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.)

March 3, 2008                         Le 3 mars 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.)

March 3, 2008                     Le 3 mars 2008

- iv -

           TABLE DES MATIÈRES / TABLE OF CONTENTS

                                                 PAGE / PARA

PHASE I

PRESENTATION BY / PRÉSENTATION PAR:

Golden West Broadcasting Ltd.                    1580 / 9315

Newcap Inc.                                      1659 / 9782

Radio CJVR Ltd.                                  1710 /10037

Vista Radio Ltd.                                 1780 /10370

Frank Torres (OBCI)                              1827 /10610

PHASE II

INTERVENTION BY / INTERVENTION PAR:

Golden West Broadcasting Ltd.                    1873 /10838

Radio CJVR Ltd.                                  1874 /10847

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

‑‑‑ Upon resuming on Monday, March 3, 2008 at 0930 /

    L'audience reprend le lundi 3 mars 2008 à 0930

9307             THE SECRETARY:  We will now start the hearing with an application by Golden West Broadcasting for a licence to operate an English‑language FM commercial radio programming undertaking in Chilliwack.

9308             Please introduce yourself and your colleagues, and you will then have 20 minutes to make your presentation.

9309             Thank you.

9310             THE CHAIRPERSON:  Mr. Hildebrand, before you start, the Commission would like to congratulate you for the CWC award for employer of the year.

9311             MR. HILDEBRAND:  Thank you very much.

9312             THE CHAIRPERSON:  Another announcement, it is Mr. Williams' birthday today.  He is looking dapper as ever.

9313             MR. HILDEBRAND:  We were actually going to have a chorus sing happy birthday, but they didn't make it, so happy birthday.

9314             COMMISSIONER WILLIAMS:  Thank God for that.

PRESENTATION / PRÉSENTATION

9315             MR. HILDEBRAND:  Members of the Commission, Commission staff, fellow applicants and listeners, we are pleased today to be here and underline the need for our kind of radio service for Chilliwack.

9316             My name is Elmer Hildebrand, President of Golden West.  With me today are Lyndon Friesen, Chief Operating Officer and Executive Vice‑President, Robin Hildebrand, Director of Human Resources, Darryl Porter, President, Chilliwack Bruins Hockey Club, Trevor McDonald, local musician, Ken Goldstein, economic guru.

9317             The reason we are here today is very simple.  On January 4, 2007, that is 13 months ago, we filed an application for a new FM station to serve Chilliwack.  Our application was the result of many discussions with area individuals and business leaders asking us to bring Golden West local community service radio to the valley.

9318             The need for our kind of local service is illustrated by Mayor Hames letter accompanying our application, which said:

"Our community has been without substantial local radio service since Fraser Valley Broadcasting sold their stations some years ago.  The current Chilliwack stations now have much of their programming originating from Vancouver‑based studios and the local relevance has been greatly diminished."

9319             Chilliwack is a market of over 80,000‑plus, and the people here deserve to be served by a station that is committed to local service 100 per cent.

9320             In addition to local all the time, another very significant Golden West policy is to hire local people to work at the radio station.  We will endeavour to develop a strong, local, valley‑based staff who will know the area they are talking about, on the air and on line.  Included in your package, we have listed our employees and their involvement in the community.  You will see that they are involved with every facet of life in the community, and this is what our radio stations are about.

9321             As the Commission knows, this kind of local service is the hallmark of what Golden West provides and we will do this for Chilliwack, in spades.

9322             The economic activity of the valley is most vibrant, and you can be assured that our entry into the market will have no negative impact on the stations currently licensed to the region.

9323             Our kind of service is focused on the community in various ways.  Not only do we cover fully what happens in city council, the Chamber of Commerce and the other civic organizations, we also report on activities that would normally not be headline grabbers.

9324             This includes covering what happens in schools, in churches, the agricultural community and every day business community.

9325             We also plan to be full media partner with the Chilliwack Bruins, which will be more fully elaborated on by Darryl Porter.

9326             MR. PORTER:  Thanks, Elmer.

9327             Just to give you a bit of a favour of who the Chilliwack Bruins are, we are a team that is just under two years old in the Western Hockey League.  We were launched into Chilliwack some two years ago.  Really, we have been an unqualified success on and off the ice except for the issue I am going to talk about in a second.

9328             A couple of highlights.  We were the best expansion team in the history of the CHL on the ice last year.  We are operating at 90 per cent capacity as far as our attendance goes.  We have two drafted players in the National Hockey League.  One that has played on the World Juniors this past season.  We have hosted an ADT, a Canada/Russia game.  Our corporate support has been unqualified.  We have made the playoffs both of our first two years.

9329             The highlight there is that we have been very successful.

9330             Why I am standing here, and I have been endorsing Elmer and asking him to apply for a licence for some two and a half years now is in spite of everything I have just said, there is very little buzz and excitement about us day to day in the fabric of the community because we really have been reduced to a print only marketing strategy based on the media situation in Chilliwack.  The successful Western Hockey League team, a junior hockey team is all about integrating with your community and giving back to your community every step of the way.  It is tough to do that and get your message out when you have absolutely no radio support from a day‑to‑day chatter standpoint.

9331             We had our biggest curve ball when we were announced and we assumed that the current local station would broadcast and partner with us.  But for business reasons, they stated that they don't broadcast games, and we were surprised.  I take ownership that I should have done that homework before I arrived, but it has been a real tough thing for us to try to operate under.

9332             We actually self‑broadcast our games at this point by linking into a CBC feed and doing it ourselves.  That doesn't provide you with any marketing.  It just gets your game on the air in a very small footprint.

9333             The key thing that I wanted to communicate today was that we really researched Golden West from our standpoint when it was first brought to our attention that they might be interested.

9334             I just got off a ten‑day road trip.  I can explain more later, but what I saw on this trip with the three teams that they work with is exactly what the Chilliwack Bruins want and desire, and I know Golden West can deliver.  So I hope that their application is approved, and I really hope that we can be on the air for August of this summer because our team desperately requires it.

9335             Thank you.

9336             MR. HILDEBRAND:  Thanks, Darryl.

9337             One of the other hallmarks of Golden West is the promotion and support of local musical talent.  We will program 40 per cent Canadian music and we will be active in promoting and providing exposure for local musicians.  We will air and produce weekly 30‑minute programs featuring local artists.  We know there will be more than adequate material readily available.

9338             Trevor McDonald has a little more of the impact that we would have on Chilliwack.  Trevor.

9339             MR. McDONALD:  Good morning.  I have lived in Chilliwack for 30 years and have spent 20 years in the music industry; I never left.  I am the owner of McDonald Entertainment and I am a general contractor of entertainment services.  I provide local artists with the tools to move to a professional level from the beginning marketing of their songwriting to recording at my studio.  Once I get them in the studio, I give them the CD or the DVD product to promote.

9340             This is no difference from myself and 15 other local studios in the Fraser Valley.  We all share a common complaint:  Why is there no local radio support for emerging talent?  My avenues of promotion for these emerging artists are the internet for mass market and live venues for the artist to promote their product grassroots‑style through live venues.

9341             Where our community is greatly lacking is in a grassroots radio station that will support our vibrant music community with locals only type programming.  It has been my own experience as a recording artist that there is no local promotion for emerging artists no matter how driven an artist is to present their material.  Artists have gone all the way to Bellingham, Washington to promote a local Canadian product.  That is wrong.

9342             In my research of Golden West, Mr. Hildebrand, and their commitment to local programming, I have seen time and time again that they stand by what made them a success for all those years.  A grassroots radio station with a very local focus.  Chilliwack deserves a broadcasting company like this that will match with reputation the talent our artists have to offer.

9343             I firmly believe in Golden West as the right choice for our growing community, and look forward to the open doors that Golden West will provide for myself and many, many hundreds of artists that the station will promote.

9344             Thank you very much.

9345             MR. HILDEBRAND:  Thank you.

9346             The station format will be one of news, music and information, and not only with a new radio station, but also a new media component to complement the radio station.

9347             To outline this process in more detail, here is Lyndon Friesen.

9348             MR. FRIESEN:  Good morning.

9349             Sitting on the doorstep of Canada's third largest city, Chilliwack already has access to any music they want.  The internet, satellite radio, Vancouver radio, American radio, it is all there.  But there is a critical element missing:  A dedicated and exclusively local approach to gathering and delivering fresh and current local content about Chilliwack for Chilliwack.  When we provide that comprehensive, interactive content, combined with a carefully crafted music package, we believe the level of service to the community will be above and beyond anything they have experienced.

9350             However, we don't want to fill the gap in local content just by providing the news they are not getting right now.  The local content we will consistently deliver will go far deeper than traditional newscasts.  It will be personal, interactive coverage of the events happening on their streets and in their neighbourhoods, delivered at the fast pace that new media users have grown to expect.

9351             Chilliwack deserves and in fact is asking for local content on‑air, on‑line and on‑demand, and we are prepared to deliver exactly that.

9352             The cornerstone of our local content will be the most comprehensive, fully staffed news and surveillance team in the valley.  Our experience in other communities tells us that the city of Chilliwack needs at least half a dozen Chilliwack reporters to fully cover ongoing news stories and events, while also giving in‑depth coverage to a huge sports community, a large and quickly growing arts community, and an under‑serviced ag industry.  The pulse of Chilliwack is its people, and it is only by hitting the streets and interacting with them that we will be able to serve them to the extent they need.

9353             To support Chilliwack's newest newsroom, a full contingent of local staff and announcers, all with their own ties and interests in the community, will serve as additional content gathers as they interact with Chilliwack in person, on the phone, and most importantly, on the air.  Fully‑equipped with microphones and cameras, the result will be fresh, relevant content that keeps pace with the valley.  As we said before, on‑air, on‑line and on‑demand.

9354             Let's narrow the focus and give you more concrete examples of the content we will provide for Chilliwack, starting with the news department.

‑‑‑ Video presentation / présentation vidéo

9355             MR. FRIESEN:  Of course, we will be talking to the mayor, but we will also be consistently reaching out to the men and women on the street, and just as often bring them into our facilities to have their voices heard on‑air and their faces seen on‑line.

