TRANSCRIPT OF PROCEEDINGS BEFORE

             THE CANADIAN RADIO‑TELEVISION AND

               TELECOMMUNICATIONS COMMISSION

             TRANSCRIPTION DES AUDIENCES DEVANT

              LE CONSEIL DE LA RADIODIFFUSION

           ET DES TÉLÉCOMMUNICATIONS CANADIENNES

                      SUBJECT / SUJET:

Various broadcasting applications further to calls for

applications for licences to carry on radio programming

undertakings to serve Chilliwack and Vancouver, British Columbia /

Plusieurs demandes en radiodiffusion suite aux appels de demandes

de licence de radiodiffusion visant l'exploitation d'une

entreprise de programmation de radio pour desservir Chilliwack et

Vancouver (Colombie-Britannique)

HELD AT:                              TENUE À:

The Empire Landmark                   The Empire Landmark

1400 Robson Street                    1400, rue Robson

Vancouver, B.C.                       Vancouver (C.-B.)

February 27, 2008                     Le 27 février 2008

Transcripts

In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

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

and staff attending the public hearings, and the Table of

Contents.

However, the aforementioned publication is the recorded

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

either of the official languages, depending on the language

spoken by the participant at the public hearing.

Transcription

Afin de rencontrer les exigences de la Loi sur les langues

officielles, les procès‑verbaux pour le Conseil seront

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

membres et du personnel du CRTC participant à l'audience

publique ainsi que la table des matières.

Toutefois, la publication susmentionnée est un compte rendu

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

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

officielles, compte tenu de la langue utilisée par le

participant à l'audience publique.

               Canadian Radio‑television and

               Telecommunications Commission

            Conseil de la radiodiffusion et des

               télécommunications canadiennes

                 Transcript / Transcription

Various broadcasting applications further to calls for

applications for licences to carry on radio programming

undertakings to serve Chilliwack and Vancouver, British Columbia /

Plusieurs demandes en radiodiffusion suite aux appels de demandes

de licence de radiodiffusion visant l'exploitation d'une

entreprise de programmation de radio pour desservir Chilliwack et

Vancouver (Colombie-Britannique)

BEFORE / DEVANT:

Helen del Val                     Chairperson / Présidente

Rita Cugini                       Commissioner / Conseillère

Elizabeth Duncan                  Commissioner / Conseillère

Peter Menzies                     Commissioner / Conseiller

Ronald Williams                   Commissioner / Conseiller

ALSO PRESENT / AUSSI PRÉSENTS:

Jade Roy                          Secretary / Secretaire

Joe Aguiar                        Hearing Manager /

                                  Gérant de l'audience

Carolyn Pinsky                    Legal Counsel /

                                  Conseillère juridique

HELD AT:                          TENUE À:

The Empire Landmark               The Empire Landmark

1400 Robson Street                1400, rue Robson

Vancouver, B.C.                   Vancouver (C.-B.)

February 27, 2008                 Le 27 février 2008

- iv -

           TABLE DES MATIÈRES / TABLE OF CONTENTS

                                                 PAGE / PARA

PHASE I (Cont.)

PRESENTATION BY / PRÉSENTATION PAR:

Nirenderjit Pataria (OBCI)                        649 / 3299

Jim Pattison Broadcast Group Ltd.                 725 / 3822

902890 Alberta Ltd.                               804 / 4274

Canadian Broadcasting Corporation                 854 / 4669

Frank Torres (OBCI)                               922 / 5142

                  Vancouver, B.C. / Vancouver (C.‑B.)

‑‑‑ Upon resuming on Wednesday, February 27, 2008

    at 0838 / L'audience reprend le mercredi 27

    février 2008 à 0838

LISTNUM 1 \l 1 \s 32923292             THE SECRETARY:  We will now begin the hearing.

LISTNUM 1 \l 13293             Madam Chair.

LISTNUM 1 \l 13294             THE CHAIRPERSON:  Good morning.  As you know, today is anti‑bullying day and let the record show that Commissioners Menzies and Williams are actually wearing pink eye shadow.  It's very subtle, but they're there.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 13295             THE SECRETARY:  Thank you.

LISTNUM 1 \l 13296             We will now proceed with Item 12, which is an Application by Nirenderjit Pataria on behalf of a corporation to be incorporated for a licence to operate an English language FM commercial radio programming undertaking in Vancouver.

LISTNUM 1 \l 13297             Please introduce yourself and your colleagues and you will then have 20 minutes for your presentation.

LISTNUM 1 \l 13298             Thank you.

PRESENTATION / PRÉSENTATION

LISTNUM 1 \l 13299             MR. SUNNER:  Thank you.

LISTNUM 1 \l 13300             Addressing the Commissions of the CRTC and the public here in attendance.  Good day and thank you for the opportunity to participate in Canada's broadcasting public process.

LISTNUM 1 \l 13301             We are very excited to propose a world urban dance music format called SKY 104 FM for Vancouver.  My name is Michael Sunner and I am representing for Nirenderjit Pataria, Application for an FM radio licence.

LISTNUM 1 \l 13302             I have been involved in broadcasting, promoting the types of music proposed in this Application for almost 20 years on the radio and television in Vancouver.  My extensive knowledge of the world‑wide music scene and my close association with Vancouver's urban world dance industry qualities me to act as Mrs. Pataria's agent.

LISTNUM 1 \l 13303             First, I will introduce to the Commissions our SKY 104 FM team.  On my right‑hand side, Jason Harmer, Canadian Content Development and Emergent Technology Director.  At the far side, leaving the man out in the middle, is Idris Hudson, SKY's Promotion Executive, and just in between on the front row our beautiful Leanne Bitner, Music Director a.k.a. DJ Leanne, an award‑winning DJ.

LISTNUM 1 \l 13304             Next to me on my left‑hand side is David St. Helene, head of Sales and Marketing with knowledge and proven success in his field.              Just next to Jay is SKY's sustainability advisor, a born environmentalist.

LISTNUM 1 \l 13305             On my far left‑hand side is our music programmer, James Morris, with a passion to promote independent Canadian talent.

LISTNUM 1 \l 13306             On my far ‑‑ behind me on my far left‑hand side is SKY's Radio Treasurer, the Applicant's husband, a.k.a. DJ Goldy.  Next to him is Kiara Hunter, A&R Director, actor, music artist and writer.

LISTNUM 1 \l 13307             And right behind me, Jesse Norsworthy, SKY's Multi‑media Chief, producer of our demo that we are presenting later on.

LISTNUM 1 \l 13308             To my left‑hand side just behind me is Jeff Young, SKY's legal advisor and to the far right‑hand side is Lance Souter, SKY street team leader.

LISTNUM 1 \l 13309             Sitting next to him is Navneet Dhillon, our A&R Director with international social craft, speaking five languages and our Asian music specialist, Phong Lee, with a true taste for the Asian underground sound.

LISTNUM 1 \l 13310             Our team is big.  I'd just like to check if I've said and introduced everybody.

LISTNUM 1 \l 13311             I would like to start the presentation right now after the introduction.

LISTNUM 1 \l 13312             As the Commission and Madam Chair can see, Mrs. Nirenderjit Pataria, the Applicant, is not present here today, she's currently in Asia for an important family wedding that was arranged two years ago.  Mrs. Pataria is a successful Vancouver businesswoman and a native born true Canadian who is committed to supporting this venture and new Canadian music.

LISTNUM 1 \l 13313             I met Nirenderjit over 12 years ago while working with her now husband, Goldy Pataria, in the production of world urban and dance music on Vancouver's 96.1 FM.  Since then I've continued on in my efforts to promote this music and in eight short years Mrs. Pataria has become the owner of a successful financially secure freight company, a true testament of her business skills.

LISTNUM 1 \l 13314             Today the Patarias' passion for music has evolved into this Application, an opportunity to participate in the Canadian broadcasting industry by proposing a format both near to our hearts.

LISTNUM 1 \l 13315             Upon learning of a call for applications for this area, Nirenderjit approached me to lead her SKY 104 FM team, knowing my love for the world of arts, music and entertainment.  Mrs. Pataria put up all the finances for her quest to be successful in her Application.

LISTNUM 1 \l 13316             Since filing, we have obtained an additional $3‑million in financial backing ready to support this initiative.

LISTNUM 1 \l 13317             The proposed music station will cover the spectrum of world urban and dance rhythms.  SKY 104 FM will be a music orientated station with a truly independent attitude, featuring music that is exceedingly popular in the non‑broadcast music scene and which has little or non‑OMNI support or commercial support in Vancouver.

LISTNUM 1 \l 13318             At this time we would like to present to the Commissions and the public here in attendance a video presentation that tells the story of SKY 104 FM.

‑‑‑ Video presentation / présentation vidéo

LISTNUM 1 \l 13319             MR. SUNNER:  Commissioners, as you can see, much care, time and passion has been put into SKY FM's application.

LISTNUM 1 \l 13320             During our preparations for this hearing, and after we had submitted our original application, we were very pleasantly surprised to discover a very high level of support for this proposal in the heart of Vancouver.  We discovered great support, not only from potential listeners, but from the advertising market.

LISTNUM 1 \l 13321             As the Commissioners also know, at intervention time we submitted nearly $5 million worth of financial sponsorship letters.

LISTNUM 1 \l 13322             Our commitment to the CCD goes beyond cash investments, and to discuss briefly some of our highlights in this area, I would like to call on Jay Harmer, our Canadian Content Development Director.

LISTNUM 1 \l 13323             MR. HARMER:  Thank you, Michael.

LISTNUM 1 \l 13324             The music industry is intimidating and appears as a closed loop to emerging artists.  Using technology and innovation, instead of financial clout, we will create self‑sustaining conduits of communication, distribution and exposure.

LISTNUM 1 \l 13325             We commit six minutes per day of advertising time toward programs such as C.A.P.I., creating a potential of up to $100,000 of tour support per year.

LISTNUM 1 \l 13326             This program is designed for any media outlet to contribute to, and we hope it will create a network of national support.

LISTNUM 1 \l 13327             We will submit 20 artist grant applications in our first year, and offer promotional support to management agencies in other cities in exchange for press and contact support for their locality.

LISTNUM 1 \l 13328             SKY 104 FM will provide organizational and promotional support to product artist workshops at high schools, cultural and community centres.

LISTNUM 1 \l 13329             We commit two minutes of programs, such as "Urban Village," to assist schools and community groups to advertise their fundraising efforts, at no fee.

LISTNUM 1 \l 13330             Our contributions for FACTOR, as well as the respective school boards and Music B.C., will provide a total of $150,000 over seven years.  With our projected sales increase of over five times since our initial projections, automatically our CCD contribution will increase correspondingly, to $750,000 over seven years.

LISTNUM 1 \l 13331             Including our C.A.P.I. program, producing a minimum of $700,000 worth of support, this will provide nearly $1.5 million of support for Canadian artists over a seven‑year period.

LISTNUM 1 \l 13332             In a landscape of new distribution technology, we no longer function as one in a series of middlemen.  We are a vehicle to unite musician and music lover, so that they may come together as artist and fan.

LISTNUM 1 \l 13333             More than just content delivery, we are a hub of communities and cultures, and with that comes a great responsibility to go above and beyond conventional practice.

LISTNUM 1 \l 13334             Thank you.

LISTNUM 1 \l 13335             MR. SUNNER:  Thank you, Jay.

LISTNUM 1 \l 13336             I will now ask Dom Repta, SKY 104 FM's Sustainability Director, for a few words on our Green Station Initiative.

LISTNUM 1 \l 13337             MR. REPTA:  Thank you.

LISTNUM 1 \l 13338             SKY 104 FM will be setting a new standard in radio.  We will be the first truly green commercial radio station.

LISTNUM 1 \l 13339             Broadcasting in a new landscape, SKY 104 FM will broadcast with a whole new mindset, an environmentally responsible attitude toward our own operations, while reflecting the demand of Vancouverites as it relates to a green way of doing business.

LISTNUM 1 \l 13340             In essence, the new business must not only behave in a responsible manner toward the environment, it must take part in conveying the message of sustainability.

LISTNUM 1 \l 13341             We have developed a comprehensive sustainability plan with the Green Community endorsement, and we understand our responsibility to implement this plan.

LISTNUM 1 \l 13342             We will be incorporating green messaging in our daily programs, such as "Climate Change Challenges and Opportunities," "The Importance of a Diverse Community," "Sustainable City Living," and our "Green DJ and Artist" program.

