  Perhaps I could try to capture the essence of what we are proposing.  What we are saying is is that in Pictou County there are a number of communities in communities, shall we put it that way.  And perhaps just in response to some earlier questioning, I could give you some ballpark figures of what we look at.  Taking Pictou County as having roughly 48,000 people with half of them living in the rural areas and half of them living in the more urban areas, you have New Glasgow with about 10,000 people and you would have Westville with maybe about 3,000 and Trenton about the same number and just under 5,000 in Stellarton and roughly 4,000 in Pictou.

2701             If you take the geographic area, for instance, of Trenton and New Glasgow and Westville and Stellarton, you have a relatively compact area where often it is very very difficult to tell when you have driven from one community into the other community.  Pictou is distinct, Pictou has a vibrant retail base, it is an attractive tourist location, it has a strong cultural presence and in and around that area is a significant industrial complex.  I am thinking of the Michelin Tire, I am thinking of the paper mill and, you know, many of the other activities that are associated with heavy industry.

2702             Taking into consideration that there is a very interesting element that, for instance, if we compare our broadcasting operations out of Atigonish, Nova Scotia we find maybe 60 percent of the tuning is done in‑home and 40 percent of the tuning would be done in the car.  We found it very interesting in Pictou County, that we had an almost reverse of that.  Much heavier tuning, for instance, in the car as opposed to in the home.  Certainly attempting to address that difference we felt that in our programming approach it would be interesting to feature programming targeted at so many of the people that would be coming out of these industrial areas that would be on their way home after shift, after work, which could be anywhere between ‑‑ the shifts come to an end anywhere between 3 o'clock and 5 o'clock ‑‑ and target our programming at those people, a mobile population in an area in which there was a high listenership level in cars.

2703             Technically, it is something which can be done totally seamlessly in the sense that we just have a location.  We have had several locations that have been offered to us in the Pictou area.  And at that location we have a studio set‑up and the studio will be directly connected to our main studio, which would be in the New Glasgow area.  The listener wouldn't notice any change other than the fact that the announcer who would be on the air live would be providing surveillance information which would have a very definite flavour if coming from a different location.  Guests from that area would be featured as part of the programming initiatives and it would also be a contact point for people in that area to bring in whatever messages, sort of things that they would like.

2704             THE CHAIRPERSON:  So you will have two distinct studios?

2705             MR. MacLEAN:  Yes.

2706             THE CHAIRPERSON:  Two physical locations?

2707             MR. MacLEAN:  Yes.

2708             THE CHAIRPERSON:  And during the drive time, and I know this isn't Toronto where ‑‑

2709             MR. MacLEAN:  No.

2710             THE CHAIRPERSON:  ‑‑ the drive time is so important but ‑‑ and I am sure you have given this a lot of thought ‑‑ but at first blush this seems somewhat contradictory to me.  I mean, you have so many people living around New Glasgow, 3,000 in Trenton, 3,000 in Westville and ‑‑ what is it ‑‑ 4,000 or 5,000 in Stellarton, plus 10,000 in New Glasgow itself and you are going to switch over to the less populated place where the people aren't driving anyway, they are home or listen more at home during drive time.  I mean it just seems ‑‑ first of all, it seems expensive and, if I may say so, it just seems an odd time to make the switch.  Or have I got this wrong?

2711             MR. MacLEAN:  Very basically, it is a drive time program and the driving is basically taking place out of that area, out of the Pictou area.

2712             THE CHAIRMAN:  People are leaving Pictou ‑‑

2713             MR. MacLEAN:  Yes, going back to their homes ‑‑

2714             THE CHAIRPERSON:  ‑‑ to go back to where they live.

2715             MR. MacLEAN:  ‑‑ in Trenton, in Stellarton, New Glasgow.

2716             THE CHAIRPERSON:  Little Harbour.

2717             MR. MacLEAN:  Yes.

2718             THE CHAIRPERSON:  And so they are going to listen to Pictou radio rather than New Glasgow radio.  Okay, it is your station and you can do what you like with it.  But that does seem strange, I have just never seen anything like that.  See, I am getting to be stuck in my ways I guess.  That is why I am outside the demographic.

2719             The satellite drop‑in broadcast facilities ‑‑ I am reading from page 6 of your substantial supplementary brief.  So you say, while the major portions of the broadcast day originate from the studios in New Glasgow and four hours daily from the Pictou studios, ABL proposes to establish "satellite drop‑in broadcast facilities" in each of the counties three remaining towns, namely Stellarton, Westville and Trenton.  Why would you do that and what does it mean?  What is a satellite drop‑in broadcast facility?

2720             MR. MacKINNON:  We proposed three satellite drop‑in studios, Westville, Trenton and Stellarton.  These venues, for example, could be CAP sites, the community access points, the high speed internet sites where people would come in, have access to a computer, but also have access to our broadcast equipment.  Next question, do they know how to use it?  We have, in our proposal, proposed to hire a staff producer who would got to the communities, go to these organizations, meet with individuals, the fire department, the ladies' auxiliary, specific individuals who want to be a correspondent.  We know for a fact that there are retired broadcasters in Pictou County that might be interested in sending us some of this information or speaking on behalf of these community groups that would probably like to access these facilities.

2721             So we proposed on Mondays, Wednesdays and Fridays, three times a week, that we would feature community spotlight, a packaged montage presentation from these three areas that we would edit in our home production facilities in New Glasgow and air on those three days.

2722             THE CHAIRPERSON:  So they are not going live to air?

2723             MR. MacKINNON:  They could go live to air.  There are two elements there.  There is the computer element, they would have a wave editor, adobe edition program where they can record live audio and send it to us via high speed internet.  They could also go live in a pre‑planned situation if we were doing an interview.  If, for example, there is a gigantic family picnic in Stellarton that we want to talk about and we have a guest that we schedule for a certain time during the day we have that option as well.

2724             Also in emergency situations these live drop‑in facilities would be made available to the emergency measures organizations, the fire department, the police departments, ie. another white WAN, etc.

2725             THE CHAIRPERSON:  And yet these three towns are very very close to New Glasgow if I am looking at your contour map correctly, if I am reading it correctly.  I would think that if Trenton's going to get white WAN, New Glasgow is going to get white WAN at the same time, but you never know.

2726             MR. MacKINNON:  But they can communicate with each other.

2727             THE CHAIRPERSON:  They can communicate.

2728             MR. MacKINNON:  They can communicate to New Glasgow and ‑‑

2729             THE CHAIRPERSON:  Assuming the satellite works during WAN, which I doubt.  Okay.  So you are going to have a small sort of studio or a room or something in each one of these things.  Each one equipped or will this producer take the equipment around with him or her when he or she goes ‑‑

2730             MR. MacKINNON:  The producer ‑‑ oh sorry, go ahead.

2731             THE CHAIRPERSON:  ‑‑ to the different ‑‑ I am just trying to get a sense of how big a capital commitment this is in a sense.  What are we dealing with here, just in the sense of hardware and space you need and financial resources?

2732             MR. MacKINNON:  The producer, I guess, is the training element.  The producer goes to the community and will work with these people so that they can best communicate their message, teach them a little bit about broadcasting, teach them a little bit or enough to certainly use both aspects, the computer and the MARD units.  As far as the cost and how the MARD units work and will they work in a white WAN, let us talk to Scott MacLeod, he is our chief engineer.

2733             MR. MacLEOD:  Yes, they will.  The MARD unit is really ‑‑

2734             THE CHAIRPERSON:  Sounds like the Pentagon, don't worry everything will work ‑‑

2735             MR. MacLEOD:  Yes, it will work.

2736             THE CHAIRPERSON: ‑‑ and nothing works after the first shot, but anyway good luck.

2737             MR. MacLEOD: These MARD units are nothing more than a small UHF transmitter at about 450 MHz.  We use them now, we have used them for the past 15 to 20 years, they are about the size of say a Sears catalogue and weigh about the same.  To operate one you need a microphone, the unit and a power source.  Power source can be 12 volts, it can be commercial power, and you can take these units and get studio quality audio back to be aired.

2738             In the past we have taken these units into the field, we have done entire weekends where our whole operation is from within the field.  When I say field, I am talking of fields ‑‑

2739             THE CHAIRPERSON:  We are talking cows here, aren't we?

2740             MR. MacLEOD: Yes.  Atigonish Highland games, which we do every year, we have done for 20 plus years.

2741             THE CHAIRPERSON:  So you have been using these in your Atigonish ‑‑

2742             MR. MacLEOD:  Yes.

2743             THE CHAIRPERSON:  ‑‑ operation and you are confident it will work.  So if you have these nifty little Sears catalogue size devices, why do you also then need the van, the two fully equipped mobile vans with remote broadcast facilities?

2744             MR. MacLEOD:  Well that is ‑‑ maybe the unit will be in the van as opposed to maybe we don't have a physical structure to go into, like if we were in the middle of a field, say at a ball game or a ‑‑

2745             THE CHAIRPERSON:  So they may be the same thing in a sense ‑‑

2746             MR. MacLEOD:  They may be the same thing, yes.

2747             THE CHAIRPERSON:  ‑‑ is what you are telling me?  Okay, thank you very much.

2748             Now, speaking of Atigonish, do you have any plans to share any of your program or share any of your staff or share any of your news gathering ‑‑ you are not that far apart ‑‑ with your Atigonish station, if you are given this licence?

2749             MR. MacLEAN:  When you say share, I guess we would have to describe what we would be doing.  At the present time, we have been providing extensive news and public affairs coverage throughout North‑eastern Nova Scotia and through Cape Breton Island.  Geographically, it is quite an extensive area.  It can take three and a half to four hours to drive from Atigonish to the extremities perhaps of our coverage area, which may be in Northern Cape Breton and the Acadian community, for instance, of Shetta Camp or in the Margaree Valley area.  It is time consuming, everywhere we go we have to travel and we have to travel considerable distances.  We have been providing considerable coverage of events that would be of particular interest to residents of Eastern Pictou County, which means that we have to go to, for instance, Pictou on a very regular basis.

2750             If we were fortunate enough to be licensed we would have an opportunity of engaging the people that would be based in Pictou County, for instance, the news staff that would be in Pictou County who could provide us with information that might be relevant to listeners in the remainder of the Eastern Nova Scotia, further to the east.  So, indeed, we would also hope to be able to use reporters that may not be busy on a Monday night to cover an event that would be of mutual interest to both stations outside the geographic area of both.  So there would certainly be many possibilities of sharing this.

2751             THE CHAIRPERSON:  And would you be sharing actual on‑air sound so that reporter Fred Smith from Atigonish would occasionally be heard on your new Glasgow station?

2752             MR. MacLEAN:  We haven't given a lot of consideration of that.  The main thing that we would be interested in would be the actualities that reporter Fred Smith has and we would expect that all of the material would be voiced by the Pictou County based news staff.

2753             THE CHAIRPERSON:  And what about things like sales and marketing and that?  Would you go out and try and market the two stations together in some way to try to attract advertising to both rather than one at a time?

2754             MR. MacLEAN:  No, that would be a very real possibility.  Many of the advertisers ‑‑ for instance, in Pictou County, we have never sold a Pictou County audience to a Pictou County advertiser.  I hope you can appreciate that the market that we have been providing primary coverage to has been to the east, but nevertheless the natural retail sales flow has been from east to west.  Pictou County's business community is a very competitive business community.  They certainly reach out to the whole surrounding area.  They have the same challenge that our business community has, try to keep the home boys home and try to get the ones from outside to come in.  Both retail areas are based with same challenge.  But the Pictou County business community has primarily bought the access that we can provide to listeners to the east and to the south.

2755             THE CHAIRPERSON:  So it is unlikely that they are going to try to attract someone from Atigonish to come down to New Glasgow to go shopping or to ‑‑

2756             MR. MacLEAN:  On the Pictou County station?

2757             THE CHAIRPERSON:  Right.

2758             MR. MacLEAN:  No.

2759             THE CHAIRPERSON:  Does that explain why your breakdown between national and the local advertising is so high?  Generally, we sort of think as the breakdown as sort of 80/20, but yours is 90/10.  Is that the reason, is just that it is so localized that ‑‑

2760             MR. MacLEAN:  That is a very optimistic figure on our part, but Andrea Bowers can speak to that.

2761             MS BOWERS:  We do feel that most of the advertising revenue will come from local sources in Pictou County.  The local radio station, CKEC, will probably still primarily receive the greater bulk of the national advertising.  Because a lot of that is targeting an older demographic as well and, traditionally, since they are used to that market, it will take sometime before we realize much national revenue I would say.

2762             THE CHAIRPERSON:  And you expect to take only 10 percent of your advertising revenues from the incumbent?  Is that right?  Have I read that correctly?

2763             MS BOWERS:  Yes, because what we are hoping to do is, because of the repatriation of the listeners to Pictou County radio station, that we will probably be able to attract new advertisers and, more, we would probably also get some of the current advertisers that advertise on CKEC to also spend dollars with us and we also are looking towards the print advertising that we will be able to ‑‑

2764             THE CHAIRPERSON:  I have to tell you that from our experience looking at this kind of thing across the country ‑‑ and we have never looked at Pictou County before, but we have sure looked at a lot of counties that look like it ‑‑ that is very low.  I mean, one would expect a newcomer just from sheer sort of excitement of having a new player on the block to take considerably more than 10 percent.

2765             Are your figures based on the incumbent remaining on the AM frequency or have you taken into consideration that they will make a very very strong case here today and could very likely be an FM competitor?

2766             MR. MacLEAN:  Our assumption is that they would be approved for an FM licence and that you would have two affective FM broadcasters in the marketplace.

2767             THE CHAIRPERSON:  Yes, every 50 years or so we would like to do something for somebody, you know, but I don't want to get their hopes up, they are going to have to make their own case here today.

2768             Finally, on the area of frequency that you have probably heard the other questions on, everyone has applied for the same frequency.  Do you have an alternative in mind should we decide to give it to someone else, the 94.1?

2769             MR. MacLEAN:  We recognize that there are a number of options and we certainly have had a number of past experiences of running head on into the LRRP and dealing with various industry problems associated with that and we don't consider that to be a challenge from a technical perspective or from a marketing or business case perspective.  The frequency, in our mind, is secondary and we are confident ‑‑ we know that there is a couple of frequencies available and we know of frequencies that could be probably negotiated and moved from other areas.

2770             THE CHAIRPERSON:  So if we tell you to find a frequency, you are pretty sure you can find one and it won't impact on your business plan?

2771             MR. MacLEAN:  Yes.

2772             THE CHAIRPERSON:  One other question I had forgotten and then I will turn you over to my colleagues if they have some.

2773             You mentioned this morning on page 7 of your opening remarks that you might open a portion of your programming to the public by phone.  Do you do phone‑in programming now on your current station?

2774             MR. MacKINNON:  In the interview situations we do, if you are talking on an actual structured open line show, no.  But as far as the content of phone‑in, it does exist in interviews on our Sunday night sport show, Inside Sports, he does phone interviews.  We are constantly doing artist interviews via the phone.

2775             THE CHAIRPERSON:  It is a bit different than phone‑in.  Do you actually mean phone‑in where J.C. Public can call in and say I am out of town, I am not going to take it anymore, or do you mean phone interviews?

2776             MR. MacKINNON:  Inside Sports would probably take in a little bit of both, but it is not a news talk show.

2777             THE CHAIRPERSON:  Well, you have an excellent advisor with you and I am sure that he will recommend certain areas in our bible to swat‑up on if you are going to go down that road and there are some guidelines and policies and regulations which govern phone‑in shows.  A little more complicated than just spinning records, but I will leave that to you and your advisors.

2778             Those are my questions.  Commissioner Cram.

2779             COMMISSIONER CRAM:  Thank you.  This fly is going to drive me crazy, it is in my water glass.

2780             Have you done a calculation as to the amount of duplication on your play list vis à vis the Hector play list?

2781             MR. MacKINNON:  The propose or the current Hector play list?

2782             COMMISSIONER CRAM:  Both.

2783             MR. MacKINNON:  With our hot AC pop mix format, including those six genres, there would be minimal I think duplication with CKEC, given to the fact that part of their programming is country music, they also play standards, you can see that there are some variations there.

2784             With their proposed new FM, which is basically a flip, there should not be that much duplication as well.

2785             COMMISSIONER CRAM:  Thank you, that is all my questions.

2786             THE CHAIRPERSON:  Counsel, do you have questions?

2787             MS MURPHY:  Yes.  Just to follow‑up on the questions relating to Canadian content.  As indicated by Mr. Chair, in your presentation today you committed to broadcast a minimum of 40 percent Canadian content.  This commitment, however, was not expressly stated in your application nor in any of your replies to interventions.  Is that correct?

2788             MR. MacLEAN:  I believe that is correct.

2789             MS MURPHY:  In the event that the Commission accepted this new commitment, would you be willing to abide by this commitment by condition of licence such that you would be broadcasting a minimum of 40 percent Canadian content during the broadcast week, as well as from 6:00 to 6:00 Monday to Friday?

2790             MR. MacLEAN:  Yes.

2791             MS MURPHY:  Thank you, those are my questions.

2792             THE CHAIRPERSON:  Thank you, counsel.  I think that concludes our questioning and your presentation, but we now give you a minute or two to wow us and tell us why you are the application of our dreams, so away you go and good luck with it.

2793             MR. MacKINNON:  Thank you, Mr. Chair, fellow commissioners.  We believe that the application that we have presented this morning to the CRTC indeed represents the presentation of a true element of diversity to the Pictou County marketplace.  We believe we will offer a distinctive programming voice, a distinctive news voice and a distinctive music sound.

2794             We are quite confident that we will repatriate what we have described as a significant portion of the audience, especially in that demographic of between 18 and 54, back to listening to Pictou County based radio.  We believe that we have a balanced approach and a thoughtful approach to our Canadian talent development initiatives and we believe that this approach will have very real meaningful long‑term results for artists and performers in Pictou County.

2795             We would underline the importance, certainly, that many people in Pictou County have told us of local ownership of the company.  The company will be truly responsive.  We will have a significant number of shareholders that exist in Pictou County and we are quite confident that, with our presence, that that shareholder base undoubtedly will increase.

2796             We firmly believe that the proposal that we have outlined for you today comes with a strong degree of support from the general public.  We got a very heavy response from people that just wanted to say we support you, we want you to get this licence and they have filed several hundred interventions with the CRTC in this matter.  We honestly believe that if we are given 94.1 as the frequency in which to provide this service we will provide a maximum utilization of that frequency and that we will be serving an almost two‑thirds of the population of Pictou County.

2797             We believe that this licence will certainly give us synergies with our existing operation in Atigonish, synergies that are not going to be driven into somebody's back pocket, they are going to be driven back into the community and into the provision of service, specifically into Pictou County.

2798             We believe that we have a long historical link to the people of Pictou County.  I grew‑up in Pictou County, CJFX was certainly a station that I grew‑up listening to and I believe that that link is still firm, it has not been broken and we look forward to reinforcing it with the possible approval of our application.  Thank you.

2799             THE CHAIRPERSON:  Thank you very much.  I think that concludes our morning's work and we will reassemble at 2:30.  I am feeling particularly magnanimous and I am giving people an extra five and a half minutes for lunch.

2800             I think we will have no trouble getting through the other two applicants this afternoon.  I would like anybody who has an intervener that they expect will show‑up and appear just to have a word with the secretary so we will just have a sense of that.  This morning we only saw one out of five or six, so it is difficult for us to schedule that element of the proceedings if we don't have a better sense.  So if anybody does know whether Dallas Roy, Dwayne Decker ‑‑ well, there is only those two because we heard from CIRPA this morning ‑‑ are or are not coming, that would be helpful to us.

2801             So we will reassemble at 2:30.  So do you have any other housekeeping matters, Madam Secretary?

2802             THE SECRETARY:  No, Mr. Chairman.

2803             THE CHAIRPERSON:  Fine, we will see you at 2:30.  Thanks very much.

‑‑‑ Upon recessing at 1255 / Suspension à 1255

‑‑‑ Upon resuming at 1430 / Reprise à 1430

2804             THE CHAIRPERSON:  Okay, as I understand it, we will reconvene now.  As I understand it, we will require a short break after your presentation, because the folks from Hector have to set‑up something a little more complicated for us.  I don't know whether they are following the sommet lumière of the coast broadcasters yesterday.

2805             Madame la secrétaire.

2806             THE SECRETARY :  Thank you, Mr. Chairman.  We will now proceed with Item 7 on the agenda, which is an application by Acadia Broadcasting Limited for a licence to operate an English‑language commercial FM radio programming undertaking in New Glasgow.

2807             The new station would operate on frequency 94.1 MHz (channel 231B) with an effective radiated power of 50,000 watts.  Appearing for the applicant is Mr. Jim MacMullin and Mr. MacMullin will introduce his colleagues and then have 20 minutes for your presentation.  Thank you.

PRESENTATION / PRÉSENTATION

2808             MR. MacMULLIN:  Thank you.  Just before I get into the process,  I always advise it is a good idea to check us against delivery, please and thanks.

2809             Mr. Chairman and good afternoon commissioners, my name is Jim MacMullin, Vice‑President of Acadia Broadcasting Limited.  Joining me are colleagues from Acadia who will be assisting me with the presentation today.  On my right is Peter Scholten, our long time Controller Accountant and Financial Expert at Acadia, and to my left is John Wiles, Station Manager of CKBW in Bridgewater, Nova Scotia.

2810             In the second row, starting again at my right is Sheldon McLeod, News Director for CKBW‑FM Bridgewater, and next to Sheldon is Michael Fockler, Regulatory Affairs for Acadia Broadcasting.

2811             Mr. Chairman and commissioners, in the next few minutes we will tell you who we are and why we are here.  We will then proceed to tell you what we promise to do with our new FM station in New Glasgow should our application be approved.  But first, who we are.  Acadia is the licensee of four radio stations: one in Bridgewater, Nova Scotia; one in Saint Stephen; and two stations in Saint John, New Brunswick.  All four stations operate in the same fashion.  There was a strong commitment to quality programming that emphasizes local information and community involvement.

2812             One of our long‑term goals at Acadia is to expand by geographic diversification.  Because we are maritime‑based company our preferred focus is to grow in the maritime provinces, this is the region we know best, that is who we are.