9356             And we will do the same thing for sports.  As you heard from Darryl Porter earlier, we have years of commitment and experience in promoting and supporting local sports, and this starts well before the level of play we see with the Bruins.

9357             Chilliwack will receive full coverage and interactive promotion of sports, from a huge commitment to the Bruins, to athletes and teams at a far more basic level.  Local sports will be our focus, from play‑by‑play game coverage to getting the athletes and coaches on the air, throughout the day, every day, and we will also serve fans with scores and results from all their favourite teams and events.

9358             Here is a sample story that happens to be about the Bruins, but throughout the day listeners will be drawn to similar stories about every sport, at most levels, in Chilliwack.

‑‑‑ Video presentation / présentation vidéo

9359             MR. FRIESEN:  The large sports community is an obvious source of content in a city that is growing as quickly as Chilliwack, but just as important are the groups that are always overlooked, including the valley's number one industry, the ag sector.  Here is an example of delivering what these people are telling us they want to hear.

‑‑‑ Video presentation / présentation vidéo

9360             MR. FRIESEN:  Facts are important, but people are more important, and we will provide a voice for an unprecedented number of people who care about and are committed to their community.

9361             For example, as we explored Chilliwack, we discovered an incredibly involved arts community.  At present, they are rallying around a new Performing Arts Centre.  This kind of project requires huge community involvement, support and exposure and we look forward to partnering with them to provide exactly that ‑‑ something like this.

‑‑‑ Video presentation / présentation vidéo

9362             MR. FRIESEN:  These samples demonstrate our ability to generate more than local information.  They are an example of our commitment to deliver exclusively local and consistently relevant content.  But that only covers the informational side.

9363             To deliver everything Chilliwack is asking for, we have carefully designed a powerful blend of bright, upbeat and positive music to entertain an exciting and growing city.

9364             The best rock, pop, and AC songs from the last 25 years will be woven together with the biggest multi‑format hits of today.  About 35 per cent of our spins will come from currents and recurrents.

9365             An extensive library of over 1500 specially selected songs will ensure a broad, family‑friendly appeal that will always sound fresh.  Here is an example to give you a sense of the overall flavour of the music Chilliwack will be tuning in to.

‑‑‑ Video presentation / présentation vidéo

9366             MR. FRIESEN:  That sample of well‑known performers and incredibly popular songs was 60 per cent Canadian artists, which tells you that our commitment to 40 per cent Canadian content will easily energize the music available locally in Chilliwack.  As well, we will create a separate music category specifically for emerging B.C. artists, scheduled a minimum of three times a day, seven days a week, all in prime time, 6:00 a.m. to 6:00 p.m.

9367             To expand on one of Elmer's earlier comments, a half‑hour program features made in the Valley music will highlight emerging singers and songwriters from the region.

9368             The thousands of artists we have partnered with in similar programs find this kind of promotion and airplay to be extremely helpful in jumpstarting careers.  It also happens to be really good local music that local audiences love.

9369             That is what we will do on radio, and we will multiply all those same benefits by giving Chilliwack a new media platform, an on‑line, on‑demand source of content, the same content that is on the radio, with an exclusively local focus, updated several times a day, seven days a week, influenced and controlled by the people it serves through state‑of‑the‑art web 2.0 technology.

9370             You have seen glimpses of the site throughout the presentation.  Here is a quick but more detailed overview.

9371             Onsite weather will display real and current local conditions.

9372             When significant news goes on the air, it also goes on line, refreshed every day

9373             Enjoy any time, anywhere content.

9374             Reporters will frequently and accurately relay relevant information to new media users about all the relevant issues in their community, and we will invite listeners to contribute to those issues with web 2.0‑based discussion and feedback platforms.

9375             Because today's new media users expect it, on‑demand video is an integrated feature of this website, and will even allow the uploading of user‑generated content.

9376             And, of course, Chilliwack will have access to classifieds, job listings, community entertainment and more 24 hours a day, seven days a week.

9377             It is a level of service well beyond anything Chilliwack has experienced or imagined.  It is what Chilliwack is missing and what Golden West is committed to providing, because our experience tells us it can and should be done, and because the people of Chilliwack have told us it is what they want and need.  Here are just a few of those people.

‑‑‑ Video presentation / présentation vidéo

9378             MR. HILDEBRAND:  Thanks, Lyndon.

9379             As you can see, by approving our application, the city of Chilliwack will not only have their own local radio station, they will also have, as an instant bonus, a new media partner in chilliwacknow.com, something that will enhance and complement our service to the city.

9380             MS HILDEBRAND:  As the Commission knows, Golden West has the experience, the commitment and the track record to guarantee that this new station for Chilliwack will be all it is expected to be, and more.

9381             We are a family‑owned radio company, one of a few in Canada, committed 100 per cent to service for smaller communities and cities.  We are a radio company pure and simple.  We have 50 years of experience which was marked during our celebrations in 2007.

9382             As already mentioned earlier this morning, we are a leader in promoting women in the workplace, which was recognized last week in Ottawa at the CWC Annual Awards Gala.  Golden West was the recipient of the employer of the year award for outstanding leadership in the promotion and advancement of women.  At Golden West, women represent 40 per cent of our management team and 72 per cent of our sales force.

9383             We have been, and continue to be, a leader in serving smaller markets with a unique brand of radio, and the leaders in Chilliwack obviously realized this when they asked us to come to Chilliwack.

9384             MR. HILDEBRAND:  Three of the other applicants for Chilliwack are also applying for a licence in Vancouver, and may well be looking for a back door entry into the city, as has been the case in the past.  We are totally committed to Chilliwack and have zero interest in Vancouver.

9385             We note that some of the applicants have offered to provide more direct Canadian content funds than we have.

9386             We think it is much more important to provide in‑depth community service than cash donations to FACTOR and other national organizations.

9387             As an example, our weekly half hour program featuring local artists will have a value of more than $200,000 in real exposure over the first licence term.

9388             We would ask that the Commission not look at these applications as an auction, where the licence is awarded to the highest bidder.

9389             In conclusion, we note that the other applicants ‑‑ Newcap, CJVR and Vista ‑‑ are all preparing to produce double the revenue we are projecting in the first year.  We know we can provide what Chilliwack wants and needs, and we are ready to do so at realistic projections.

9390             We think that not only would our proposed service to Chilliwack be the best for the community, it would also have the least financial impact on the broadcasters in the market today.

9391             Madam Chair, that concludes our presentation and we are ready for questions.  We are one minute over, sorry.

9392             THE CHAIRPERSON:  Thank you, Mr. Hildebrand and your panel.

9393             Commissioner Duncan will lead the questions.

9394             COMMISSIONER DUNCAN:  Good morning, and Mr. Porter, my husband and I are season ticket holders for the Halifax Mooseheads in the Quebec Major Junior Hockey League.  So I certainly can appreciate what radio means in promoting that hockey team.

9395             I want to start first of all with programming.  I am sure, as you know, the Commercial Radio Policy 2006 states:

"In their local programming licensees must incorporate spoken word material of direct and particular relevance to the community served.  This must include local news, weather, sports coverage and the promotion of local events and activities."

9396             Your message is certainly clear.  You are planning to have a lot of that.  I would like to get some more specifics.

9397             When I look at your letter of April 17th, you included a chart with it of your programming which was called "Local News and Sports."  On that chart there was nothing indicated for Sunday.  So, I was wondering what your intentions are for Sunday programming?

9398             MR. FRIESEN:  We staff our radio stations seven days a week.  Every Sunday morning we will start at the same time we start the rest of the week.  Our first newscast will be 6:00.  We will have a few less newscasts.  They will look exactly like Saturdays.

9399             COMMISSIONER DUNCAN:  So it was just an oversight it wasn't on the chart?

9400             MR. FRIESEN:  We should have added Sunday to that.  It is an oversight, absolutely.

9401             COMMISSIONER DUNCAN:  Thank you.

9402             I am wondering what the total number of hours per broadcast week will be devoted to spoken word programming?

9403             MR. FRIESEN:  If it would be possible for me to do the math after this and provide it for the record after.

9404             COMMISSIONER DUNCAN:  That is fine.  Because the next few questions sort of deal with the timing as well, so we can get the whole picture.

9405             I am also interested to know the breakdown of hours per broadcast week to be devoted to news and to sports.  So I am looking for total news:  Local, regional, provincial, national.

9406             MR. FRIESEN:  That is simple because 100 per cent of what we do will be local.  At all of our FM stations across the company, we don't subscribe to national services.  We don't do any kind of national news.

9407             If it is a major event provincially, we will send somebody to pick it up, but it is all information that we gather.

9408             Is that the question?

9409             COMMISSIONER DUNCAN:  Wouldn't you report on national events?

9410             MR. FRIESEN:  Very seldom.  We will refer to some national activities, but most of that is available everywhere else.  So our focus will be 100 per cent on local.

9411             Of course, if 9/11 happens, we have facilities and arrangements with national news service providers to be able to cover that kind of thing off, but our focus is all about what is happening in the community.  We tell our listeners all the time that we just care about that.  If they want more information about what is happening in the rest of the world, there are services that are already there that provide that.

9412             COMMISSIONER DUNCAN:  So this morning's lead item, for example, Steven Harper and he is serving libel notice I guess on Stephan Dion and a few other prominent liberals ‑‑

9413             MR. HILDEBRAND:  That would get some mention, but wouldn't get a lot of in‑depth coverage because our experience has been that people everywhere have access to daily newspapers and to television news channels 24 hours a day.  So, that information is readily available to everyone.  We have found that if we provide the local service ‑‑ what is happening in Chilliwack, what is happening in the schools and city council, all of that ‑‑ that makes far more sense and is far more relevant to the area.

9414             We have just found that that is something that the communities can relate to and they like, and the national and international news, they can get it from other sources.