LISTNUM 1 \l 13343             Our team has wholeheartedly embraced the culture of being a green radio station and will work beyond "reduce, reuse and recycle" ‑‑ we will be "re‑thinking".

LISTNUM 1 \l 13344             If our application is approved, sustainability will become an integrated part of Vancouver's airwaves.

LISTNUM 1 \l 13345             MR. SUNNER:  Thank you, Dom.

LISTNUM 1 \l 13346             I would like to introduce DJ Leanne Bitner, our Music Director, who will say a few words about our programming and music variety.

LISTNUM 1 \l 13347             MS BITNER:  Thank you.

LISTNUM 1 \l 13348             SKY 104 FM's format is completely unique and diverse, with 74 percent of its daily selection pertaining to urban and dance, and 26 percent to world music.

LISTNUM 1 \l 13349             The world, urban and dance selections all share a common ground as electronic‑based music with an urban beat and feel.

LISTNUM 1 \l 13350             With an aspiring young team of not only knowledgeable, but music‑involved individuals, SKY can explore the depth of these genres and fill the musical void in Vancouver.

LISTNUM 1 \l 13351             Staying cutting edge with exclusive tracks, re‑mixes of popular songs, international hits and less repetition, we will educate and introduce to listeners that new and innovative sound that will set us apart from the rest.

LISTNUM 1 \l 13352             MR. SUNNER:  Thank you, Leanne.

LISTNUM 1 \l 13353             Members of the Commission, Madam Chair, we are a passionate team of future broadcasters with fresh ideas and enthusiasm for this industry, backed by solid business skills, reliable legal and accounting professionals, and an ownership and management structure that will truly commit long‑term to the success of SKY 104 FM as an independent broadcasting service.

LISTNUM 1 \l 13354             Nirenderjit Pataria has built a team dedicated to filling the demand that Vancouver has for fresh music, voices and broadcasting styles, bringing Vancouver's diverse urban audience together, uniting a public of all colours and nationalities.  With an exciting world‑urban‑dance format, SKY 104 FM will support Canadian and independent artists 200 percent.

LISTNUM 1 \l 13355             We now welcome the Commissioners to examine our application.  Thank you.

LISTNUM 1 \l 13356             THE CHAIRPERSON:  Thank you, Mr. Sunner, and your panellists.

LISTNUM 1 \l 13357             I will ask Commissioner Cugini to lead the questions.

LISTNUM 1 \l 13358             COMMISSIONER CUGINI:  Thank you.

LISTNUM 1 \l 13359             Good morning and thank you for your very enthusiastic presentation this morning, not only through your actual oral presentation, but your video as well.

LISTNUM 1 \l 13360             Mr. Sunner, if they haven't given you a job to be an on‑air talent, I think they should.

LISTNUM 1 \l 13361             I have some questions for you regarding your format.  You are right, it is new to the Vancouver market, based on what is currently available.

LISTNUM 1 \l 13362             We know that this demographic, in particular, that you are targeting is getting its music from, maybe, 10 sources other than radio.  What, in your plans, includes attracting these kids back to radio?

LISTNUM 1 \l 13363             How are you going to get them back to listening to radio?

LISTNUM 1 \l 13364             The kind of music that you are proposing, they are hearing it in the dance clubs, they are hearing it on their iPods, they are hearing it on the internet.  What is going to make them listen to your radio station?

LISTNUM 1 \l 13365             MR. SUNNER:  I believe, myself, in the kind of music that we are committed to, through our team's efforts in the city over the last two decades.

LISTNUM 1 \l 13366             This team is an unusual broadcasting team that has been heavily involved in the underground music scene in Vancouver.  Many of these DJs or broadcasters have built up much linkage internationally and in Canada, especially from the underground movements, and not many radio stations will be playing the kind of music that will be presented on SKY 104 FM.

LISTNUM 1 \l 13367             Even looking to the internet, where kids are more geared up to listening and tuning, and not tuning into the commercial FM radio stations in the city, from the responses we have had from the public, the music on our playlist ‑‑ 75 percent of that independent sound has not hit Vancouver, or even Canada's market yet, we believe.

LISTNUM 1 \l 13368             MR. YOUNG:  If I may, I would add that, if you take a look at our presentation, you will see that we have already taken into account a lot of convergence of media and new media methodology, in terms of podcasts and things like that, which actually would drive traffic back to radio.

LISTNUM 1 \l 13369             We are recognizing that the new ways of accessing music are a reality for younger people, but I think there is a way to take all of that via the internet, via podcasts, via those kinds of situations and drive that traffic back to radio.

LISTNUM 1 \l 13370             COMMISSIONER CUGINI:  We keep hearing that with this demographic group, in particular, radio, to them, is like black‑and‑white TV.  They just have no legacy.  They have no loyalty to the medium itself, and you are asking them to change their habits and to listen to radio.

LISTNUM 1 \l 13371             MR. YOUNG:  I think we are proposing to make it exciting, so they won't view it as black‑and‑white TV.  I think that may be why our application is framed the way it is, to say:  Can we, in fact, take what may be perceived that way and put some colour to it.

LISTNUM 1 \l 13372             I think that is what makes it new, unique, and something that our team is very excited about.

LISTNUM 1 \l 13373             MR. SUNNER:  I believe that James Morris would have a few words about the music and bringing the new audience, as you are saying, that demographic ‑‑ the kids are really tuning into that.

LISTNUM 1 \l 13374             James Morris has been involved in the underground music scene here, and I think he has many ways of introducing Vancouver youth, especially through the schoolings and the DJ‑ing process of these army camps.

LISTNUM 1 \l 13375             James, would you like to say a few words?

LISTNUM 1 \l 13376             MR. MORRIS:  Yes, thank you.

LISTNUM 1 \l 13377             Not only is our team made up of all of these young individuals who are involved in the music industry, the mix shows ‑‑ and the way we are involved with the community, this is just another way of keeping in touch with youth.

LISTNUM 1 \l 13378             I am an artist, as well.  I have been involved with the music industry for many years.  There is one thing about being in clubs ‑‑ doing performances in clubs is one thing, but another thing is to reach those kids who are still in school.

LISTNUM 1 \l 13379             New generations just keep coming and coming, and as technology changes, you still have to ‑‑

LISTNUM 1 \l 13380             As a musician, it is hard to sell CDs.  Now we are looking at MP3s and all of this new type of technology.

LISTNUM 1 \l 13381             So still trying to get the attention of the youth is very important, and these mixed shows, and these DJs that are still involved in the community as DJs in the clubs ‑‑ this is how we can attract them back.

LISTNUM 1 \l 13382             If you listen to radio nowadays, there is not a lot of live mixing, live shows, and it's the characters and the on‑air personalities that are on these shows that are the ones the kids look up to, or respect, or follow in the communities.  These are the people who are bringing them back ‑‑ or, in our case, we want to bring them back to radio.

LISTNUM 1 \l 13383             And they will follow us because we are of that genre and we are in that community, in that age category.

LISTNUM 1 \l 13384             COMMISSIONER CUGINI:  It sounds to me like you are going to create an all‑ages dance club on the radio.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 13385             COMMISSIONER CUGINI:  I am looking at your playlist.  I am not the target demo, but I do recognize some of the names on the playlist.

LISTNUM 1 \l 13386             Have you been able to do a comparative analysis in terms of what is duplicated in the market currently, both from an artist point of view and from the tracks?

LISTNUM 1 \l 13387             In other words, how much of your proposed music is currently being played in the market, both in terms of tracks and artists?

LISTNUM 1 \l 13388             MR. SUNNER:  James, would you like to answer that question?

LISTNUM 1 \l 13389             MR. MORRIS:  Yes.

LISTNUM 1 \l 13390             Could you repeat the question one more time, please?

LISTNUM 1 \l 13391             COMMISSIONER CUGINI:  I am looking at artists like ‑‑ you have Holly Cole, Jacksoul, Rihanna, The Chemical Brothers, Massive Attack, Sean Paul ‑‑ those are just some examples of artists that are on your playlist, which I could see, also, probably, being played ‑‑ I am not from Vancouver, but some of the radio stations in Vancouver probably play these same artists.

LISTNUM 1 \l 13392             MR. MORRIS:  The difference with us is ‑‑ as you can see, this is just a two‑day programming schedule.

LISTNUM 1 \l 13393             COMMISSIONER CUGINI:  I realize it is a sample.

LISTNUM 1 \l 13394             MR. MORRIS:  Our music range is thousands and thousands.

LISTNUM 1 \l 13395             And the type of music that we will be playing, it is not necessarily your top 20 or top 30 songs that you see on the charts that these radio stations select, because they are scared to try these other songs.

LISTNUM 1 \l 13396             But, say, an artist on a major scale, who is very popular, their music ‑‑ they might have a single that all of these billboard charts and all of these major radio stations are playing, but they are not playing other singles that the clubs are playing, or, say, "MuchVIBE" is playing, rather than "MuchMusic" or BET or MTV.  These are the types of songs ‑‑ they are specialty songs or re‑mixes.  They are songs like this that do not reach these airwaves.

LISTNUM 1 \l 13397             That is not to mention the Canadian artists and the independent artists.  These are artists who don't have that platform where their music is being exposed.  Let's say that they have 20,000 mixed tapes put out throughout the years and they have ‑‑ they have successful touring and all this other ‑‑ avenues that they are successful on, but radio was that one platform that they are not successful on yet.

LISTNUM 1 \l 13398             So they are popular, just not popular on the charts.  So that kind of music is the music we will be bringing out, as well as the remixes of the popular or crossover hits, certain things like that.  So you might see a song that might be on The Beat that might be with us but it will be remix if it's on our station or it could be that popular that we have to play it.

LISTNUM 1 \l 13399             So if that answers your question right there?

LISTNUM 1 \l 13400             MEMBER CUGINI:  Yes, it does.

LISTNUM 1 \l 13401             MR. SUNNER:  Also, I would just like to add onto that, that world music has changed so much that when you look at Nelly Furtado or Sean Paul there is always a Bhangra mix coming out of Canada or the U.K. and that might be put on the album or on the vinyl itself but it never really receives any airplay on an FM radio station here in Vancouver.

LISTNUM 1 \l 13402             And also the same goes for the Top 40 when it comes to a different kind of mixes, whether it's a popular song, an electronica version or a reggae version.  Sometimes even in the retail outlets you can't really ‑‑ the public can't really go there to buy those records like in the big stores.  And there is so many.  There is hundreds and hundreds of vinyl stores in the city.  The DJ pool in Vancouver is really, really hot.

LISTNUM 1 \l 13403             We believe SKY FM will bring that sound to the public through radio airwaves because, really, I believe the public doesn't even know that these kinds of mixes are out there.  And it really ‑‑ as a world beat kind of vibe that's where we bring it all together, right?  That when the youth in this town will hear that Nelly Furtado's Bhangra mix or Sean Paul's electronica mix it sorts of brings the ravers, the urban and the new younger immigrants all together, you know, through music and SKY 104 FM.

LISTNUM 1 \l 13404             This is unique.  Sometimes it might be hard for me to actually explain.  Hopefully, the video demo did answer that question.

LISTNUM 1 \l 13405             MEMBER CUGINI:  The context in which we ask this question is truly one of truly trying to understand the format and how it will bring musical diversity to the market.  And it's not just this market when we do this analysis.  We do this across the country whenever we are hearing new radio applications.

LISTNUM 1 \l 13406             If we take the Nelly Furtado example, and she has got a Bhangra beat in her next track and that's going to be played on this radio station and won't necessarily be played on The Beat, but as a commercial FM radio licensee you are not tied to your format.  And down the road after licensed, six months down the road, you may decide you know what, that Nelly Furtado Bhangra beat ‑‑ track ‑‑ doesn't work so well.  We are going to go back and we are just going to play Nelly Furtado no matter what she puts out and, therefore, not being a new sound to the market because you are not tied to format.  So we just want to make sure that what you are proposing will stay as true to the licence as you possibly can, recognizing that we do not licence formats.

LISTNUM 1 \l 13407             So it really is critical for us to understand what the differences are between what you are proposing and what is currently available in the market.  So it's in that context.

LISTNUM 1 \l 13408             MR. SUNNER:  If I can just say this, our music director, Leanne Bitner, is award winning.  We chose her because of her taste for the music of having an international sound that brings all mainstream and the underground together with a selection.

LISTNUM 1 \l 13409             Leanne, would you like to say something?

LISTNUM 1 \l 13410             MS BITNER:  Basically, because on a weekly basis there are thousands of people out there listening to say dance music, there are songs that are number one in the dance music community but nowhere heard on radio.  So we want to break these tracks.  We really want to be the innovators in the city, and there has been incredible response for it.