2813             Now permit me to explain why we are here.  Mr. Chairman, prior to submitting this application Acadia carefully evaluated New Glasgow and Pictou County.  There were four specific areas that we examined.  Firstly, the economic strength of the market; second, the competitive state of the market; thirdly, the impact our new FM station would have on the existing commercial radio station in New Glasgow owned by Hector Broadcasting; and finally, the diversity of news voices in the market.

2814             We have undertaken to address these four issues in our supplementary brief.  Obviously, we would not be appearing here today if we had not first assured ourselves that we could satisfactorily answer those four criteria.

2815             Throughout our brief presentation and our presentation today we will show that a second radio service in the New Glasgow, Pictou County area, such as that proposed by Acadia, will compliment and strengthen the existing radio service and will not have a significant impact on the incumbent licensee, Hector Broadcasting.

2816             In the next few minutes we would like to review our application covering three specific areas:  the overall business plan, programming and Canadian talent development.  The new FM radio station described in this presentation is intended to serve listeners in New Glasgow and Pictou County.  Acadia found a community of communities exists among the towns, villages and rural areas within the county and particularly in the area defined as the New Glasgow census agglomeration, which includes the towns of Glasgow, Pictou, Stellarton, Trenton and Westville according to FP Canadian Demographics 2004.

2817             For purposes of this application all financial projections and market valuations refer to the total population of Pictou County, the area to which the station's principal marketing activities will be directed.  As part of our growth strategy Acadia initiated a study to determine the feasibility of a new FM radio station in New Glasgow and Pictou County.  We found a robust economy with an optimistic future.

2818             MR. SCHOLTEN:  Members of the Commission, the revenue and operating forecasts for the proposed new FM station are based on our many years of experience with Acadia's four radio stations.  We have taken pains in our financial forecast to clearly show the Commission how Acadia intends to finance the operation of a live to air music format and the intended costs that are incurred with this type of local programming.

2819             From an economic point of view I am convinced we have conducted due diligence in the New Glasgow market.  According to our research, we determined the proposed music format and the local economy can support our financial forecast.  Our business plan includes employing 12 full and part‑time professional broadcasters.  We have taken great care in preparing our business plan to present financial forecasts as they relate to the format and the target audience.  In year one Acadia forecasts total revenue to be approximately $516,000, of that amount only half will be allocated to program expenses, which suggests where our priorities lie.

2820             As a result of our research we are satisfied we can enter the advertising market without causing undue harm to the other commercial broadcaster.  However, should a revenue forecast fall short or should our expenses be greater than forecast, I can assure you that Acadia has the financial capability to meet all the objectives of the business plan and we will provide additional funds to augment broadcast operations should they be required.  We are confident Acadia's management team can achieve the strategic goal of growing the business and understand the resources required for starting a new radio station.

2821             MR. FOCKLER:  In response to the Commission's call for applications Acadia's management team spent considerable time monitoring the current radio service in Pictou County.  We also gathered economic information about the area to learn more about the potential future of this market.

2822             We then commissioned an independent market research company to conduct a scientific survey throughout Pictou County to provide empirical evidence of the potential success a new radio entrant might have.  The results of that survey identified an opportunity for a new entrant in commercial radio in the county.  It should be noted that two of the other applicants currently have one or more FM stations on the periphery of Pictou County and they subsequent draw a market share away from New Glasgow to their out‑of‑market stations.

2823             As a new entrant, Acadia's is the only proposal to add a true diversity of news and programming voices to Pictou County.  Our proposed classic rock format is distinctly different from the existing local radio station.  As a matter of fact, the results of the market study, along with our own monitoring of CKEC‑AM, determined listeners of classic rock are not being served by the existing local radio service at all.  As part of Acadia's original due diligence we conducted a music monitor in New Glasgow last fall and again just three weeks ago we conducted another monitor to double‑check our original assumptions.  Once again, our assessment of the music market confirmed there is indeed room for a classic rock format.

2824             Acadia's proposed new FM will compliment not compete with the existing CKEC radio service.  CKEC‑AM can currently be described as adult contemporary and variety in their format.  It plays a little bit of everything, from 1960s folk, 1970s disco, 1980s new wave, current top 40 and blocks of country music on weekday afternoons.  One thing they are not, however, is a classic rock radio station and our research into listener profiles confirms this.

2825             Acadia is forecasting a 30 percent market share of total audience in year one with a minimal impact on the incumbent radio station, not exceeding 3.4 percent of total share.  According to our research, we expect our audience to come from a variety of different sources, but very little from the Hector radio station.  For example, we have our eye on redeeming and reclaiming substantial numbers of listeners who are tuning to out‑of‑market stations.

2826             The majority of our listeners will be repatriated from the classic rock and hot AC station, CKTO Truro.  Currently, CKTO‑FM has 32 percent of Pictou County audience share, almost twice as much as the next highest radio station, CKTY‑FM, which also broadcasts from Truro.

2827             Members of the Commission, we believe there is more to defining an audience than their age demographic.  While all applicants for New Glasgow are proposing formats targeting variance of the 18 to 54 age demographic our research and experience suggests listeners will choose a radio station which most closely matches their lifestyle, background and listening preferences.  As an example to illustrate the difference between demographic and music preference, in our research 47 percent of current CKEC listeners are less likely to tune to a classic rock format and yet, even though both CKEC and the new FM propose targeting the same 25 to 54 age demographic the new FM will compliment, not compete with CKEC.

2828             Age is only one of a variety of factors which determine the composition of a station's audience.  In other words, Mr. Chairman, there should be no concern on the part of the Commission or Hector Broadcasting that a classic rock format will unduly impact on their established core audiences.

2829             MR. WILES:  Members of the Commission, should this application be approved it will be my responsibility to set the building blocks in place to develop the program plans we have promised you today.  I would like to describe the new FM service to you.  The new FM will be a full service local radio station catering primarily to a 25 to 54 demographic with a classic rock format.  The music will span the 1960s and 1970s through to today to reflect what is and what will become classic rock.  Today Acadia is prepared to commit to a condition of licence amounting to 40 percent Canadian content between 6:00 a.m. and 6:00 p.m. daily and between 6:00 a.m. and midnight each day, reflecting our pride in Canadian music and our support for home‑grown talent.

2830             Mr. Chairman, commissioners and staff, we have no intention of entering into a bidding war with our proposed 40 percent Canadian content and inclusion of current music on our play list.  Acadia is making this commitment after careful consideration of our format and Acadia's history of aggressively playing and promoting Canadian and particularly east coast musical talent on CKBW in Bridgewater, which is the Acadia station which will most closely be compared to our proposed new FM.

2831             Embedded in that format will be more than just music.  Our experience has told us that this audience is interested in style and form, production values and presentation.  They want information related to the music and to their lifestyle.  The radio station will not simply be a music jukebox.  The all important morning and drive time segments will be packed with information, particularly weather and driving conditions and in severe weather or emergency conditions additional staff will be on the air to provide the necessary information such as school closures and cancellations.  Birthdays, anniversaries and lost and found announcements will all engender a neighbourhood back fence relationship with the listeners.

2832             The true strength of the station will be its continuous presence in the community.  This will be apparent when listening for less than an hour, any hour, and knowing without a doubt this is a radio station originating in New Glasgow, Nova Scotia and this program could not possibly originate anywhere else.  Staff members will be encouraged to join community organizations, service clubs and committees, on‑air community announcements will cover a myriad of fundraising events such as Saturday morning carwashes, bake sales and other similar events.  Many events will be reported live from on location broadcast using station promotional vehicles.

2833             Commissioners, the other element of a strong local radio station is the news and public affairs programming.  News Director and fellow Nova Scotian, Sheldon McLeod, will be providing direction to the news room.

2834             MR. SCHOLTEN:  Mr. Chairman, in a day and age when many radio stations are cutting back on local news coverage the new FM station plans to carry 10 hours and 15 minutes of locally produced news each week.  A full 75 percent of this news total of 7 hours and 41 minutes per week will be stories of local and regional importance.  Local regional coverage will be comprised of municipal council meetings, schools, hospital boards, news conferences, emergencies and the like.

2835             In addition, the new FM will carry 2 hours and 55 minutes weekly of the broadcast news service during the evening time period, overall this represents a total news package of 13 hours and 10 minutes weekly.  Each Sunday at noon we plan to put all this new and information into context with a half hour Pictou County This Week program delving deeper into the stories and the issues behind the daily newscasts.  For an example, a recent Pictou County This Week would include stories about reclaiming the pioneer coalmine property for recreational use and development and the reassessment of elementary school districts throughout Pictou County.

2836             Now each week the program will conclude with a segment offering a soap box for those involved in the issues, thereby adding an alternative editorial voice for the community.  Our regular newsroom staff will be augmented by news stringers, local contacts.  In addition, I recently spoke with the principals of both the North Nova and the Northumberland Regional High Schools.  Should this application be successful, we will be working with the grade 12 journalism students at these schools to implement an internship program as well as offer students freelance work with monetary compensation.

2837             Overall the news and public affairs programming will reflect the local issues and concerns of Pictou County.

2838             MR. WILES:  Mr. Chairman, I would like now to address the subject of our proposed initiatives regarding the development of Canadian talent.  Acadia is proposing four initiatives, each targeted at supporting a different segment of Canadian talent.  We have endeavoured to spread the net as wide as possible.  For example, we will provide local musicians with the opportunity of live local on‑stage exposure.  Another initiative offers training and financial assistance to Pictou County artists.  And a further commitment to support factor at the national level.

2839             We understand that commitments to Canadian talent extend far beyond the cash contribution in our application.  Acadia recognizes and embraces the spirit and intent of the development of Canadian talent as originally envisaged by the Commission many years ago.  We believe this intent is not only reflected in the four initiatives that we have proposed in our application, but throughout our programming and promotional efforts as well.  Our annual cash contributions to Canadian talent development represent the absolute minimum level of our commitment.  I am proud of our accomplishments with regard to commitments to Canadian talent with our other radio stations and we fully intend to meet or exceed our commitments in New Glasgow.

2840             MR. MacMULLIN:  Mr. Chairman, Acadia Broadcasting supports the application by Hector Broadcasting to convert its AM radio service to the FM band.  Further, to avoid the technical mutual exclusivity issue between Acadia and Hector, Acadia is prepared to accept an alternate frequency.  This will ensure Hector receives the 94.1 allocation deemed by Hector to be the only frequency suitable under its business plan submitted to the Commission.

2841             Our consulting engineers and technical staff have assured me that the available alternate frequency of 97.9, a vacant class B allotment in Pictou, could be relocated to our proposed site and operated as a 41 kW non‑directional service.  As a result, use of this alternate frequency would have absolutely no impact on our business plan.

2842             Finally, I would like to address the issue of diversity of editorial voices in the market.  The Acadia proposal is the only one before you today to offer true diversity of news and programming.  Our analysis indicates the other applicants' existing stations represent a full two‑thirds of audience tuning in Pictou County.  Therefore, we respectfully submit the new FM is the only proposal which will increase the quality and quantity of editorial voices in New Glasgow and Pictou County.

2843             Mr. Chairman and commissioners, I would like to conclude my remarks by simply stating that Acadia proposes a bright, friendly and informative FM radio station for New Glasgow and all of Pictou County.  Hopefully we have projected this sense of community with this presentation, it is the very heart and soul of this application.  We have endeavoured to present a reasonable business plan and program proposal that describes how Acadia would increase the diversity of voices in New Glasgow and we sincerely believe our proposal is the best fit for Pictou County.  We thank you for your attention and we will be more than pleased to answer any questions you may have.

2844             THE CHAIRPERSON:  Thank you very much.  Sorry, just stopped me in my tracks with something you said, but I am sure my colleague Commissioner Noël will pick it up.  Commissioner Noël.

2845             COMMISSIONER NO'L:  Good afternoon.  Just bear with me a second while I am trying to get these binders open, thank you.

2846             First of all, I will say hello to you.

2847             MR. MacMULLIN:  Good afternoon.

2848             COMMISSIONER NO'L:  Let me grab my documents here.  Mr. MacMullin, Mr. Scholten, Mr. Wiles, Mr. McLeod and Mr. Fockler, am I right in the pronunciation?  Thank you.

2849             I have a number of things that I want to discuss with you, but the first one on my list is that new 40 percent Canadian content.  You supplementary brief at page 38 says:

2850                  "Acadia Broadcasting will adhere to these regulatory requirements at a minimum broadcasting not less than 35 percent Canadian content."

Is that ‑‑ and you said you wanted to adhere to 40 percent now as a condition of licence.  So it is a bit of a, you know, an increase at the last second.

2851             MR. FOCKLER:  Commissioner Noël ‑‑

2852             COMMISSIONER NO'L:  We are not always happy to get that kind of surprise.

2853             MR. MacMULLIN:  I hear Michael in the background is anxious to respond.  It is not without undue consideration and, yes, it is coming to the table today, but it wasn't decided in that fashion.  Michael.

2854             MR. FOCKLER:  Thank you, Mr. MacMullin.  Commissioner Noël, I do have the notes that Mr. Wiles read into the record and I can provide that to you through the hearing secretary right now if you wish.

2855             COMMISSIONER NO'L:  You mean the notes that you just ‑‑

2856             MR. MacMULLIN:  It was just an addition in the verbal, yes.  Maybe Mr. Wiles can explain our rationale a little bit better to answer your question.  We have increased from 35 to 40 percent.  Again, we feel it is, you know, we have been aggressive in promoting Canadian talent in many forms and this is another way.  But, John, if you would explain.

2857             MR. WILES:  I think it is more a reflections, commissioners, of the state of Canadian music as it exists today.  I don't think there are too many people in this room who would dare say anymore that Canadian music is harmful to Canadian radio.  It is actually very well received on not only the national stage, but also on the international stage.  And the fact is is that we look at our other radio stations and we actually are very close to that 40 percent mark and we decided that if we are going to be doing it we may as well actually say it and commit to it.

2858             THE CHAIRPERSON:  If Commissioner Noël would permit me to ‑‑

2859             COMMISSIONER NO'L:  Oh, I will allow you everything you want, my dear.

2860             THE CHAIRPERSON:  Thank you very much.  We are all, as you know, great fans of Canadian content.  But also we are in a bit of a conundrum because we have had one applicant, Astral, who has come and made a commitment of 40 percent blindfolded, they had not the advantage of seeing anyone else's application, were not entering into a bidding war of any sort.  We had another applicant in Atlantic that has an interesting case because they made no commitment and suggested that we could have dug it out of their records and that is interesting and perhaps defensible, we will have to look at that, it is more complicated.

2861             But what you have brought before us is something that I think crosses the line, with the greatest respect.  Though we are great fans and promoters of Canadian content and we absolutely think that if you get the licence you should give as much Canadian content as possible.  But your application was made kind of, you know, in a blindfolded way to make it fair and it was 35 percent and I think my colleagues will probably support me that at this point, though we listened to you and we heard you and we understand you are committed to do more, but we would take your commitment for the purpose of the competitive process to be 35 percent because it is really unfair to see what the other people are offering and then bid‑up the process.  I hope you can understand that.

2862             There are many other attractions as I am sure that you and Commissioner Noël will discuss about your program and we do suggest that you play 100 percent Canadian content if you can, but at this point I think it would be unfair to the process to allow a last minute change like that.

2863             MR. MacMULLIN:  We are certainly agreeable to that, Mr. Chairman, and I want to assure the Commission again that this not something that was done after hearing the other applicants this morning.  We have been here working since Friday on our presentation and this was decided sometime ago and put together then.  However ‑‑

2864             THE CHAIRPERSON:  I take you at your word.  I believe you, absolutely.  It is just that if we set a precedent like that we would have bidding wars and people would start kicking up their CDD and it would madness, we would be basically auctioning off a spectrum and we are not in that business here.

2865             So anyway, sorry to interrupt.  Thank you, Commissioner Noël.

2866             COMMISSIONER NO'L:  You made my point, and it is the process and its validity that are at stake when we allow increases in various sides of the applications at the hearing without the other parties having a chance to intervene.

2867             So let us go back to ‑‑ this was an impromptu question.  Let us go back to my line of questioning.  We will discuss your proposed format, the spoken words and the scope in terms of geographic scope of your proposed station, the impact of the market ‑‑ now I can't read my handwriting here ‑‑ the impact on the market of your technical proposal and, finally, you will also have your two minutes to tell us why your application is the best.

2868             So let us start with your format.  You have decided to offer a classic rock music format on your proposed FM and describe this format ‑‑ well let us not go back right away.  Let us go on a little bit more here.  There is also something that puzzled me when I read your supplementary brief and it is based on your market study by  ‑‑ let me find the name of those people, I had it somewhere, Corporate Research Associates.  I am comparing that with the figures that were provided by Astral this morning and it is inconsistent and I would like to understand what happened.

2869             At page 13 of your supplementary brief you state that Astral's two Truro stations have an audience in Pictou of about 50 percent and that Hector has 14 percent, right?

2870             MR. MacMULLIN:  That is what we show in the brief, yes.

2871             COMMISSIONER NO'L:  That is what you show on the brief.  And Hector is ‑‑ it is quite surprising to see that Hector, who is the incumbent, has less than half, much less than half listening in his own incumbent market before using the telecom jargon than out‑of‑market tuning.

2872             Then I oppose that to the findings of Astral and those findings are based on the ‑‑ mind you the data is not as young maybe, I don't know what you had ‑‑ that market study was conducted in 2004.  This one is based on the BBM radio Pictou County for Fall 2002 and Spring 2003 and the BBM ‑‑ and I am disclosing those figures because they are in the supplementary brief of Astral, because otherwise the BBMs are not public, but they disclosed it so I can piggyback on their disclosure.  It shows that Hector has a 43.5 audience in Pictou County and that the combined Astral stations have about 30.2.  So that is a big difference from the figures you are arriving at.

2873             So I am wondering how did Corporate Research Associates derive their figures?

2874             MR. MacMULLIN:  Commissioner Noël, like yourself, I am somewhat confused.  It is my understanding that BBM doesn't do any measurements in Pictou County and has not done one for quite a number of years, so I certainly didn't have access to that kind of BBM data.

2875             And as far as our corporate research goes, I am going to turn that over to Michael Fockler, who is somewhat of our research expert and understands that a little bit better than I do and can probably answer your question in how they arrived at that.

2876             MR. FOCKLER:  Thank you, Mr. MacMullen.

2877             Corporate Research Associates used a sample size of 251 persons between the ages of 18 and 54 years old in order to determine these particular market shares.

2878             So I am sure Hector, if it was 18 plus or 12 plus inclusive, then I am sure Hector would rate higher.  But we are looking at the 18‑54 demographic as a reflection of the share.

2879             COMMISSIONER NOËL:  But you know, going from 14 per cent, if you are using your 18 to 54, as opposed to 12 plus where they are at 43.5, I mean there is a hell of a ...

‑‑‑ Laughter / Rires

2880             MR. FOCKLER:  I can ‑‑

2881             COMMISSIONER NOËL:  ... a hell of a step there.

2882             MR. FOCKLER:  I can appreciate that.

2883             COMMISSIONER NOËL:  I mean there is only six years.  How many people are in that six‑year age difference, you know, the 12 and the 18?

2884             MR. FOCKLER:  Hm‑hmm.

2885             And Astral also had a smaller sample size than we did.

2886             COMMISSIONER NOËL:  No, this is a BBM.

2887             MR. FOCKLER:  Well, again, we are sticking with our CRA study because, as Mr. MacMullen just state, there does not appear to be BBM information for that market.

2888             And we can't particularly understand where those BBM numbers came from.

2889             COMMISSIONER NOËL:  We will have a chance to ask Astral in the final stage where they picked up that number, or you will have a chance to ask them where they picked up their number.

2890             But the source I have is BBM radio Pictou County 207 Fall 2002 Spring 2003.  It looks like it is ‑‑

2891             MR. FOCKLER:  Well, that is, whether it is a composite number, it is not one that we were privy to.

2892             COMMISSIONER NOËL:  It sure sends us a signal that those numbers are ‑‑ can be tweaked.

2893             MR. FOCKLER:  Well, we still stand by the validity of our survey.

2894             COMMISSIONER NOËL:  Okay, that was the first part of my interrogations.  Now let us go to your format.

2895             You have indicated that you wanted to offer a classic rock music format on your proposed FM station as one that would have a wide appeal to adult listeners 24 to 54 in the Pictou County.

2896             Usually how we understand that format is oriented towards a larger percentage of male audience that female.  It is skewed towards a male audience.

2897             The adult contemporary, on the other side, would be more female‑oriented.  Am I right?  And it is a more versatile format.

2898             The applications that are before us today ‑‑ you have your classic rock application and there is three adult contemporary formats (a mainstream AC and two hot AC).

2899             How do you feel that your classic rock format would be the best choice to serve the broad cross‑section of female and male listeners aged 25 to 54 in the New Glasgow market and in the larger Pictou ‑‑ you say "Picto", but I read Pictou, O‑U, so I will say it the French way:  Pictou County.

2900             Could you elaborate on your rationale to pick up the classic rock format?

2901             MR. MacMULLIN:  Madam Commissioner, once again, I am going to defer that to our resident programming expert, our station manager from Bridgewater:  John Wiles.

2902             MR. WILES:  We feel that there is a significant portion of the audience that would like the classic rock format.  That is what our research has shown.

2903             And as Commissioner Langford said this morning, there are those who drink beer and those who drink Courvoisier, I believe was the terms that you used.

2904             Those two people could be both 45 years old and both living next ‑‑

2905             COMMISSIONER NOËL:  I prefer Hennessey,

2906             MR. WILES:  Yes.

2907             But they could both be 45 years old and living side by side, but they have distinct lifestyle differences.

2908             And we are going to appeal to the lifestyle of the classic rock listener rather than the lifestyle of the adult contemporary listener.

2909             COMMISSIONER NOËL:  Thank you.

2910             Now, I will take you to page ‑‑ I have got so many pages here in front of me that I am all mixed up ‑‑ page 22 of your supplementary brief.

2911             You have repeated the same numbers in your presentation today, which is comforting.  Thirteen hours and ten minutes.

2912             That would be devoted to schedules news and related surveillance programming.  Out of a total commitment of 15 hours and seven minutes, as you described as enriched spoken words.

2913             But if we go to page 15 of that same supplementary brief ‑‑ and I am going to refer you to page 15, 20 and 23 actually of your supplementary brief.

2914             You are talking about 75 per cent news commitment is related to the coverage of regional stories, local stories, or perhaps a combination of local and regional.