9415             COMMISSIONER DUNCAN:  Would you say then probably less than 2 or less than 5 per cent?

9416             MR. HILDEBRAND:  Certainly less than 5 per cent for sure.

9417             COMMISSIONER DUNCAN:  All right.  Then talking about the local news and surveillance material, which is news, weather, sports coverage and the promotion of local events and activities, what will be the total number of hours per week devoted to pure local news?  I guess what you are telling me is 98 per cent?

9418             MR. HILDEBRAND:  Pretty much everything, yes.

9419             COMMISSIONER DUNCAN:  Can we break that down?  Can you break out the surveillance material from the pure local news?  So, the surveillance is the weather, traffic, sports, entertainment.

9420             MR. HILDEBRAND:  Again, that would be hard to actually schedule in advance because some days you have a lot of weather reports and other days you don't in different parts of the country.  I guess if you have a lot of sunny days, you don't have as much weather information as you do when it is snowy or rainy or that kind of thing.

9421             So, I think it is very hard to in advance give exactly the amount of time you would use there.

9422             The same as with sports.  During certain playoff times you would have a lot more sports going than you would have the rest of the time.  That is why it is very hard to quantify in advance the exact number of minutes and hours you would have.

9423             But suffice it to say if something happens in the Valley, we are there and it would be on the air.

9424             COMMISSIONER DUNCAN:  Your sports as well, then, is only local sports?

9425             MR. HILDEBRAND:  By and large we would use the scores of the Vancouver Canucks obviously because it is important here, but we would designate our local talent to local information.

9426             COMMISSIONER DUNCAN:  I think you have probably made this point, but I will just ask you again in case you want to cover it.

9427             We are just wondering why you think that such a considerable amount of news and information is so important to your business plan given that it is a music‑driven format?

9428             MR. HILDEBRAND:  Again, we have found over the years, as Lyndon said at the outset, music is generally available everywhere and local news isn't.  So, even though your music is a very important part of the radio station, in our experience it isn't the most important piece.

9429             The most important piece is the local information, the local news and surveillance and all of those kind of things, local interviews, because that sets us apart from every other radio station.

9430             We have found in markets where we operate, nobody else does this.  Because we are doing it, we are more relevant, we have more loyal audience and we can, in that sense, then, have a successful business in markets that otherwise might not be large enough.

9431             With the size of Chilliwack, we think that this kind of thing would work in spades because the music at the end of the day is not going to set it apart because, again, as was mentioned by a number of panellists, especially in this part of the country, music is available everywhere with satellite, music on the internet.  From our perspective and for our business plan, it just not as important as local information.

9432             COMMISSIONER DUNCAN:  Just referring to a point you made there, how many communities are you currently serving that would be the size of Chilliwack, 80,000 in that area?

9433             MR. HILDEBRAND:  Saskatoon would be the largest community that we are serving and then other cities would be smaller.  But Saskatoon is probably three times the size of Chilliwack.  So we have experience in that size city.

9434             COMMISSIONER DUNCAN:  Twice the size, did you say, Saskatoon?

9435             MR. HILDEBRAND:  Three times I guess.  It is 250,000.  I have three radio stations there.  So I have experience in both larger and smaller markets.

9436             COMMISSIONER DUNCAN:  The live‑to‑air programming, how many hours of live‑to‑air are you planning in the broadcast week?

9437             MR. FRIESEN:  We would think we would need a staff, the radio station for sure from 6:00 a.m. to 12 midnight, including weekends.  Weekends in the evenings we could probably staff it till about 9:00 p.m., but we do start really early.  In all of our communities, our news people are going in already at 4:00 or 5:00 in the morning for the 6:00 o'clock start.  So, we have fully staffed radio stations.

9438             COMMISSIONER DUNCAN:  You said 6:00 to midnight Monday to Friday, and what were the hours on Saturday and Sunday?

9439             MR. FRIESEN:  6:00 to about 9:00 p.m.

9440             COMMISSIONER DUNCAN:  How many full and part‑time newsroom employees do you expect that you will have?

9441             MR. FRIESEN:  For sure we would need to have six, as mentioned in the earlier thing.  Then what we do is add community players, get community reporters involved as well.

9442             COMMISSIONER DUNCAN:  Are those paid positions?

9443             MR. FRIESEN:  Mostly they are, but in some cases we have people that just want to become part of what we do.  We often use students to help us.  It gives them an entry into our business, and we start to use them part time and we pay them for that.

9444             But we have stringers out there as well that provide ideas and coverage.  One of the things I guess with new media is there is a new interest in people wanting to provide information that gets exposure, so they have all the equipment.  So it is that kind of information, too, that is of real benefit to us.

9445             MR. HILDEBRAND:  The other thing that adds dramatically to whatever happens in our news department is that the people that work mornings on air in all instances at our radio stations are involved with the community and many times will be doing evening MC jobs or attending functions, and they will then feed more information back.  So, they become actually reporters as well.

9446             So, we like to see all our employees really act as news funnels back to the station.  So, again, we found that that works very well.

9447             COMMISSIONER DUNCAN:  Again, I noticed in your April 17th response that you referred to voice tracking on parts of Sunday evening.  We were just wondering specifically how many hours of voice tracking you are planning.  In the broadcast week first, I notice you do say that you plan to voice track through the evening, but in the broadcast week, voice tracking?

9448             MR. FRIESEN:  The way that we operate, we have staff in the building the entire schedule that I mentioned to you.

9449             Sometimes they will voice track a piece or two early so they can go and do something else in the community and come back.  Whoever is on the air, whether it is voice tracked or live, is responsible for the product on the air.  So, we don't leave the building, but we do occasionally voice track so that they can go and do something else and then come back.

9450             So, it is not just a black and white question.  But we do staff it the hours that I mentioned to you and they are there to respond and we answer the phones during those times.

9451             COMMISSIONER DUNCAN:  So, it is a tool to let you operate more efficiently really is what you are saying?

9452             MR. FRIESEN:  Yes, for sure.

9453             COMMISSIONER DUNCAN:  I was curious to know, this sort of comes out of last week's hearings.  Is your music all scheduled locally or do you centralize the play of your music?  Does somebody else make that decision and just communicate it to the folks operating the station here in Chilliwack?

9454             MR. HILDEBRAND:  If you are referring to do we use consultants for our music?

9455             COMMISSIONER DUNCAN:  No.  I just meant if you centrally organize and decide what songs you are going to be played when.

9456             MR. FRIESEN:  We have people that are experts in scheduling.  They help contribute to the local person doing it.

9457             So, the answer is both.  The end result comes from the people on site massaging and adding the local content.  The general format would be laid out.

9458             COMMISSIONER DUNCAN:  I think what we were hearing last week, maybe that is where we are missing the local input, or not as much play, anyway, of local artists.

9459             MR. FRIESEN:  No, very important in the kind of thing that we do across the prairies and then for Chilliwack is we have to be able to provide the local nuances and the local edition of local artists.  That is what makes this.

9460             COMMISSIONER DUNCAN:  Your emerging artists I notice you said 2 to 5 per cent, but it sounds more than that when I listen to you this morning, because you are talking about B.C. artists.

9461             MR. HILDEBRAND:  It probably is more than that percentage.  Again, it is so difficult to say exactly what it will be when you are putting these things together.

9462             One of the things that we have found is that we actually ‑‑ I don't know if we can call them emerging artists.  They are local artists.  They may never emerge past the local area, but again they have relevance to the community.

9463             So, we always have a little difficulty with a national formula or a national name for these things because it is rare that certainly from the smaller markets that they will become stars in Vancouver or Toronto or Montreal.  But they are stars in their own right in their local community.

9464             One of the things that we would try to always do in our applications, and I think I mentioned, we will over perform in whatever commitments we have made in our application.  So, there are always minimums there because we think we can do more but we also don't want to exaggerate the process.  So, we are always using those as conservative estimates.

9465             COMMISSIONER DUNCAN:  So your minimum 2 to 5 per cent would include the reference this morning then to B.C. artists in general and to local but it could be more is what I am understanding?

9466             MR. HILDEBRAND:  Oh, for sure.

9467             MR. FRIESEN:  B.C. and local artists, I think the current average is about 2 per cent.  Just the three times per day, 6:00 a.m. to 6:00 p.m. I think comes out to about 4 per cent of the total spins, of just the spins.  That doesn't include the feature programs we would have on the weekends.

9468             COMMISSIONER DUNCAN:  Thank you.

9469             I was just wondering if you could elaborate on the synergies that you expect to realize between Chilliwack and your other stations, and if they have been incorporated or how they have been reflected in your financial projections?

9470             MR. HILDEBRAND:  There will be significant synergies.  Much of the backroom work is done.  We have a central traffic location; we have a central creative department; and we have a centralized accounting and billing department.  So, all of that has been taken into account in our financial projections.

9471             We have developed a variety of systems over the years that enable us to do those functions that are not visible in a community from a central location.  Then we spend all of our efforts and our resources on on‑air talent, news talent and sales people that are visible in the community.

9472             So, there is huge synergies.

9473             COMMISSIONER DUNCAN:  I can understand there will be synergies.  In your projections do they reflect an allocation of some portion of those costs?

9474             MR. HILDEBRAND:  For a news station, they would really be minimal.  Once the station is established and has a track record, then we would ultimately start allocating some of those costs to it.  But initially, those would be overhead costs that wouldn't impact the local operation.

9475             COMMISSIONER DUNCAN:  So, in the seven‑year projections that we have, would they be reflected in the years, say, 4, 5 and 6?

9476             MR. HILDEBRAND:  Marginally, yes, but not significantly.

9477             COMMISSIONER DUNCAN:  Just out of interest, is that all centralized in Altona or do you have different points that you ‑‑

9478             MR. HILDEBRAND:  Our traffic is centralized in Altona; our creative is centralized in Steinbach; our accounting is also centralized in Altona.

9479             COMMISSIONER DUNCAN:  Is that for all three provinces?

9480             MR. HILDEBRAND:  Yes.  That centralizing process enables us to put more resources into on‑air talent and to news talent.  We have developed our own systems that actually work very well and they are very efficient.  We see that as one of the synergies that makes these things possible.