LISTNUM 1 \l 13411             So definitely we will be playing, you know ‑‑ yes, we may play some remixes of recognizable artists but we are breaking new artists and new DJs.  That definitely is our mission.

LISTNUM 1 \l 13412             MR. MORRIS:  If I can add to that, like we were saying, the way we are going to be different is the fact that we are not going to be dabbling into picking the top songs in the world or urban.  We are actually going into the depths of these genres and really playing world, urban and dance.  We are not playing alternative crossover hits, stuff like that or you know the top pop song, top hip hop songs.  We are digging deeper than that.

LISTNUM 1 \l 13413             If the Nelly Furtado Bhangra song does not work like you said, it doesn't stop there.  There is tons of, you know, unheard popular songs from other artists that you or the public would not even hear of but you would hear in the clubs or on American stations or ‑‑

LISTNUM 1 \l 13414             MEMBER CUGINI:  Are you saying I don't go to clubs?  Just kidding.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 13415             MR. MORRIS:  Yes, so ‑‑

‑‑‑ Laughter / Rires

LISTNUM 1 \l 13416             MEMBER CUGINI:  You are right.

LISTNUM 1 \l 13417             MR. MORRIS:  But you know what I mean.  We are basically going to the depths of these genres.

LISTNUM 1 \l 13418             And especially with Canadian music; us being you know, some people artists or being involved with the music industry that brings that passion even more into actually wanting to help these artists.  Because you know being an artist, getting your music played on radio is very hard and it's a struggle and probably discouraging for a lot of artists over the years and over years that they tried.  So there has to be another opportunity for these artists.

LISTNUM 1 \l 13419             And we don't have to pick the top five artists, Canadian artists that are doing well.  We should be helping those ones that are doing well but not on radio.

LISTNUM 1 \l 13420             MR. YOUNG:  Madam Commissioner, I would also add, I think, reflecting on your earlier comment about loyalty and the younger demographic, that perhaps one of the realities is that the lack of loyalty, maybe they don't feel that someone is understanding what they are really experiencing in terms of the music they listen to.  I think what SKY is trying to do is say, you know what, we are the real thing.  We understand what you want.  We understand what is really going on in your clubs and because you are not getting it on the radio we are going to give it to you.

LISTNUM 1 \l 13421             And that's part of our submission as a new voice that's unique and, I would submit, that that would be exactly why we think this format will succeed in a very unique way.

LISTNUM 1 \l 13422             MEMBER CUGINI:  Thank you very much for that.  I think we do have a better understanding now of your format and what it is that you hope to accomplish with this format.

LISTNUM 1 \l 13423             I do have a very detailed question, however.

LISTNUM 1 \l 13424             Today, Ms Bitner, in your presentation you very succinctly said 74 percent of the daily selection will be urban and dance; 26 percent to world music.  Therefore, 74 percent is Category 2 music and 26 percent is Category 3?

LISTNUM 1 \l 13425             MS BITNER:  Absolutely.

LISTNUM 1 \l 13426             MEMBER CUGINI:  Okay.  I needed to get that clarified because ‑‑

LISTNUM 1 \l 13427             MS BITNER:  Absolutely, yes.

LISTNUM 1 \l 13428             MEMBER CUGINI:  ‑‑ in response of deficiencies dated the 23rd of November the applicant said 100 percent of our music selections would be considered Category 3.  Then on November 30th the response was that all of the music falls into Category 2, and then later in that same letter you say that 74 percent would be Category 2 and 26 percent Category 3.

LISTNUM 1 \l 13429             MS BITNER:  The last ‑‑

LISTNUM 1 \l 13430             MEMBER CUGINI:  So I needed that confusion to be cleared up on the record.

LISTNUM 1 \l 13431             MS BITNER:  Yes.

LISTNUM 1 \l 13432             MEMBER CUGINI:  It's definitely 74 and 26?

LISTNUM 1 \l 13433             MS BITNER:  Absolutely.

LISTNUM 1 \l 13434             MEMBER CUGINI:  Mr. Sunner.

LISTNUM 1 \l 13435             MR. SUNNER:  If I can actually touch on that, that was an actually genuine mistake when ‑‑ the answer for the 100 percent on the Category 3 and we rectified that in our deficiencies.

LISTNUM 1 \l 13436             And on the 23rd ‑‑ on the 30th I believe of the deficiencies, there was two sheets submitted and the one that stated 74, it was sort of hard to get that category mix right.

LISTNUM 1 \l 13437             So when I was speaking to Michael Craig he suggested that we send in a two‑day playlist and it was sort of really ‑‑ even these playlists that we did submit in such a short time we tried to explain it by dropping the Category 2 and 3 on the right‑hand side of the playlist to try and just clear that up.

LISTNUM 1 \l 13438             MEMBER CUGINI:  Okay, thank you.

LISTNUM 1 \l 13439             If the Commission deems it necessary would you accept a condition of licence that caps your Category 3 music at 26 percent of your playlist?

LISTNUM 1 \l 13440             MR. SUNNER:  We would.

LISTNUM 1 \l 13441             MEMBER CUGINI:  Okay, thank you.

LISTNUM 1 \l 13442             Will any of the music ‑‑ will any of the world music be in languages other than English or French?

LISTNUM 1 \l 13443             MR. SUNNER:  Of course.  Music ‑‑ African music, music from Asia.  As you know, there is a massive Asian population in Vancouver which is very underserved.  Even on the Asian radio stations here they are lacking the same as all the multicultural radio stations of having a radio station where that youth can go to, to get into that underground demographic.  That's why Phong Lee, our Asian music specialist ‑‑ we are really committed into bringing a right mix, however long it takes to find the right sound.

LISTNUM 1 \l 13444             We have a different radio operation as well when it comes to the music.  We have a programmer, a selector and specialists from each department.  It's quite exciting actually being here in Vancouver, living here for nearly 20 years now, to see how the city has changed and how the music really hasn't to a certain degree.  And we felt that there was a massive void in this market.  And if you do actually look around at this beautiful team here today you will see that this is Vancouver as it stands and we will stand and deliver a very underground sound for the Asian massive here, definitely.

LISTNUM 1 \l 13445             MR. MORRIS:  I just wanted to actually add to that ‑‑ sorry.

LISTNUM 1 \l 13446             MEMBER CUGINI:  M'hm.

LISTNUM 1 \l 13447             MR. MORRIS:  Not only is the ‑‑ you were asking if the music ‑‑ the language will be in all ‑‑ in English or in foreign languages.  Of course, some music, like there is reggae tone and Asian hip hop that is spoken in English by these artists.  So it could vary, you know, depending on the song, right?

LISTNUM 1 \l 13448             MR. SUNNER:  So also a lot of mixes that are being produced right now, on a four‑minute song you will get two minutes of sort of Asian language and then two minutes of English on it.  There is a massive amount of music being produced like that.  That's what we would decidedly go for, the split of English and whatever other language, like French and English, even German and English, Bhangra and English.  There is so many mixes now.  That's actually ‑‑ that's the thing that's bringing the youth of the world together.

LISTNUM 1 \l 13449             MR. YOUNG:  I do want to interject and say how much with the issue of different languages that things have changed.  Just as a comment this is my 20th year of call at the bar.  Pretty much all my legal career has been in entertainment and media and when we first dealt with language issues at one point there was sort of this feeling that it's language A or language B.

LISTNUM 1 \l 13450             And what I have noticed in the last couple of years, having a 15‑year old daughter at home that constantly has her computer on with music, is in fact that there is just a tremendous amount of music that has mixed language.  I'm thinking pretty much on a nightly basis I'm hearing songs that are predominantly English for same very, very interesting  interjections of Asian language mixes and things like that.

LISTNUM 1 \l 13451             And part of the diversity of Vancouver, I think, is reflected in our format because of the fact that we are recognizing that in the world scene.

LISTNUM 1 \l 13452             MR. SUNNER:  If I could just jump in there?

LISTNUM 1 \l 13453             In 1997 on the world music station here, Fairchild Radio, I produced and hosted a show that was a two‑hour show that actually brought that mix into Vancouver for the first time.  It was the first Indo‑Canadian remix show in Canada and every song that we played had half the languages where they were in Hindi or Punjabi and half of them was from all over the other parts of the world.

LISTNUM 1 \l 13454             There is actually music being produced now with English as a third language where Asian people from, say, Japan and Bollywood are working together with artists over in North America.  So the new thing is the three‑slice that SKY FM would be bringing to the radio as well.

LISTNUM 1 \l 13455             MEMBER CUGINI:  Will any of the spoken word be in languages other than English and French?

LISTNUM 1 \l 13456             MR. SUNNER:  Not at all.  Everything will be spoken in English.

LISTNUM 1 \l 13457             MEMBER CUGINI:  Do you ‑‑ based on that description of the world music what do you believe will be your impact on the two ethnic South Asian radio stations in the market currently?

LISTNUM 1 \l 13458             MR. SUNNER:  Well, I have seen the progress of ethnic radio here, like being here for 20 years.  There would be no impact into that as the mixes that would be played on SKY 104 FM would not be played on those.

LISTNUM 1 \l 13459             The demographic, the audience from those communities, basically young Canadian‑born are not really into the traditional and the folk music which, as like world beat, we at SKY 104 FM are not playing traditional and folk music.  We are more in the remix market.

LISTNUM 1 \l 13460             So the same thing goes for all the ethnic radio stations that we are away from that tradition and folk, and that's where we feel there is a niche there to really explore, as we did in 1997 that brought me into Radioland and how successful that show became.  It was mind blowing.

LISTNUM 1 \l 13461             MEMBER CUGINI:  Onto the area of spoken word programming, you are proposing a total of 2.5 hours per broadcast week of spoken word of which approximately one hour is news; is that correct, on a weekly basis?

LISTNUM 1 \l 13462             MR. SUNNER:  On a weekly basis we do have 60 minutes of news.

LISTNUM 1 \l 13463             MEMBER CUGINI:  Does that one hour of news include surveillance material; weather, traffic, sports?

LISTNUM 1 \l 13464             MR. SUNNER:  No.

LISTNUM 1 \l 13465             MEMBER CUGINI:  Okay.  We will take two and a half hours per week spoken word minus one hour of news.  How much surveillance material will you be broadcasting on a weekly basis?  You have got an hour and a half left.

LISTNUM 1 \l 13466             MR. SUNNER:  Spoken word ‑‑ as far as spoken word goes, if I remember correctly, we are at about ‑‑ just under 200 minutes of spoken word counting the weather, traffic and news and also our community billboard notice.

LISTNUM 1 \l 13467             MEMBER CUGINI:  And that's your total?

LISTNUM 1 \l 13468             MR. SUNNER:  That's right.  That also includes the urban village.

LISTNUM 1 \l 13469             MEMBER CUGINI:  So to that 200 minutes I add 60 minutes of news?

LISTNUM 1 \l 13470             MR. SUNNER:  No, no.

LISTNUM 1 \l 13471             MS BITNER:  Yes.  Okay, actually we ‑‑

LISTNUM 1 \l 13472             MEMBER CUGINI:  Do you want to confer?

LISTNUM 1 \l 13473             MS BITNER:  I would, yes, absolutely.

LISTNUM 1 \l 13474             MR. SUNNER:  Just one second.  Let me ‑‑

LISTNUM 1 \l 13475             MS BITNER:  240 minutes of traffic and weather per week, 45 minutes of community notice board.

LISTNUM 1 \l 13476             Let's see here.  Our news is 60 minutes per week.

LISTNUM 1 \l 13477             MEMBER CUGINI:  Okay.

LISTNUM 1 \l 13478             MS BITNER:  And then also we have our urban village program which is 30 minutes.  Let's see, 150 minutes per week, half of that; 75 minutes per week which is ‑‑

LISTNUM 1 \l 13479             MEMBER CUGINI:  I'm sorry, is what?

LISTNUM 1 \l 13480             MS BITNER:  Sorry.  We have got our urban village program which is 30 minutes per day, but half of that program is actually music and half of it is spoken word.  So that's 75 minutes per week at a total of 420 minutes.

LISTNUM 1 \l 13481             MEMBER CUGINI:  And what about unstructured spoken word programming, DJ banter?

LISTNUM 1 \l 13482             MS BITNER:  Oh, was that included?  That is definitely not included.

LISTNUM 1 \l 13483             MEMBER CUGINI:  That's not included in the 420?