2915             Could you clarify that and indicate how you envision that that 75 per cent commitment is broken down between local New Glasgow oriented stories, news stories and regional news stories, which ‑‑ it would be that Pictou County I understand.  The regional would be Pictou and the local could be New Glasgow.

2916             How is it seventy‑five ‑‑

2917             MR. MacMULLIN:  I think you are pretty close to what we are looking at compiling for the newsroom in New Glasgow should we be successful.

2918             But probably the best person to answer your question, because they will be very instrumental in setting up this new newsroom if we get the license, and that our news director from Bridgewater, Sheldon McLeod.

2919             MR. MacLEOD:  Madam Commissioner, we are proposing to provide a 75 per cent local‑regional coverage.  The market that I currently work in along the South shore of Nova Scotia is comprised of many different small towns that are characterized by one overall, I guess, similarity in that geographically the population is very close although they each have their own distinct community and voice.

2920             The local would be the Pictou County, local‑regional.  Provincial, which would make up about 15 per cent of the news, would be from across the province.

2921             COMMISSIONER NOËL:  Just wait.  Local would be Pictou County ‑‑

2922             MR. MacLEOD:  Pictou County, yes.

2923             COMMISSIONER NOËL:  ‑‑ and not New Glasgow.

2924             MR. MacLEOD:  Pictou County.

2925             COMMISSIONER NOËL:  Pictou County would be local.

2926             MR. MacLEOD:  We should clarify.  Like News Glasgow, Pictou County, we envision it, as we said in our presentation, a community of communities.

2927             So if it is a story that happens in Pictou or it is a story that happens in Westville or Trenton, it is definitely local.

2928             Regional would extend throughout the county and perhaps a little beyond before you would start considering stories of a scope that aren't local or regional.

2929             COMMISSIONER NOËL:  Okay.

2930             So, if I understand well, it is a regional type of station, not a local, local to News Glasgow.  It is regional.  It is the whole Pictou County.

2931             MR. MacMULLIN:  Again, I guess, yes.  We will be situated in New Glasgow is the plan, and serve New Glasgow and Pictou County.  It is how we have envisioned it all along.

2932             It is more like one big community, rather than a collection of small towns, villages and rural areas.

2933             Because the commonality I think someone earlier today referred to:  they work in Pictou where the large industrial is, but they reside in New Glasgow and Westville.

2934             But they all have the same common lifestyles, pretty much, and mixed in throughout the whole area.  So we kind of treat it as one big community.

2935             COMMISSIONER NOËL:  Thank you.

2936             Now, when you say at page 25 of your supplementary brief that you will have a total news and spoken words of 15 hours and seven minutes, is that your total commitment for spoken words or do you envisage that you will have more than that?

2937             MR. MacMULLIN:  Pretty much all of the commitments we make with regards to spoken words and other initiatives are always minimums.

2938             This is what we outline to set up the structure of the programming, and we constantly exceed those things in many ways.  But those are the bare minimums.

2939             COMMISSIONER NOËL:  And do you have an idea of how much more, given your expertise in your other stations or your experience in your other stations should I say?

2940             MR. MacMULLIN:  Exactly right.  Depending on what happens in the communities, the timing of things, we tend to get involved very much in things and support them very vocally through our staff involvement, aside from regularly scheduled spoken word features.

‑‑‑ Pause

2941             COMMISSIONER NOËL:  Now, from a programming perspective, why would you feel that the market would be best served by an FM station which has a community of communities type programming, rather than a strictly local New Glasgow?

2942             MR. MacMULLIN:  Well, we are going to be a new entrant into this market, and you know, we are basing our assumption on that Hector and we have actually endorsed that new ‑‑ give them their conversion to the FM band.

2943             It take a little while to get recognized or settled in a community, especially smaller communities, if you have ever moved into one.

2944             And we want to be as far reaching as we can because we have to rely on this as our principal marketing area and super‑serve the 47,000 or so population that live in New Glasgow and the surrounding communities.

2945             So our intent is not to treat one child better than the other, but rather to spread our generosity and involvement throughout the county and commit to the communities that way.

2946             And of course it will give us the opportunity to become familiar and accepted in the community and be successful that much sooner.

2947             COMMISSIONER NOËL:  Now, a totally different area of questioning.

2948             If we look at your proposed format, which is more regional than local, local New Glasgow, and the contours of your proposed ‑‑ your proposed contour for your antenna, is it fair to say that two stations who would tend to loose more if your application is approved are the two Astral Truro stations?

2949             MR. MacMULLIN:  Where they have the biggest share of out‑of‑market tuning, yes, that would be a fair assumption.

2950             COMMISSIONER NOËL:  But your contour, your .5 millivolt per meter contour, goes East ‑‑ oh no, West of Truro.  Which means that your signal will be very well received in the Truro area.

2951             MR. MacMULLIN:  Much like theirs is in Pictou and New Glasgow.  However, I mean we are being licensed and applying to be licensed in for New Glasgow and Pictou County.

2952             And our entire focus of our programming will be for the communities within that principal marketing area.

2953             We ‑‑ I mean we certainly won't ignore if there is something that an organization from Truro or Antigonish for that matter or Prince Edward Island wanted us to promote ‑‑

2954             COMMISSIONER NOËL:  Yes, I noticed.  It goes as far as Antigonish and Prince Edward Island as well.

2955             MR. MacMULLIN:  Yes.

2956             COMMISSIONER NOËL:  I haven't seen what it goes to in the South because the map stops.

‑‑‑ Laughter / Rires

2957             MR. MacMULLIN:  That is how we will do that.  Our focus will be on the principal New Glasgow‑Pictou County area.

2958             COMMISSIONER NOËL:  No, I am asking the question because you repeat a number of times in your oral presentation of today that the station, in the singular, will not be impacted ‑‑ or 3. ‑‑

2959             It was 4 per cent in your other documents, but it is now down to 3.4 per cent of the market share of Hector that would be ‑‑ that you intend to pick up.

2960             But it would be much more from the out‑of‑market tuning, the Astral CKTO station.

2961             MR. MacMULLIN:  I would think.

2962             COMMISSIONER NOËL:  You are going head on with them on the formats ‑‑ on the formats.

2963             MR. MacMULLIN:  Yes.

2964             COMMISSIONER NOËL:  Thank you.

2965             As they say; all is fair in love and war.

2966             Now let us go to your financial projections.  Your financial projections indicate a strong local advertising component, very strong local advertising component, of 94 per cent, when the average is ‑‑ the national average is 80 per cent to 20 per cent national, which would leave you with 6 six per cent national sales.

2967             Could you comment on why you believe you would pick up 94 per cent of your revenues from local sales rather than the more normal blend of 80‑20.

2968             MR. MacMULLIN:  Well again, it is like the previous applicants have said.  The smaller the market, the less focus it gets from business that spoke nationally through representatives and agencies.

2969             And it has been our experience in the smaller markets that we have our other stations that that is indeed the case.

2970             Our local business is built strongly in those markets, very strongly, on relationships and ‑‑ because of our commitment and our involvement in the communities.  And then you just get a lot of loyalty both listenership wise and customer wise.

2971             As you know, Hector is pretty much a living proof of that.  If you look at their revenue it is coming locally, and their audience and their revenue doesn't change dramatically year over year because of that loyalty base.  And that is where we will get our business.

2972             The six per cent in the first year is just that.  In the first year.  It will increase.

2973             There is ‑‑ as we expressed a few minutes ago, there is no BBM measurement in those ‑‑ in this market.

2974             And once our licence is approved I will assume that there will be some sort of BBM measurement at least on a regular basis.  And that also impacts greatly on how national players place their buys.

2975             But it is a pretty small market to get a big chunk of national business.  It just doesn't usually go that small.

2976             COMMISSIONER NOËL:  Now, 94 per cent of your projected revenues come from the local market.  And at the same time you are telling us that only 3.4 per cent, if I look at the figures you gave us today as the impact of your proposed service on Hector.

2977             Could you tell us how this is going to work?

2978             MR. MacMULLIN:  Well, I will probably rely on Peter in a second to give me a hand here, but I think the 3.4 per cent you are referring to is audience share, not ‑‑

2979             COMMISSIONER NOËL:  Audience share.

2980             MR. MacMULLIN:  ‑‑ not revenue share.

2981             COMMISSIONER NOËL:  Fair enough.

2982             MR. MacMULLIN:  And you certainly can't compare the two because it is somewhat apples and oranges.

2983             But I believe your question was ‑‑

2984             COMMISSIONER NOËL:  Four per cent.

2985             MR. MacMULLIN:  ‑‑ four per cent of the revenue that we will get will come from the incumbent.

2986             And that is because, as we have said through our presentation, we are going into the market meeting one of the CRTC's criteria:  to complement and not to compete with the existing radio service.

2987             Our unique format shouldn't impact upon the loyalty of their listeners.  In fact, I think our own survey ‑‑ and Michael will correct me if I am wrong, but I believe it is close to 50 per cent, 47 per cent or so, of respondents to this survey that listen to CKEC will be less likely to listen to a classic rock station.

2988             Well, that large number of their audience is certainly not going to go anywhere, particular to our classic rock.

2989             And that is obviously the audience that those advertisers that are forming the core of Hector's business want to reach continually.

2990             So we don't see ourselves impacting greatly largely because of that.

2991             COMMISSIONER NOËL:  So for you the local advertising dollars will be different?

2992             MR. MacMULLIN:  Yes.

2993             COMMISSIONER NOËL:  Than those of Hector?

2994             MR. MacMULLIN:  Yes.

2995             COMMISSIONER NOËL:  That different?

2996             MR. MacMULLIN:  We believe that, yes.

2997             COMMISSIONER NOËL:  I think I saw somewhere you preview the advertising market would be for New Glasgow or Pictou County ‑‑ you will have to correct me now ‑‑ it is 2.3 million?

2998             MR. MacMULLIN:  We did arrive at a different figure than most people.  We used a little bit different formula.

2999             And we are pretty comfortable that that number is fairly accurate.

3000             COMMISSIONER NOËL:  2.2 million, which is about a half a million more than ‑‑ or over 25 per cent more than the figures that Astral evaluated.

3001             MR. MacMULLIN:  Yes.  Obviously the formula that we used was a little bit different.

3002             COMMISSIONER NOËL:  More optimistic.

‑‑‑ Laughter / Rires

3003             MR. MacMULLIN:  Yes, yes.

3004             COMMISSIONER NOËL:  You have pink glasses on.

3005             MR. MacMULLIN:  You think.

3006             The formula that we used incorporated all the population.  Like I know, for example, when we went through it, about 20 per cent of the population was not included in the FP Canadian demographic statistics, which is about 9,200 people.

3007             So, you know, as we looked at their numbers and the numbers from the New Glasgow census agglomeration ‑‑ I belie the document is called ‑‑ we calculated the numbers over the years historically.

3008             And in 2004, which is the year it was we were in when we were preparing this, and we calculated the retailers average expenditure on all advertising as a percentage of total sales.  And it is ‑‑ in Canada that number is 2.9 per cent.

3009             So when we came up with our 2004 number from FP Canadian demographics, it was about 475 million.  We upped that by 20 per cent because they had left out 20 per cent of the population.

3010             So when you follow the math through and use the percentages and take that at 2.9 per cent ‑‑ and we also know that the share allocated radio according to the Commission's monitoring report is 14.3 per cent ‑‑ so when you do the math on our formula it came out to 2.3 million.

3011             MR. FOCKLER:  If I may assist Mr. MacMullen, the 1.7 number that you have, 1.8, I can't recall exactly.

3012             COMMISSIONER NOËL:  1.8 approximately.  I don't have it in front of me.

3013             MR. FOCKLER:  1.8.  Thank you.

3014             Using some of our normal formulas we came out with a number that was fairly close to that.

3015             Using a method that we deemed as the proportional method where by it works population, and you take the population of Nova Scotia and then the population of Pictou County as a percentage of that, which actually works out to 5.1 per cent, then you follow through with CRTC's radio revenues for Nova Scotia, and taking 5.1 per cent of that number comes down to about 1.7 million dollars.

3016             However the issue that we have with using that particular method was that, according to the Financial Post Canadian demographics, the retail sales for Nova Scotia in 2004 were flat.

3017             Actually, the actual number is ‑2, versus the Canadian average.  So it is two per cent less than the Canadian average.

3018             However the retail sales in the New Glasgow census agglomeration for the same period of time was 21 per cent higher than the Canadian national average.

3019             So therefore we felt that using this proportional method of simple percentages did not accurately reflect the wealth and prosperity that is occurring in Pictou County at this time.

3020             COMMISSIONER NOËL:  So, in your view, this is a buoyant market?

3021             MR. FOCKLER:  Yes.

3022             COMMISSIONER NOËL:  Thank you.

3023             Now, you also indicated in your application that approximately one hundred thousand dollars of your first year's revenue would be generated from out‑of‑market station advertisers.

3024             Could you clarify what you mean by ‑‑ if you mean that New Glasgow businesses are actually in out‑of‑market stations?  Is that based on that assumption?

3025             MR. SCHOLTEN:  Yes, that is correct.

3026             And we got a little bit of an idea of what that number was, thanks to Mr. Eddy today.  It was more in the order of 200,000 dollars.

‑‑‑ Laughter / Rires

3027             COMMISSIONER NOËL:  Which you intend to repatriate entirely in your first year of operation?

3028             MR. SCHOLTEN:  That would be a good plan.

‑‑‑ Laughter / Rires

3029             COMMISSIONER NOËL:  Maybe it is a good plan.  Is it a realistic plan?

‑‑‑ Laughter / Rires

3030             MR. SCHOLTEN:  I think the advertisers ‑‑ we are looking at a lot of the business coming from new advertisers in the market.

3031             Because, without taking away from Hector Broadcasting, I think there is some advertisers that are in the market that are disillusioned because they don't feel that they are meeting their target audience and they don't want to go to an out‑of‑market.

3032             So a good portion of where we consider the advertising revenue coming from locally is from new business.

3033             The out‑of‑market stations certainly.  That is a source that we would target.

3034             We want to repatriate those dollars and put them back in the community for those advertisers rather than them having to go to an out‑of‑market station to reach the people that they want to hear their ads.

3035             We feel that our format will then provide that to them.

3036             Other media.  There was some indications that the newspaper business is going down a little bit.  And I think there is some ‑‑

3037             COMMISSIONER NOËL:  Do you have any newspapers in that part of ‑‑

3038             MR. SCHOLTEN:  There is a daily in ‑‑    COMMISSIONER NOËL:  You have a daily here in ‑‑ no, the Irving family.

3039             MR. SCHOLTEN:  No, there is ‑‑

3040             MR. MacMULLIN:  Excuse me. What was the question?

3041             COMMISSIONER NOËL:  If the Irving owns newspapers in this area of Nova Scotia or the area that we are discussing?

3042             MR. MacMULLIN:  Our ownership certainly has no affiliation with newspapers.  But that family certainly has some print business, yes.

3043             COMMISSIONER NOËL:  Yes, that is what I was wondering. if there is some of their newspapers circulating in that particular area.

3044             MR. MacMULLIN:  No.

3045             COMMISSIONER NOËL:  No.   MR. SCHOLTEN:  Again, we are very guarded on the national numbers.  We are showing about a six per cent coming from national.

3046             Again, it being a smaller market, the agencies don't buy that deeply into ‑‑ they concentrate on the major markets.

3047             We are showing some growth.  We plan and have budgeted for participation in BBM ratings.  So we closely monitor how well a job we are doing with our listeners.

3048             And those are the numbers that attract the agencies.  And that is the number that will increase the national buys.

3049             By the end of the licence term, we are looking at doubling the six to about 12 per cent, which I think is ‑‑

3050             COMMISSIONER NOËL:  Yes, national sales.

3051             MR. SCHOLTEN:  Yes.

3052             COMMISSIONER NOËL:   Given that it is a small market.

3053             MR. SCHOLTEN:  A smaller market.  Thank you.

3054             COMMISSIONER NOËL:  Now, could you tell us how you arrived at your estimates that 51 per cent of your total revenues would come from new radio advertisers?

3055             I know it is buoyant.  I know ‑‑ I listened to you.  But can you tell us how come you come to 51 per cent of your advertising dollars from new advertisers?

3056             MR. MacMULLIN:  Well, and maybe Michael, our researcher, again can help me with this in a second, but as we, the station, get settled into the market and we start to attract an audience and we are going to create some new listeners as well as repatriate others, as we have stated, I think the same think will happen with a lot of advertisers that feel they may have a limited choice in the market right now, prefer not to go out of market, maybe aren't using radio at all because the incumbent is ‑‑

3057             COMMISSIONER NOËL:  You will be the charming prince ‑‑

‑‑‑ Laughter / Rires

3058             COMMISSIONER NOËL:  ‑‑ taking them out of their dormancy, as I have heard this morning?

3059             MR. MacMULLIN:  I guess so.

‑‑‑ Laughter / Rires

3060             MR. MacMULLIN:  And thank you for that.  You know ...

3061             But that is certainly going to be the case.  I mean some of the bigger regional businesses ‑‑ and what I mean by that is people that are not locally, just they have more than one around the Maritimes or around the country ‑‑ will certainly reassess advertising, budgets.

3062             And in many cases, with a new entrant in the market, they will increase their advertising budgets.

3063             We will have appeal to some businesses that the current format just doesn't appeal to the, say, 25‑year‑old customer of that business or the 30‑year‑old customer, which our classic rock format certainly will.

3064             So there will be many opportunities, and we feel strongly that a lot of it will come from those kinds of sources.  Big regional, big seasonal businesses.  As it is a pretty strong tourism area.

3065             COMMISSIONER NOËL:  Thank you.

3066             I don't ‑‑ I think that you have answered my last question by stating, just at the end of your presentation, that you were willing to accept another frequency, namely 97.9.

3067             Could you just confirm that it would not impact on your business plan if you use that frequency rather than the 94.1?

3068             MR. MacMULLIN:  That is correct.  The 97.9 would have no change on our business plan at all.

3069             COMMISSIONER NOËL:  Thank you very much.  Those are my questions.

3070             THE CHAIRPERSON:  Thank you, Commissioner Noël.

3071             I just, having tortured you folks earlier with the beer and Courvoisier analogy, you then came back and twisted its arm a little further.

‑‑‑ Laughter / Rires

3072             I am afraid even I got lost at that point.

3073             I think, if I wrote down, Mr. Wiles, what you said correctly, you said:  We are going to appeal to the lifestyle of the classic rock listener rather than the adult contemporary listener.

3074             Did I get that right?

3075             MR. MacMULLIN:  Yes, we did.

3076             THE CHAIRPERSON:  Could you expand on that?  Because I am not quite sure I understand it, frankly.

3077             MR. WILES:  It is more than simple demographics, is what I mean in as far as determining the preferences, the musical preferences, of people.

3078             You can't just say that all people between the ages of 25 and 54 enjoy this.  There are other factors involved, and a lot of that involves lifestyle and the types of things that they enjoy doing and the history of what they have listened to throughout their lives and that sort of thing and the environment they were brought up in.

3079             So we are going to, you know, target not only the people who like that, but we ‑‑ through our spoken word and everything else, we will target the lifestyles of those people.

3080             THE CHAIRPERSON:  This is, in a sense, kind of your station image or your brand then carried to a strategy.

3081             Is that what it would be?

3082             MR. WILES:  Yes, it would be.

3083             THE CHAIRPERSON:  Well, then let me ‑‑ first of all let me ask you, you have four other stations, are any of them adult contemporary?

3084             Do you have any adult contemporary format stations?

‑‑‑ Laughter / Rires

3085             MR. WILES:  I believe that two of the stations would be considered more hot AC than adult contemporary.

3086             THE CHAIRPERSON:  Okay.

3087             Do you have any other classic rock stations?

3088             MR. WILES:  No.

3089             THE CHAIRPERSON:  So, you are new in classic rock; got a little bit of experience.

3090             So then, take me into it a little bit.  What do you do here to appeal to the lifestyle of the classic rock listener?  And what do you not do to make sure you are not crossing over into the adult contemporary listeners' lifestyle?

3091             MR. WILES:  Well, a lot of it will be, Mr. Commissioner, will be reflected through the music we play.  Certainly, yes.

3092             But also, as I say, through the type of spoken word material that we do and, you know, for instance ‑‑ you know, we would have to do a little bit more research in the particular local area as to the preferences of the people, but you know, if they are, you know, more interested in riding ATVs than gardening, then obviously we would be, you know, concerned more with talking about riding all‑terrain vehicles around through the area than we would be about putting a gardening program on the air.

3093             It is, you know, just focusing more on the types of people that we are trying to attract to the radio station.

3094             And through artist information as well.  They seem to want to know about the people that they are hearing on the radio.

3095             MR. FOCKLER:  If I may add, Commissioner?

3096             THE CHAIRPERSON:  Yes, help me on this because I am not getting where the chicken is and where the egg is on this one.

3097             It may not be important, but I do find it fascinating.  And the reason I find it fascinating is the same discussion I had earlier with the folks from Atlantic.  It is a big, big, big demographic you have got.

3098             You can call it 24 to 54.  You can call it 18 to 54.  But it is basically everybody other than the little guys.  Little, you know, than the Brownies and the Boy Scouts.  You have got them all.

3099             And I am just not quite sure ‑‑ I mean do you choose the format, then go out to try to figure out whether the people you are appealing to ride ATVs or garden?

3100             Or do you find out they ride ATVs rather than garden and then choose the format?

3101             I am having a little trouble about how you are approaching this and then how you are going to brand this station or whatever the horrid colloquialism is these days to appeal to this person that you haven't yet defined.

3102             MR. MacMULLIN:  I think the way that we go about it, to help clarify it for you, is, as we said early on in our presentation, I mean all the applicants are after in some form or another of variant fo the 18 to 54 demographic.

3103             We want to talk to adults because that is who advertisers want to talk to, and we can't have one without the other.  If we have no listeners we will have no advertisers.  And if we have no advertisers, then we just won't be there.

3104             So it is a large percentage of the population.  And when you choose a niche and you direct at that, and in following the criteria of preparing the application there is some direction in that area to begin with, so in order to have a minimal impact, we relied on our own monitors, on our own research, to say what is missing in the market and what is the greatest percentage that comes back from our survey.

3105             So then we go and we find a classic rock format, and then from experience and available programming ‑‑ programmers and programming tools ‑‑ that we can use, we get a lot of research and of lifestyle information and stuff that we can incorporate in the programming that in general terms will have a large appeal to the people we will attract to this kind of format.