9481             COMMISSIONER DUNCAN:  Just a little bit about the CCD.  I am sure that you know that the policy requires that the initiatives involve direct expenditures and that they be allocated to the support, promotion, training and development of Canadian musical and spoken word talent, including journalists.

9482             In your April 17th reply you confirmed that 80 per cent of your over and above CCD contributions would go to local groups.  But we don't have any details on the local groups that you intended.

9483             MR. HILDEBRAND:  I think they were included in your packet today.  There was a schedule of material.  It would be chart number 2.

9484             COMMISSIONER DUNCAN:  Thank you.

9485             MR. HILDEBRAND:  We have allocated funds to a variety of organizations.  We have also for years 5 and 6 out ‑‑ or 6 and 7, we have not designated individuals.  Some of the money is not designated.

9486             We feel it is probably irresponsible to designate that far ahead because there is going to be emerging artists that aren't even known yet that will be coming on the scene over the next three or four or five years.  So, we have allocated some of the money for years 6 and 7 to be determined.

9487             COMMISSIONER DUNCAN:  I can understand your point on that.  I guess we just need your assurance that you will ensure that these expenditures do qualify as direct contributions.

9488             MR. HILDEBRAND:  For sure.  Again, this is something that over the years I have handled personally the entire process.  I can assure the Commission that not only will it qualify, but it will be spent and we have historically spent more than we committed in applications.  We generally spend far in excess of that, but again we feel these are conservative estimates and we want to make sure we continue that process.

9489             COMMISSIONER DUNCAN:  Have you already had discussions with some of the groups that are mentioned here?

9490             MR. HILDEBRAND:  Yes.

9491             COMMISSIONER DUNCAN:  Thank you.

9492             Also on the CCD, I notice that in your letter you refer to the $200,000, including total, the basic and the over and above.  I just wanted to confirm that, that it does include both.

9493             MR. HILDEBRAND:  The chart that we have here, the $200,000 is over and above the base fees.

9494             COMMISSIONER DUNCAN:  Is over and above the basic?

9495             MR. HILDEBRAND:  Right.

9496             COMMISSIONER DUNCAN:  I notice in your projections you just have one line that shows $200,000.

9497             MR. HILDEBRAND:  Right.

9498             COMMISSIONER DUNCAN:  Where was the basic shown in your projections?

9499             MR. HILDEBRAND:  That was actually done before the new policies came out.  When the application was originally filed, that was prior to your December release.  Originally the basics were relatively minor and so wouldn't be material.

9500             COMMISSIONER DUNCAN:  So, the $200,000 is over and above, just to be clear?

9501             MR. HILDEBRAND:  Right.

9502             COMMISSIONER DUNCAN:  That eliminates the rest of those questions on that.  That answers that.

9503             I would like to understand how your proposed format will bring diversity to the market.  Rogers, I understand, has a soft AC and a light rock format.  So I am just wondering what the similarities and differences would be on the music side?  I gather from the spoken word ‑‑ I think you have made that quite clear ‑‑ that your spoken word will be quite different, but on the music side.

9504             MR. FRIESEN:  I think your description of the other local broadcaster as being very light is probably ‑‑ I think the music that you heard on our clip gives a better ‑‑ I think the music that we have prepared is far more upbeat, far more brighter, fast paced.  It is a different brand.  It is a faster‑paced AC blend.  There is some HOT AC in there, there is some adult hits, and there is some classic hits that are actually part of the blend of music that we put together for a place like this.

9505             So, there really isn't a similarity.  There will be some similar artists, but it won't have a similar pace.

9506             We thought it was the most logical way to go in that market, at least sitting next to Vancouver.  We wanted to provide a blend of popular music that we thought would be, just as we described earlier, something that was well crafted just for a market to have the widest appeal.  So we won't be too soft and we won't be too hard.  We will be, we like to use the word "safe."  We are going to be safe but we are going to be really upbeat, bright and in the popular music category.

9507             MR. HILDEBRAND:  In Canada, the adult contemporary formats amount for about 22 per cent of all formats.  So there obviously are various corners that you can be in in that adult contemporary arena.

9508             We don't think that we will sound at all like the station in Chilliwack now.

9509             COMMISSIONER DUNCAN:  When you make that statement, are you talking about both Rogers' statements, including the one that appears to be somewhat directed to Vancouver?

9510             MR. HILDEBRAND:  I think that is country now, is it not?

9511             COMMISSIONER DUNCAN:  The information I have is soft AC and light rock.

9512             MR. HILDEBRAND:  Again, we will certainly sound quite different than the Rogers stations for sure.  And you add to that the preponderance of local material that we have, and again, I can't stress this enough, the thing that will really make the radio station different is the local information surveillance and all of the local news.  I mean, this will be such a different radio station that there will be no similarities and the people in the Valley will really benefit from that diversity.

9513             COMMISSIONER DUNCAN:  I noticed in your letter January 5th, 2007 ‑‑ so this has been underway for a while for you people ‑‑ you had a letter from the CBC about shared use of their broadcast facilities, and I was wondering if you were still intending to do that?

9514             MR. HILDEBRAND:  Yes.

9515             COMMISSIONER DUNCAN:  What type of costs or are those costs included in your projection?

9516             MR. HILDEBRAND:  Those costs are included.  That is just a rental process.

9517             COMMISSIONER DUNCAN:  So it is a relatively minor amount?

9518             MR. HILDEBRAND:  Yes.

9519             COMMISSIONER DUNCAN:  Would that be included in admin and general or technical?

9520             MR. HILDEBRAND:  Yes, in the technical.

9521             COMMISSIONER DUNCAN:  I want to now talk a bit about the economic impact.  I am referring to the sources of revenue that you gave us, 5 per cent you expect to take from existing stations and 25 per cent increase in existing advertising spins, and new radio advertisers 65 per cent, 5 per cent from other media.

9522             What percentage of the revenue that you are going to get do you expect will be garnered from out‑of‑market stations?

9523             MR. HILDEBRAND:  I would like Ken Goldstein to address this.

9524             MR. GOLDSTEIN:  We have a station here where there is essentially one station serving Chilliwack and the rest almost all is going to Vancouver tuning.

9525             The amount of advertising that might be going into Vancouver to come back to Chilliwack would be very small because if you are a local advertiser, as a rule the rates would not work.  If I want to reach the 80,000 or 90,000 people in Chilliwack, I am not going to spend at audience reaches of two million.  So, I think that a very small amount would be really coming from Vancouver stations.

9526             What we have here is an opportunity to recapture more of the potential that would be there from local retailers by having another station that is truly local, local, local.  So, the largest amount here, as you can see, is new radio advertisers, which would be people who haven't found a home on the current station and don't have another station that makes economic sense.

9527             COMMISSIONER DUNCAN:  I think I didn't phrase my first question properly, but I will come back to it because you are into my next track anyway.  So, that is okay.

9528             How did you arrive at the 65 per cent?  Did you do door‑to‑door or based on your other ‑‑

9529             MR. HILDEBRAND:  These estimates are really taken from 50 years of experience in this business, in communities large and small.  From previous applications that we made and our experience, we have a track record of what works and the impact on existing broadcasters.  So, these are really estimates that we have experienced in our previous applications and launches.

9530             COMMISSIONER DUNCAN:  Does that also apply to expecting that current advertisers will increase their advertising buys by 25 per cent?

9531             MR. HILDEBRAND:  Exactly, yes.

9532             COMMISSIONER DUNCAN:  Not by 25 per cent but that you ‑‑

9533             MR. HILDEBRAND:  We find that when we provide the kind of local service that we are proposing, that attracts advertisers in a whole different way because they want to get involved with that.  So, that is why we are very confident that, number one, we won't be taking money from the existing broadcaster, and certainly we won't be making any impact on Vancouver broadcasters.  They won't even know we exist here, and that is fine with us.  We are just happy to be under the radar entirely for them and just we are Chilliwack.

9534             As Ken Goldstein has done a number of studies, he has very interesting stats on how this works and only confirms what our experience has been.

9535             COMMISSIONER DUNCAN:  The 5 per cent from existing incumbent stations seems low.

9536             MR. HILDEBRAND:  It is low and nobody can know exactly whether it will be 4 or 7 or whatever, but, again, we don't think that we are taking money from existing broadcasters.  We may get business from the same clients, but that is revenue over and above because the existing clients that are on the radio stations in Chilliwack, they are looking to reach the Chilliwack listeners that that station has.

9537             We propose to have different listeners.  We would be repatriating listeners from Vancouver stations, from U.S. stations, from satellite.  So, this was a new audience.  So, we don't expect that we will be moving audience from that radio station, nor will we move much revenue from that radio station.  We will develop new revenue.

9538             COMMISSIONER DUNCAN:  That actually dovetails into what I had intended to be my earlier question, which was which Vancouver stations, then, which out‑of‑market stations do you expect that you are going to get your audience from?

9539             MR. HILDEBRAND:  We will get some from everywhere.

9540             COMMISSIONER DUNCAN:  Not your revenue but your audience.

9541             MR. HILDEBRAND:  We will get some from everywhere because, again, as we said earlier, right now people are listening to a broad spectrum of available signals, even though there isn't really a lot of local service.

9542             As these people find out there is local service here, they will gravitate to that radio station.  That has been our experience.

9543             MR. GOLDSTEIN:  If I might just amplify on that a bit.  First of all, yes, indeed it will be a sliver from here and a sliver from there, but the key point here, and I think your question focuses on that key point, is why so little from the current local station?

9544             It is because we are not dealing with a fully developed potential here.  If the full potential in the market was now being realized or virtually the full potential and you were talking about a rearrangement of shares within a full potential, you have here a situation where, based on the retail data and I provided in our report a range, you have a range of possible radio revenues that are greater than what the current station is taking and, consequently, recapturing some of that unrealized potential is where the greatest opportunity is, rather than necessarily cutting into the other guy.

9545             COMMISSIONER DUNCAN:  I did read your report.  I saw that.

9546             I am curious because you did have quite a bit on new media in your remarks this morning.  Are you into new media in a big way in some of your other stations or are you just entering that?