LISTNUM 1 \l 13484             MS BITNER:  No, it is not.

LISTNUM 1 \l 13485             MEMBER CUGINI:  Perhaps you could provide us with a chart outlining what you have just given us plus unstructured spoken word for a grand total.  And our legal counsel will tell you by when you have to do that.

LISTNUM 1 \l 13486             MS BITNER:  Thank you very much, absolutely.

LISTNUM 1 \l 13487             MEMBER CUGINI:  I am curious, though, as to why you believe only one hour of news per week is sufficient for this target demo.

LISTNUM 1 \l 13488             MR. SUNNER:  Well, we ‑‑ when we put the application together our passion is more about the music and we fully believe in being a music‑oriented radio station.  We made the choice that there is many radio stations here in the city that have large news crews which also cost a lot of money to run that.  If you are going to do news you really have to do it big time.

LISTNUM 1 \l 13489             We made the choice to deal with a smaller news segment that didn't really touch upon too much of the bad things that are broadcasted.  Unless it is something really important, most of our news will be about the world of arts and culture, lifestyles and the environment.

LISTNUM 1 \l 13490             MEMBER CUGINI:  So you are not going to provide, I don't know, the headline news of the news story of the day?  The budget, you are not going to cover the budget for this demo?  Not that a 12‑year old might be that interested.

LISTNUM 1 \l 13491             MR. SUNNER:  Well, our demographics, you know, we believe are more interested in other different kinds of news.  Unless the Pope gets shot, you know.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 13492             MR. SUNNER:  Then, you know, something that's major.  And we are local.  We are local news.  We are more talking about Granville Street and the issues, the problems in Vancouver as a whole, that kind of news with a different twist.

LISTNUM 1 \l 13493             Like I said, our news is just five days, just in the morning times.

LISTNUM 1 \l 13494             MR. YOUNG:  I think that again goes to the reality that our demo target, demographic is being recognized as being both internet savvy, television savvy, and otherwise.  And I think looking at the realities of the other forms of media that they consume has led to that result.

LISTNUM 1 \l 13495             MEMBER CUGINI:  But I can't help but feel that therefore ‑‑ I mean you are providing, you know, community listings or club listings as opposed to hard news.  Like you are providing community news to this target demo as opposed to news they can use.  Is that correct?  Does that ‑‑ because I do understand from your application that you are saying:

"...a more positive and social facet to our spoken word programming where activities, events and cultural issues take precedence over what is traditionally described as news."  (As read)

LISTNUM 1 \l 13496             MEMBER CUGINI:  I mean are you going to tell your demo when for some reason schools are closed or school buses aren't in operation?  Is there going to be news they can use?

LISTNUM 1 \l 13497             MR. SUNNER:  Of course, if you are talking about from the application it gives the information of just what you said.  Of course when we made this application, once again going back into the news, we haven't projected a big news team, right.

LISTNUM 1 \l 13498             So the important day‑to‑day services communicating with Vancouver's public, there will be awareness and news will be delivered about some things that are important, especially with the schooling because of the demographics.

LISTNUM 1 \l 13499             MEMBER CUGINI:  And because you brought up the issue of the news team it probably is in your application.  I can't find it right now but can you go over ‑‑ can you go through your staffing list for me; in particular how many people will be employed in the newsroom, how many programming people, how many on air people within that programming element?

LISTNUM 1 \l 13500             MR. SUNNER:  It really hasn't been 100 percent finalized in the application.  We believe that we can run this operation with about ‑‑ under 20 people for a budget of about half a million dollars.

LISTNUM 1 \l 13501             MEMBER CUGINI:  You are anticipating my next line of questioning because it is something that I looked at in terms of your financial and did notice that there is quite a sizeable amount on that payroll line.  Payroll and benefits for the first year I think it is $583,000?

LISTNUM 1 \l 13502             MR. SUNNER:  Yes, I believe that's it.

LISTNUM 1 \l 13503             MEMBER CUGINI:  That's for the 20 people?

LISTNUM 1 \l 13504             MR. SUNNER:  Yes, yes.

LISTNUM 1 \l 13505             MEMBER CUGINI:  And yet your programming expenses are relatively low.  It's only $29,000.  What are you including in that line item?

LISTNUM 1 \l 13506             MR. SUNNER:  The programming expenses of ‑‑ I have to check, just to double check.  But when it says programming that was just the cost, costings for the people on air.  Am I understanding that?

LISTNUM 1 \l 13507             MEMBER CUGINI:  They are your financials.

LISTNUM 1 \l 13508             MR. SUNNER:  Okay.

LISTNUM 1 \l 13509             MEMBER CUGINI:  So I need to know what you included in that.

LISTNUM 1 \l 13510             MR. SUNNER:  Jeff, could you look into that, please?  You are more familiar with the figures.

LISTNUM 1 \l 13511             MR. YOUNG:  I actually believe that the programming is mainly to do with licensing fees and ‑‑ in that direction, and the staffing side of it is to deal with all, basically human resources‑type costs.

LISTNUM 1 \l 13512             MEMBER CUGINI:  And that's all in the payroll and benefits?

LISTNUM 1 \l 13513             MR. YOUNG:  Correct.

LISTNUM 1 \l 13514             MEMBER CUGINI:  And administration in general does that include staff members?

LISTNUM 1 \l 13515             MR. YOUNG:  I am just looking at the ‑‑ are you referring actually to the Excel spreadsheet that was filed supplementary or on the face of the application?

LISTNUM 1 \l 13516             MEMBER CUGINI:  I'm looking at your financial projections and assumptions.

LISTNUM 1 \l 13517             MR. YOUNG:  Okay.

LISTNUM 1 \l 13518             MEMBER CUGINI:  Which is 7.1, I believe.

LISTNUM 1 \l 13519             MR. YOUNG:  Okay.

LISTNUM 1 \l 13520             MEMBER CUGINI:  In the application.

‑‑‑ Pause

LISTNUM 1 \l 13521             MR. YOUNG:  Oh, here we are.

LISTNUM 1 \l 13522             Programming refers to statutory licences.

LISTNUM 1 \l 13523             MEMBER CUGINI:  Okay.

LISTNUM 1 \l 13524             MR. YOUNG:  Administration in general, payroll and benefits; payroll and benefits would deal with human resources matters.  Administration in general will deal with office expenses and related things as such, so everything from rent to photocopy paper to those types of things.

LISTNUM 1 \l 13525             MEMBER CUGINI:  So everything above the payroll and benefits line does not include people?

LISTNUM 1 \l 13526             MR. YOUNG:  Correct.

LISTNUM 1 \l 13527             MEMBER CUGINI:  Okay.

LISTNUM 1 \l 13528             Now, staying with the economic analysis of your application, I mean, you guys really do present a very positive picture going forward.  You have a positive PBIT in the first year.  And that's a good thing.  I am not saying that that's a bad thing.

LISTNUM 1 \l 13529             And between years four and seven your average PBIT is 52.3 percent while the average for the Vancouver market is 24.1.  What makes you such savvy business people?

LISTNUM 1 \l 13530             MR. SUNNER:  We believe in running an operation cost effective.

LISTNUM 1 \l 13531             And maybe, Jeff, you could add to that?

LISTNUM 1 \l 13532             MR. YOUNG:  I think the optimism is balanced with the reality that we have secured a significant amount of financial backing.  In the event that it doesn't happen we are covered, in essence.

LISTNUM 1 \l 13533             And so we have looked at the revenues and projections on the basis that there is indeed a significant amount of optimism in terms of the efficiency that the station wants to run.  It is being run with what is viewed as somewhat of a thin, you know, infrastructure compared to a lot of other stations.  And recognizing that it's a new team, we have I guess got the cushion in case these figures don't materialize.

LISTNUM 1 \l 13534             MEMBER CUGINI:  Because you will ‑‑ you have access to additional financing?

LISTNUM 1 \l 13535             MR. YOUNG:  I'm sorry?

LISTNUM 1 \l 13536             MEMBER CUGINI:  Because you will have access to additional financing?

LISTNUM 1 \l 13537             MR. YOUNG:  Yes, correct.

LISTNUM 1 \l 13538             MEMBER CUGINI:  Your target audience, however, is not typically that attractive to advertisers.  Do you wish to confirm or deny?

‑‑‑ Laughter / Rires

LISTNUM 1 \l 13539             MR. YOUNG:  I'm actually quite comfortable in denying that.  I think it has everything to do with how you reach that target market in terms of the way media is converging.

LISTNUM 1 \l 13540             And I would very much look at major, major corporations in the world, particularly in the new media area, Yahoo, Google, My Space, you know, on and on, and some of the new electronics manufacturers and people like that that have zeroed in completely on that market.  I think specifically of the number of kids that were lined up in front of electronics stores last Christmas when I was lining up with my own daughter.  And I really ‑‑

LISTNUM 1 \l 13541             MEMBER CUGINI:  They are all going after Guitar Hero ‑‑

LISTNUM 1 \l 13542             MR. YOUNG:  And the like, but you know there is a lot of interesting cross promotion in that area, for example, when you are negotiating with videogame manufacturer, when you are negotiating with people who are dealing with that media.

LISTNUM 1 \l 13543             And that's exactly what I mean.  We want to build business relationships with those people to drive that youth market back to radio to listen.  And I think that's an approach that is somewhat different.

LISTNUM 1 \l 13544             It's not just about going to traditional advertisers which obviously we are not going to turn down, but it's also to look for those new areas of, you know, cross promotion.  A lot of interesting people who are willing to look at that type of relationship is where we are after.

LISTNUM 1 \l 13545             MEMBER CUGINI:  Have you had preliminary discussions with advertisers in the market to gauge their interest?

LISTNUM 1 \l 13546             MR. YOUNG:  There is a significant number of ‑‑ like I think somewhat ‑‑ in fact I have them here, photocopies of very ‑‑ I think about 50 letters from different advertisers, all talking about estimated monies that they would you know consider giving to the station for advertising revenues and such.

LISTNUM 1 \l 13547             And so I think our projections, as optimistic as they were, were not pie in the sky.  They were based on things like the letters that I have in my file.

LISTNUM 1 \l 13548             MEMBER CUGINI:  And that's the reference that Mr. Sunner made in your oral presentation.

LISTNUM 1 \l 13549             MR. SUNNER:  Yes, if I could just add to that?

LISTNUM 1 \l 13550             Being involved, myself here in Vancouver in radio and television, when you talk about our demographics that it's not that big, I sort of seem to disagree.  But this is a custom‑made kind of a crew here that already has built up lots of ‑‑ hundreds of thousands, millions some of us here that have collected over the years from local sponsorship.

LISTNUM 1 \l 13551             And I think the better answer might come from actually David who has done a lot of research on the sales and marketing side of things in Vancouver.

LISTNUM 1 \l 13552             MR. ST. HELENE:  Good morning.  Thank you.

LISTNUM 1 \l 13553             We have definitely done the research and the research that was conducted prior to the application, and as part of the application indicates steadily from a research one, information that was provided in the application that that demographic does continue to grow steadily, that the 12 to 34; 18 to 24 which is really our focus target segment, does continue to grow.  And being a non‑traditional broadcaster we are targeting non‑traditional advertisers as well, that we are providing a target group that a lot of advertisers do have a difficult time reaching.

LISTNUM 1 \l 13554             The comment that you made with regards to this is one of those ones that advertisers are sometimes wary of in how do you tap into, it's because traditional advertising methods don't reach them.  The message that's being sent isn't being heard and it's sometimes due to a lack of understanding of the market.

LISTNUM 1 \l 13555             The opportunity that we provide to non‑traditional advertisers is a mixed media presentation as well.  We are not just a radio broadcasting company.  We're an online presentation as well, that we do look at the communities that exist on that side of the marketplace as well, and that companies moving forward can't just look at things in isolation when they go to sending their message to those potential target groups.

LISTNUM 1 \l 13556             You're exactly right, these people are receiving their radio ‑‑ their broadcast music on a multitude of different signals, be it PodCast, be it iPod, be it download, be it even illegal download and how advertisers can now tap into that market is not the same way.

LISTNUM 1 \l 13557             So, the success rates that they've seen traditionally now have to adjust, the companies need to grow and evolve and we're definitely providing a pipeline for that.

LISTNUM 1 \l 13558             MEMBER CUGINI:  And you did touch upon it a little bit in your video presentation, but what are you doing about interactivity and Internet presence?

LISTNUM 1 \l 13559             Go ahead.

LISTNUM 1 \l 13560             MR. ST. HELENE:  We have several programs in place and our interactive director Jay can attest to a few of those.