3106             Does that help clarify it a little bit?

3107             THE CHAIRPERSON:  I must be thick as a brick.  I just don't get this.

‑‑‑ Laughter / Rires

3108             And I wish you wouldn't agree so readily, Commissioner Cram, with that characterization.

‑‑‑ Laughter / Rires

3109             MR. MacMULLIN:  Mr. Chairman?

3110             THE CHAIRPERSON:  But I don't understand ‑‑ because what I am not getting here is ‑‑ I mean the theory sounds wonderful.  It sounds like something you might get in MBA School or something like that.

3111             You are still dealing with a huge, huge cross‑section of the population here.  And I just don't quite understand how you set your station up to make them all feel that you are, to use your word, appealing to their lifestyle.

3112             How do you do that?  I mean the lifestyle of a 20‑year‑old has got to be different than the lifestyle of a 48‑year old.

3113             MR. MacMULLIN:  Agreed.

3114             And Michael has got something on the tip of his tongue.  Go ahead, Mike.

3115             MR. FOCKLER:  Yes, I guess, it is my turn to take a shot at this.

3116             Mr. Chairman, I think, if we get away from the research and from the economics and from everything else and we just look at the listener for a second, and the listener, whether it is 35 years old or 20 or 40 or regardless, all have their preference in music.

3117             Certain generations have their musical preferences directed by or from the lifestyle that they lead.  And they immediately gravitate to the type of music that their lifestyle or that their past or that their preference draws them to.

3118             So, for example, a person in a rock band would be automatically drawn to rock music.  Or I myself, I am 35 years old and I fall smack in the middle of the demographic that this proposed radio station is trying to attract.

3119             If this radio station were a hot AC radio station, and adult contemporary radio station, a country radio station, all going after the age group that I am in, I gravitate towards a rock music radio station.  Because that is what my preference is.

3120             That rock radio station then recognizes who I am and provides the programming to get to me, whether it is about computers or cars or, you know, the golfing or.

3121             That is ‑‑ I think the chicken may be the station and the egg is the listener.  Clearly.

3122             THE CHAIRPERSON:  Well, even I follow that.  You will be delighted to know.  Now add the last piece for me.

3123             MR. FOCKLER:  Yes.

3124             THE CHAIRPERSON:  Because you sort of ‑‑ you kind of described a listening area with three stations in a way, and you said you would go for the rock.

3125             MR. FOCKLER:  Yes.

3126             THE CHAIRPERSON:  But you are not going to have three stations.  If you are living here, you are going to have to find what you want on this station, protect your station ‑‑

3127             MR. FOCKLER:  Yes.

3128             THE CHAIRPERSON:  ‑‑ and your older brother, 20 years older, is going to have to find the same thing, maybe even your father.

3129             MR. FOCKLER:  I understand completely.

3130             THE CHAIRPERSON:  So how now do you do that bit of magic?

3131             MR. FOCKLER:  I understand completely what your question is, Mr. Commissioner.  And I have done considerable monitoring, especially in the last couple of weeks on the incumbent radio station in the market that we are referring to.

3132             And they play a little bit of everything, as I said in my presentation.  And they are primarily an AC variety radio station.

3133             They do have elements of country.  They do have elements of hot AC.  But what they do not do on a consistent basis, every time the radio is turned on, I want to hear a rock song.  I want to hear guitars and drums and people screaming at me through my radio.  That is what I am looking for.

3134             So what this whole presentation, what this whole application is about is recognizing that CKEC in their existing programming is capturing a good chunk of the market that likes what they hear on that station.

3135             But according to our research, Mr. Chairman, there is over 50 per cent of people in Pictou County that are tuning primarily to a classic hot AC, hot rock, station from Truro, which would be me.

3136             If I were living in New Glasgow ‑‑

3137             THE CHAIRPERSON:  You and your father?

3138             MR. FOCKLER:  Well, my father is another story.  My father would be quite content with CKEC.

3139             THE CHAIRPERSON:  Hm‑hmm.  So maybe your demographic is a lot more narrow than you described it to us today.

3140             MR. FOCKLER:  I don't believe so.  I believe that it reflects.

3141             THE CHAIRPERSON:  Your father could be 54.

3142             MR. FOCKLER:  My father is not 54.

3143             THE CHAIRPERSON:  But he could be.

‑‑‑ Laughter / Rires

3144             MR. FOCKLER:  No.

3145             You are right, he could be.  And the demographic can be narrow, but there are also 54 year olds who ‑‑ the Rolling Stones have got to average to 54 somewhere.

3146             THE CHAIRPERSON:  They are all over 54.

‑‑‑ Laughter / Rires

3147             THE CHAIRPERSON:  Keith Richard was over 54 when he was born.

‑‑‑ Laughter / Rires

3148             MR. FOCKLER:  But you understand my point.

3149             THE CHAIRPERSON:  I do.

3150             MR. FOCKLER:  It is that age cannot be the only quantifier for your radio station, right?

3151             THE CHAIRPERSON:  Hm‑hmm.

3152             MR. MacMULLIN:  And that is what it comes down to.  This morning there was some discussion about you are trying to be all things to all people and you just can't do that.

3153             And we realize that too.  And this is a day and age of specialization.  And people do want things to call their own.

3154             And we have to rely heavily on the results that Corporate Research provided us in their independent market study that showed us that if you come into this market and you are in the 25 to 54 demo where you have got about 20,000 people, and there it is over 40 per cent of the population, your most viable format to go, if you are going to go single format and complement the existing radio services, to choose a classic rock format and you will get enough response positively from the audience, and hopefully, from our own marketing and involvement and awareness in the community, from the advertisers to make it a viable operation.

3155             And if we didn't think that was so, we wouldn't be here today.

3156             THE CHAIRPERSON:  Thank you for that.

3157             I think that those are the questions. No, Commissioner Duncan has one more, and then we may go to counsel.

3158             COMMISSIONER DUNCAN:  Thank you.

3159             Actually I have a couple.

3160             I just was wondering if you could describe for us what synergies you expect to realize from operating a system in New Glasgow in conjunction with your one in Bridgewater?

3161             MR. MacMULLIN:  Other than some administrative functions from head office out of that ‑‑ we actually work out of St. John in that capacity ‑‑ the station will function day‑to‑day on its own.  All the programming and news.

3162             COMMISSIONER DUNCAN:  So it didn't really impact your financial projections greatly then?

3163             MR. MacMULLIN:  No.

3164             COMMISSIONER DUNCAN:  I am just wondering, on the voice tracking, how many hours of voice tracking do you anticipate maybe in a week?

3165             MR. WILES:  I am just trying to think here, in a week.  Forty‑two hours per week would be voice track.  We are looking at voice tracking from 6 p.m. to midnight at this point.

3166             However that does not, you know, preclude us from breaking into those hours should it be warranted.

3167             COMMISSIONER DUNCAN:  So, how would the 42 hours break out then through the week, over the seven days, or ‑‑

3168             MR. MacMULLIN:  Well, we are live 6 a.m. to 6 p.m. seven days a week.

3169             COMMISSIONER DUNCAN:  So the rest of the time is voice track?

3170             MR. MacMULLIN:  And then from 6 p.m. until midnight on week nights we would be voice tracked.  And we would probably run some locally produced specialty shows or things as got settled on the Saturday and Sunday nights.

3171             But that is the plan for now.  Until we get started and the station gets established.

3172             And then the goal, the long‑term goal, I guess, would be to reduce the amount of voice track hours and go longer hours live.

3173             COMMISSIONER DUNCAN:  Can you just give me those hours again?

3174             MR. MacMULLIN:  We are live 6 a. ‑‑

3175             COMMISSIONER DUNCAN:  Yes, 6 a.m.

3176             MR. MacMULLIN:  ‑‑ to 6 p.m. seven days a week.

3177             COMMISSIONER DUNCAN:  Right.  And then ‑‑

3178             MR. MacMULLIN:  And then voice tracked 6 p.m. ‑‑

3179             COMMISSIONER DUNCAN:  Oh, okay.

3180             MR. MacMULLIN:  ‑‑ to midnight.

3181             THE CHAIRPERSON:  Okay.

3182             All right.  That is it.

3183             THE CHAIRPERSON:  Commissioner Noël?

3184             COMMISSIONER NOËL:  And you don't have anything at night?  You know, from midnight to 6, it will be playing music?

3185             MR. MacMULLIN:  Well, yes.  We will run station identification and community involvement notices and if we can sell some commercials overnight we will always gladly run those.

3186             THE CHAIRPERSON:  For sleeping pills, or something.

‑‑‑ Laughter / Rires

3187             THE CHAIRPERSON:  Counsel, do you have questions?

3188             MS MURPHY:  I have no questions.  Thank you.

3189             THE CHAIRPERSON:  Then this is your chance to wow us with your last song and dance.

‑‑‑ Pause

3190             MR. MacMULLIN:  Well, we think that there is a lot of good reasons why Acadia is a good choice for New Glasgow and Pictou County.

3191             First and foremost, we truly are a new entrant in the market, a new voice for New Glasgow and Pictou County.  We bring that diversity in our news and our programming.

3192             The classic rock format is targeting the 25‑54 lifestyle.  It provides a listening alternative.

3193             We live to air 12 hours a day, seven days a week.  We are going to bring to the community a lot of useful information and very localized approach with our news of over 13 hours a week.

3194             That combines to add up to over 15 hours weekly minimum in news and enriched spoken word programming.

3195             We commit to play a minimum level of 35 per cent Canadian content.  We have 30,000 dollars per year in direct contributions to Canadian talent.  That is 210,000 dollars over the first term of the licence.  And an additional 420,000‑dollar minimum indirect contributions will also go hand in hand with that.

3196             Community access will be readily available and encouraged through public service announcements.  We will do interviews.  We will do request programs.  Coverage of special events.  Hands‑on, up‑front‑and‑centre involvement with the community.

3197             We feel that Pictou County is very capable of supporting another radio station.  We will have a minimum impact on the incumbent licencee in all aspects of operation.

3198             Approval will add to the economic growth of Pictou County.  Our payroll for the first year with our 12 people and onward and upward from there will be 350,000 plus.

3199             The new FM will strengthen and benefit all member stations in our own group.

3200             And we truly the management experience and the financial resources to make this a very viable long‑term radio station for New Glasgow and Pictou County.

3201             Thank you.

3202             THE CHAIRPERSON:  Thank you very much, gentlemen.

3203             That brings us to one more presentation from the Hector group.  We are going to take a 15‑minute break to allow them to set up and get ready.

3204             I have been asked by some of the participants whether we are going to end tonight or whether we are going to end tomorrow morning.  Really a lot of it depends on you.

3205             And if you contact ‑‑ because there is still the phase two when you ‑‑ those of you who know the game know what that is about.

3206             Then there is phase four.  It doesn't look there are any appearing interveners.

3207             So it really is up to you to communicate with Chantal, the secretary, and let her know what your plans are for phase two and phase four. We can make some kind of ‑‑ we can make some kind of, you know, educated strategy here.

3208             Otherwise, you know, it is really quite difficult for me to say whether we will push through tonight or go in tomorrow morning.  A lot of it depends on really your wishes at this point.

3209             So we are going to hear ‑‑ in 15 minutes, we will hear from the Hector group.  Then we will make a decision at that time depending on what you have related to the secretary with regard to your wishes on the phase two and phase four parts of this proceeding.

3210             I hope that is clear.

3211             Thank you very much.

‑‑‑ Upon recessing at 1547 / Suspension à 1547

‑‑‑ Upon resuming at 1600 / Reprise à 1600

3212             THE CHAIRPERSON:  Ladies and gentlemen, this brings us to our final presentation.

3213             Madame la secrétaire, will you do the honours, please?

3214             THE SECRETARY:  Yes.  Thank you, Mr. Chairman.

3215             We will now proceed with Item 8 on the Agenda, which is an application by Hector Broadcasting Company Limited to convert radio station CKEC New Glasgow from the AM band to the FM band.

3216             The new station would operate on frequency 94.1 MHz, Channel 231C1, with an effective radiated power of 51,880 watts

3217             Appearing for the applicant is Mr. Douglas Freeman.  Mr. Freeman will introduce his colleagues, after which you will have 20 minutes for your presentation.

3218             Thank you.

PRESENTATION / PRÉSENTATION

3219             MR. D. FREEMAN:  Thank you, Madam Secretary.

3220             Good afternoon, Mr. Chair, Members of the Commission and Commission staff.  I am Doug Freeman, President of Hector Broadcasting Company Limited, the licensee of CKEC‑AM in New Glasgow, Nova Scotia.

3221             Before we start our presentation, as the Secretary indicated, I would like to introduce our team.

3222             To my immediate left is my oldest son Michael, the General Manager and General Sales Manager of CKEC‑AM in New Glasgow.  Michael has worked for the station since he was a teenager, some 22 years of service.  Michael is actively involved in the community.  He was on the Board of Directors of the Food Bank for 7 years and he served on Big Brothers and Big Sisters and has been on a number of fund‑raising committees for the United Way and for the Regional Economic Development Committee, and is also somewhat of a computer expert.  He takes care of all our computer systems at CKEC‑AM.

3223             Next to Michael is Lynn MacDonald.  She was born in Pictou County.  She worked for CBC, incidentally, elsewhere in Canada, but returned home to raise her family.  Lynn started volunteering for the Pictou County Tourist Association in 1999 and has been the President for the past three years.  She is our office manager and, of course, knows the route of every penny in our business.

3224             Rounding out the first row is our Music Director, Ann MacGregor.  Ann has been with the station for 4 years and is responsible for the programming of music on CKEC.  Ann is on the Board of Directors of the Glasgow Square Theatre, the Pictou County Christmas Fund and volunteers with many Pictou County organizations, including the Tearmann House, a residence for battered women, the United Way, along with Big Brothers and Big Sisters, just to mention a few that Ann is involved with.

3225             In the second row, to your right is Rod Mackey.  Rod just celebrated 30 years of service with CKEC and he has been our Program Director for most of that time.  Rod is not only known for waking up Pictou County with his Breakfast Club program, but he also known for the breadth of his volunteer contributions to Pictou County.  He has been recognized by the Province of Nova Scotia for his many years of volunteer work.

3226             Beside Rod is Carlton Munroe.  Carlton is our News Editor.  Carlton has 15 years in the radio news business and most of it has been with us.  Although news is his forte, he is an acknowledged expert on all kinds of popular music of today and yesterday.  This past summer he hosted our program,  "The East Coast Road Trip", the focus of which was on Atlantic musicians and events.  Originally intended as a summer feature, it proved so popular that we plan to continue it this fall.  Carlton is also an active community volunteer as a Big Brother and with minor sports in Pictou County.

3227             As you are more than aware, this hearing is quite crucial to us.  The future of our business and the local service of Pictou County is at stake.  CKEC has proved service and provided service to the five towns and the rural communities that make up Pictou County since 1953, and I have owned the station since 1964.

3228             We are proud of the kind of service we have provided all these years and of course we would entertain the idea of continuing to do so, but we face a number of challenges and I am not just referring to the competing applicants.

3229             Pictou County is situated on the Northumberland Strait between Colchester County and Antigonish County and has the warmest water, salt water that is, in North American north of the Carolinas.  The map you see on the screen shows our location.  All Canadians are proud of where they come from, but Maritimers are particularly known for their attachment to their homes, their lifestyles and of course their culture.

3230             We, Pictonians, are proud of our diverse heritage.  The largest segment is Celtic, but also includes a rich mosaic of First Nations, Acadians and the descendants of the Black Loyalists.  We are the only Nova Scotians who identify ourselves here in Pictou County as being from Pictou County rather than for our individual towns.

3231             We are proud of the services we provide to all of our communities.

3232             Right now I would like to ask Rod, our Program Director, to speak on some of our programming highlights.

3233             Ron...?

3234             MR. MACKEY:  Thank you, Mr. Freeman and good afternoon Commissioners.

3235             CKEC provides service to the residents of all Pictou County and of many ages and tastes.  For this reason we have chosen to provide a mainstream Adult Contemporary format with specialty music programs and a wide range of spoken features.  In a moment I will be asking Ann MacGregor to speak about our music programs, I will be asking Carlton to talk about our news and information, but I would like to address the services that we do provide as a regular part of our broadcast schedule.

3236             Every day we provide a range of spoken word features to inform and entertain our listeners.

3237             They include the "County Crier" community event broadcast six days a week at 9:30 and 2:30p.m.; "Lost and Found", which is aired at 9:45, 1:45 and 5:45; "Swap and Shop", householders buy and sell, at 10: 45, 11:45 and 3:15 Monday to Friday.

3238             We also provide a business update during our "Midday Report" at 12:30; and the emphasis is definitely science with "Earth and Sky and Science Shorts" aired daily.

3239             These may not seem glamorous for those who are used to large market radio.  In fact, these features are much needed and much appreciated by

our community.

3240             Many of them rely on input from listeners throughout our listening area and we have no lack of calls or no lack of e‑mails.  For example, each week we recognize people nominated by somebody in the community as volunteers of the week.  We are never short of nominees.  The difficult task is choosing a winner.

3241             Through the year, we are very active in covering the County's cultural and social activities.  Once a week, we provide at least 20 minutes of programming about the deCoste Centre in the Town of Pictou.  That is our region's largest Centre for Performing Arts.  The show includes weekly updates of their activities showcasing their busy schedule of plays, concerts, comedy and other activities.

3242             Similarly, we provide a monthly show on the Pictou‑Antigonish Library system that keeps people informed on what new books are in, special events in the library.  The emphasis is on literacy.

3243             CKEC is the station for the County's festivals and events.  Pictou County was settled by Scots, many of whom came here on the ship Hector.  Hence, our company name.  Many of our festivals celebrate this heritage, from the summer Hector Festival at the deCoste Centre to the Festival of the Tartans, to the New Scotland days.

3244             In 2000, for the launching of the replica of the ship Hector, built in Pictou, CKEC worked cooperatively with a Scottish radio station who carried our broadcast live.  CKEC is there in support with promotion of the events, with the use of our personalities to host shows, with live cut‑ins and also live from the locations.

3245             But our heritage includes many backgrounds.  In 2004, le Congres Mondiale des Acadiens was held in Nova Scotia and we worked hard and very actively with the Acadian community to promote and to cover this event.  Every year for over 20 years CKEC has participated and promoted the Black Gala Homecoming, and we have supported this community in the development of the Africentric Park in New Glasgow.  Every summer we cover the Mi'kmaq Pow Wow with promotion, cut‑ins from the event and interviews with participants.

3246             We are also very active in helping our local musicians in Pictou County:  the East Coast Music Awards, the Canadian Country Music Awards, and even recently the CBS program "Rock Star: INXS".  We are proud that a Pictou County musician, J.D. Fortune, won this contest to become the lead singer of the Australian band INXS.

3247             There are many other events throughout our coverage area that we have outlined in our application.

3248             Now I would like to call on Ann MacGregor to outline our music programming.

3249             Ann.

3250             MS MacGREGOR:  Thank you, Rod and good morning Commissioners.

3251             As the local Pictou County station we try to provide a music format with as wide an appeal as possible.  To do this, we provide an Adult Contemporary sound in most day parts with a number of music programs to meet specific tastes.

3252             We also change the music emphasis slightly through the day to reflect the composition of our audience.  Our AC format includes artists such as Santana, Sheryl Crowe, the Tragically Hip, Great Big Sea, Mariah Carey, Kelly Clarkson, Gordie Sampson and Crush, all mainstream artists.  The sound is a mixture of 45 percent current records, 30 percent recurrence and 25 percent Gold.

3253             We provide a bit more rock and contemporary pop in the after school periods and evening to be attractive to the younger audience.  The format, in fact, is more Hot AC from 3:00 p.m. to midnight, with artists like The Black Eyed Peas, Kaos, Nickelback, Our Lady Peace, Simple Plan, Sloan, The Trews and The Killers.

3254             Our specialty music programs include a two‑hour country program every afternoon, which includes interviews with artists, an opportunity for requests and an entertainment billboard.

3255             A "Classic Country" show is broadcast for an hour Sunday morning and at 6:00 on Sunday evening.

3256             Every day from 11:00 until 12:3O p.m. we air "Lunchtime Rewind", which features the hits of the >60s, >70s and >80s, a mix of Oldies and Classic Rock and includes an artist feature and information on the music.

3257             Saturdays at 6:00 p.m., Rod hosts the hour long "Sweet Music", which focuses on the music of the Maritime provinces.

3258             He also hosts Sunday evenings "Sunday Tradition", a mix  of Maritime and Scottish music with fiddles, bagpipes and everything in between.

3259             At noon every Sunday we air a half hour program of Maritime music of all kinds.

3260             Don Mackenzie and I host "Saturday Night", a mixture of oldies from the >5Os through to the >8Os.  Mr. Freeman hosts "Music Til 8" on Sunday evening from 7:00 until 8:00 p.m., which provides adult standards from the pre‑rock >n roll era.

3261             In all, over 95 hours per week of programming mixing news, information and Adult Contemporary music, supplemented by about 30 hours per week of specialty music. is heard on CKEC.

3262             Now to talk more about our news programming I would like to call upon Carlton Munroe.

3263             MR. MUNROE:  Thanks, Ann, and good afternoon, Commissioners.

3264             CKEC provides comprehensive news and information programming throughout the broadcast day and week.  In the morning drive period, we air news on the hour and half hour, and then from 9:00 a.m. until 6:00 a.m. the following morning on the hour.  CKEC also provides 10‑minute newscasts at 8:00 a.m. and 5:00 p.m., as well as a 30‑minute "Midday Report" at 12:30 p.m. featuring a 10‑minute major newscast, sports roundup and a business report.

3265             In all, we air eight and three‑quarters hours of news per‑week in‑house.  Including broadcast news national reports, that figure jumps to about 13.7 hours weekly.

3266             In addition, we provide sportscasts and regular weather and travel information for all of Pictou County.

3267             Our four‑person newsroom is supplemented in the summer by a student intern who helps ensure that we report on all of the regions summer festivals and events.

3268             CKEC provides thorough coverage of council meetings from each of the five towns and rural municipalities in Pictou County, as well as the school board, the planning commission, and other public authorities.

3269             In addition, CKEC also delves into investigative broadcast journalism on various issues when they arise.  While we do not ignore national and international stories, our emphasis is local.  I would estimate that about 5O percent of our weekly stories are local.  We pride ourselves on setting the trend in local news gathering to be the first source for local news.