9547             MR. FRIESEN:  Certainly what we found in all the other communities is that if we do the radio part right, we have all this content and all this information that nobody has on the internet, and if we can get it there quickly, new media is a very, very important part of people's lives.  We can't operate in the next generation without having an on‑line component that is absolutely fast paced.  We have to provide that information to the internet as much and as quickly as we do, but this isn't a radio station website.  We do have radio websites and that is where we run contesting and the fun parts maybe go there.

9548             But for the community, all that information we have, we think it is vital that we provide that to the community.  Yes, we have nine portals similar to this across the prairies.  The town I lived in I was mentioned not long ago it was minus 45 and they are closing schools.  I live in a town of 10,000.  We had 17,000 computers go on our site that morning to find out if there was school.

9549             We know that it impacts.  We drive activity both ways.  So, it is a very important part of our future.  We think we have to do that to stay relevant on the radio side.

9550             COMMISSIONER DUNCAN:  Are you just streaming the exact radio station?

9551             MR. HILDEBRAND:  No, we don't stream.  This is totally different.  The local news and information that we gather appears there.  The weather is there all the time.  Lyndon is a little modest.  In Steinbach where we started this process, steinbachonline.com is the second busiest site in Manitoba, second only to Manitoba Telephone System.

9552             So, it is a huge part of our business and is growing.  So, that is what I said before in my remarks.  I said Chilliwack would not only be getting a new radio station, they would be getting a new media component that would explode the process even more dramatically.

9553             So, we see that radio and the new media going forward will be an integral part of being viable, and we see the new media piece actually growing in communities where we are already doing it at a much greater percentage than radio revenue.

9554             This is almost like another business.

9555             COMMISSIONER DUNCAN:  So, you are generating revenue on those sites now?

9556             MR. HILDEBRAND:  We are.

9557             COMMISSIONER DUNCAN:  Which is not in your projections?

9558             MR. HILDEBRAND:  No, this is not radio revenue.  So, this is not part of the projections there at all.

9559             COMMISSIONER DUNCAN:  Do you have an interactive so that if I was on my computer I could give you back information or feed comments to you?  Do you do that as well?

9560             MR. FRIESEN:  We do that.  That is why I made reference to the web 2.0 technology.  We want to be totally interactive.  We want to have discussions with the community.  We want to throw out stuff on the radio and ask questions so that they can debate it on line.  We have also a user generated portion where users with cameras or videos or comments can automatically put it into the categories in the community portal so that they can interact.

9561             So, it is all going on there as well at the same time that we are stimulating some of that on the radio.

9562             COMMISSIONER DUNCAN:  Is this in place now and operating, for example, in a community the size of Steinbach, fully operating?

9563             MR. FRIESEN:  We have this.  We are just upgrading to 2.0 in the next month.  But we are doing all the same things in nine communities now.

9564             MR. HILDEBRAND:  There is nine across Manitoba and Saskatchewan.

9565             COMMISSIONER DUNCAN:  So, I would assume probably your larger ones; is that what you are doing?

9566             MR. HILDEBRAND:  We have experience in this.

9567             MR. FRIESEN:  As well Saskatoon.

9568             MR. HILDEBRAND:  Yes, Saskatoon is doing it as well.  So it is working in both Estevan and Weyburn of the size of 10,000 and 250,000 in Saskatoon.  So the process works in both of those sizes and, as I said before, it is just growing.  We think this is a very, very important part of our future.

9569             COMMISSIONER DUNCAN:  I am just curious because, as you know, one of the applicants is for Chilliwack/Abbotsford.  I am just wondering if you didn't consider Abbotsford or will your signal reach into Abbotsford?

9570             MR. HILDEBRAND:  We did consider Abbotsford but we thought we would apply for Chilliwack and hopefully we would get an approval for Chilliwack and once that was done, then we would apply for Abbotsford.  We see these as two separate markets, two totally different communities.  So, we didn't want to mix them up.  We didn't want to apply for both at the same time to confuse the Commission.  We wanted to focus on Chilliwack.

9571             COMMISSIONER DUNCAN:  I appreciate you not confusing us, me in particular.

9572             How many new licences do you think that the market could support?

9573             MR. HILDEBRAND:  It might support one or two, but it appears there is only one frequency.  So I think the Commission's task is going to be more difficult.  From a market size itself, we would have no objection at all if there would be two new stations, but we don't see where there is a frequency that will make it work.  I think that may be the problem.

9574             COMMISSIONER DUNCAN:  Thank you, Mr. Hildebrand, team.

9575             THE CHAIRPERSON:  Commissioner Williams, please.

9576             COMMISSIONER WILLIAMS:  Good morning, Mr. Hildebrand and Golden West panellists.

9577             I am going to start with Mr. Porter.  You stated earlier that you have been encouraging Golden West for about two and a half years.  How did you meet?  How did you find Golden West and have you encouraged other applicants as well or was this primarily a Golden West focus?

9578             MR. PORTER:  It wasn't really us finding Golden West.  We were surprised, as I said in my initial comments, about the decisions that were made about not supporting us when we got to town.  And we got into we have to do something about this mode really fast.  We hired a consultant who I think has been in communication on and off with the Commission over this.  We were working with what was going to be civil radio in Abbotsford, and we just put it in the hands of the mayor; the former owner of the local station in Chilliwack years ago, went to him, just anybody.

9579             I think it came where Golden West was the first that showed any interest.  We then started the conversations from there.  As a business owner, I decided I better learn who these people are and started doing my research and liked what I saw, and that is when I said I would like to endorse them for sure.

9580             COMMISSIONER WILLIAMS:  Thank you.

9581             It is just Mr. Hildebrand said about 13 months ago he applied, and I guess what I am hearing is that there was 13 months of preparatory work before that application was even filed.  Would that be correct?

9582             MR. HILDEBRAND:  I would like Darryl actually to talk a little bit about his experience.  The team just came back from a prairie road trip which took them to many of the communities in Saskatchewan where we are media partners with teams in the league, including Swift Current and Moose Jaw and Saskatoon.  I would like to have him elaborate a little bit of his experience in Saskatoon which outlines exactly the kind of thing that we propose to do.

9583             MR. PORTER:  It was impactful because when I first researched Golden West I simply went on line and made some calls and actually phoned some teams that deal with them.  I didn't know them.  I liked what I heard around local relevance.

9584             In Chilliwack, when you are a bedroom community ‑‑ and they hate that terminology, I know ‑‑ when we are so close to Vancouver, you run the risk all the time of being very forced to deal with the Vancouver‑based media, which is exactly who we cannot be.  In fact, right now 80 per cent of our media spin is in Vancouver.  So, some of your previous questions, we would stop doing that because we don't want to do that.  We have to be about Chilliwack.

9585             That is what we were told Golden West does.  So, I go out on the road with my team, and you have a lot of hours to pass when you are waiting for games every day and I see in Saskatoon, Swift Current, Moose Jaw, but in Saskatoon especially, it was so integrated to the point where you couldn't tell during the game who works for who.  Was it the team that was putting on the game or was it the radio station?  It was all blended.

9586             I was going that is exactly what Chilliwack needs and the Chilliwack Bruins need because that means you get all day chatter; there are just chatting about you, and that is where vibrancy and excitement comes from.  What I saw was local relevant radio is exactly what Chilliwack needs to be because we are only 30 minutes away from Abbotsford and we don't want to be that.  So, at the end of the day that is what these people do.  So I came back excited about what I saw.

9587             COMMISSIONER WILLIAMS:  Thank you, Mr. Porter and Mr. Hildebrand.

9588             Mr. Friesen, you gave us a demonstration of your new media initiatives or Golden West new media initiatives.  I understand you have nine portals doing similar.

9589             Is this monetized?  Is there a way that you are getting revenue?  Do you sell classified ads?  Do you have to buy a radio ad before you can buy a classified ad?  Do you need both?  Is it an emerging revenue stream?  What percentage, say, in rough terms if you have monetized it, are you drawing into Golden West from that opportunity?

9590             MR. FRIESEN:  First of all, we don't ask our audience or our users to pay anything to use our sites.  All the user generated and all the other benefits to the community, it is all free.  The information is free.  There is no sign up.  There is nothing that costs money.

9591             We have always thought we were relatively good at selling advertising so we wanted to be advertising‑based.  So, we are utilizing both the visual ad space as well as the pay per clicks or the other side of the internet as well.

9592             So, it is totally advertiser based, and at this point it is growing faster than anything else that we have done.  It is growing at probably 50 to 100 per cent in most of our markets.

9593             COMMISSIONER WILLIAMS:  That is great.  That is my next question.  So, it is growing at a rapid pace.

9594             MR. FRIESEN:  And it is making maybe 10 per cent, Elmer; is that fair?

9595             MR. HILDEBRAND:  There is a significant revenue stream that we are developing with these portals, new media.  I shared this with the Commission earlier that our new media business for our company will likely hit $1 million this year across our company.  It is starting to be significant.

9596             We see this growing rapidly.  So, that is why we want to marry the two together.  We see this as a business that is so complementary that at the end of the day they merge like that.

9597             COMMISSIONER WILLIAMS:  The information or the content that is on your new media sites, you have gathered it through your traditional methods, but is it presented exactly the same or is it reworked in some way?

9598             MR. HILDEBRAND:  All of the content on there is our own.  We don't have anybody giving us content.

9599             One of the things that we have done over the years, because we have made our living on local information, we saw that we had this bag of local information.  If we can reuse it again in another form, then that only makes some sense.

9600             So, we have been putting all of the information that we gather on to this community portal.  So, if you happen to go away for a day, you come back tomorrow, or if you are away and you want to see tonight what happened in Steinbach during the day, you click on and it is all there.

9601             COMMISSIONER WILLIAMS:  Is it verbatim to what is on the radio?

9602             MR. HILDEBRAND:  No, it wouldn't be verbatim.  It wouldn't be like 24‑hour information.  But all of the local news and local weather, sports, that is all there.

9603             MR. FRIESEN:  Writing styles change not a lot, but conversational writing versus visual reading, but it is essentially the same information.  Our news team basically writes another version or two for the internet and it is so simple.  It automatically feeds to the website.