LISTNUM 1 \l 13561             MR. HARMER:  To begin with, to draw attention to our website for artists we are going to be creating a PodCast called Industry for Musicians, which is mentioned in the video.

LISTNUM 1 \l 13562             MEMBER CUGINI:  Mm‑hmm.

LISTNUM 1 \l 13563             MR. HARMER:  Which is going to be a learning tool.  It won't be something at this point we're going to broadcast, it will just be available online.

LISTNUM 1 \l 13564             So, that is going to start our program for drawing people directly ‑‑

LISTNUM 1 \l 13565             MEMBER CUGINI:  To be exclusive to the web?

LISTNUM 1 \l 13566             MR. HARMER:  Exclusive to the web, yeah.  It will be a PodCast which would be free to download, but it's not something that we broadcast.

LISTNUM 1 \l 13567             Beyond that, having an online presence, working with things like sponsor advertising, we can run give‑aways and promotions through the website, we can handle song sales for material that's already been licensed, we can do polling, statistics gathering, as well as ticket sales for our events or other local events.

LISTNUM 1 \l 13568             There are other stations who run very successful preferred ticket sales programs and we're definitely interested in looking at something like that.  As well, working with labels to create promotions for their artists on the website.

LISTNUM 1 \l 13569             So, we are really looking at a very robust presentation for online because we know that our target audiences will be watching both at the same time, listening to the radio, surfing the Net.  So, we'd like to get them on both sides.

LISTNUM 1 \l 13570             MEMBER CUGINI:  Okay.

LISTNUM 1 \l 13571             MR. YOUNG:  Point of clarification also on two things.  One, the revenue projections does include what we anticipate just from peer on‑air radio advertising but, rather, all advertising, all revenues, including new media and online sources.

LISTNUM 1 \l 13572             And, secondly, just by reference, this stack of paper is indeed all single sheets, signed documentation that shows commitments, at least in principle, ranging from a high of about 200,000 per company down to about a low of 10,000 per company per annum in terms of, you know, intentions that they would advertise with us.

LISTNUM 1 \l 13573             MEMBER CUGINI:  So, when I look at your financial projections though, in both the national revenue line and the local retail revenue line, therein are amounts generated from your website?

LISTNUM 1 \l 13574             Is that what you just ‑‑

LISTNUM 1 \l 13575             MR. YOUNG:  I just want to clarify so we can be absolutely, sure.

LISTNUM 1 \l 13576             MEMBER CUGINI:  Because I have your Schedule "C", Seven Year Financial Forecast.

LISTNUM 1 \l 13577             MR. YOUNG:  Okay.

LISTNUM 1 \l 13578             MEMBER CUGINI:  And I have got a national revenue line, agency commissions, net national revenue, local retail revenue and other, which is blank.

LISTNUM 1 \l 13579             MR. ST. HELENE:  Sorry.  If it pleases the Commission, I'll answer that question.

LISTNUM 1 \l 13580             MEMBER CUGINI:  Thank you.

LISTNUM 1 \l 13581             MR. ST. HELENE:  The revenue projections are based on radio revenue, but as part of our radio sales we do have a product mix that includes online features where an advertiser might be purchasing a 30‑second spot but part of that might also include a new media portion, be that something on our website or as part of a contest or something that we might be running on our new media.

LISTNUM 1 \l 13582             Going forward, new products would be developed that would allow us to sell new media exclusively as well as part of a bundled package that would be part of both radio advertising and a new media advertising program.

LISTNUM 1 \l 13583             MEMBER CUGINI:  So, that would be on top of what is included in this Schedule, should that come to fruition; right?

LISTNUM 1 \l 13584             MR. ST. HELEN:  That would be, and that would fall under either a new media advertising line or an other income line, yes.

LISTNUM 1 \l 13585             MEMBER CUGINI:  Okay.  Well, thank you for clarifying that.  I just got a little bit of a, you know, panic moment there.

LISTNUM 1 \l 13586             I'm going to move on to your CCD and, again, in your oral presentation this morning ‑‑ sorry, I'll get it ‑‑ you say $150,000 over seven years is your base amount, is that...

LISTNUM 1 \l 13587             MR. SUNNER:  Regarding the CCD, I think, Jay, you'd be much better at explaining it than me because you're a specialist.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 13588             MR. HARMER:  Thank you, Michael.

LISTNUM 1 \l 13589             The total ‑‑ our total contribution was $150,378 and that's based on seven‑year contributions starting 2009, 13,000; same with 2010, 2011, 2012 it increases to 17,800; 2013 goes to 24,403; 2014 is 31,000; 2015 is 37,000.

LISTNUM 1 \l 13590             MEMBER CUGINI:  And what is your base amount?

LISTNUM 1 \l 13591             MR. HARMER:  The base amount is a thousand dollars and our over and above is 2,400 which increases over the course of the years.

LISTNUM 1 \l 13592             MEMBER CUGINI:  Over the course of the seven years.

LISTNUM 1 \l 13593             MR. HARMER:  But we also do include additional contributions to Music B.C. as well as the Richmond/Vancouver/Burnaby and New Westminster School Boards.

LISTNUM 1 \l 13594             MEMBER CUGINI:  Right.  And on the school boards, because other than FACTOR, for the most part ‑‑

LISTNUM 1 \l 13595             MR. HARMER:  Mm‑hmm.

LISTNUM 1 \l 13596             MEMBER CUGINI:  ‑‑ the recipients of your CCD monies are school boards?

LISTNUM 1 \l 13597             MR. HARMER:  That's correct.  Music B.C. and FACTOR and the school boards.

LISTNUM 1 \l 13598             MEMBER CUGINI:  Right.  And have you had discussions with the recipients?

LISTNUM 1 \l 13599             MR. HARMER:  We actually haven't pursued them yet until we have something that we can actually concretely bring to them, but our research has shown that they will be reciprocative to receiving a donation.

LISTNUM 1 \l 13600             MEMBER CUGINI:  Okay.  You may have noticed from reading other applications in this proceeding that typically applicants will include letters from the potential ‑‑

LISTNUM 1 \l 13601             MR. HARMER:  Mm‑hmm.

LISTNUM 1 \l 13602             MEMBER CUGINI:  ‑‑ CCD recipients saying that the recipients understand our policy when it comes to the distribution of those monies and how they should be used and that they will agree to dispensing the monies according to our commercial radio policy.

LISTNUM 1 \l 13603             Is it possible for you to do that ‑‑

LISTNUM 1 \l 13604             MR. HARMER:  Absolutely.

LISTNUM 1 \l 13605             MEMBER CUGINI:  ‑‑ before the licensing decision is made?

LISTNUM 1 \l 13606             MR. HARMER:  Absolutely.

LISTNUM 1 \l 13607             MEMBER CUGINI:  And have those letters submitted to the Commission by the potential recipients of CCD monies?

LISTNUM 1 \l 13608             MR. HARMER:  Most certainly.  Absolutely.

LISTNUM 1 \l 13609             MEMBER CUGINI:  And, once again, our legal counsel will tell you by when you need to do that.

LISTNUM 1 \l 13610             MR. HARMER:  Okay.

LISTNUM 1 \l 13611             MEMBER CUGINI:  Thank you.

LISTNUM 1 \l 13612             MR. SUNNER:  If I could just add a little bit more onto the talking about the base of Canadian content development.

LISTNUM 1 \l 13613             When we put this application to the CRTC, being our first application we've ever put together, we kept it very realistic and very honest with the amount of financing we had.

LISTNUM 1 \l 13614             And it was sort of quite an interesting period because it was a secret when we made the application and then when it went to public notice we were quite amazed by the support in our community.

LISTNUM 1 \l 13615             I think one of the reasons for that was because our team is so powerful in the city in the fields that we work in and we amassed this massive amount of money.

LISTNUM 1 \l 13616             We were looking at sort of roughly about a million dollars a year and then, all of a sudden, during that period of becoming public notice to our intervention period that all the support came in which really sort of encouraged us, because the Canadian content development program does need funding, but we couldn't just write out a cheque and say, you know, we can put a million dollars towards that plan because we wouldn't be able to do it.  So, we went very realistic.

LISTNUM 1 \l 13617             Today, sitting here, and after spending hundreds of hours with Jason figuring this out when all the support came in, to onward forward march with the CAPI plan, that the ratio of sales really does skyrocket, like, it's sort of like five times fold.  And, like I said, we were amazed and surprised.

LISTNUM 1 \l 13618             So, our Canadian content from looking at how low it seemed to be compared with other applicants, it's still low, but when all put together, you know, it still amounts up to, you know, a hundred thousand dollars a year if all these sales do actually come in.

LISTNUM 1 \l 13619             MEMBER CUGINI:  It's what you do with it that counts as well.

LISTNUM 1 \l 13620             MR. SUNNER:  Yes, yes.

LISTNUM 1 \l 13621             MEMBER CUGINI:  As well.  Before I ask you to compare your proposal to that of others who seem to be going after the same target demo, I do need to ask you a couple more detail questions regarding your format so that we have a broader base on which to compare.

LISTNUM 1 \l 13622             One of the areas of your application that had, you know, a couple of different answers was the area of the number of musical selections per hour.

LISTNUM 1 \l 13623             I think in your file we find a range of answers going from 10 to 30 songs per hour and, you know, from our research a typical radio station will broadcast 10 to 15 songs per clock hour with the number being closer to 10.

LISTNUM 1 \l 13624             Do you have a better idea as to how many songs per clock hour you will be broadcasting?

LISTNUM 1 \l 13625             MR. SUNNER:  When we sort of put this together there was a few ideas and I think Leanne, I think you would be ‑‑ send out a more loud clear message regarding the amount of songs.

LISTNUM 1 \l 13626             MS BITNER:  Basically between 10 and 14 songs is what we've stuck to.

LISTNUM 1 \l 13627             MEMBER CUGINI:  And given ‑‑ I'm sorry, I don't remember your name.

LISTNUM 1 \l 13628             MS BITNER:  Leanne.

LISTNUM 1 \l 13629             MEMBER CUGINI:  No, the gentleman sitting beside you.

LISTNUM 1 \l 13630             MS BITNER:  I'm sorry, sure.

LISTNUM 1 \l 13631             MR. MORRIS:  James.

LISTNUM 1 \l 13632             MEMBER CUGINI:  Your last name?

LISTNUM 1 \l 13633             MR. MORRIS:  Morris.

LISTNUM 1 \l 13634             MEMBER CUGINI:  Okay.  So, we have to do this.  Mr. Morris, given how you were talking about the different mixes ‑‑

LISTNUM 1 \l 13635             MR. MORRIS:  Right.

LISTNUM 1 \l 13636             MEMBER CUGINI:  ‑‑ that you might be presenting on air, is it your intention to make use of medleys or montages in order to provide that mix of music, or will it be, you know, this is the track from Rhianna and this is the track from Delhi 2 Dublin and play the track in its entirety?

LISTNUM 1 \l 13637             MR. MORRIS:  Well, it all depends really.  It could range from a lot of songs.  If Rhianna had a song that is popular and it's requested, or if that's what's on our playlist, we will play something like that.  If we have a remix, maybe we might be playing something like that.

LISTNUM 1 \l 13638             There's no one way we're going to stick to it.

LISTNUM 1 \l 13639             MEMBER CUGINI:  It might be a remix, but would it be a medley or a montage of an artist?

LISTNUM 1 \l 13640             Okay.  A medley is a compilation of one minute or more in duration in which artists or musicians combine excerpts from several musical selections within a single performance.

LISTNUM 1 \l 13641             MR. MORRIS:  No, it will be just one song, like, there will be individual songs.

LISTNUM 1 \l 13642             MEMBER CUGINI:  And a montage is a compilation of one minute or more in duration containing excerpts from several musical selections.

LISTNUM 1 \l 13643             MR. MORRIS:  No, no, no.

LISTNUM 1 \l 13644             MEMBER CUGINI:  So, you won't be making any use of montages or medleys?

LISTNUM 1 \l 13645             MR. MORRIS:  No, they will be actual songs.

LISTNUM 1 \l 13646             MEMBER CUGINI:  Okay.

LISTNUM 1 \l 13647             MR. MORRIS:  Yes.

LISTNUM 1 \l 13648             MEMBER CUGINI:  Thank you for that.

LISTNUM 1 \l 13649             MR. MORRIS:  Okay.

LISTNUM 1 \l 13650             MEMBER CUGINI:  Now, we do have a couple of other applications in this proceeding that, as I said before, does target your demo as well.