3270             Our news coverage is complemented by "Sunday Report", a weekly half‑hour public affairs broadcast after the 10:00 a.m. news.  I host and produce "Sunday Report", which provides an in‑depth look over the weeks' news, as well as interviews on local lifestyle topics, arts and culture and other features.

3271             In all, we provide some 20 hours per week of spoken word in our programming.

3272             Now I would Like to ask Michael Freeman to continue.

3273             MR. M. FREEMAN:  Thanks, Carlton and good afternoon Mr. Chairman, Commissioners and CRTC staff.

3274             Our intent is to maintain the general programming direction of CKEC if it is converted to the FM band.  An FM station will help us meet some of the challenges that we are facing in our market.

3275             The five towns make up the principal population centres.  They are New Glasgow, which has 9,400 residents; Pictou, with a population of 3,875; Trenton, with 2,800; Westville, with 3,879; and Stellarton, with 4,800.  These were the population numbers in the 2001 Census and each one is lower than it was in the 1996 Census.  The remaining small communities and rural residents bring the population of Pictou County to 46,733.

3276             Unfortunately, our region faces a challenge that many smaller Nova Scotia communities face ‑‑ population decline ‑‑ as our younger people are drawn to the economic opportunities available in the Halifax Regional Municipality, a very hot economy.

3277             While Halifax's population grew 4.7 percent between 1996 and 2001, the New Glasgow CA declined by 3.5 percent.

3278             What is of even greater concern is the loss of our young people and our young families.  The slide you see on the screen represents the decrease in school enrolment between 2000 and 2005, a decrease of 6.9 percent.

3279             The following slide shows the three‑year projected decline of 3.2 percent, taking it to the end of the school year of 2008.  All in all, enrolment decreased 14.7 percent from 1997 to 2005.

3280             The Halifax Regional Municipality's booming economy is also attractive to radio advertisers.  While HRM's population in 2001 made up 39.6 percent of Nova Scotia's population, it drew 46.4 percent of the province s retail sales in 2003 and 50.9 percent of all radio revenues in 2004.  In fact, in 2004 HRM radio drew 72.7 percent of the province's national radio revenues.

3281             The 2003 Financial Post Markets predicted that retail sales in the New Glasgow CA would be $465 million in 2003.  The projections for 2004 were $495.2 million.  But the 2005 projections were down to $440 million, 5 percent lower than the 2003 projections.

3282             We have provided photocopies of the FP sheets in our presentation package.

3283             Part of the explanation for this decline is the opening of big box stores and the retail expansion within a half hour's drive east and west of Pictou County that has diverted significant revenues from our local economy.

3284             Also in New Glasgow we face a further challenge, the penetration of regional signals in our market.

3285             The map on the screen shows CKTY and CKTO, Astral stations in Truro, and their penetration into our market.  They are adding CJFX‑FM.  Now we are adding the three stations from Prince Edward Island, CHLQ, CHTN and CFCY.

3286             The Truro stations have a full‑time salesperson in our market, one who used to work for us for some time; and CJFX regularly sends salespeople into our market to solicit advertising.

3287             I also missed one slide.  There is the CBC rebroadcaster that is also in our market.

3288             The nighttime limitation to our AM signal reduces coverage in the west of Pictou County.  While we are proud of the programming that we provide to our market, the technical limitations of AM and the perception, particularly among younger listeners, that AM is not as good, has had a negative impact on us.

3289             The further challenge for us is that Pictou County is not a one‑community market.  Our 46,000‑plus people are distributed across five towns and over 50 rural communities.  Deriving advertising dollars from this kind of a market is not the same as in a one‑city market of the same size.  Many of the retailers, particularly in the smaller communities, are not of sufficient size that they can afford to advertise on radio or in the daily newspaper.

3290             To speak a little bit more about our revenue trends, I would like to introduce Lynn MacDonald.

3291             MS MacDONALD:  Thank you, Michael, and good afternoon, Commissioners.

3292             Over the past five years we have seen an ongoing decline in our revenues.  Interestingly enough, it is local revenue, radio's mainstay, that has been most affected.  In the five years from 2000 to 2004 they decreased by 8 percent.  This may well be the result of the stagnation in the retail sales in our area.

3293             As we pointed out in our written intervention, while there have been many new stores in the area it seems that we are facing one step forward, two steps back scenario.  For example, two new chain restaurants opened last year in Pictou County.  Shortly thereafter, and unfortunately for the County, two locally owned restaurants closed, the Ranch House and Mulligan's, both of which had been in business for 20 years.

3294             National revenues over this same period have increased, but they still only represent 15 percent of our total revenue.

3295             The result is that over the past five years our total revenues have declined by approximately 2 percent.

3296             During this time period I am referencing, 2000 to 2004, we have been marginally profitable.  This can be attributed in part to a decrease in our amortization, having fully depreciated our towers and transmitter, and also to management s aggressive approach to paying down any company debt, resulting in the reduction of costs associated with that.

3297             During this same period, our programming expenses increased by 11 percent.  This is fairly reflective of the results in Nova Scotia radio, where the Commission's annual return information shows that all operating expenses increased by 19 percent in the same period.

3298             Since coming to Hector Broadcasting in 1990, I have always viewed Hector as a living entity, one that we want to keep healthy.  As someone who works with the numbers every day, I have grave concerns about the possibility of another licence being granted in Pictou County.  At a time when we are looking at taking on a major capital expansion, losing a portion of our market would seriously hinder the company's ability to repay debts incurred to finance our upgrade to FM.

3299             MR. M. FREEMAN:  Mr. Chairman and Commissioners, in a number of decisions you have outlined your criteria for evaluating competitive applications for a new FM station.  We believe that those criteria lead to one conclusion:  Awarding a licence to convert CKEC to the FM band and issuing no other licences.

3300             Your first criterion is the ability of the market to sustain a new entrant without undue impact on existing stations.

3301             Our application does not constitute a new entrant.  However, we strongly believe that the market cannot sustain a second operator in this market without undue damage to our viability.

3302             Look around the Province of Nova Scotia, the only market with more than one local station owner is Halifax.  Truro has two stations, but Astral is the owner.  Antigonish and Port Hawkesbury both have one station, each with one owner.  Yarmouth has one station, one owner.

3303             Sydney, the second largest city in the province, has three stations, but one owner.

3304             Acadia is the only owner in Bridgewater serving a regional market that is larger than ours, and in that area they do not share their market with a multitude of print media, as we do.

3305             Second, we will have no negative impact on the market's competitive balance.  Licensing Astral will tilt the competitive field against us, giving them three stations to sell in our market, received well and sold in our market.

3306             Licensing Atlantic will give them a second station to sell against us in Pictou County.

3307             Although Acadia may seem like the lesser threat, adding a fourth company to sell the fifth station in Pictou County would clearly put CKEC in jeopardy in an over saturated market.

3308             Third, while we do not add a new editorial voice, we already provide a strong comprehensive local news and information service.  Two of the other applicants are already received in our community.  Licensing a new station to either of them would not add a new editorial voice.

3309             Fourth, our application is of the highest quality.  Our business plan is sustainable, offering by far the highest spending on programming.  The chart you see on the screen compares the proposals for spending on Canadian programming for 7 years from each of the applications.

3310             We will continue to provide the best local reflection possible.  One of the plaques we received from the Pictou County United Way explains why, because we live here.

3311             Finally we will provide a technically superior signal to our community with sufficient power to cover our entire market.

3312             At the outset of this presentation my father indicated that it was the future of local radio that was at play at this hearing.  We feel that of all the criteria you use to evaluate applications the maintenance of local reflection is the key one in our market.

3313             Our listeners refer to us as "our CKEC" and this connection is key to the service we provide.  No other broadcaster, whether headquartered in Montreal, Saint John, or even in a neighbouring county can bring the knowledge and the passion for our community that we have.

3314             Now is the right time to approve our conversion to the FM band, but we submit it is not an appropriate time to add a new competition to us.  We already face strong competition for listeners and for revenues in our market from three stations selling in our market.  A fourth station, or at least one licensed to someone else, will result in lower advertising rates and inevitably put us in a loss position.

3315             We suggest that you give us some time to establish our new FM station before you consider adding a second one.

3316             By the way, our community e‑mails us photos of Pictou County that we regularly feature on our website.  I hope you have enjoyed this mini virtual tour of the best of Pictou County that we draw from this source.

3317             Thank you for your attention and we would be more than pleased to answer your questions.

3318             THE CHAIRPERSON:  Thank you, ladies and gentlemen.

3319             Maybe we could have just a little more light for these tired old eyes of mine.

3320             So if I understand this correctly, you are looking for just another 50 years and then ‑‑

3321             MR. M. FREEMAN:  Yes, sir.

3322             THE CHAIRPERSON:  ‑‑ maybe you will be ready for some competition.

‑‑‑ Laughter / Rires

3323             THE CHAIRPERSON:  That sounds fair enough, doesn't it.

3324             MR. M. FREEMAN:  We believe the competition is already there ‑‑

3325             THE CHAIRPERSON:  We can all just go home I suppose.

3326             MR. M. FREEMAN:  ‑‑ in a large way.

3327             THE CHAIRPERSON:  Okay.

3328             I want to probe, obviously, some of the scenarios you won't like, but I do this not because I'm a sadist but because you have the expertise by your own sort of claim and presentation here today.  You are the experts on Pictou County radio.  You have been here since ‑‑ did you say 1964?

3329             MR. D. FREEMAN:  I have been here since 1964.  The station was established in 1953.

3330             THE CHAIRPERSON:  Right.  So that gives you a good run at it and if you can't answer our questions then I don't know who can.  We will have to go out on the street and just pull people off the road and ask them, I suppose.

3331             So I'm not here, as I say, in some way to make you crazy with questions about "what if", "what if", but it will help us put it in some kind of a perspective.

3332             MR. M. FREEMAN:  Certainly.

3333             THE CHAIRPERSON:  I must say that if we didn't have these other applications before us really I wouldn't have any questions for you ‑‑

3334             MR. M. FREEMAN:  Certainly.

3335             THE CHAIRPERSON:  ‑‑ because you would be the only game in town, you have run the game, you are happy with it.  Astral says there are $800,000 that you could be running after in the market, but if you don't want to run after it, that is your business really.  You can do what you like if you are the only game.

3336             So obviously putting my questions in the kind of hypothetical would be the best use of our time this afternoon because your presentation is perfectly clear as to what you do and what you want to keep doing.

3337             MR. M. FREEMAN:  Yes.

3338             THE CHAIRPERSON:  So let's jump right into it.

3339             Actually, I have one pure licence only you question ‑‑ one or two ‑‑ and that has to do with coverage.

3340             I have looked at these maps but I am not an engineer.  We all miss David Colville because he would look at this stuff and actually understand what it meant.  To the rest of us maybe it is not quite as clear.

3341             I am trying to figure out, particularly when I look at the second map you gave us, which I think covers your AM coverage as well as your proposed coverage ‑‑

3342             MR. M. FREEMAN:  Right.

3343             THE CHAIRPERSON:  How many of your listeners will be disenfranchised by the move to FM?  Obviously you won't get that big nighttime coverage, I guess, that you sometimes get on AM, or is the daytime even bigger?

3344             MR. M. FREEMAN:  If I could just jump in there, we have a pattern change currently at night with our AM operation, so our signal is severely limited.

3345             THE CHAIRPERSON:  So it is actually lower.  It is bigger during the day?

3346             MR. M. FREEMAN:  Yes.

3347             THE CHAIRPERSON:  It looked that way, but I thought maybe you didn't ‑‑

3348             MR. M. FREEMAN:  Also ‑‑ sorry to interrupt you.

3349             THE CHAIRPERSON:  No, that's all right.

3350             MR. M. FREEMAN:  That particular map that you have may not show the revision that actually was done to our proposed FM because of an interference conflict channel adjacency with CJLU in Halifax.  That wasn't in the database when we filed, so it was done later.  So the contour is a little bit different.

3351             THE CHAIRPERSON:  Okay.  I do see some shading on one of your maps around sort of Wentworth Centre.

3352             MR. M. FREEMAN:  Yes.  I believe that was with a station in New Brunswick.

3353             THE CHAIRPERSON:  Ah, okay.

3354             MR. M. FREEMAN:  Saint John.

3355             THE CHAIRPERSON:  Maybe we could just take the question as asked.

3356             MR. M. FREEMAN:  Certainly.

3357             THE CHAIRPERSON:  How many people will be disenfranchised by the move to FM?  How many people, if any, won't be getting the benefit of your AM signal?

3358             MR. D. FREEMAN:  If I could answer that, Mr. Chair?

3359             THE CHAIRPERSON:  Absolutely.

3360             MR. D. FREEMAN:  Actually, we will be increasing our overall coverage from a new FM signal in that we lose half of Pictou County at night.  So we don't disenfranchise, we actually gain our nighttime listeners that would have to go somewhere else, to another radio source.

3361             THE CHAIRPERSON:  But during the day, for example, you are not going to be up into Port Hood and Inverness and Margaree Harbour and that sort of thing?

3362             MR. D. FREEMAN:  Yes.  Actually, we don't count that as our coverage area.

3363             THE CHAIRPERSON:  Do you know if anybody up there is listening?

3364             MR. D. FREEMAN:  Yes, we do.  We get calls actually for "Buy and Sell" or letters acknowledging things that we have done on‑the‑air.  But we don't include that as part of our coverage area.

3365             Our central area is Pictou County and that is what we concentrate on.

3366             THE CHAIRPERSON:  Right.  Okay.  So there will be a few people out there who may miss you, but essentially your central area will be almost duplicated, your core area, if I can call it that?

3367             MR. D. FREEMAN:  That is correct.  That was our plan.

3368             THE CHAIRPERSON:  Maybe even expand it a little.  Okay.

3369             Now, I notice that you go into Truro.  You made quite a lot of people coming from Truro into your area, but you also cover Truro in your present contours and in your proposed contours, if I have it right.  Again, if I haven't you will correct me, but certainly in your proposed.

3370             Does the cloth cut both ways?  Are you selling some advertising in Truro?

3371             MR. D. FREEMAN:  We have quite a following actually in Colchester County.  As I stated before, Colchester County or Antigonish County, they are not markets of ours.  We have never historically sold there before, but we have had clients come to us wanting to advertise on those markets.  We didn't solicit their patronage or commercialism on our station, no.

3372             THE CHAIRPERSON:  But the Truro stations are soliciting in New Glasgow?

3373             MR. D. FREEMAN:  Yes, they are, very actively.

3374             THE CHAIRPERSON:  What about the Antigonish stations?

3375             MR. D. FREEMAN:  Yes.  They have actually ‑‑

3376             THE CHAIRPERSON:  Are they selling in New Glasgow?

3377             MR. D. FREEMAN:  Yes, quite regularly with two salespeople I understand.

3378             THE CHAIRPERSON:  But you are not selling in their areas?

3379             MR. D. FREEMAN:  No.

3380             MR. M. FREEMAN:  Not aggressively selling in their markets, no.  We do have people who contact us from either markets and they are wanting people from Pictou County to go to that market.

3381             THE CHAIRPERSON:  Then the obviously next question is why not and what is the scope there for you?

3382             Now we are going to get into the horrible assumptions, but remember, this is all to have good, scholarly research here.

3383             Assuming we licence one of the applicants that you saw before us today, some of them want us to give you your FM flip as well ‑‑ they are quite happy for you to survive and to thrive ‑‑ but feel that there is lots of scope in this market.

3384             Wouldn't that be an area for you to expand if you lose a little?  If you get nibbled at by a new applicant, couldn't you nibble back in some of these other areas?

3385             MR. M. FREEMAN:  Are you referring to us now as an AM station or as an FM station?

3386             THE CHAIRPERSON:  Let's not go into Dante's Inferno here.  Let's at least put half a smile on your face.

3387             Let's assume for the sake of this discussion that we grant your application for a flip to FM, but that we also grant one of the other applications on the grounds that, well, you would think we were mad, but we would think we were trying to bring diversity, so whether for reasons of madness or for reasons of diversity we grant one of the others, what is to stop you from selling harder and selling in different areas to make up for whatever loss you may sustain on the other side of the equation?

3388             MR. M. FREEMAN:  The business plans and the business models that we have looked at is that there is not enough, if you want to call it, fringe revenue available in adjacent markets to make up for the impact that we would receive from adding a fourth company selling the fifth radio station in Pictou County.

3389             THE CHAIRPERSON:  We used to say in law that there are many towns where one lawyer cannot survive, but there are no towns where two lawyers can't survive.

3390             No one tells better lawyer jokes than lawyers.  Isn't it sad.

‑‑‑ Laughter / Rires

3391             THE CHAIRPERSON:  I wonder, competition does bring out ‑‑ we generally see when we license markets expand under licence pressure.

3392             I will have you react to Astral's contention that there is about $800,000 there available and, as I say, no one says you have to go out and chase every last dollar in the County.  You could respond to that specific contention.

3393             But what about the notion that a little competition sells, that two lawyers can survive where one can't?

3394             MR. M. FREEMAN:  Certainly.

3395             Competition generally, first of all, breeds a rate war.  We already face a rate war.  We have two other companies selling three stations in our market.  We have had downward pressure on our rates for the last nine years.

3396             Of course, as many of you understand, once your rates go down it is awful hard to get them back up.  So adding another station, a fourth company selling the fifth station in our market is only going to make that challenge tougher for us.

3397             To be quite honest, I don't see us winning a long‑term rate war with a company that has a competitive advantage or market advantage over us.

3398             THE CHAIRPERSON:  How tough is the competition?  Tell me what it is like to sell in your own market against Astral and against Atlantic and then we can get to some of the others later.

3399             MR. M. FREEMAN:  Yes, sure.

3400             MS MacDONALD:  Can I speak to that as well?

3401             MR. M. FREEMAN:  Certainly.

3402             I will have Lynn MacDonald add a comment there.

3403             One thing we know for sure is that when we are doing a remote oftentimes there will be a competitor across the store at the same time.  That has happened to us on more than one occasion.  So that is how competitive it is.

3404             It is head‑to‑head competitive I would have to say.

3405             THE CHAIRPERSON:  Where would this competitor come from typically, if I may interrupt?

3406             MR. M. FREEMAN:  It was Astral and Antigonish, from CJFX and from Astral in Truro.

3407             We face them both in our markets on a regular basis.  The salesperson that they have, the regular that calls on us, worked for us for over 13 years.  He works for Astral now.

3408             We also know both individuals who work in Antigonish that sell in our market as well.

3409             So, yes, we face strong competition every day.

3410             Couple that with a daily newspaper, which isn't in Antigonish, two weekly papers, two monthly business papers.

3411             Also, the daily paper is a transcontinental paper and they have moved their printing operations to Halifax, so now they are back in the print business.  So they are not just selling a newspaper, they do their own phone book with Yellow Page advertising, they do all kinds of flyers, posters, basically anything in print now that paper can handle that.  So that has added another competitive edge because they have changed their fit, form and function.

3412             I will ask Lynn to jump in here as well.

3413             MS MacDONALD:  Thank you, Michael.

3414             Actually, Michael has stolen a bit of my thunder.  I was going to reiterate the list of competition that we do have in the County now besides the other radio stations that are selling in our market, the radio, the print, EastLink, the local cable company, ATV.

3415             I would also like to talk a bit about a challenge that Prime Minister Martin gave to Pictou County several years ago when he was the Finance Minister for Canada.  He met with the Pictou County Chamber of Commerce and gave us a challenge to meet the challenges that businesses are facing now in the Province of Nova Scotia, in Canada and globally.

3416             Out of that meeting, with the now Prime Minister Martin, the various groups in Pictou County formed a Pictou County Business Summit.  This is an organization that draws on every walk of life in Pictou County, volunteer organizations such as the Pictou County Tourist Association, which I am associated with, the Pictou County Chamber of Commerce, our local regional development authority, the Pictou County regional development Commission, every council in Pictou Country, mayors and councillors, business people from every walk of life.

3417             We regularly met to talk about the challenges that we are facing in Pictou County and how we can grow commerce in our area.  We right now are at a point in history where we are facing some very serious challenges to the east and west of us, big box stores.

3418             In particular, the Antigonish area just had a Wal‑Mart open last December 2004.  They have a huge central supply store, they have a new Staples store.  All these are well situated on the Trans‑Canada Highway and, as you have already heard, shopping in Nova Scotia is traditionally an east to west shopping corridor and predictions now are saying that this is going to seriously affect Pictou County, because commerce that we used to get traditionally from Guysborough, Inverness, Antigonish County will not be coming into Pictou County because they have things more available closer to their home.

3419             THE CHAIRPERSON:  They are all going to Costco, are they, or Wal‑Mart, or wherever?

3420             MS MacDONALD:  Yes, a lot are going to Wal‑Mart, and not the Wal‑Mart in New Glasgow unfortunately for Pictou County.  They are going to the Wal‑Mart in Truro or the one in Antigonish.

3421             THE CHAIRPERSON:  So you have one as well, a Wal‑Mart?

3422             MS MacDONALD:  Yes, we have one as well, but not as large as the one in Antigonish.

3423             At CKEC we are not pessimistic about our market, but we are realistic because we have such a long history there.  The fact remains to be seen as to how this market will develop and what the future will be.

3424             Obviously, we are very fortunate in Pictou County.  We have a society that we are interested in helping each other and working together and we are working to meet these challenges.  But it remains to be seen how successful we will be.

3425             THE CHAIRPERSON:  I'm interested in your strategy.  Remember, we regulate you folks but we don't necessarily understand what you do.  We just understand the theory behind it.  So you can always help us with a little pragmatism.

3426             Your strategy is to flip to FM, but you also stated, Ms MacDonald, earlier in your opening remarks that you have fully paid off your AM transmitter and towers.

3427             What shape are they in and why wouldn't you have stuck with AM and added FM?

3428             MS MacDONALD:  Well, I'm happy to say on one hand our equipment is in excellent condition.  We have had due diligence as far as keeping our condition up to good working order.  We have an excellent engineer in Peter Khan.  He is not here today, but I can certainly speak to Peter's attention to detail and his dedication.  He has 32 years of service in CKEC and our equipment is in good condition.

3429             But our challenge is the AM.  I'm sure that Michael or Ann MacGregor can speak to this from a programming perspective.  That is our challenge.

3430             The Commission is aware of our annual filing.  I think we have done fairly well to survive the way we have, to do what we have done.  I think it speaks to the deep roots, the connection that we have with Pictou County.