9604             So, it is an extra jump.  That said, the audio portion that we are showing here in terms of podcasts, we are really doing some of that.  That is a little more labour intensive but it is all radio product that we already have that is repurposed for this.

9605             COMMISSIONER WILLIAMS:  And the growth rate, if I can hear again, what percentage was it growing?

9606             MR. HILDEBRAND:  The growth rate is dramatic.  We don't want to overdo it.

9607             COMMISSIONER WILLIAMS:  Yes, dramatic it is.

9608             Thank you very much.  Those are my questions, Madam Chair.

9609             THE CHAIRPERSON:  Commissioner Menzies, please.

9610             COMMISSIONER MENZIES:  Just quickly, there are newspapers in Chilliwack; right?

9611             MR. HILDEBRAND:  Yes, weekly newspapers.

9612             COMMISSIONER MENZIES:  Mr. Porter, just to clear this up for me now, your organization owns the Langley Chiefs as well?

9613             MR. PORTER:  No.  The former Chilliwack Chiefs moved to Langley.  We went into Chilliwack as the Chilliwack Bruins.  We don't own them.

9614             COMMISSIONER MENZIES:  Are a couple of your owners also working on the Langley arena project or is that just separate?

9615             MR. PORTER:  They have a minority share in the Bruins company, but that is a whole different company that is building that arena in Langley.  But, yes, they are involved in that.

9616             COMMISSIONER MENZIES:  That is a smaller arena in Langley; right?  So there is no chance that you would be moving there?

9617             MR. PORTER:  Oh, God, no.  I wouldn't be sitting here doing this if I was planning a move.

9618             MR. HILDEBRAND:  He wants to stay in Chilliwack.

9619             COMMISSIONER MENZIES:  Because that is 5100 or something in Chilliwack so it is much bigger?

9620             MR. PORTER:  Yes.

9621             COMMISSIONER MENZIES:  In terms of the music formatting, I just want to get a chance to more fully understand that.  You made reference to the fact that there is somebody centrally in the company who helps with the music formatting.  Just to be clear, I mean, "Hi, I'm from head office and I'm here to help," I don't want to be sarcastic about it, because it is fine with me either way it goes, but is there local input on music formatting or is it central or, if not, help me understand the nature of the relationship.

9622             MR. FRIESEN:  Our program director for the company provides guidance and direction.  We do some standardized things, but, no, absolutely it is finished on site.  So, the guidelines are provided.  Much of the work may be done, but then it goes on site where the local part is finished.

9623             We are very aware of that.  And to come from head office, we have done that a few times.  We know as well as anyone that is not how we are going to get a buy in from the community; that is not how we are going to get a buy in from our staff.  We try to guide them and influence what we can and try to set up the basics that we know makes sense with our experience.  Then we give it to the local people and they have to program.  We don't know the artists that are local.  We know Trevor.  We will rely on the local artists to provide the local influence to that sound.

9624             So, the answer is both.  We provide guidance, but they finish it on site.

9625             COMMISSIONER MENZIES:  Thank you.

9626             MR. HILDEBRAND:  One of the things that I guess we have developed in many facets of our radio business over the 50 years are certain templates that we know work in every market, whether it is news or music or other things.  There are certain similarities.

9627             So, we feel it is only prudent to use the experience that we have already gained in other markets to say, these kind of things actually work; so, here is a framework of how we are going to do that, then you finish it up locally.  That is sort of the modus operandi that we have used and it works quite well.

9628             COMMISSIONER MENZIES:  Thank you.

9629             You may have mentioned this and I may have missed it.  Forgive me if I did.  I found a reference on line to the fact that you might be using the call letters CHWK.  Is that the case?

9630             MR. HILDEBRAND:  Yes.  We have already had the Department of Industry approve those call letters.  So, they are reserved for us.

9631             COMMISSIONER MENZIES:  That is the historic founding call letters for Chilliwack radio; right?

9632             MR. HILDEBRAND:  That is right, yes.

9633             COMMISSIONER MENZIES:  I was curious because there was a guy named Menzies involved and from what I found he forgot to put the station on air sometimes because he was too busy selling radios.

9634             MR. HILDEBRAND:  We were very happy that those call letters were still available because they do have heritage going back probably 50 years as well.  So, when we trotted those out in the community, they said, wow, this will be great.

9635             COMMISSIONER MENZIES:  I am interested in a little expansion on what sounds to me like a very strict definition of "local."  I don't mean that either positive or negative.

9636             Given the nature of the Fraser Valley and the way commerce and traffic and jobs and things flow through, I was surprised that you were excluding Abbotsford even, for instance, from your coverage area.  Could you just expand on that a little bit for me?

9637             MR. HILDEBRAND:  Technically it is very hard to cover Abbotsford from Chilliwack because of the rocks that get in the way.  Again, that is why I said if we were successful with this one, then we would readily apply for Abbotsford to give them their own radio station.

9638             But, again, the local process, in many areas, we are in the shadows of large cities.  A good example would be Calgary.  We have radio stations in High River and Okotoks, which is in the shadow of Calgary.  When we went there, the Commission was asking, how much time are you going to spend in Calgary, what are you going to do there?  We said the same thing there as we say here.  We are not interested in Calgary.  Over there we actually have a signal because there is no mountains in the way.  But we don't go to Calgary to solicit business.  There is enough business in Okotoks and High River to provide more than adequate base for our growth.  When we do that, the local communities are actually very appreciative of the fact that they don't have to compete with a Calgary advertiser on the Okotoks radio station.  By concentrating on local, you sort of eliminate that.

9639             So, we are experienced with that both in Calgary, Regina, Moose Jaw is close to Regina, and in Winnipeg, where we have a number of stations within 40 miles of Winnipeg and the signals cover there.  But we don't go there; we concentrate on the local communities.

9640             It has just been our business practice.  It is surprisingly simple and it works very effectively, and that is what we know would work here as well.

9641             COMMISSIONER MENZIES:  Thank you very much.

9642             THE CHAIRPERSON:  Commissioner Duncan.

9643             COMMISSIONER DUNCAN:  I have a few more questions that I overlooked asking.

9644             I notice in your December 3rd response you projected your audience share would grow from 15 per cent in year 1 to 30 per cent in year 7.  Is it possible for you to give us a breakdown of those projections by year for the seven years?

9645             MR. HILDEBRAND:  Yes, we actually have a graph of the audience share that we are projecting, and we would be happy to file it with you.

9646             COMMISSIONER DUNCAN:  That is great.

9647             Can you also give us the detail of your minimum annual over and above contribution for each of the seven years?

9648             MR. HILDEBRAND:  We can file that with you as well, yes.

9649             COMMISSIONER DUNCAN:  Are you also agreeable to accepting a COL that your total over and above contribution over the seven years would be $200,000 for CCD?

9650             MR. HILDEBRAND:  Yes.

9651             COMMISSIONER DUNCAN:  I am just curious about the staff employed that would be, for lack of a better word, repackaging the content to go on the new media.  Are they included in the staff employed at your ‑‑

9652             MR. HILDEBRAND:  No, that would be separate.

9653             COMMISSIONER DUNCAN:  That is it.  Thanks very much, Mr. Hildebrand.

9654             THE CHAIRPERSON:  Thank you.

9655             I just have a few follow‑up questions.  I wasn't following very well the full‑time and the staffing that you would have at the station.  I know that you have said several times that it is six reporters.

9656             So, can you explain to me again on how many of the reporters will be full‑time, how many part‑time and then in addition to the six reporters, what other paid staff there will be?

9657             MR. FRIESEN:  We will require at least six full‑time news people.  Then we are going to need a full complement of announcers and backroom staff and sales people and everything else that makes a radio station.

9658             With six people, we will need to at least have 21 to 25 employees at the outset in order to operate the kind of service that we need to.  It is far more employees than we need to have, but because of our service on the local side it takes a lot more people.  So, we will likely start with a lot more people than we need, but we say at least a minimum of six on the news side, as well as a full complement of announcers and support staff.

9659             THE CHAIRPERSON:  In terms of the full complement of support staff, staff other than the six reporters, how many head counts do you anticipate right now?

9660             MR. FRIESEN:  I would think we would need at least another four or five just on the on‑air side, plus some part‑timers.

9661             MR. HILDEBRAND:  Again, all of these things would be similar to our operations that we have in other communities.  We want to commit to the Commission that the kind of service that we are proposing to do, we will put the horsepower behind it to make it happen.

9662             THE CHAIRPERSON:  Thank you.

9663             Generally I have heard about voice tracking and that there is some negative perception on voice tracking.  I know that you don't have much in your application and live‑to‑air programming is a better reflection of ‑‑ the local programs will be better than voice tracking.

9664             Do you have a comment on that, just your perception?

9665             MR. HILDEBRAND:  My perception on voice tracking, as I think Madam Duncan said before, it is an assist.  So you have a person in the studio, he or she can voice track part of a program that they are doing and then do some other productive work while the hour or two hours are passing.  Whereas it used to be this person would have to sit in the control room watching the records spin, and now if they didn't do any voice tracking they would have to sit there and watch the computer do all the work.  So, there is time in between voice tracks when they can actually do some other productive work, do some production work, make some calls, surveillance calls, that kind of thing.

9666             So, we see voice tracking as an assist to be more efficient, to sound better, but we still like to have people in the building so that we can answer the phone and we see that as being live.  Again, we find that that makes the most sense.

9667             THE CHAIRPERSON:  So, it is sort of not necessarily true that the voice track programming will be far inferior; it doesn't necessarily have to be that case; right?

9668             MR. HILDEBRAND:  No.

9669             THE CHAIRPERSON:  For Mr. Goldstein and Mr. Hildebrand, I think, Mr. Hildebrand, you commented that had it not been for the lack of frequencies, probably the Chilliwack market can sustain two new entrants.  I will just throw this question out.

9670             On what basis do you come to that conclusion, and then I am wondering if, Mr. Goldstein, you can also comment on the Chilliwack BBM market is very, very large, and can you add any information to assist the Commission in terms of the commuter traffic and the population being concentrated along the Fraser River corridor, just to give us more information about the economics of the area, please.