LISTNUM 1 \l 13651             Have you had an opportunity to look at those applications and, in particular, I'm thinking of the application from Newcap which is proposing an adult urban format, Evanov which is a youth contemporary format and as well the numbered Alberta company which is a modern global world hits format.

LISTNUM 1 \l 13652             MR. SUNNER:  Yes, of course we've gone through all the applications of all the other companies.

LISTNUM 1 \l 13653             We feel pretty strong about our format.  The urban format with the electronical beat mixed up with a truly brand new world beat kind of style.

LISTNUM 1 \l 13654             We don't ‑‑ even though we might have gone for the same demographics, we feel that there is more of a void in the market space for a station like SKY 104 FM's format than the other applicants that you just talked about.

LISTNUM 1 \l 13655             MEMBER CUGINI:  So, if we were to license you, could we license any of these others as well?

LISTNUM 1 \l 13656             MR. SUNNER:  Like I said earlier on, we stand and deliver on our format.  It wouldn't really affect us because we have our own sources of revenue.  Basically a lot of that revenue is new revenues that would be coming into radio land.

LISTNUM 1 \l 13657             I think the reason for that is because of the experience and the team being here are Vancouver people for a long, long time.  Business people sponsor support when they like individuals and we do definitely have some individuals and characters on our team.

LISTNUM 1 \l 13658             It would make a difference if you did license someone from the other demographics, no, not at all.

LISTNUM 1 \l 13659             MEMBER CUGINI:  Well, I want to thank you all very much for your presentation here this morning.

LISTNUM 1 \l 13660             Madam Chair, those are all my questions.

LISTNUM 1 \l 13661             THE CHAIRPERSON:  I believe Commissioner Menzies has some questions.

LISTNUM 1 \l 13662             COMMISSIONER MENZIES:  Good morning.

LISTNUM 1 \l 13663             This relates to your business plan and, to some extent ‑‑ actually entirely, regarding your ability to attract and retain the sort of talent that you'll need in the long run in a market ‑‑ in any market, but in a market this competitive, the quality of talent you have will be very important to you.  And you are a really interesting team to listen to and to look at.  You're right, you look like Vancouver and I'm enjoying that.

LISTNUM 1 \l 13664             But in year seven ‑‑ and I think in year one your business plan is very prudent and very honest.  In year seven you're planning on making a lot of money, 60 per cent ROR, your profits will have risen 300 per cent, by then your wages will have gone up 35 per cent.

LISTNUM 1 \l 13665             And it made me curious so that I could ‑‑ made me curious about what your plan would be to retain talent and keep it happy, given the cost of living in Vancouver and given that your salaries for 20 people, from what I understand would be, you know, averaging around 30,000 a year, growing to 35, 36 seven years from now.

LISTNUM 1 \l 13666             Can you address that for me?

LISTNUM 1 \l 13667             MR. YOUNG:  Yeah.  I think that if we achieve any of our financial targets that the company would not necessarily be closed to some form of profit participation on behalf of the key people that are involved and that would address the fact that if everyone's working for perhaps lower than industry standard compensation, that things like that would be there to compensate.

LISTNUM 1 \l 13668             COMMISSIONER MENZIES:  I'm not trying to be a bargaining agent for your staff.

LISTNUM 1 \l 13669             MR. YOUNG:  I understand.

LISTNUM 1 \l 13670             COMMISSIONER MENZIES:  I'm just trying to get a sense of your understanding of some of those challenges that you might face down the road and whether you have, at least, the beginnings of a plan to retain talent.

LISTNUM 1 \l 13671             MR. YOUNG:  Yeah.  Well, I really ‑‑ that was a very genuine comment in the sense that I think a lot of what's happened in Vancouver specifically, and I, you know, pretty much spend eight to 10 billable hours a day dealing with some form of entertainment in Vancouver and I discovered that, in fact, a lot of what the compensation package that attracts, you know, business talent as well as on‑air talent and otherwise in this city is the ability to be involved in the success of businesses.

LISTNUM 1 \l 13672             In so many negotiations I'm involved with I actually see people going, "You know it's not about the base salary, I need this to live, it's about being involved and feeling part of the team financially and otherwise".

LISTNUM 1 \l 13673             And to the extent that if the success does happen, which we believe in, I think that's a very genuine reality of saying, let's get people involved.  Not necessarily in a, you know, common share voting kind of way, but certainly in some kind of a bonus percentage kind of way that's properly documented and promised.

LISTNUM 1 \l 13674             MR. SUNNER:  If I may add to that, like I says, when we made the application it was our first application, very realistic, so it sort of ‑‑ when ‑‑ after we went public notice, again I have to say this is that we were absolutely amazed at the amount of support people are sort of pushing towards us.

LISTNUM 1 \l 13675             So, all those projections on the business plan, keeping that talent happy and together, most of this crew has been working together for at least 10 years in different ways individually.

LISTNUM 1 \l 13676             I now can honestly sit here and say that that business plan and all those projections of our first year to seven years ‑‑ and, sir, you says that by the seventh year we would be making a lot of money ‑‑ well, I believe it's not going to take us that long and I believe this team will benefit from it all the way around through artists' belief and in their pockets because we have ‑‑ I can't really explain in the way that having all that extra finance now also available how confident and strong we really feel.

LISTNUM 1 \l 13677             If we were accepted, and I'm sure all these people on this team would be even working harder than they've worked over the last three months, to take all them projection figures and say, listen, we said that we were going to do about a million, now someone says that, all the people in the Vancouver that $5‑million a year, that's a big difference.

LISTNUM 1 \l 13678             So, our overall cost of wages and all that is going to be beneficial to the people that will basically be the birth of SKY 104 FM.

LISTNUM 1 \l 13679             And, hopefully, being in radio land for many years, you know, it is hard to keep talent together.  One of the ways we believe we can do it is by at the end of the day ‑‑ at the end of the year, make sure that the whole crew is happy financially.

LISTNUM 1 \l 13680             COMMISSIONER MENZIES:  Okay.  Thank you very much for your answer and, for the record, I'm not at all opposed to making money.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 13681             THE CHAIRPERSON:  Commissioner Duncan, please.

LISTNUM 1 \l 13682             COMMISSIONER DUNCAN:  I do have just a couple of questions.

LISTNUM 1 \l 13683             I just want to understand on your financials then, just referring to your unique way of selling advertising, and I think you referred to it as cross‑promotion.

LISTNUM 1 \l 13684             So, what I'd like to know is if your revenue line includes those cross‑promotions like the contra; is the revenue in and then the contra part an expense, or is it just not recorded in your revenues?

LISTNUM 1 \l 13685             MR. ST. HELENE:  When you're referring to contra, are you referring to the programs that we're offering for emerging artists and that type of thing?

LISTNUM 1 \l 13686             COMMISSIONER DUNCAN:  No, I'm talking about revenue and the contra word is my word, I think that you use the word cross‑promotion.

LISTNUM 1 \l 13687             MR. ST. HELENE:  Okay.  If referring to the kind of mixed media approach ‑‑

LISTNUM 1 \l 13688             COMMISSIONER DUNCAN:  Yes.

LISTNUM 1 \l 13689             MR. ST. HELENE:  ‑‑ with regards to having perhaps an online and a radio component.  Initially, as we ‑‑

LISTNUM 1 \l 13690             COMMISSIONER DUNCAN:  Sorry, no, I'm not.  I think you were talking about ‑‑ just let me just get the gentleman's name just behind you, your counsel.

LISTNUM 1 \l 13691             MR. ST. HELENE:  Oh, Mr. Young.

LISTNUM 1 \l 13692             MR. YOUNG:  Yes.

LISTNUM 1 \l 13693             COMMISSIONER DUNCAN:  Sorry, thank you.

LISTNUM 1 \l 13694             You had mentioned ‑‑ you had talked in terms of cross‑promotion and you'd be looking ‑‑ what I understood you to be saying is you would be looking for unique ways of raising advertising revenues, perhaps Google I think was one of the examples that you had illustrated ‑‑ you had given.

LISTNUM 1 \l 13695             So, I'm just wondering how that is reflected on your revenue line?

LISTNUM 1 \l 13696             MR. YOUNG:  I think any of these types of things it would be reflected as reality because a lot of these do involve a payment component and ‑‑

LISTNUM 1 \l 13697             COMMISSIONER DUNCAN:  Your microphone is not on, sorry.

LISTNUM 1 \l 13698             MR. YOUNG:  A lot of these transactions involve both cash and payment components, whether by Internet micro‑payments and, you know, referral fees and those types of things; or, alternatively, if it's reflected in actual contra, meaning, you know, a certain amount of services in exchange for certain amounts of services.

LISTNUM 1 \l 13699             In the latter category, the projections are ‑‑ don't reflect that from a dollar and cents perspective, but in the former category it would.

LISTNUM 1 \l 13700             COMMISSIONER DUNCAN:  Okay.  So, that's important from my point of view, because we do have a limited number of frequencies.

LISTNUM 1 \l 13701             MR. YOUNG:  Mm‑hmm.

LISTNUM 1 \l 13702             COMMISSIONER DUNCAN:  And we're trying to assess, you know, what's going to serve the market the best.  And this is very exciting, it's interesting ‑‑

LISTNUM 1 \l 13703             MR. YOUNG:  Mm‑hmmm.

LISTNUM 1 \l 13704             COMMISSIONER DUNCAN:  ‑‑ it's unique, I can appreciate all of that and you are all fun to look at and I'm sure you do represent Vancouver.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 13705             COMMISSIONER DUNCAN:  But I'm just concerned that your revenue projections, then when I look at your revenue projections and your audience share projections you're second lowest in what we have.

LISTNUM 1 \l 13706             MR. YOUNG:  Mm‑hmm.

LISTNUM 1 \l 13707             COMMISSIONER DUNCAN:  And, so, your revenues might be understated ‑‑ your gross revenues, if I want to look at that line ‑‑

LISTNUM 1 \l 13708             MR. YOUNG:  Mm‑hmm.

LISTNUM 1 \l 13709             COMMISSIONER DUNCAN:  ‑‑ and compare you to the other applicants, then they're going to be understated by the amount of those revenues.

LISTNUM 1 \l 13710             MR. YOUNG:  I think Michael's comment in terms of the additional optimism of our team increasing is in fact true, that at the time the application was filed there was the thought of doing something different, doing something unique and as a result we wanted to be completely open and honest with the resources that the Applicant had at the time.

LISTNUM 1 \l 13711             As you can appreciate, with the sort of energy that these things build, we have had sort of community support in a way that's very dramatic, very unique.  And even, like I said, the stack of papers here that I have that reflect advertisers and excitement about it is not something we had when we first started.

LISTNUM 1 \l 13712             So, I would say that where we positioned ourselves relative to everyone else, as it turns out is the reality of what was happening then.  Now, that we've reached hearing date, I would say we were being honest and real for the time that it was.

LISTNUM 1 \l 13713             Are we more optimistic than we were when we started?  Absolutely.  And I think that we ‑‑ if we were to say ‑‑ if the Commission were to say, is there revised documents that we could submit that reflect the optimism and the current reality, we could.  But given that this is what was filed and we were very honest to ourselves at the time, that's what we have before us.

LISTNUM 1 \l 13714             COMMISSIONER DUNCAN:  All right.  Thank you for that explanation.

LISTNUM 1 \l 13715             MR. YOUNG:  Yeah.

LISTNUM 1 \l 13716             COMMISSIONER DUNCAN:  Thank you.

LISTNUM 1 \l 13717             THE CHAIRPERSON:  I do have a couple of questions.  I'm just going to make notes first.

‑‑‑ Pause

LISTNUM 1 \l 13718             THE CHAIRPERSON:  Okay.  Firstly, we will come back to you for your last pitch, but I recognize that you are applying for the first time and that but, you know, you look like there's some business experience here.  I think that you can tell from the Panel questions that your business case is a real concern.

LISTNUM 1 \l 13719             So, that's something you may want to address when we come back on the last pitch or in Phase IV to better explain your business case.  You cannot change it any more, but that's something you may wish to address.

LISTNUM 1 \l 13720             And, so, more specifically, I have a question right now.  I was interested in your video where you talked about CAPI, the C‑A‑P‑I, and it sounded like it was a barter where you would let them have air time for advertising.  Could you explain that, please.

LISTNUM 1 \l 13721             MR. HARMER:  Certainly.  It's not just simply barter.  What we're proposing is, we're going to pony up a pool of advertising and we're going to exchange ‑‑ we'll administer the exchange as well ‑‑ to suppliers that bands will be requiring to go on tour.