3431             I don't say that to tug at your heartstrings.  I think that can't be denied.  We have been there for 53 years.  So I think our success and survival speaks to that.

3432             THE CHAIRPERSON:  We are regulators, we have our hearts removed when we are appointed to this job.

‑‑‑ Laughter / Rires

3433             MS MacDONALD:  Okay.  So we will let that one go.

3434             THE CHAIRPERSON:  I guess I was thinking more of it in the sense of a strategy.  You do have an AM that is making money.  It may not be making as much money as you would like it to do, but it has a strong following, it is offering a very, very diverse product, as you show us, a product that could be chopped and diced a little bit and changed somewhat, if that were your strategy.

3435             I'm just looking, from again hypothetical, why wouldn't you have said to yourself, "Well, gee, we could chop this up a little bit and offer two services, keep the AM going for a while and put an FM up as well."

3436             Why wouldn't you have gone that route and then perhaps then been able to offer a second format and all that goes with it?

3437             MR. D. FREEMAN:  Perhaps I may answer that, Mr. Chair.

3438             The perception of AM today is old radio.  I think it was referred to yesterday in one of the presentations as a black and white television in a colour world.

3439             That is the perception of people growing up in Pictou County.  We have to move along.  They are looking for this new technology and that is what we are prepared to give them.

3440             I don't think by hanging on ‑‑ as much as I would like to because obviously at my ripe age I have grown up with AM and it was the basis of all communication in Canada for so many, many years.  But it is old technology now and we must move along.

3441             THE CHAIRPERSON:  I don't think anyone would suggest that you start in AM, but as you are there and your equipment is in good repair...

3442             You talk about, Ms MacDonald, the need to finance the upgrade to FM.  It is a far less expensive technology to use than AM, so are we really talking about something that will hamstring you financially for that long?

3443             MS MacDONALD:  Certainly the operating costs will be somewhat different from the AM, but the initial capital costs are there and cannot be denied.  We will be developing a new site, building a new building, putting up quite a substantial tower, upgrading our studios.  There will be upgrades to technical equipment within the station as far as computer equipment, things like that.

3444             So certainly the capital outlay is definitely required.

3445             THE CHAIRPERSON:  We have looked a little bit about what your business strategy might be in the face of competition, what about the sense of your format, your programming strategy?

3446             You must have heard some of the discussions we had earlier with some of your would‑be competitors, what I see here is not atypical of a one‑station situation, because of course you try to offer as much as you can.  You have gone over it with us today.  There is a little bit of everything and you try to keep as many people happy.

3447             Is that sustainable in the face of competition that would be then picking ‑‑ to use the last applicant's example ‑‑ a much narrower niche, a Classic Rock.  Would that force you, then, to rethink your strategy and to perhaps rethink your format, rethink the breadth of programming that you were going to offer?

3448             MR. D. FREEMAN:  Perhaps I could answer that.

3449             We have the diversity of our programming, as you have experienced here in our presentation.  That has been developed over the needs of Pictou County for a great number of years.

3450             We have thought of the possibility of going into a particular niche in the music world, but we are saying, "Hey, we are going into a narrow niche and what do we do with all the other listeners?  Do we just casually pass them off to Antigonish or Truro or to Charlottetown?"  I don't think that we are prepared to or want to do that.

3451             So we try to develop our programming that somebody, no matter what time of the day they are listening to CKEC, will find something of interest because it involves Pictou County and embraces a wide range of music.

3452             In a case of an example, we have unknown artists, they don't have a CD out but they made something in their basement or with a local guy someplace in his home or whatever and it sounds pretty good.  They come to us, sure, we have the space to provide that because we have the diversity of a format to accommodate these individuals.

3453             They go to other stations, they are denied.  They come to us from other counties because they can't get these independent little guys played.  We play them.

3454             THE CHAIRPERSON:  That is an eloquent defence of what you do and I don't in any way criticize it.  You are obviously offering an incredible, remarkable, single‑handed service to this community.

3455             I am trying to push you a little, if I may, to respond to a different scenario.  I just wonder whether you would be forced to narrow your focus ‑‑ and it may not be a bad thing, who knows ‑‑ in the face of a competitor on your home turf.

3456             Let's assume for a moment that we license the last applicant who is bringing in Classic Rock.  There you go, bam, you have Classic Rock.

3457             What do you do?  Do you just carry on or do your senses tell you no, you are going to have to make some adjustments and where might they be?

3458             MR. M. FREEMAN:  Well, regardless ‑‑ we already face strong competition in the market.  We have many different musical formats coming into our market now.

3459             CKEC and Hector Broadcasting's corporate mind‑set on that is that we sail our own ship in reflection of the community that we are in.  We are tight with our community, we hear from our community, they respond to the things that we do, and what we are hearing is, "When are you guys going FM?  When are you guys going FM?"

3460             They are not looking for a new station.  They don't say they don't like the music ‑‑  to us.  Apparently they have said it to a lot of other people, but they don't say it to us.  I'm going to ‑‑

3461             THE CHAIRPERSON:  Just about everybody.

‑‑‑ Laughter / Rires

3462             MR. M. FREEMAN:  Apparently.  I'm amazed.

3463             Ann is going to speak to that in just a moment.

3464             We try not to be reactive in our market.  We know our market, we know our people, they know us.

3465             THE CHAIRPERSON:  We will get to Ann in a moment, but I am positing to you a major change in your market.

3466             MR. M. FREEMAN:  We have already seen major ‑‑ sorry.

3467             THE CHAIRPERSON:  I don't want to be flippant, but you sound a little bit like the captain of the Titanic, "I know my ship".  Yes, well, he knew his ship and it was fast, but he didn't know his icebergs.

3468             MR. M. FREEMAN:  Yes.  Right.

3469             THE CHAIRPERSON:  I'm not asking you to defend what you are doing as a solo player, because I think it doesn't need any defending.  It is well‑explained in your applications and even better explained here today.

3470             I am wondering whether that works in a two‑station market.

3471             Let's face it, listeners would like a second station, and a third, and a fourth and a fifteenth and a thirty‑ninth.

3472             MR. M. FREEMAN:  Oh, certainly.  Certainly.

3473             THE CHAIRPERSON:  Because they say, "Gee, we own the airwaves.  It is public property.  Let's get a little more out there and let's listen to it all before somebody shifts all the frequencies off to Halifax or does something else with them."  So they would like more.

3474             You would say, "Look, we are trying to give something to everybody."  That is admirable, but what if we listen to the listeners and say we are going to give them ‑‑ I don't want to use Classic Rock all the time or I'm going to get the people from the other stations depressed, but we will give them one or the other listening opportunities here.

3475             How do you respond to that in your programming, both musical and spoken word?

3476             MR. M. FREEMAN:  Inevitably, we would have to change, there is no question about that.  Another hometown radio station next door to us is obviously going to impact on us greatly.

3477             What we know for certain is the biggest impact on that is going to be financial, and that is going to happen immediately.

3478             The trickle down from that fact of having a fourth company selling the fifth station in Pictou County is that our spending on programming is going to suffer.  Our spending on everything is going to suffer, because we are going to have less money to spend.

3479             Because there is going to be a rate war, there are going to be five stations selling in Pictou County, there are going to be four companies knocking on advertisers doors every day.  That is going to hurt us and it is going to hurt our programming, regardless of what genre we particularly decide.  We will solve the problem at that time.

3480             THE CHAIRPERSON:  We have heard that there isn't much being sold here by the outsiders and we have also heard that if they get in they are not going to take much away from you.

3481             Maybe you could speak to both of those.  What is your best guess?

3482             Don't start doing that Wagnerian stuff with the four horsemen riding across here.  I understand worst‑case scenarios, but I am really looking for some kind of definite business sense.

3483             MR. M. FREEMAN:  Certainly.

3484             THE CHAIRPERSON:  What are you losing now and how much of your lunch would get eaten if we brought one of these competitors in?

3485             MR. M. FREEMAN:  Astral has already told us this morning how much they are taking out of the market.  CJFX has said in their application they are taking about 7 percent.

3486             THE CHAIRPERSON:  Do those feel accurate to you from the pain you are feeling?

3487             MR. M. FREEMAN:  Yes, they do.

3488             THE CHAIRPERSON:  Okay.

3489             MR. M. FREEMAN:  Yes, they do.  We know one thing for certain, adding another station would make that pain a lot more.

3490             I don't imagine for one moment that Astral would give up selling those two stations that are currently in our market in our market if they got a third, and I'm certain that Antigonish would sell both stations in our market as well.

3491             Acadia there again is adding a fourth company selling a fifth station in our market which is already over saturated.

3492             If we could just touch on the research and some of the magical numbers that have been presented ‑‑

3493             THE CHAIRPERSON:  Yes, by all means.  Numbers are us today.

3494             MR. M. FREEMAN:  Numbers are us today and they are all over the map.

3495             If we take Astral's model and try to make that more accurate, because they have included all of Nova Scotia and their comparisons of retail sales and radio revenue.  If you take that component out of that math formula, out of the Halifax Regional Municipality, take that out of the rest of Nova Scotia ‑‑ because it is an anomaly, it is a hot economy and, to be quite honest, there are many communities in Nova Scotia that are suffering from decline of this huge magnet that is sucking everybody towards HRM.

3496             So if we take that out of the picture, then our math comes back with a figure more like 1.3 million, because you are taking a huge component out of that.  Right?

3497             THE CHAIRPERSON:  Right.

3498             MR. M. FREEMAN:  You are taking the radio sales out of that, you are taking the number of radio stations, you are taking the retail revenue out of there, and then you are looking at just rural Nova Scotia.

3499             By using their analogy and their calculations you come back with a factor of about .3 as opposed to .333 or whatever it came to.

3500             So we see the market more at 1.3 million.

3501             THE CHAIRPERSON:  You are taking a million out of it now.

3502             MR. M. FREEMAN:  We also have other guys taking some out of it.  So we consider that the market is pretty much sold.  It is near the top of what it can handle.

3503             If we look at Acadia's research and how they come at it, their strategy, they took a ‑‑ looking at the New Glasgow CA and then put a 20 percent cap on that because they had a retail sales figure for the New Glasgow CA.

3504             Well, two things.  The retail sales figure was dated, because subsequently in the Financial Post markets they are showing a decline.  The 2005 projection is 5 percent lower than it was in 2003.  Also, their projections for 2007 are lower than 2005, which is lower than 2003.

3505             Population trends, school enrolment, that is also showing the same trend.  We are going in the wrong direction.

3506             Back to Acadia.  They looked at the New Glasgow CA and said:  Well, the population for Pictou County, including the whole county, is about 20 percent more than what they call the New Glasgow Census Agglomeration.  Okay, let's take 20 percent of the retail sales.

3507             One thing they are missing is that 99 percent of the bulk of the retail business and the jobs in Pictou County are already in the New Glasgow CA.  So by upping that figure by a general 20 percent across the board is not at all accurate.

3508             Quite frankly, if there were $2.6 million available in the market, then I assure you we would have a much larger slice than we have right now, because we are aggressive in our market, we know our market, we have good people, we have knowledgeable people, we have experienced people and we have professional people who know how to get the job done.

3509             THE CHAIRPERSON:  But nothing is stagnant.  You have shown us some problem areas which I'm sure we all acknowledge, we have seen them, school enrolment going down, as you say, and the east‑west retail situation.  So I'm not putting that out of my mind at all.

3510             But still, generally speaking, for whatever the reason, a new player in a market increases the size of the market, maybe just the energy of it all or something like that.

3511             What do you factor in on that?

3512             I know you are a one‑station operation, but you also seem to be very savvy, very informed people.  You must be following trends, you must be looking at markets, you must be a member of associations, you know what is going on.

3513             MR. M. FREEMAN:  Certainly.

3514             THE CHAIRPERSON:  I think you would have to agree that for some magical reason in most situations there is a jump, there is a growth.  That doesn't mean the incumbent doesn't lose some, but there is a bigger pie for some reason, whether it is just the energy, whether people move a little from print, or they can't get serviced on television, it is too expensive, or whatever, they begin to re‑look at radio.  There are new demographics that can be serviced and serviced in a more niche way.

3515             I can give you those reasons, you can give me 10 more.

3516             How much scope is there for jump?  You are saying it is 1.3.  How high could it go with a second person?

3517             MR. M. FREEMAN:  We don't know.  That certainly remains unseen.

3518             We certainly don't pretend to be soothsayers here.  All we can go with is the trends that we are seeing and what trends are projected.

3519             I have talked to many business people about this hearing and about our situation and they say, "Well, where is the money going to come from?"

3520             All retailers, like any business, are facing higher expenses all across the board regardless of what category of business you look at.

3521             I talked to our sports store guy in the mall and his profit margin is half of what it was five years ago.  His sales might be about the same or a little bit more, but his margin is down.

3522             Also, I think Lynn wants to ‑‑

3523             THE CHAIRPERSON:  At the price of gas you think they would be selling more walking shoes, if nothing else.

3524             MS MacDONALD:  Exactly.  Bicycles.

3525             THE CHAIRPERSON:  Bicycles, yes.

3526             MS MacDONALD:  Exactly.

3527             I understand what you are saying, Commissioner, but realistically you have to look at what is going on in Nova Scotia.  Granted, there is always the honeymoon period for new business, but it is the same old question:  How long does the honeymoon go.

3528             THE CHAIRPERSON:  The dishes are always flying in the kitchen sooner or later.

3529             MS MacDONALD:  When does the honeymoon end and what do you do after that.

3530             You have to look at what is going on in Nova Scotia.  This is something that, if I can put on another hat for a moment, I have been talking to some of our municipal funding partners for the Pictou County Tourist Association for the past two years, HRM is a magnet.  It is drawing our well‑educated young workforce from every rural part of Nova Scotia.

3531             That is our challenge.  For us to survive as an area in Pictou County, we have to create opportunities for them to stay in our area.  That is our challenge.

3532             I understand what you are saying about new business can generate more new business and that sort of thing, but realistically, on the other hand, we are dealing with a situation where our young people ‑‑ in particular our young people, probably people of every age bracket but particularly our young ‑‑ are going either to HRM or out of the province.

3533             So that, in essence, is our challenge, aside from the fact of the growth areas east and west of us.

3534             MR. M. FREEMAN:  If I could also just jump in for one quick moment?

3535             The slide I currently have on the screen shows the FP market data that is compiled from the province when they do their province summary.  So this is not the New Glasgow CA, this is what FP markets had for Pictou County.

3536             Our population trend is not something new, it is not something that is new to us certainly in the market, or new to our community.  As you can see, in 1981 we had over 51,000 people, now we have 46,900.

3537             The projections for the New Glasgow FP market CA ‑‑ because they don't do projections on the County itself ‑‑ they are looking at projected percent change from 2001, the last Census data, to 2005 of minus 3.2.  In July 2005, the population is estimated at 36,400.  The FP markets estimate that the population in 2007 will drop again, and in 2010 drop again.

3538             So we don't have any indicators.  Although Lynn has mentioned we have many organizations that are trying to address these issues, we have had these business summits going on for the last couple of years and at this point we don't have the answers and we are not hearing about anybody else in the community who has the answers.

3539             So when we look at our market, what other small market in Nova Scotia has the radio signal penetration into their market that we have now?  What other non‑metro market has four radio stations selling in the market?  Yarmouth doesn't, Sydney doesn't, Bridgewater doesn't, Antigonish doesn't, Port Hawkesbury doesn't.  Sydney has three stations, but it is one owner.  They are way down in Cape Breton.  There is nobody getting close to them.

3540             So that is our point.  That is the cusp of what is going on here, is that we are in a sandwich.  We are the jelly and the jam and we have big pieces of bread on either side of us going squish, squish.

3541             THE CHAIRPERSON:  Not comforting you are telling me.  Not warm bread.

‑‑‑ Laughter / Rires

3542             MR. M. FREEMAN:  No, it is not entirely.  Like I say, what other markets in Nova Scotia face that now.

3543             THE CHAIRPERSON:  Who is the fourth competitor selling out of Charlottetown?  Is it Maritime?  I forget your circles.  You had so many circles.

3544             MR. M. FREEMAN:  There is our station and three other stations.

3545             THE CHAIRPERSON:  I see.  You are counting yourself as the fourth.

3546             MR. M. FREEMAN:  Yes.

3547             THE CHAIRPERSON:  It is probably wise to count yourself.  You are in for the long haul.

‑‑‑ Laughter / Rires

3548             THE CHAIRPERSON:  What are housing price's doing if people are leaving?  Are housing prices dropping, remaining stable?  Or at least dropping against trends, nothing goes down.  But are they not going up as high as other areas?

3549             MR. M. FREEMAN:  Real estate would appear to be all over the map, but real estate values in Pictou Country appear to be rising.

3550             At any one time there are about 200 properties for sale in Pictou County from the real estate people and that number doesn't seem to change.  Obviously with a very flexible or in flux state that we are in there seems to be a lot of people coming and going and not a whole lot left of them staying.

3551             We have a lot of people who are upgrading homes, a lot of renovations going on, but certainly new home starts or real estate values ‑‑ I wouldn't say they would be on fire, but they are probably in pace with the rest of the province.

3552             MS MacDONALD:  If I may add to that?  I am someone who follows real estate all the time just because I have an interest in it.

3553             I would have to say that interestingly enough, I think because of our tourism, our land values are really increasing because we are seeing a lot of foreign ownership in the county, in particular our shore fronts.  I think probably you are well aware of that trend everywhere in Canada perhaps.

3554             THE CHAIRPERSON:  So they are only buying two months or three months a year and they are not having ‑‑

3555             MR. M. FREEMAN:  That is correct.

3556             MS MacDONALD:  Well, they are buying land ‑‑

3557             THE CHAIRPERSON:  They are buying land, but they are not having a big impact on the retailers is what you are saying.

3558             MS MacDONALD:  Right.  They are buying a shore front property to own the property, come here in the summertime.

3559             THE CHAIRPERSON:  Shop at Costco.

3560             MS MacDONALD:  Probably.

3561             THE CHAIRPERSON:  Dirty rats.  They are all the same.

‑‑‑ Laughter / Rires

3562             MR. D. FREEMAN:  If I might add my comment to that, too, Commissioners, you will find in Pictou County it is only the higher bracket or more exclusive homes that are pricey.  The others aren't moving.  The lower class accommodations, there are lots of them there and their prices don't change.  It is more the exclusive or new homes, or more exclusive sections of the town that the prices continue to maintain a high value.

3563             THE CHAIRPERSON:  Okay.

3564             Well, you paint a compelling argument for your case.  That is your job and you are doing it well.

3565             A couple of little detail questions, if I could.

3566             This is going to sound so petty after the big market things, but I am unclear on your CTD expenditures.

3567             To what third party, if any, would you be directing that CTD commitment?

3568             MR. M. FREEMAN:  Our commitment right now stays local and it always has stayed local.  We have given it to school bands, to the New Glasgow Music Festival, initiatives of that kind.

3569             THE CHAIRPERSON:  That sort of thing.

3570             MR. M. FREEMAN:  Yes.

3571             THE CHAIRPERSON:  Okay.

3572             I could ask you a lot of the same sort of questions I have been asking some of the others and my colleagues have been asking some of the others about how you make things work for this broad demographic, but I think your commitment to it is clear, your programming is clear.  You have acknowledged that you would have to make some variations if there was a competitor, so I think I'm just going to leave that.

3573             How you deal with 18 year olds to 54 year olds is your own challenge.  God bless you with it.

3574             MR. M. FREEMAN:  Thank you.

3575             THE CHAIRPERSON:  It is something that particularly tickles my kind of imagination as to how you do it, as a person with an 18 year old in my household.

3576             Actually, I shipped her off to Halifax, too.  She is at Dalhousie, so they can deal with her.

3577             MR. M. FREEMAN:  Very good.

3578             THE CHAIRPERSON:  Interestingly enough ‑‑ which is apropos of nothing, but it is kind of interesting ‑‑ neither one of my daughters who are currently at university brought a radio with them this year, which is another one of your challenges.

3579             MR. M. FREEMAN:  Certainly.

3580             THE CHAIRPERSON:  They listen to it on the internet and they left the radio, the boom boxes.  They didn't bring them.  There was room in the car, not much, but there was some.  They said, no, we don't want them.  We don't need them.  So there is another ‑‑

‑‑‑ Laughter / Rires

3581             MR. D. FREEMAN:  Coincidently, sir, we are on the internet and we do have streaming.

3582             THE CHAIRPERSON:  Well, that is a very, very good idea.  I would stick with it if I were you.

3583             Financing, I'm fine on that.  I'm just flipping through this sort of thing.

3584             I guess the question on frequency.  Again, not the scenario you prefer.

3585             Have you looked at any other frequencies other than 94.1?

3586             MR. M. FREEMAN:  Yes, we have.  We looked at several different frequencies and we looked at five different sites, actually fairly extensively.

3587             The topography of Pictou County is somewhat of a challenge.  Other applicants have mentioned our layout, and you might have noticed on the map, it is kind of hard to see, but anyway, our five towns, we call them the up river towns.  Because we are on the East River, the East River enters out into Pictou Harbour, and Pictou of course is over there.  The up river part ‑‑ where was I going with that?  Sorry, I just lost it.

3588             THE CHAIRPERSON:  Five towns.

3589             MR. M. FREEMAN:  Five towns, yes.

3590             THE CHAIRPERSON:  Five frequencies.

‑‑‑ Laughter / Rires

3591             MR. M. FREEMAN:  Topography, mountains and hills.

3592             THE CHAIRPERSON:  Five brides for five brothers, I don't know, something.

3593             Carry on.

3594             MR. M. FREEMAN:  We have a lot of hills and mountains in Pictou County and that is obviously a tough thing for an FM station to deal with as far as being technically conducive so you don't have a shadow here or a shadow there.

3595             We did look at other frequencies and there was either an adjacency problem or an interference problem that wouldn't give us the coverage to cover the entire county.

3596             We are not interested in giving up any of our turf when we flip that we have now during the daytime.  We obviously have nighttime limitations and we have already spoken to that.

3597             But we want to cover the entire county.  So we found the best site that actually turns out to have the highest elevation, we went with the highest tower and the biggest power.  That is how we are ensuring.  94.1 gave us that best option.

3598             We actually lobbied with Industry Canada to have it reclassified so we could increase the power from 50,000 watts.  Actually, we got 100,000 and then that got kicked back to 80,000.