9671             MR. HILDEBRAND:  Maybe I will ask Mr. Goldstein to go first and then I will follow up.

9672             THE CHAIRPERSON:  Thank you.

9673             MR. GOLDSTEIN:  There is indeed commuter traffic, but I think it is important to understand the way Statistics Canada defines a census metropolitan area or, if it is less than 100,000, usually they call it a census agglomeration.

9674             The underlying definitional idea that goes into that is to say that you have a core urban area and then you are going to include in the census metropolitan area near that core area, areas from which a lot of commuting takes place.

9675             So, the fact that Statistics Canada has defined the Vancouver census metropolitan area, which is essentially the same as the Greater Vancouver Regional District, the GVRD ‑‑ Abbotsford is now a separate census metropolitan area, and Chilliwack, not yet over 100,000, although clearly heading in that direction, is a separate census agglomeration ‑‑ tells us that although there is some commuting, there is not that much commuting, certainly not enough for them to say that it would be the Abbotsford/Chilliwack census metropolitan area.

9676             So, they are clearly distinct communities.

9677             In terms of estimating the economic activity, I looked on line at the Chilliwack Economic Partners Corp. website, and it was actually quite interesting to see the mix in Chilliwack.  Obviously it is growing because it is a nice place.  I mean, people want to live there.  But you have a company called Stream International, which is in the high tech area there, for example, that I think has over 1,000 employees now in Chilliwack, perhaps more.

9678             But I looked at the list, and just to read the list, without trying to put a specific number to each, of how they divided up the Chilliwack economy, agriculture, aviation and aerospace, education, film, food processing, health care, manufacturing, professional services, real estate, retail/wholesale trade, technology and tourism.

9679             Well, that is a very nice mix.  That is really a very nice mix and they all seem to be firing on pretty good cylinders.

9680             To get down to the specifics of the radio projections, of course with only one station there and even if we counted the other station that is there but, as you observed last year in your decision on the renewal of the licence, it is really in Vancouver, it is under one owner; there is one station, we can't get the specific results, but what we can do is an exercise that takes a couple of steps, and I did it in the report.

9681             First of all, you can get a good estimate for the retail trade in the area.  The next thing you can do is you have published the data for Vancouver radio and you have published the data for Victoria radio.  So we can start to do some subtraction, and we can say that outside of Vancouver/Victoria radio in British Columbia is a certain amount, and the relationship between that and the retail trade outside of Vancouver and Victoria is a certain amount, and that then gives us a basis for a range for a market like Chilliwack.

9682             What I found when I analyzed this application was that the experience that Mr. Hildebrand was talking about has put their audience projections and their revenue projections, as far as I am concerned, right in the sweet spot, exactly where it should be if you look at the current station, what audience it has at the moment.  It hasn't been overly optimistic or overly pessimistic.  I think it is exactly where it should be.

9683             MR. HILDEBRAND:  To add to that, if there was a frequency, and maybe you could licence two stations, when we look at some cities, for example, Brandon is 35,000, 40,000 people, they have four radio stations.  So that Chilliwack at 80,000 people could certainly have at least three.  That was the basis of my comment that if there was a frequency, certainly from our perspective two licences wouldn't be an issue.

9684             Does that answer the question?

9685             THE CHAIRPERSON:  Yes, I will come back to this one.

9686             Mr. Goldstein, I should know this, but what is the most easterly community within the Chilliwack BBM?  Merritt is not in there, is it?  Merritt is the Nicola Valley.

9687             MR. GOLDSTEIN:  The answer is I am not sure, but even if Merritt were included, most of the 80,000‑plus is Chilliwack.  So, even if you had some small communities to the east included, the economic impact of those communities on the projections would be relatively small.

9688             THE CHAIRPERSON:  Do you know what proportion of the 80,000‑plus commutes to Vancouver for work?

9689             MR. GOLDSTEIN:  I do not, but because of the definitions of the CMAs, I would guess it would be a modest amount.

9690             THE CHAIRPERSON:  Modest would be a third?

9691             MR. GOLDSTEIN:  Oh no.

9692             THE CHAIRPERSON:  Less than that.

9693             MR. GOLDSTEIN:  If it was as high as a third, Stats Can would have somehow linked it to either Abbotsford or Vancouver.  That goes into the definition of a census metropolitan area or a census agglomeration.  Commuting is one of the key factors.

9694             THE CHAIRPERSON:  Thank you very much.

9695             Mr. Hildebrand, based on your answer, you would feel that even if we were to licence two in Chilliwack, your business case would not be adversely impacted?

9696             MR. HILDEBRAND:  Not really, no.

9697             THE CHAIRPERSON:  If we were to licence two, in addition to you, who do you think we should licence or who would be the most compatible; who would be the most not compatible?

9698             MR. HILDEBRAND:  They are all my friends so I don't know.

9699             THE CHAIRPERSON:  You can just talk about the format.

9700             MR. HILDEBRAND:  Again, as we have said before, format is important, but for us, format is only this piece.  The information, the news is the other piece.  So it is like a total package.

9701             As we know, there are a variety of formats available now, and who, if we are successful, by the time we sign on, one or two of the stations could have changed formats.  So, that is always a moving target.  I think the Commission has a great challenge in trying to deal with a format process simply because it is so fluid.

9702             We basically decided to hang our hat and our future on not just the musical format, but an entire community service format that includes far more news and information and music to make one conglomerate picture that then makes some sense.

9703             THE CHAIRPERSON:  Mr. Friesen, just on the format, when I was listening to the music, I agree with you, I think it is a little harder than 104.9, Clear FM, but do you think it is accurate to describe it between 104.9 and maybe JACK‑FM, 96.9?

9704             MR. FRIESEN:  It could have those similarities.

9705             THE CHAIRPERSON:  I believe legal has some questions.  Ms. Pinky.

9706             MS PINSKY:  Thank you.  I just have a few questions of clarification with regard to your presentation this morning.

9707             First, with regard to your statement, and you did discuss the issue with Commissioner Duncan, that you would be creating a separate category specifically for emerging B.C. artists and you state that it would be scheduled a minimum of three times a day.  I just want to understand what that meant.

9708             Is that referring to three tracks a day, if you could elaborate on that, please?

9709             MR. FRIESEN:  Our intent with that category was three times a day, 6:00 a.m. to 6:00 p.m. every day to play three local B.C. emerging artists.

9710             MS PINSKY:  Thank you.

9711             With respect to the CCD commitments, because you have newly identified the specific initiatives, I wonder if I could ask a few questions of clarification so we have a better understanding of what the initiatives will consist of.

9712             Firstly, with regard to the McDonald recording studio, you indicate that the money would be allocated to the production of music CDs by local artists.  Could you just elaborate as to would that money be earmarked for studio time or is that money for the actual production of the CD?

9713             MR. HILDEBRAND:  What we have been doing in some other provinces with recording studios, we would provide $10,000 toward the production of a CD.  That could then include both studio time and some production time.  In many cases they have done the complete job, including packaging, everything.  That is the way that we have been working with existing studios in Manitoba and Saskatchewan.

9714             So we provide the money to the studio to then work with the artist or the group.  The outcome is then a CD.

9715             MS PINSKY:  Also just to clarify, McDonald Recording Studio, is that independent of your station?

9716             MR. HILDEBRAND:  Yes, totally independent.

9717             MS PINSKY:  Who would be responsible for identifying the local artist that you would target?

9718             MR. HILDEBRAND:  That would be done in conjunction with the station and the local music community.  So that if there was an abundance of material that was available, we would set up an independent panel in the community and Trevor is well versed with the musicians in the Valley and we would then determine who was most deserving of this contribution.

9719             MS PINSKY:  So the station would be spearheading the ‑‑

9720             MR. HILDEBRAND:  We would work with the music community.

9721             MS PINSKY:  But it is not the production studio?

9722             MR. HILDEBRAND:  No.

9723             MS PINSKY:  Then with regard to the Chilliwack Symphony, if you could just explain what they would be ‑‑

9724             MR. HILDEBRAND:  Again, this would be a donation to the symphony to underwrite their expenses.  There would be no strings attached to it.

9725             MS PINSKY:  And with the Academy of Music?

9726             MR. HILDEBRAND:  The same with the academy.  The academy, I think, currently has about 1,000 students that they are working with on a regular basis.  The academy is an interesting organization.  They start students in some cases in pre‑school, taking music lessons.  So, we would envision, again, this would be a contribution to the academy with no springs attached.

9727             MS PINSKY:  Just to clarify, in both these instances, the Academy of Music and the Symphony, the money would be given to the institution to allocate to expenses?  It won't necessarily be, for example, funding a student?

9728             MR. HILDEBRAND:  It would be at their discretion.

9729             MS PINSKY:  With regard to the high school music scholarship, would you be identifying the high school?

9730             MR. HILDEBRAND:  No, we would want the people involved with the music program to actually identify the individuals that would get the scholarship.

9731             MS PINSKY:  Excuse me, but is there only one high school in Chilliwack?

9732             MR. HILDEBRAND:  We would provide this amount to the schools on a rotating basis.  So this would be an annual amount that we would provide.

9733             MS PINSKY:  Then with regard to years 6 and 7 for the money to be allocated to the artists who have not yet emerged, I understand you obviously couldn't identify the artists, but would you be giving money directly to the artists?  What would the initiative consist of?

9734             MR. HILDEBRAND:  We would be giving it to qualified artists or qualified organizations that would appear between now and then.  Again, all of this would be done with the local music community and, as I say, the reason we are doing it this way, we don't know who they will be at this point.

9735             MS PINSKY:  I understand, but you are saying it could either be given to an association involved with local musicians or the local musicians themselves.

9736             MR. HILDEBRAND:  We would coordinate with the local music community to determine where that would go.

9737             MS PINSKY:  With regard to the 20 per cent contribution to FACTOR, that would be attributable to the $200,000?  Should we add that money on top of the 200,000?