LISTNUM 1 \l 13722             So, we would be putting together packages that instead of ‑‑ this comes from the argument that bands don't just need to be given money they also need to be given means.

LISTNUM 1 \l 13723             So, it's much easier to get a sponsor to trade something that they already have in their inventory instead of trying to get direct cash out of them.  So, if you ‑‑

LISTNUM 1 \l 13724             THE CHAIRPERSON:  So, maybe you can give me a concrete example.

LISTNUM 1 \l 13725             MR. HARMER:  Sure.  Let's say hypothetically we went to a hotel chain like Best Western and we approached them and we said, "We have a program that is going to be supporting new artists, we'd be interested in exchanging $5,000 worth of air time advertising directly to you at your list cost for a hotel room."  And then we sign an agreement with them, we get the agreement for the hotel rooms and then we crate that with a package with fuel and a vehicle rental and we put it all together and then we award it to a band and that way offsetting their touring costs.

LISTNUM 1 \l 13726             And it's ‑‑ I think one of the best parts of it is ‑‑ well, there's two best parts.  It's win/win for everybody because it's ‑‑ the advertising is less expensive for the supplier because they're charging list cost; it's beneficial to us because we're helping new artists and we're helping the bands because this is just ‑‑ we're just handing them the hotel rooms, thing, go, get out of here.

LISTNUM 1 \l 13727             THE CHAIRPERSON:  Okay.  And that is in addition to the dollar amount in CCD contributions?

LISTNUM 1 \l 13728             MR. HARMER:  Yes, yes, absolutely.

LISTNUM 1 \l 13729             THE CHAIRPERSON:  Okay, right.

LISTNUM 1 \l 13730             MR. HARMER:  This is ‑‑ the idea was to try and ‑‑ Michael challenged me to come up with programs that would go above and beyond the financial requirement using the resources that we had, so this is one of the solutions that I had come up with ‑‑ we have come up with.

LISTNUM 1 \l 13731             THE CHAIRPERSON:  Okay.

LISTNUM 1 \l 13732             MR. SUNNER:  You've done a great job, Jay.

LISTNUM 1 \l 13733             MR. HARMER:  Thanks, man.

LISTNUM 1 \l 13734             THE CHAIRPERSON:  Thank you.

LISTNUM 1 \l 13735             MR. HARMER:  There's one thing else I'd like to add.  With the CAPI program, the principle behind it is that anyone can actually donate to the media pool.  So, we'd really like to encourage other resources like print and other radio stations to also contribute time and print ads so that we can create a network which will allow us a much larger amount of clout so that we can create an even bigger pool of exchange so that we can support ours directly on a much grander national scale.

LISTNUM 1 \l 13736             THE CHAIRPERSON:  Thank you, Mr. Harmer.

LISTNUM 1 \l 13737             MR. HARMER:  Thank you.

LISTNUM 1 \l 13738             THE CHAIRPERSON:  I believe Ms Pinsky has a question.

LISTNUM 1 \l 13739             MS PINSKY:  Yes, I just have a few questions of clarification.

LISTNUM 1 \l 13740             You discussed your CCD commitments with Commissioner Cugini this morning, and in your presentation you spoke of a CCD commitment over seven years of $150,000.  We have in your Application I believe a number of $123,000.

LISTNUM 1 \l 13741             Would you be able to explain the difference?

LISTNUM 1 \l 13742             MR. HARMER:  Could you give me the reference for the $123,000?

LISTNUM 1 \l 13743             MS PINSKY:  Yes.

LISTNUM 1 \l 13744             MR. HARMER:  That may be the number for the additional other.

LISTNUM 1 \l 13745             MS PINSKY:  You mean on ‑‑ see, we have a break‑out of 25,200 for FACTOR and 19,560 for each of the various school boards and the Pacific Music Industry Association.  So, those numbers together add up to 123.

LISTNUM 1 \l 13746             MR. HARMER:  I'm sorry, could you read me those again, please?

LISTNUM 1 \l 13747             MS PINSKY:  Mm‑hmm.  It was 19,560 for each of the school boards and the Pacific Music Industry Association.

LISTNUM 1 \l 13748             MR. HARMER:  Yeah.

LISTNUM 1 \l 13749             MS PINSKY:  And the 25,200 to FACTOR.

LISTNUM 1 \l 13750             MR. SUNNER:  What appendix are you looking at there, please?

LISTNUM 1 \l 13751             MS PINSKY:  I will get you the reference.  Sorry, I had it in ‑‑ I'll come back to that question when I have the reference.

LISTNUM 1 \l 13752             MR. HARMER:  Sure.

LISTNUM 1 \l 13753             MS PINSKY:  Just to clarify the concept of live‑to‑air ‑‑ because in your response to the deficiency, I think there may have been a misunderstanding.

LISTNUM 1 \l 13754             You have committed to 126 hours of local programming.  Did I understand your response correctly that the full amount would be live?

LISTNUM 1 \l 13755             MR. SUNNER:  That's correct.

LISTNUM 1 \l 13756             MS PINSKY:  Also, with regard to your CCD commitment, in your oral presentation today you spoke of how it would increase five times, since your initial projections, to $750,000 over seven years.

LISTNUM 1 \l 13757             I wondered if you could explain that, please.

LISTNUM 1 \l 13758             MR. SUNNER:  I can briefly get into that, and maybe Jay could help me finish it off.

LISTNUM 1 \l 13759             Like I say, when we projected about $1 million for the year, our CCD plan broke down, over a seven‑year period, to about $150,000.  That was on no sales.

LISTNUM 1 \l 13760             At the intervention time, when we submitted ‑‑ turning our annual sales to $5 million ‑‑ in our deficiencies we were asked the question that, if our sales went up, would we contribute a certain ratio toward our CCD commitment.

LISTNUM 1 \l 13761             So when we sort of five‑folded the $150,000 over the seven‑year period, it amounted to ‑‑ you would have the figure there, Jay ‑‑ $700,000 or something like that.

LISTNUM 1 \l 13762             MR. HARMER:  The C.A.P.I. contribution would have been $700,000, but originally, when speaking to the $150,000 overall, that included all of the contribution additions between FACTOR, PMIA and the school boards.

LISTNUM 1 \l 13763             To go back to the $126,000, that is actually our additional, over and above the basic FACTOR.

LISTNUM 1 \l 13764             It is at 8.1 in the additional information.  I believe that is what you are referencing.

LISTNUM 1 \l 13765             If you look at the first page, where it says "Statement of Basic Contribution," if you total the additional FACTOR and the additional "Other" together, that is the $126,000.  That doesn't include the basic FACTOR contribution.

LISTNUM 1 \l 13766             What 8.1 is referencing is what we are going to be donating above the compulsory donations to FACTOR via the CCD.

LISTNUM 1 \l 13767             MS PINSKY:  I am sorry, I didn't follow that.

LISTNUM 1 \l 13768             This is above the $25,200 to FACTOR?

LISTNUM 1 \l 13769             MR. HARMER:  Yes, it is above the basic FACTOR contribution.  It is the $126,000.  That is the additional "Other" and the additional FACTOR.

LISTNUM 1 \l 13770             MS PINSKY:  I'm sorry.  What is the difference there compared to the $150,000 that you were talking about this morning?

LISTNUM 1 \l 13771             MR. HARMER:  Our basic plan for the CCD over seven years is, roughly, $150,000.  It is actually slightly more.

LISTNUM 1 \l 13772             The split between the $126,000 and the $25,000, those two together equal that $150,000.

LISTNUM 1 \l 13773             So the $126,000 is only the additional FACTOR and the additional "Other".  That doesn't include the basic FACTOR.  The basic FACTOR is the $25,000.

LISTNUM 1 \l 13774             MS PINSKY:  Okay.  Thank you.

LISTNUM 1 \l 13775             With regard to the commitments that you made to file various information, firstly, you are going to file the amount of unstructured spoken word, and also a chart confirming the amounts of spoken word broken down, as you discussed with Commissioner Cugini.

LISTNUM 1 \l 13776             When would you be in a position to file that information?

LISTNUM 1 \l 13777             MR. SUNNER:  We will be able to do that in a couple of days, I would say.

LISTNUM 1 \l 13778             MS PINSKY:  Could you provide that by the end of the day tomorrow?

LISTNUM 1 \l 13779             MR. SUNNER:  By the end of the day tomorrow?

LISTNUM 1 \l 13780             MS PINSKY:  Yes.

LISTNUM 1 \l 13781             MR. SUNNER:  That will be done.

LISTNUM 1 \l 13782             MS PINSKY:  Secondly, you have committed to filing some additional letters with regard to your CCD commitments.  When do you think you would be in a position to provide those?

LISTNUM 1 \l 13783             MR. HARMER:  A couple of days would be great.

LISTNUM 1 \l 13784             MS PINSKY:  We could have those a bit later, if you want.

LISTNUM 1 \l 13785             MR. HARMER:  I would appreciate that.

LISTNUM 1 \l 13786             MS PINSKY:  By Monday, at the end of the day?

LISTNUM 1 \l 13787             Would that be ‑‑

LISTNUM 1 \l 13788             MR. HARMER:  Sure.  We will endeavour to do that.

LISTNUM 1 \l 13789             MS PINSKY:  Okay.  Thank you very much.

LISTNUM 1 \l 13790             MR. HARMER:  Thank you.

LISTNUM 1 \l 13791             THE CHAIRPERSON:  Mr. Sunner and your team, this is your opportunity for a two‑minute pitch on why you feel you should be licensed.

LISTNUM 1 \l 13792             MR. SUNNER:  One of the main reasons why we should be licensed is the people that the Commissioners and Madam Chair are looking at.  They have a lot of passion, dedication, and they are very, very committed to Canadian content, music and artists.

LISTNUM 1 \l 13793             They are also a multi‑mix of nationalities.  It is one of the most joyful things about being Canadian in a city as big as Vancouver, having to establish that kind of communication.

LISTNUM 1 \l 13794             That is one of the reasons that, if granted, SKY 104 FM ‑‑ this team ‑‑ will really start to deliver.

LISTNUM 1 \l 13795             The music ‑‑ it brings diversity to the market.

LISTNUM 1 \l 13796             Revenue ‑‑ radio stations show lots of revenue.  This radio station has enough financing now to really stand up over the next three years and maintain and get really established in this city.

LISTNUM 1 \l 13797             Our CCD plans will go far and beyond.

LISTNUM 1 \l 13798             We are responsible.  We have a desire, and we are definitely committed to Canadian talent.

LISTNUM 1 \l 13799             We also know that there is a void in this market space, and given the opportunity, you will really get a true world‑Vancouver sound that will go international.

LISTNUM 1 \l 13800             As a matter of fact, just a few days ago I got a phone call from Bollywood in Mombay, where, working in the movie business, as well, there is interest in making a radio movie about world urban sounds.  They have chosen Indian Lion to represent the SKY team in a format that will be shot here in Vancouver.

LISTNUM 1 \l 13801             If granted the licence, SKY 104 FM will take Canadian radio internationally in more than one way, because we have so many routes to go.  We have built many passages here in Vancouver.

LISTNUM 1 \l 13802             In Canada, at present, there is no format that can really do what SKY FM is proposing.  Vancouver already has several radio stations that play and do the same type of format and promotions.  We know that.

LISTNUM 1 \l 13803             SKY will be a change from the normal.

LISTNUM 1 \l 13804             SKY will open up markets for Canadian talent and music.

LISTNUM 1 \l 13805             We are very local.  We are very honest to our commitments in this application.

LISTNUM 1 \l 13806             If there is anyone on the team that would like to say something, please do.

LISTNUM 1 \l 13807             MR. YOUNG:  Just to summarize with respect to the comments that the Commission has made regarding the business case, it is a first‑time application, but I think we have evolved over the time that the application was prepared.

LISTNUM 1 \l 13808             If the Commission were to consider exercising its discretion in wanting any supplementary filings on that, it is something we would confidently do in a very simple period of time.

LISTNUM 1 \l 13809             I am not sure if that is in the cards at this stage, but I can certainly assure you that that has now been reviewed, and from whatever standpoint we can make, the business side of the vision that we have started with is something that can be followed through confidently on.

LISTNUM 1 \l 13810             Most notable is the additional financing, additional legal, accounting and professional skills in the broadcast industry locally.

LISTNUM 1 \l 13811             MR. SUNNER:  Thank you very much.  It has been an honour and a pleasure to work with this team, and I really do, honestly, believe that, given the chance, we can maintain a radio station, and run it, and become world‑renowned and known, because Vancouver is a world‑class city.