3599             THE CHAIRPERSON:  You can live with that?

3600             MR. M. FREEMAN:  We certainly can.

3601             THE CHAIRPERSON:  I don't know if any of my colleagues have questions.  That certainly covers mine.

3602             Yes, Commissioner Cugini and then we will go to Commissioner Cram.

3603             None on this side?  Totally left wing sort of stuff going on here today.

‑‑‑ Laughter / Rires

3604             MR. M. FREEMAN:  Good afternoon.

3605             COMMISSIONER CUGINI:  Good afternoon.

3606             This may be a combination marketing/programming question, so bear with me and then whoever you feel obviously is most qualified to answer the question will.

3607             I understand that if I am a fan of Nickelback or Our Lady Peace I can come to your station from 3:00 p.m. to midnight and I will get the kind of music that I want to listen to.  But if I am a fan of that kind of music ‑‑ Mr. Freeman no offence ‑‑ I am not going to come to you to listen on Sunday night on the "Pre‑Rock Oldies"

3608             MR. M. FREEMAN:  Understandable.

3609             COMMISSIONER CUGINI:  So how do you keep me coming back?

3610             I suppose the precursor to that question is:  How do you stop me from going to an out‑of‑market radio station during those times that I want to listen to Nickelback or Our Lady Peace?  How do you keep me a loyal listener coming back to you?

3611             MR. M. FREEMAN:  Well, the market is already fragmented quite heavily.  Including us there are eight radio stations on the dial.  Inevitably, tuning to those other radio stations is going to happen.  There is no question about that.  There are a variety of formats available.

3612             Our target demographic is the 46‑plus‑thousand people who live in Pictou County.  That is our target demographic.  We will definitely keep people coming back because we are plugged into Pictou County.  News, information, events, whatever it is they know where to find that on the dial for Pictou County, and that is us.

3613             We do have a fairly considerable amount of news and spoken word features.  We do concentrate heavily on the County.  That is who we are and that is where we are.

3614             I'm not sure if Ann might want to jump in on this as well.

3615             MS MacGREGOR:  In regards to the music, we certainly feel passionate about it and we bring who we are as Pictonians to the music.

3616             For instance, we went to the East Coast Music Awards, we covered that.  I personally went to Los Angeles, California to go to "Rock Star INXS" and covered it for the radio station ‑‑ lot of fun, I might add ‑‑ as did another coworker of mine.  He went at a later date and then he went on to the Canadian Country Music Awards.

3617             Because we do cover these different formats it is a very, very exciting time in Pictou County.  We have had George Canyon go on to international stardom and he cleaned house at the CCMAs.  He is from Pictou County.

3618             J.D. Fortune won "Rock Star INXS", becoming the new lead singer of INXS.  We have stayed up to date with these events.

3619             Kevin Murdoch who was a finalist with "Canadian Idol".  We are on top of these things.

3620             We all are of all different ages at the station, too, so we bring that energy to it and it is great to be able to talk about these things and be involved in them and report back to Pictou County about what is happening.

3621             COMMISSIONER CUGINI:  Thank you very much.

3622             THE CHAIRPERSON:  Commissioner Cram.

3623             COMMISSIONER CRAM:  I swear I am going to be an engineer when I cease this job.

3624             I am looking at your second last overlay of the frequencies where you added in the Charlottetown frequencies.

3625             I'm just wondering, actually, in addition to the present AM contours of CHTN and CFCY, if you could overlay on this the proposed FM frequencies for CHTN, the coverage frequencies for CHTN and CFCY?

3626             MR. M. FREEMAN:  I can't do that at this very moment.

3627             COMMISSIONER CRAM:  No, no.

3628             MR. M. FREEMAN:  But we certainly could.

3629             COMMISSIONER CRAM:  I'm sure with your computer skills you could do that, just so I have an idea of where you may end up at the end of the day in terms of getting into your ‑‑

3630             MR. M. FREEMAN:  Certainly.  Right.

3631             COMMISSIONER CRAM:  Then I wanted to go to ‑‑ Lord forbid, I think I am replacing David Colville these days.  He is not here so somebody has to look at these maps.

‑‑‑ Laughter / Rires

3632             COMMISSIONER CRAM:  I wanted to look I guess first at your Map 4, "Peter Khan Engineering", dated February 5, 2005, revised July 25, 2005.

3633             Do you have that?

3634             MR. M. FREEMAN:  I know which one you are referring to, yes.

3635             COMMISSIONER CRAM:  Okay.  If I see this correctly in terms of your proposed coverage and your old coverage ‑‑ I'm not sure if I have your old coverage correct ‑‑ there is another map that appears to show your old daytime coverage.  In that, in your old daytime coverage, under the 5 megavolt you did not get into Truro and it appears you did get into Antigonish during the day?

3636             MR. M. FREEMAN:  Yes.  Actually, our AM station currently gets into both of those markets.

3637             COMMISSIONER CRAM:  Okay.  I'm just wondering about the contours, though, in terms of reliability of signal.

3638             MR. M. FREEMAN:  Yes.

3639             COMMISSIONER CRAM:  It gets into both?

3640             MR. M. FREEMAN:  Yes.

3641             COMMISSIONER CRAM:  Okay.

3642             Then at night, on Map 4, is that the dotted dark line that sort of goes down the coast?

3643             MR. M. FREEMAN:  Yes.  I believe that is the 9.1 millivolt nighttime coverage contour, yes.

3644             COMMISSIONER CRAM:  So that is your nighttime coverage?

3645             MR. M. FREEMAN:  Yes.

3646             COMMISSIONER CRAM:  That is what you have to reduce to?

3647             MR. M. FREEMAN:  Yes.

3648             MR. D. FREEMAN:  Yes.

3649             COMMISSIONER CRAM:  So when you say you missed a part of coverage, Mr. Freeman, Senior ‑‑ I will just call you that.  It has nothing to do with your age, it's just there are two of you ‑‑

3650             MR. D. FREEMAN:  I realize that.

‑‑‑ Laughter / Rires

3651             COMMISSIONER CRAM:  When you say you missed a part of Pictou County, it seems like you only covered at night like less than 25 percent with your nighttime coverage.

3652             MR. D. FREEMAN:  Could I answer that, please?

3653             COMMISSIONER CRAM:  Yes.

3654             MR. D. FREEMAN:  When we go on pattern at night the wattage to the backward side of our signal I believe was a quarter kilowatt, around 250 watts.

3655             MR. M. FREEMAN:  If I could just add on that?

3656             So what happens is, we have two towers in our present setup, so at night our signal is hauled in from the east and basically that power is pushed ‑‑ hauled in from the west and pushed back out to the east.

3657             So you have to remember that Pictou County goes all the way to River John, which is up the shore there a fair chunk.  With other nighttime interference you don't have to get very far away from the New Glasgow CA to start hearing that noise and getting that interference.  Certainly by the time you are going up the shore we are gone and it will be a foreign station coming in from God knows where.

3658             COMMISSIONER CRAM:  So out of the 46,000 population of Pictou County, what could you reliably cover at night?

3659             MR. M. FREEMAN:  I don't mean to argue, the 36,000 would be the New Glasgow CA ‑‑

3660             COMMISSIONER CRAM:  New Glasgow CA, I'm sorry.

3661             MR. M. FREEMAN:  ‑‑ and the Pictou County would be the 46,000‑plus.

3662             COMMISSIONER CRAM:  Okay.

3663             MR. M. FREEMAN:  I would have to say at nighttime we are covering most of the New Glasgow CA, but we are probably missing a good third or 40 percent.  We are covering most of that 36,000, but we are not getting the 47,000.

3664             COMMISSIONER CRAM:  Okay.

3665             When do you have to shut down on December 22nd habitually, or turn it down?

3666             MR. M. FREEMAN:  Pardon me?  I'm sorry?

3667             COMMISSIONER CRAM:  When do you have to go to nighttime coverage on ‑‑

3668             MR. M. FREEMAN:  At dusk.

3669             COMMISSIONER CRAM:  So what time is that habitually on December 22nd?

3670             MR. D. FREEMAN:  It changes every month.  I don't have the calendar here, but it is done by a computer anyway.  The engineer sets it up in a computer and it does it automatically.

3671             COMMISSIONER CRAM:  But the shortest day of the year ‑‑

3672             MR. D. FREEMAN:  It is 4:30.

3673             COMMISSIONER CRAM:  At 4:30?

3674             MR. D. FREEMAN:  Yes.

3675             COMMISSIONER CRAM:  Until 9:00 in the morning or something?

3676             MR. M. FREEMAN:  No.  I don't recall when the pattern switches back, but it is ‑‑

3677             MR. D. FREEMAN:  I think it is 8:30.

3678             MR. M. FREEMAN:  I'm not sure.  I would have to check that.

3679             COMMISSIONER CRAM:  I hear all of your answers about the problem with the declining economy and young people leaving.  I am from Saskatchewan so I think I understand the trend somewhat.  Alberta is right next door, just sort of like Halifax.

3680             Astral, at page 6 of their supplementary brief, talked to us about different places across the country with similar population.  One in particular, they show Brandon, Manitoba with a population of 36,000 and having four local commercial stations.

3681             Do you have that?

3682             MR. M. FREEMAN:  No, no, that's okay. I'm just referring to our intervention, because we did address those issues in our written intervention.

3683             COMMISSIONER CRAM:  I'm sorry.

3684             MR. M. FREEMAN:  That is quite all right.

3685             I believe in that particular example there were four stations, but there were two owners.

3686             COMMISSIONER CRAM:  Yes, that's right.

3687             MR. M. FREEMAN:  So that would obviously be a difference with both owners offering the benefits of the synergies of that ownership.

3688             Also, the actual markets that those places are serving are much larger than their CA population.  I believe it may be two or three times, actually, their Census Agglomeration.  I believe Brandon would be around 108,000 when you actually look at what their market is.

3689             COMMISSIONER CRAM:  Their actual serving area.

3690             MR. M. FREEMAN:  Right.  And I believe that is actually referenced in some of their applications and changes that they have made on the market.

3691             COMMISSIONER CRAM:  And the same with Brockville?

3692             MR. M. FREEMAN:  We looked at all those and that is really what we came back with.  Our point is that you can't just look at the tiny little spot in the middle.  You have to look at the market around them type of thing, the market that they actually serve.  I am sure all those are actually documented in the CRTC applications and filings.

3693             We did investigate all those, and we did look at the research of that of course, and we did address those in our written intervention.

3694             COMMISSIONER CRAM:  Thank you very much.

3695             MR. M. FREEMAN:  Thank you.

3696             COMMISSIONER CRAM:  Thank you, Mr. Chair.

3697             THE CHAIRPERSON:  Commissioner Duncan.

3698             COMMISSIONER DUNCAN:  I just have one question on your financial projections.

3699             Maybe it is in the documents, but could you clarify for me what you expect your revenue increase will be if your FM request is approved and no other licence is granted.

3700             MR. M. FREEMAN:  That is basically the model that we did submit originally with our application.

3701             COMMISSIONER DUNCAN:  And what percentage increase would that represent?

3702             MR. M. FREEMAN:  We are looking at 2 to 3 percent growth, because we are really unknown because of the state of our market and because of the changes that are going on there.

3703             Our big five industries have had reductions in employment over the last ten years.  We do not have any leading indicators of huge growth, any big box companies coming to our community or offering new manufacturing.  Our community is still wrestling with these things.

3704             We try to be, I think, optimistic in looking at if we put a little bit of growth in, then where are we going?

3705             I am not going to sit here and say we are going to get 10 percent because we just don't know.

3706             COMMISSIONER DUNCAN:  So you didn't  temper your projections assuming that there would be another FM licensed.

3707             MR. M. FREEMAN:  No, we didn't. There was a question that did come back from the Commission that asked us to project a financial model if we didn't get the flip and we were just left and no other station.  That shows basically a slow decline because we see that as where our business is going now.

3708             COMMISSIONER DUNCAN:  Just for clarification, could I ask:  Do you mean growth over the first year or the seven years that were projected?

3709             MS MacDONALD:  No, just into the next year.

3710             COMMISSIONER DUNCAN:  Okay.  Thank you very much.

3711             THE CHAIRPERSON:  Counsel, do you have any questions?

3712             MS MURPHY:  Yes, just to review the undertaking in providing the modified map showing the overlay for your proposed FM station.

3713             Would you be able to provide that by October 12th?

3714             MR. M. FREEMAN:  If I could just clarify on what Commissioner Cram wanted, you wanted the overlays of the proposed two stations from here that are applying?

3715             MS MURPHY:  No, yours.

3716             MR. M. FREEMAN:  You just wanted ours?

3717             COMMISSIONER CRAM:  No.  I wanted the overlays.  In the Charlottetown part of this hearing, we had applications by CHTN to flip from AM to FM and CFCY to flip from AM to FM.

3718             MR. M. FREEMAN:  Right.  So you would like to see those contours overlaid on that map.

3719             COMMISSIONER CRAM:  Yes, yes.

3720             MR. M. FREEMAN:  Also with our proposed FM?

3721             COMMISSIONER CRAM:  Yes, that would be fine, with your FM too.

3722             MR. M. FREEMAN:  All right.

3723             COMMISSIONER CRAM:  You have only done sort of one contour for each signal, and that is fine.

3724             MR. M. FREEMAN:  Yes.  We didn't put the proposed ones in from the Charlottetown proceedings with the other stations, because obviously we don't know what the outcome is.

3725             COMMISSIONER CRAM:  Right.  I don't want the .3 and the .5, because you only gave one contour for each one.

3726             MR. M. FREEMAN:  Yes.  They will be all referenced the same, absolutely.  That is no problem to supply that information by October 12th.

3727             COMMISSIONER CRAM:  Thank you.

3728             MS  MURPHY:  And you will serve copies on the other applicants.

3729             MR. M. FREEMAN:  Yes.

3730             MS MURPHY:  The other applicants will have an opportunity to comment by October 19 and your right to reply would be the following Monday, which is October 24th.

3731             MR. M. FREEMAN:  All right.

3732             MS MURPHY:  Those are all of my questions, Mr. Chair; thank you.

3733             THE CHAIRPERSON:  Thank you, counsel.

3734             I want you to know that those of us who were with Commissioner Cram last week at the telecom hearings, there are not enough maps in the world to satisfy that Commissioner.  So don't feel you are being picked on.  Bell Telephone are still drawing in their bands and having a lovely time.

3735             Cartography may be a growth industry.

‑‑‑ Laughter / Rires

3736             THE CHAIRPERSON:  You now have a minute or two, whatever you think you can take, to wow us with your final pitch for what you would ideally like to see come out of this process.

3737             MR. M. FREEMAN:  I will ask my father to do that; thank you.

3738             MR. D. FREEMAN:  I wasn't prepared for this.  I had something here.

3739             THE CHAIRPERSON:  Well, you could just plead, if you like.  Some people do that: just put a bib on and plead.

3740             MR. D. FREEMAN:  As we have stated, we have been the incumbent station in our market for 53 years, established first in 1953.  Through all the turmoil of the economy in such a market that is highly unionized and big industry up and down with the international scene, we feel that we have done a fairly good job of not only servicing commercially Pictou County but serving and maintaining a high standard of service to our listeners.

3741             We don't figure on other percentages of brackets that we serve, 24‑to‑54.  We don't exclude people because they are over 54, that they don't exist, or people under 18, that they don't exist.  We include those people in our total coverage of 47,000 people that live in Pictou County.

3742             Those are the people we want to serve and we want to serve properly.  Through thick and thin, we have been doing that all along.

3743             If we add another station to the mix, we already have four stations selling in our market, which is extremely rare or very unusual in Nova Scotia.  I don't know of any other market of our size that has four stations selling in a population of 47,000 people.

3744             If you add a fifth station, where are we going with this anyway?  We now have five stations selling in a market.

3745             If we were in Halifax, we would be happy, but this doesn't work in Pictou County.  We haven't got the resources.  We don't have the money.  We don't have the people to support five radio stations.

3746             Our service to Pictou County is based on what Pictonians want.  We have been tuned into them for so many years, as we have said, since 1953.  We have other stations applying for our market.  I am not pinpointing anybody or any application, but some of the inaccuracies, that they don't know about facts and figures of our county even down to pronunciation, and they want to come in here and open up a radio station, doesn't hold too much water with me in the frankness of their ability to actually come in here and service, other than getting a ticket.

3747             We have served Pictou County successfully for 53 years, and we earnestly hope that you will give us the opportunity of flipping us to FM and proving us right for another number of years and not closing the door to us for applying again in the future for, not a standalone but a combo for Pictou County.

3748             Thank you.

3749             THE CHAIRPERSON:  Thank you very much, ladies and gentlemen.  You are clear.  We heard you.

3750             We are going to take a five‑minute break.

3751             If participants are willing to go a little bit longer, I have been told that nobody wants to utilize their rights under Phase II.  There may be some who would wish a final word under what we call Phase IV.  It all becomes a bit meaningless, doesn't it, when we are all sitting in the same room.

3752             Essentially what we are saying is there may be some people, in light of what they have heard, who want to make one more statement; want to maybe clarify something, maybe want to spend five or ten minutes saying something in response to what has been said by another participant.

3753             I would ask you to speak to the Secretary.

3754             Unless people really want to come back here tomorrow morning, I think we can probably wrap that up this evening without anybody feeling that they have lost any opportunity.  If anybody does want to take the evening to prepare something, to come back tomorrow morning, we are paid to listen to you and we will be here.

3755             We will take a five‑minute break.  If you could make your wishes known to the Secretary, we will make a final decision at that point as to how we are going to proceed.

3756             Thank you very much.

‑‑‑ Upon recessing at 1730 / Suspension à 1730

‑‑‑ Upon resuming at 1740/ Reprise à 1740

3757             THE CHAIRPERSON:  Do you need another couple of minutes or are we ready to go?

3758             MR. D. FREEMAN:  Sorry for the delay here.

3759             THE CHAIRPERSON:  That is all right.  Do you want another minute or two to organize yourself?

3760             MR. D. FREEMAN:  No.  There are just so many papers around here.

3761             THE CHAIRPERSON:  We will turn things over to the Secretary, who will take us through a bit of a process.  That will give you an extra minute to organize your thoughts.  Then we will proceed.

3762             Madame la Secrétaire.

3763             THE SECRETARY:  Thank you, Mr. Chairman.

3764             I just want to confirm that we have now completed Phase I of the considerations of Items 5 to 8 of the agenda.

3765             As for Phase II, which is where the applicants re‑appear, in the same order, to intervene on competing applications, all applicants have indicated that they will not be appearing in Phase II.

3766             Therefore, moving on to Phase III, where we would hear from the appearing interveners, we have two interveners on our agenda.  For the record, we should invite them again, to see if they have arrived at the hearing to make their presentation.

3767             I would call Mr. Dallas Roy and Mr. Dwayne Decker, if they are in the room, to come up to the front to make their presentation.

‑‑‑ Pause

PHASE IV

3768             THE SECRETARY:  Seeing as they are not here, we will now proceed to Phase IV, which is where the applicants can reply to all interventions on their application.  All applicants will appear in reverse order.

3769             Therefore, we would ask Hector Broadcasting to respond to all the interventions that were filed with their application.

3770             You have ten minutes for this presentation.  Thank you.

REPLY / RÉPLIQUE

3771             MR. D. FREEMAN:  Thank you very much, Madam Secretary.

3772             Just to recap, I am Doug Freeman, CKEC.  With me is my son Michael, Lynn, Ann, Rod and Carlton.

3773             Michael.

3774             MR. M. FREEMAN:  We are here to reply to the positive and negative written and oral interventions.  This is a unique process as the Commission initially announced that its inclination was to have the New Glasgow applications dealt with as non‑appearing items.  For this reason, when we spoke with those who wished to support us, we did not ask them to request to appear at the hearing.

3775             As all broadcasters do when coming before the Commission, we reached out to our community to ask them for their support.  We prepared a petition and asked those interested to come into our station to sign it.  This resulted in almost 1300 signatures on petitions, letters and other forms of support.

3776             One of the other applicants mentioned this, stating that they provided a transcript of my father's on‑air statement.  In fact, it was readily available on our website.  I guess their mention of this was somehow supposed to indicate that we did not really have much support or that we played outside the rules.

3777             In fact, we never hid what we asked for, that support, nor did we disguise who we were or what we wanted.

3778             It was somewhat discouraging to look at the Commission's website and see that it would appear there were only 11 interventions relating to us, of which two are from competing applicants.  So I would like to ask Lynn MacDonald to speak a little bit more about people who came into our office and describe the range and depth of the interventions that we received.

3779             MS MacDONALD:  Thank you, Michael.

3780             It was a humbling experience to meet the people who walked in our doors to support us.  These teenagers, parents, business owners, professionals, seniors all came to say how much CKEC meant to them.  When people are in a mindset that they have ownership in something, the expectations placed on that entity are very high.  And hearing what these people had to say, CKEC over the course of our 53 years with Pictou County, we felt that we had both met and surpassed these expectations.

3781             Here are some of the quotations from their interventions.

                      "CKEC helped us raise money for a new fire truck for our community.  We couldn't have done it without you."

3782             And:

                      "You played our music when we were just starting out.  When no one else would put us on the air, you did."

3783             The Kids First Resource Centre talked about the day when their premises flooded and not knowing where to turn to, they came to Michael, and within minutes we had a PSA on the air and the community responded.

3784             I'm sorry, but this is a very emotional thing for me.  People were so good to support us.  It was wonderful.

3785             Everyone had a story or a comment about how CKEC had helped them, how we had become interwoven in the fabric of the community.

3786             We also received support from politicians, social services, community services and many others.

3787             At the political level, we received support from our Member of Parliament, Peter MacKay.  The many letters of support also included two members of the Provincial Legislature, one of whom is the Premier of the Province.

3788             Also with the many letters of support was the Mayor, Town Administrator and Town Council for the town of New Glasgow, the Mayor and Town Council for the town of Trenton and the Mayor of Westville.

3789             Listed separately on our website was a resolution from the Council of the Municipality of Pictou County in support of CKEC.

3790             Incidentally, in our written intervention we noted that the rural municipality had received a letter from CJFX‑FM asking for support.  CJFX stated in its reply that it had not written such a letter.  I apologize.  That was our mistake.

3791             We have here the agenda from the County Council meeting in question, which has an item, Agenda Item No. 4:  CJFX Request ‑ Letter of Support for FM Application.

3792             I guess they must have phoned, faxed or e‑mailed their request in.  Whatever the way CJFX's request was conveyed to the Council, the Council decided to provide exclusive support to CKEC.  Our intention was not to mislead the CRTC and we do apologize for that.

3793             Our support also included organizations such as the Pictou County Recreation, Tourism & Culture, Pictou Harbour Environmental Project & Pictou County Rivers Association, the Pictou County Tourist Association and the Pictou Regional Development Commission.

3794             Service clubs and social services organizations include the Pictou Rotary Club, the Knights of Columbus, and the Pictou County United Way and Big Brothers and Big Sisters have also sent their support.

3795             There are many more categories of support.  Suffice it to say, we have received strong recognition from every kind of social, cultural and business organization in Pictou County.

3796             Ann, would you like to add a few comments?

3797             MS MacGREGOR:  Thank you, Lynn, and hello again, Commissioners.

3798             As the music director of our station, I must say that I take the remarks from Atlantic Broadcasters that our music is not up to snuff rather personally.  However, after looking at their quotations from a few people, I took a deep breath and I switched to decaf coffee for the day and asked myself why.

3799             First of all, I looked at what we are playing.  In fact, we play a range of music, including much of what is proposed by some of the other applicants.  As a broadly based format, we try to satisfy as many people as often as possible.

3800             So if you are a Country and Country only fan, you won't be very pleased.  If you are a Hard Rock fan, then you won't like our daytime more AC music, our two hours of Country or our Maritime and Atlantic music shows.  If you are a Classical or Jazz fan, then most of our music, other than Mr. Freeman's program, will leave you cold.

3801             On the other hand, if you like Cheryl Crowe, Gordie Sampson or the Tragically Hip, you will like most of our programming.  If you want to support local artists like ECMA winning folk artist Dave Gunning, multiple CCMA award winning country artist George Canyon, or emerging rockers Rudy, you will appreciate that we give them airplay.  We interview them on air and even send station staff to Los Angeles or to Calgary to cover them.

3802             And if you are interested in Australian rockers INXS, you will love the access we have to JD Fortune, their new lead singer and Pictou County's own.  We have such a good relationship with him that we received a call from the BBC in London looking for information on him.  When we asked how they found us, they said the Googled his name and our call sign came up.

3803             Frankly, another reason that some may think they don't like our music is that it is on AM.  For those under a certain age, AM "sucks" and therefore anything played on an AM station "sucks".

3804             I can tell you, with a great deal of certainty, we look forward to taking CKEC into the future by maintaining that which we do best: serving Pictou County.  That can be easily rectified by approving our application.

3805             Mr. Freeman would like to wrap things up.

3806             MR. D. FREEMAN:  Thank you very much, Ann

3807             Mr. Chairman, Members of the Commission and the CRTC staff, we want to take this time to personally thank you for the attention that we have received and the kindness that you have offered us here at this hearing today.  Your courtesy is unsurpassed.

3808             We are quite willing to have you judge our application through the written process, but we are also pleased to have the opportunity to present it here today.

3809             We have provided many years of exemplary radio service to Pictou County, with a diversity of music reflecting many of our traditions and with a comprehensive newsroom that delivers accurate and up to date news and covers all the events of interest in Pictou County, plus supplying other community information.

3810             We have struggled with three other stations selling in our market.  We hope that you will see fit to grant us a conversion to the FM band, and we also hope that you don't add a fifth station to compete in our market for radio revenues.

3811             I thank you very much, and all of you have a safe journey home.

3812             We would be pleased to answer any other questions you may have.

3813             THE CHAIRPERSON:  I think we are fresh out of questions, you will be delighted to know.

3814             Thank you very much.

3815             MR. D. FREEMAN:  Thank you, sir.

3816             THE CHAIRPERSON:  Madam Secretary.

3817             THE SECRETARY:  Thank you, Mr. Chairman.

3818             The next applicant to appear would be Acadia Broadcasting.  They have indicated that they will not be appearing in Phase IV.

3819             I would then ask Atlantic Broadcasters to respond to all the interventions that were filed to their application.

3820             THE CHAIRPERSON:  We just have to put 1300 Pictou residents back in that box and we are going to make room for Antigonish.

‑‑‑ Laughter / Rires

3821             THE CHAIRPERSON:  Atlantic, are you ready?  This is it.

3822             THE SECRETARY:  You will have ten minutes for your presentation.

3823             THE CHAIRPERSON:  When you push that button the clock will run, but we won't sit here and look at you all night ‑‑ as attractive a proposition as that may be to some.

‑‑‑ Laughter / Rires

REPLY / RÉPLIQUE

3824             MR. MacLEAN:  Mr. Chairman and Commissioners, there are a number of issues that we would like to look at as part of the rebuttal process of this proceeding.

3825             In particular, we are interested in clarifying some issues with regard to format that have been raised that I fear we perhaps did not provide the desired clarity.

3826             As well, I would like to touch on the research that has been brought forward as part of this proceeding.

3827             We would like to touch, just briefly, on the physical proposal of separate studios.

3828             We would also like to touch on a couple of sales related items that perhaps would bring clarification to the whole picture.

3829             First of all, I would like to note that we did conduct extensive research which identified a number of genres in the format that we have been proposing.  The data clearly indicated that there were similarities that clustered very closely together when we examined them.  We saw commonalities in these clusters which came out as a result of the very detailed research that we did conduct.

3830             Before I get into perhaps an extrapolation out of the data, I would like to touch on the nature of the research that is being done, and I would ask that consideration be given to perhaps seriously evaluating the research that we are putting in front of you.

3831             I can tell you, as a broadcaster who has had a long association with one of the owners, who only has one vote but nevertheless does have a position on our board ‑‑ I am thinking in particular of St. Francis Xavier University.  Quite often the board representatives may very well be part of the academic community, generally are quite frequently from the Business Department, quite often from the Marketing Department, and research is very, very dear to their heart.

3832             I hope you can appreciate the challenge that I, as the manager would have, in responding to:

3833             (A) what kind of research do you have?

3834             (B) how valid is that research?

3835             (C) respond to the way that we take all your research apart and makes sure that that research justifies the business case that you are proposing that we go and the next steps that we take.

3836             Indeed, research has always been a very important part of what we do as a business.  For that reason, we have engaged people from organizations like Focal.  We have had St. Xavier University.  We have had organizations associated with the university doing research.  We have always looked for the very best that would be available to us in Nova Scotia, shall I say, and Focal Research certainly meets that particular criterion.

3837             We think that we have good research, and I would like Jennifer to explain the basis of how they did things and what is unique with what we have left you with today.

3838             MS GRACE:  Thank you, Dave.

3839             The Atlantic Broadcasters' application was the only one that was in fact based on a scientifically sound consumer demand study.  In contrast, Astral has used BBM data, which has minimum sample sizes and can't be described as representative of the total region, for many reasons, the biggest of which being the typically low response rates that are achieved by mail‑out surveys.  And that is just inherent in that methodology.

3840             They conducted independent research that used a format finding tool which does provide soft measures of appeal for a series of individual hypothetical music formats that may or may not be offered.

3841             The Acadia Broadcasting indicated that they commissioned a market study.  They had about half of the sample size of Atlantic Broadcasters', and they also surveyed only the 18‑to‑54 age group.  That excluded 34 percent of the adult population within Pictou County.  So their results, as a result, can't be generalized to the underlying adult population within the region.

3842             Hector Broadcasting didn't undertake formal market research.  They do have a lot of market contact, being the incumbent, but essentially that means that they hear from the people who seek to be heard, whether it is with very positive comments and contact or negative.

3843             Atlantic Broadcasters, for their consumer demand study, completed surveys with 500 randomly selected adults throughout Pictou County.  We too great care to ensure that the results are representative of the adult population.  We also gathered measures of actual listening behaviours around which to design the music and the spoken word format components that would have the broadest appeal in serving such a wide demographic group.

3844             So instead of presenting some various options and measuring appeal of what you might do with things that might be offered, we collected:  What do you do now?  What do you listen to now and how frequently do you listen to it, in terms of the music?

3845             We also gathered behavioural measures and importance perception for factors contributing to the spoken word design.

3846             MR. D. MacLEAN:  Thank you very much, Jennifer.

3847             There were some questions about the type of studio arrangements that we were proposing.  I am sure that many of you have had an opportunity, especially staff, of very carefully examining all of these contour maps and technical maps.  I think we all know exactly what Pictou County looks like, with a lot of help from Hector as well.

3848             I think you can see that the communities within the urban area are pretty close together.

3849             Pictou, for instance, might be a 20‑minute drive from New Glasgow, but as the crow flies, we are just looking at a very short distance, perhaps five to seven kilometres along that line.

3850             As we say, it is a relatively compact area.  Certainly from our broadcasting perspective, it looks extremely attractive.  We are used to no matter where you go, it is a half‑hour drive as soon as you go beyond our very small town limits.

3851             These communities in Pictou County are close enough together geographically that the term "amalgamation" is something that has certainly been discussed very frequently within that area.  So it seems to indicate that yes, at least from the people looking outside, there seemed to be enough similarities that perhaps they should be looking at that particular approach.

3852             That is a term that has been on the tip of many, many tongues.  Nevertheless, there are many elements that bind all of these communities together.  So not only in our programming initiatives do we want to focus on those elements, we also want to look at the respective distinctive qualities that exist in all of these communities.

3853             It is for this reason that we, as a marketing strategy, intend to develop a Pictou County radio station as opposed to a New Glasgow radio station.  I recognize that the existing radio station serves Pictou County.  It is certainly known everywhere as the New Glasgow radio station.  That, of course, is not scientifically proven; that is anecdotal evidence that we are putting in.

3854             I just make a point of clarifying that particular point.

3855             Another element of the presentations that have been made have to deal with the size of the market.  I hope you will forgive me for looking enviously at the market to the west of us in Pictou County because we have been functioning for more than 60 years in a market that is less than half, much less than half the size.

3856             In our particular market the retail base is indeed supporting two commercial FM radio stations at the present time.  You would have access to the numbers.  I would have to assume that if you examined them, you would see that it is being done successfully.

3857             There is a whole variety of reasons why it is being done successfully.  I would suggest that the incumbents are used to eking a living out of a small rural marketplace.

3858             I certainly would like to touch on some of the comments with regard to the sales initiatives.

3859             Andrea Bowers would be pleased to comment.

3860             MS BOWERS:  Thank you.  To address some of the sales issues that were of concern to CKEC, I want to remind the Commissioners that CJFX has sold advertising in Pictou County for over 62 years.  In fact, our first broadcast log in 1943 consisted of predominantly Pictou County advertisers.

3861             Having said that, it should be noted that current retail sales in Pictou County are based upon delivering our Antigonish‑Guysborough audience to Pictou County retailers.

3862             You will note that CKEC acknowledged in their presentation the importance of the Antigonish‑Guysborough consumers to Pictou County businesses.  In fact, CKEC noted the adverse effect that the opening of the big box stores in Antigonish had on Pictou County business.  Because of this, the retailers and businesses in Pictou County continue to advertise on CJFX to attract more customers to their businesses.  CJFX does not sell advertising by claiming Pictou County audience at this time.  I should say that CJFX should not be taking away from the retail sales dollars of CKEC that are targeting Pictou County audience.

3863             Dave also mentioned that CKEC identified Antigonish and Port Hawkesbury as being single station markets where in actuality Port Hawkesbury is in the centre of our coverage area with a competing station.

3864             THE SECRETARY:  Excuse me.  You may wish to wrap it up.

3865             MR. MacLEAN:  I would like to conclude by indicating our programming initiatives, as we attempted to describe, were carefully based on careful research.  They are broadly based, simply because we believe that a brand new radio station coming on the air in Pictou County is going to generate the kind of excitement that is going to overcome let's say the downside of a very, very narrow targeted format that we do not believe the market could sustain at this particular point in time.

3866             In conclusion, Mr. Chairman and Commissioners, I would certainly like to thank all of the people that have taken the time to ensure that their viewpoints on behalf of our application were filed with the CRTC.  You have a long list of them, and I certainly wouldn't want to have to start reading through them all now.

3867             Thank you very much.

3868             THE CHAIRPERSON:  Thank you very much for that.  You were very clear.

3869             I think we have one more Phase IV presentation, but I would like to call a one‑minute adjournment because counsel is anxious to whisper in my ear.  And when a lawyer wants to whisper in your ear, you are best to let them.

3870             We will take one minute, perhaps while you are setting up for Astral.

‑‑‑ Upon recessing at 1805 / Suspension à 1805

‑‑‑ Upon resuming at 1807 / Reprise à 1807

3871             THE CHAIRPERSON:  We are just about ready.  We have a request from one of the other participants for some clarification, but we are going to absolutely hear from you.  We are just waiting to find out what would make them happy, quite frankly.

3872             I think what happens in some of these events ‑‑ yes, licences all around, I say.

‑‑‑ Laughter / Rires

3873             THE CHAIRPERSON:  I think what happens in some of these processes, it is tough to draw a line between Phase II and Phase IV, and people are not before us every day.

3874             If there is some way that someone feels someone "Phase II'd" more than "Phase IV'd" and we can do something to make them feel balanced, we will do it.

3875             We will just wait a moment to see how we are going.

‑‑‑ Pause

3876             THE CHAIRPERSON:  We have a small procedural difficulty, well maybe not so small.

3877             I should take the blame for this because I was quietly congratulating myself on what a perfect hearing this had been.  Of course, the Irish in me should have known better.  So I have brought this on.  It is all my fault.

3878             There is some feeling from one of the participants that Atlantic's most recent presentation perhaps was more a mixture of Part II and Part IV than pure Part IV.  I think all of us up here recognize that.

3879             We also recognize that not every industry participant is before the Commission on a semi‑annual basis the way some of the bigger corporations are.  So quite frankly our tendency is to try, to use the colloquial, cut everybody a little slack if they haven't had the advantage of being so familiar with our processes that they know the actual dividing line between Phase II and Phase IV.

3880             I am not entirely sure what to suggest.  Essentially what would give all of us ‑‑ I am sure I am speaking for my colleagues ‑‑ the greatest amount of comfort is that all participants came away from this process feeling they had an absolute fair opportunity on every level and that their case was in no way prejudiced or jeopardized by what went on.

3881             What I would suggest ‑‑ and we have to be quick; we have to be nimble here ‑‑ is that we hear from Astral, who are here and ready to go and quite cognizant with our processes.  At that point, if the participants from Acadia would like to speak, then of course we will hear them.

3882             If, on the other hand, you would like to present something in writing, go home and think about what you heard here today, look at the transcripts, and you want to provide something more for the record in writing to what you heard that you felt maybe crossed some sort of process barrier, we will accept that too.  And, of course, we will make sure that all participants see it.

3883             Give it some thought as we listen to Astral.

3884             The suggestion is that we give everybody a licence and everybody goes home happy, but I don't know what that would do to Hector Broadcasting.  So that may not be the simple solution either.

3885             Let's try to end this as it has proceeded.  I think everybody feels ‑‑ I hope I am analyzing what I am seeing: that everybody feels they have had a very fair hearing here.  I think so.

3886             Think about it as we listen to Astral.  Think about what you would like to do and we will bend over backwards to ensure that anyone who feels they want to add a little extra, either orally or in writing, gets a chance.

3887             Perhaps, counsel, you could add to that in your more formalistic way.

3888             MS MURPHY:  For those who feel that the last presentation was in the nature of a Phase II and represented an intervention against their case ‑‑ that would be Hector or Acadia ‑‑ we would ask you to please indicate to the hearing Secretary whether you would like to exercise your right to reply to that part of Atlantic's presentation, and we will then decide whether it is in person or in writing.

3889             Please let the hearing Secretary know once we have finished with Astral's presentation.  Thank you.

3890             MR. EDDY:  May I ask a question?

3891             MS MURPHY:  Yes.

3892             MR. EDDY:  Is the implication  of this that nothing that is involved in this exchange affects Astral?

3893             THE CHAIRPERSON:  If you feel something affected you, you have absolutely identical rights to everyone else.

3894             MR. EDDY:  But we haven't heard what these people might say yet.    THE CHAIRPERSON:  Anything that comes out of any added process, you would be a party to.

3895             MR. EDDY:  I thought there was somebody coming after us.

3896             THE CHAIRPERSON:  No.  Well, there may be.  You see, Acadia waived their rights under IV, but then, if I can put this in a very colloquial way, was somewhat distressed by some of the things they heard from Atlantic and felt this reflected on their case and felt that it was more in the nature of a Phase II reply than a Phase IV.

3897             We don't want this to drag on for the next three and a half months, obviously, into "Phase 52", but we don't want anyone at this late date to go away ‑‑ at one point we have a participant that is so comfortable that they have waived their rights and then hears something that says oh, gosh, maybe we shouldn't.

3898             So we will see what they decide.  And we are sorry to do this on your watch, but it certainly won't count against you.

3899             Should anyone decide ‑‑ and I think I am speaking for counsel here.

3900             MS MURPHY:  Yes.

3901             THE CHAIRPERSON:  Should anyone decide that they want to add anything further say in writing, obviously all participants will have an opportunity to review it and to respond to it.

3902             MS MURPHY:  And I apologize for omitting your name.  Seeing that you were presenting after Atlantic, I assumed that you would exercise your right.

3903             MR. EDDY:  I appreciate that; thank you.

3904             MR. BARKER:  We were feeling very left out.

‑‑‑ Laughter / Rires

3905             THE CHAIRPERSON:  Well, we certainly don't want that.  We are going to have loot bags at the end of this for everyone.  That is going to be a new policy and we are going to bring it in soon.  No one will go home without a treat.

3906             Are you ready to proceed for your Phase IV presentation?

3907             MR. EDDY:  We are.  Thank you, Mr. Chairman.

3908             THE CHAIRPERSON:  Thank you.

REPLY / RÉPLIQUE

3909             MR. EDDY:  Mr. Chairman, again, my name is John Eddy.  With me is Garry Barker, in the event that there are any questions.

3910             We have really only a minor point of clarification which we hope will be helpful, and that arises from the exchange between Commissioner Noël and Acadia with respect to the reference to BBM research.

3911             That BBM research we filed this morning, it is the last page of our opening comments.  That is the updated BBM research that updates the BBM research that was referred to in the Carat expert report that you were referring to, which lists the shares of the relevant participants.  That is now on the record, and that is the only clarification we wish to make, subject of course to any questions you may have.

3912             THE CHAIRPERSON:  Thank you very much.  We have no questions.

3913             MR. EDDY:  Other than that, we would like to echo the sentiments of our fellow broadcasters in expressing our appreciation for your consideration and your attention and the professionalism of your staff.  Thanks.

3914             MR. BARKER:  Just one final note.  I know this is a long process, but I would like to publicly acknowledge, without sucking up to you, Commissioner Noël, for really getting my attention this morning by addressing us in French, because it really got me going.

3915             So thank you.

‑‑‑ Laughter / Rires

3916             MR. EDDY:  If I may, I should thank the intervener who supported our application.  We very much appreciate it and appreciate the time they took to do that.

3917             MR. BARKER:  Merci.

3918             THE CHAIRPERSON:  Thank you.  And any time you want to suck up to us, that's just fine.

‑‑‑ Laughter / Rires

3919             THE CHAIRPERSON:  Perhaps we need just one more very short adjournment.  We will stay in place here.  Counsel and Madame la Secrétaire can caucus with anybody who has had some time to think about their position here, and we will make a final determination about how we are going to go.

3920             We will just adjourn for as long as it takes.

‑‑‑ Upon recessing at 1816 / Suspension à 1816

‑‑‑ Upon resuming at 1820 / Reprise à 1820

3921             THE CHAIRMAN:  Could we come to order, please.  À l'ordre, s'il vous plaît.

3922             I think we have managed to work out our difficulties.  I am under the impression from the discussions between staff and participants that people seem to be at ease now and tranquil with what has gone on.

3923             I do want to remind all participants that we have an enormous record at the end of this proceeding, and a stray remark here or there is unlikely to be the silver bullet that finishes off anyone's ambitions.

3924             I am not trying to put us up as Daniel come to judgment here, or anything, but we are blessed with an incredibly professional and careful staff who keep us on the straight and narrow.  We have an enormous record.  You are seeing just a bit of it there behind you.  We have all of the transcripts and everything that was said here today.  We have some further undertakings that are coming in, which will add information.

3925             I have never seen a situation where a Panel has been swayed by a line here or a line there or a stray sentence, or even a stray five minutes of kind of free flow of thinking.

3926             We will do our best.  We are not perfect, but we will do our best to weigh all of the evidence before us and to come to the best decision we can.  I think you can at least remain confident that we will not base our decision on any two or three‑minute perhaps bit of process that might have crossed a boundary line between Phase II and Phase IV, which I think the uninitiated can be forgiven for not seeing the fence line so perfectly.

3927             Madame la Secrétaire.

3928             THE SECRETARY:  Thank you, Mr. Chairman.

3929             I would just like to say that we have completed consideration of Items 5 to 8 on the agenda.  Before we conclude the hearing, I would like to indicate that there are a number of non‑appearing applications on the agenda of this public hearing.

3930             Interventions were received on some of those applications.  The Panel will consider these interventions, along with the applications and decisions will be rendered at a later date.

3931             That now completes the agenda of this public hearing.

3932             Thank you, Mr. Chairman.

3933             THE CHAIRPERSON:  Thank you, Madam la Secrétaire.

3934             On behalf of my colleagues, I would like to thank everyone who participated here.  I think everyone was responsive and incredibly professional and clear.  We have learned a lot and the process has been valuable to us.

3935             I want to thank the staff who have worked incredibly hard, including poor Ms Roy who is hidden in the back but has been helpful to you, as well as to us.  Of course, I want to thank the kind citizens of Charlottetown who really opened their town to us and put a welcome sign on the hotel sign.  We have enjoyed ourselves and the beautiful weather that they arranged for us.  It is obvious why they are a tourist destination of choice for so many North Americans and people around the world.

3936             I think with those words, that brings this process to an end.  I declare this meeting of the CRTC adjourned and at an end.

3937             Thank you very much.

‑‑‑ Whereupon the hearing concluded at 1823 /

    L'audience est terminée à 1823

 

 

 

 

 

  

 

                      REPORTERS

 

 

 

                         

 

____________________      ____________________

Richard Johansson            Kristin Johansson

 

 

 

 

____________________      ____________________

Jean Desaulniers          Fiona Potvin

 

 

                         

                         

____________________      ____________________

Susan Villeneuve          Johanne Morin

 

     

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