LISTNUM 1 \l 13812             There is no one in this town that really doesn't know about this application.  We have worked extremely hard from the rainy days to the summertime.  Hopefully the CRTC will grant us this licence.  We would love to get this up and running as soon as possible.

LISTNUM 1 \l 13813             One more time, thank you very much, Commissioners and Madam Chair, for giving us the time.

LISTNUM 1 \l 13814             THE CHAIRPERSON:  Thank you.

LISTNUM 1 \l 13815             Mr. Young, thank you for the offer.  I believe that the additional information we feel we need has already been requested by the panel.  So, thank you.

LISTNUM 1 \l 13816             Mr. Sunner and your team, I thank you very much for your time and your presentation.

LISTNUM 1 \l 13817             MR. SUNNER:  God bless you all.

LISTNUM 1 \l 13818             THE CHAIRPERSON:  We are going to take a 20‑minute break.  We will come back at 10:35.  Thank you.

‑‑‑ Upon recessing at 1011 / Suspension à 1011

‑‑‑ Upon resuming at 1034 / Reprise à 1034

LISTNUM 1 \l 13819             THE SECRETARY:  We will now proceed with Item No. 13, an application by Jim Pattison Broadcast Group Ltd. to move the English‑language commercial radio station CKBD Vancouver from the AM Band to the FM Band, and for a licence to operate an English‑language FM commercial radio programming undertaking in Vancouver.

LISTNUM 1 \l 13820             Please introduce yourself and your colleagues.  You will then have 30 minutes for your presentation.

LISTNUM 1 \l 13821             Thank you.

PRESENTATION / PRÉSENTATION

LISTNUM 1 \l 13822             MR. ARNISH:  Thank you, Madam Secretary.

LISTNUM 1 \l 13823             Good morning, Madam Chair and Members of the Commission.  My name is Rick Arnish, and I am President of the Jim Pattison Broadcast Group Ltd. partnership.

LISTNUM 1 \l 13824             We are pleased to be before you this morning to speak to you with respect to our two applications for a new FM station to service Vancouver and the Lower Mainland of British Columbia.

LISTNUM 1 \l 13825             We are applying for a new FM licence on 104.1 FM, or, alternatively, an AM to FM conversion which would see us close our 600 AM Station and launch a new FM service on 100.5 FM.

LISTNUM 1 \l 13826             This presentation will speak to both of these applications.

LISTNUM 1 \l 13827             Before commencing our formal presentation, I would like to introduce the panel which is appearing before you this morning.

LISTNUM 1 \l 13828             To my right is Mr. Gerry Siemens, Vice‑President and General Manager of the Jim Pattison Broadcast Group's existing Vancouver radio stations.

LISTNUM 1 \l 13829             To Gerry's right is Mr. Bill Dinicol, Vice‑President of Finance for the Pattison Broadcast Group.

LISTNUM 1 \l 13830             To my left is Jasmin Doobay, News Director of our Pattison Kelowna radio stations, who will speak to our news and information programming.

LISTNUM 1 \l 13831             To Jasmin's left is Bruce Davis, who is our Vice‑President of Sales.

LISTNUM 1 \l 13832             In the back row we have Gord Eno, who is with our Vancouver broadcast operations, and who worked on the music and spoken word programming of the new station, and will speak to the music components of our application.

LISTNUM 1 \l 13833             To Gord's left is Mark Rogers, our General Sales Manager in Vancouver, who can speak to our revenue forecasts.

LISTNUM 1 \l 13834             To Mark's left is Tamara Stanners.  Tamara has worked with us in interacting with the independent emerging artists in the music community in Vancouver.

LISTNUM 1 \l 13835             To Tamara's left is Chris Weafer, our legal counsel from Owen Bird here in Vancouver.

LISTNUM 1 \l 13836             To Chris' left is Jeff Vidler of Solutions Research Group, who did the market research for us in Vancouver.

LISTNUM 1 \l 13837             To Jeff's left is Ann Luu, who will be the Arts and Features producer on the new station.

LISTNUM 1 \l 13838             I also wish to acknowledge our entire Vancouver radio team that has joined us in the front row this morning.  It is nice to see our team here.

LISTNUM 1 \l 13839             Gerry was saying earlier, "I guess the sales guys are running the radio station this morning."

‑‑‑ Laughter / Rires

LISTNUM 1 \l 13840             MR. ARNISH:  Madam Chair, we are ready to begin our presentation.  We will commence with a four‑minute video, which we hope will give you a good picture of Peak FM, our proposed adult, album, alternative format, which we believe is the best choice for Vancouver.

‑‑‑ Video presentation / Présentation vidéo

LISTNUM 1 \l 13841             MR. ARNISH:  Madam Chair, the applications we have before you are extremely important for the Jim Pattison Broadcast Group.  If approved, you will strengthen a western‑based, radio‑focused broadcast company which has operated in Vancouver since 1965.

LISTNUM 1 \l 13842             While independents, large groups and regional players have come and gone from the Vancouver radio market over the last 42 years, one thing that has remained constant is our shareholders' commitment to Vancouver and the Vancouver radio market, and to the growth of our radio broadcast group in western Canada.

LISTNUM 1 \l 13843             We believe, consistent with the Commission's criteria, that a new FM station for Vancouver must have the following five points:  (1) provide a new format choice which adds diversity to the marketplace; (2) have strong Canadian content development initiatives and other tangible benefits that contribute to the Canadian broadcasting system; (3) be based on a solid, realistic business plan, and have the financial resources of a strong owner to ensure that commitments are met over a seven‑year licence term and beyond; (4) have minimal impact on existing players; and (5) be beneficial to the local community.

LISTNUM 1 \l 13844             The Jim Pattison Broadcast Group's application addresses all of those points, the highlights of which we will discuss today.

LISTNUM 1 \l 13845             The adult, album, alternative, "Triple A" format is a format not available in Vancouver, and one that many applicants in this proceeding have demonstrated will do well in the market.

LISTNUM 1 \l 13846             The evidence is convincing that the "Triple A" format is in demand in Vancouver.

LISTNUM 1 \l 13847             To speak on the feel and flavour of the new Peak FM, here is Gerry Siemens.

LISTNUM 1 \l 13848             MR. SIEMENS:  Good morning.

LISTNUM 1 \l 13849             In studying the Vancouver market, we determined that "Triple A" represents a wide open opportunity, as currently no one station is associated with delivering this distinct format.

LISTNUM 1 \l 13850             Based on our research, we developed an application for the "Triple A" format that will incorporate a wide range of current and recent music, supplemented with music from the eighties and nineties and the early half of this decade.

LISTNUM 1 \l 13851             The station will serve adults 25 to 49 years of age, with an emphasis on women 35 to 44 years of age.

LISTNUM 1 \l 13852             The "Triple A" radio format is perhaps best described as a spinoff from the AOR, or album‑oriented rock format, and its roots can be traced back to the late sixties, with what was then considered underground or progressive music.

LISTNUM 1 \l 13853             "Triple A" has a broad and more diverse playlist than most radio stations, and less played tracks are quite common.

LISTNUM 1 \l 13854             The music tends to be on the fringe of mainstream popular music and rock music, and is quite often acoustic‑based, with forays into alternative rock, folk, alternative country, blues, and even jazz.

LISTNUM 1 \l 13855             The Peak will place a heavy emphasis on current and recent material.  Sixty percent of our music will have been released within the last two years, with the remaining 40 percent coming from the eighties, nineties and earlier part of this decade.

LISTNUM 1 \l 13856             Core artists on the new station will include Juno Award nominees such as Feist and Arcade Fire, plus Vancouver's own, The New Pornographers, along with the likes of Jack Johnson and John Mayer.

LISTNUM 1 \l 13857             The licensing of such a station would create an exciting new vehicle to expose new and emerging Canadian artists, and will repatriate many listeners who have given up on conventional radio.

LISTNUM 1 \l 13858             We are extremely pleased to have the support of the President of Nettwerk Music Group, Rick Arboit.  Nettwerk is one of Canada's leading, privately owned record labels, based in Vancouver.  It oversees the careers of artists such as Avril Lavigne, Barenaked Ladies, Billy Talent and Sarah McLachlan.

LISTNUM 1 \l 13859             In his letter of support, Mr. Arboit stated on behalf of Nettwerk:

"The `Triple A' format is much needed in Vancouver, along with other major cities in Canada.  Our artists have found great support from the `Triple A' format in the United States.  This support is translated back into Canada, where we then face less resistance to emerging artists being added at the AC and Hot AC playlists.  We have a stable of great artists that would fit perfectly into the `Triple A' format, such as Tara McLean (Shaye), The Weepies, The Submarines, the Great Lake Swimmers, Uh Huh Her, Fauxliage, and D.B. Clifford, who currently, as of this letter, has the number one single in Japan."

LISTNUM 1 \l 13860             The Peak will be a music intensive station that will operate as a Group 2 licence, with a format that will be a refreshing alternative in the existing Vancouver FM stations.

LISTNUM 1 \l 13861             It is clear that the "Triple A" format will be a new format, which adds diversity to the Vancouver radio market.

LISTNUM 1 \l 13862             I will now ask Jasmin Doobay to talk about our news and spoken word programming.

LISTNUM 1 \l 13863             MS DOOBAY:  To set The Peak spoken word programming further apart from existing Vancouver stations, three long‑form programs will include "Voices Today", "Into the Arts ‑ Weekend" and "The Peak EcoZone", all part of a Sunday brunch radio magazine.

LISTNUM 1 \l 13864             As well, the daily short‑form features include "Vancouver Flavours", "The Peak EcoZone ‑ Daily", "Into the Arts ‑ Daily", "Talking Rocks", and "Peak Fitness".

LISTNUM 1 \l 13865             Each of these programs will be unique to Vancouver, and will be created and produced by The Peak.

LISTNUM 1 \l 13866             We are particularly excited about our green focus, reflected in The Peak EcoZone programs and in the culture of the radio station.

LISTNUM 1 \l 13867             The birthplace of Greenpeace and the headquarters of the David Suzuki Foundation, Vancouver has taken an international role in the complex and challenging area of environmental leadership.

LISTNUM 1 \l 13868             While all may not agree on the solutions, all agree that critical issues exist.

LISTNUM 1 \l 13869             Evidence that we are on track with our green approach to this application was never more top of mind than last week, when the Government of B.C. introduced Canada's first ever green budget, pledging $1 billion over four years to fight climate change.  This is on top of the tens of millions of dollars that B.C. Hydro will be spending in the coming years, as they work toward their mandate of reducing energy consumption in the province by 50 percent.

LISTNUM 1 \l 13870             Our green approach to this application articulates the core values of our listeners and will constitute a unique new voice.

LISTNUM 1 \l 13871             We are very appreciative of the letter of support received from the David Suzuki Foundation, as well as the Fraser Basin Council, recognizing the unique green initiatives that our application provides to the Vancouver radio market.

LISTNUM 1 \l 13872             I will now ask Ann Luu to make a comment on The Peak's arts programming.

LISTNUM 1 \l 13873             MS LUU:  The City of Vancouver has a dynamic and vital arts scene that receives little exposure on existing commercial radio stations.  Coverage and promotion of the arts will be an integral component of The Peak.

LISTNUM 1 \l 13874             "Into the Arts" weekend edition will be a 30‑minute program that will take our listeners behind the curtain of arts and cultural events throughout the Lower Mainland, with in‑depth interviews with actors, dancers, directors, musicians and producers.

LISTNUM 1 \l 13875             The long‑form feature will be complemented by our daily "Into the Arts" short‑form feature, which will air 10 times during the broadcast week.

LISTNUM 1 \l 13876             I will now turn the mic over to Gord Eno, to speak to some of the music programs that will air on The Peak.

LISTNUM 1 \l 13877             MR. ENO:  Good morning.

LISTNUM 1 \l 13878             As detailed in our supplementary brief, The Peak program schedule features a number of innovative music programs.

LISTNUM 1 \l 13879             "The Daily Demo", each weekday evening from 8 to 8:30, will present music demos, primarily from local emerging artists, providing their first radio exposure.

LISTNUM 1 \l 13880             "Threshold", Sunday nights from 7 to 10, is a showcase for Canadian and international emerging artists.  Presenting new music from a vast spectrum of "Triple A" artists, "Threshold" will have an experimental texture, exploring new ideas in music.

LISTNUM 1 \l 13881             Friday