9738             MR. HILDEBRAND:  You can if you want.

9739             MS PINSKY:  Because I notice the chart doesn't refer to the 20 per cent FACTOR contribution.

9740             MR. HILDEBRAND:  You can add it on top of that if you want, Yes.

9741             Given the opportunity here to speak about FACTOR, I wouldn't mind if I could make an aside comment on this.

9742             We think FACTOR does a great job in many instances, but we have also found that in many of the smaller markets, the FACTOR money never sort of gets down that far.  So, we will be happy to provide money to FACTOR if that is what the Commission determines we should do.

9743             We would prefer that money go to local organizations rather than to national organizations.  We see it going farther in the smaller markets if we do it that way.  We have been sending money to FACTOR for many years and we haven't seen any of it ever come back to our markets.  Yet, we know there are artists there that would benefit from it.

9744             So, FACTOR, from our perspective, and we may have the wrong perspective, but from our perspective, it is more an organization that supports and helps the major markets of Canada, which we aren't one of.

9745             That is just my editorial, Madam Chair.

9746             MS PINSKY:  Should any of these initiatives be determined to be ineligible by the Commission, would that money be ‑‑

9747             MR. HILDEBRAND:  Reallocated to whatever is eligible, for sure.

9748             MS PINSKY:  Thank you.

9749             Would you be able to provide for us letters from at least from the Academy of Music, the Symphony and McDonald Recording Studio and perhaps any of the high schools indicating that all monies received would be dispersed according to CRTC criteria?

9750             MR. HILDEBRAND:  Surely, yes.

9751             MS PINSKY:  When would you be in a position to provide that?

9752             MR. HILDEBRAND:  Again, as soon as possible.  Probably not before today or tomorrow, but shortly.

9753             MS PINSKY:  For the purpose of that letter, if you could provide that by the end of Friday, that should be adequate.

9754             MR. HILDEBRAND:  Fine.

9755             MS PINSKY:  You have also undertaken to provide the total amount of spoken words to take into account the Sundays.

9756             MR. HILDEBRAND:  On the weekend, yes.

9757             MS PINSKY:  Could you provide that by tomorrow end of day?

9758             MR. HILDEBRAND:  Sure.

9759             MS PINSKY:  As well, you have undertaken to provide the break down of the audience share.  Could you provide that by the end of day ‑‑

9760             MR. HILDEBRAND:  We have some charts that we could actually leave with you, I think as we walk out now.

9761             MS PINSKY:  Great.  I think that is it.

9762             I just wonder if I could ask one last question.  You have been discussing your new media initiative and have been saying that it is an integral component of the station of the undertaking that, for example, the news team would be used to produce and repurpose material.  The fact that you report your revenue separately, is that a function of the distinct regulatory frameworks that apply?

9763             MR. HILDEBRAND:  Yes.

9764             MS PINSKY:  Thank you very much.

9765             THE CHAIRPERSON:  Thank you, Mr. Hildebrand and your team.

9766             This is your opportunity to have your last pitch on why you believe you are the best.

9767             MR. HILDEBRAND:  If we haven't convinced you by now, I am not sure what we will say, but maybe just recap a bit.

9768             The most relevant reason we should be licensed is outlined in the supporting letter from Mayor Clint Hames.  I think that says it all.

9769             The city of Chilliwack asked us to come and provide a local radio service for one simple reasons.  Mayor Hames told me at our original meeting that they had done their homework in checking out broadcasters and wanted the Golden West brand of service.

9770             The same is true on our planned relationship with the Chilliwack Bruins.  They operate in a league where they can see first hand the kind of media partner Golden West can provide in cities like Moose Jaw, Swift Current and Saskatoon.

9771             I also think the Commission is well aware of our track record.  We generally deliver more than we promise at hearings.

9772             The Commission is also aware that in areas where we operate in the shadow of major markets, we continue to focus only on our local markets.  In Manitoba we operate in the shadow of Winnipeg; in Saskatchewan we operate in the shadow of Regina; and in Alberta we are in the shadow of Calgary.  In each case we ignore the fact that we could do business in these major markets for a number of reasons.

9773             First of all, we told the Commission we were not looking at those markets.  We would rather focus only on the local community.  Second, it actually makes business sense to concentrate on the local markets because local businesses like the fact they do not have to compete with city advertisers on our airwaves.

9774             The two letters in our original application, both from Mayor Hames and from Darryl Porter I think underline the reason.

9775             Our financial projections are most realistic, as are our audience projections, and we will have the least impact on the incumbent broadcasters in the Valley.

9776             Lastly, we have the history, the track record, the resources and the commitment to do a great job for Chilliwack.

9777             Thank you.

9778             THE CHAIRPERSON:  Thank you, Mr. Hildebrand and your team.  Thank you for your time.

9779             We will take a 15‑minute break right now and be back for 11:25, please.

‑‑‑ Upon recessing at 1109 / Suspension à 1109

‑‑‑ Upon resuming at 1125 / Reprise à 1225

9780             THE SECRETARY:  We will now proceed with item 19, which is an application by Newcap Inc. for a licence to operate an English‑language FM commercial radio programming undertaking in Chilliwack.

9781             Please introduce yourself and your colleagues, and you will then have 20 minutes to make your presentation.  Thank you.

PRESENTATION / PRÉSENTATION

9782             MR. STEELE:  Madam Chair, members of the Commission, and Commission staff, thank you for considering this application from Newcap for a new FM radio station to serve Chilliwack, B.C.

9783             My name is Rob Steele, President and CEO of Newcap Radio.  Joining me today are Glenda Spenrath, Director of Newcap Operations, David Murray, Chief Operating Officer for Newcap Radio, Steve Jones, VP of Programming, and Josie Geuer, Program Director of Ottawa's Hot 89.9.

9784             Chilliwack is a vibrant community of close to 80,000 people and one of the fastest‑growing mid‑sized cities in B.C.  Chilliwack is a beautiful city nestled in a wide river valley surrounded by lakes and mountains.  While only 100 kilometres east of Vancouver, Chilliwack enjoys milder temperatures, a lower cost of living, and a slower pace lifestyle that makes it a great place to live, and an increasingly attractive alternative for Lower Mainland residents.

9785             Most Vancouver stations, to one degree or another, are heard in or near Chilliwack, as well as several cross‑border stations from Washington state.  However, Chilliwack is served by only one local commercial radio, that is Rogers AC station STAR‑FM.

9786             Newcap Radio has a strong track record for operating radio stations in mid‑sized markets like Chilliwack.  It takes a certain kind of radio company to be successful with both audiences and advertisers, and maximize their contribution to the Canadian broadcasting system.  Many large broadcasters don't bother.  The profits are too thin and management's priorities are elsewhere.

9787             We see it differently at Newcap.  Partly because our roots are in smaller and mid‑sized radio markets, and partly because we do keep a lean head office, and we put our resources where we think it matters most ‑‑ at our local stations.  But mostly, I think, it is because we do have a passion for it and we are pretty good at it.

9788             Our small and mid‑sized market stations are all highly rated commercially, and highly rated for their commitment to their local communities.  Our staff across the country generously give their time to raise money and awareness for a variety of charitable efforts, developing strong partnerships where we can make a difference.  Last week, our Charlottetown stations Ocean 100 and K‑Rock raised $120,000 for the IWK Children's Hospital in Halifax.

9789             Rest assured that if you choose to licence a Newcap Radio station in Chilliwack, the community will get nothing but the best.

9790             MR. JONES:  In Chilliwack, we researched the viability of nine different formats:  Classic hits, classic rock, country, 60s/70s oldies, 80s/90s, soft AC, Hot AC, CHR, and new rock.  We looked at a wide demographic group, 18 to 64, and surveyed 300 Chilliwack residents, describing each format using artist examples and playing music montages.

9791             Our research uncovered a strong desire for a local radio station playing what we call classic hits.  Our broad based format includes elements of 60s and 70s oldies, classic rock and 80s and 90s hits.

9792             Classic hits ranks number one in positive interest.  Forty‑eight per cent express positive interest in classic hits, of which 19 per cent indicate they would listen to it all the time.  Twenty per cent expressed positive interest in classic hits and could not associate any station with the format, what we call the per cent of format void.

9793             Potential listeners for a classic hits station are also less satisfied with their radio choices than Chilliwack listeners as a whole.  Only 11 per cent of those we have identified as potential listeners for classic hits say they are 100 per cent satisfied with Chilliwack radio today, and 25 per cent say they are not at all satisfied.

9794             As a result, we believe our proposal for a broad based classic hits format represents the biggest unserved listening need in Chilliwack radio.

9795             The classic hits station that we propose for Chilliwack will be called The Peak.  We believe it is a perfect name for a station serving this area, as it stands for both the essence of the region and the essence of the format, playing only the best of the best from what many consider the peak musical years.

9796             The Peak will focus on timeless music by artists our target audience grew up with, including The Beatles, The Guess Who, The Beach Boys, and many others from the 60s.  From the 70s the station will feature Elton John, Gordon Lightfoot and Fleetwood Mac.  From the 80s our listeners can expect to hear Bryan Adams, Phil Collins, Tom Cochrane and, yes, even Chilliwack.  The music will be older and more familiar than the music on other stations available in the market.  Our listeners will expect to turn on The Peak and hear songs they grew up with and have come to identify as the music of their generation.

9797             The Peak will attract a strong following of listeners, especially in the 25 to 54 and 35 to 64 demographics.  The median age of our target listener will be approximately 45, and the audience will skew slightly male, although it will remain fairly balanced between the genders.

9798             As a result, we predict a 9 per cent share 18‑64 for our classic hits format, and a 12 per cent share 25‑54.

9799             MS GEUER:  While the focus of The Peak will be music, we are proposing a radio station to serve the residents of Chilliwack on an equally, if not more important, level:  The community.

9800             The Peak will provide a strong local news and community presence, and act as a fresh radio news voice that is simply not present in Chilliwack today.  We will present 79 traditional weekly newscasts, all of them sourced and presented by our staff in Chilliwack.  The Peak will offer our listeners 75 per cent local content in all newscasts, with the remaining 25 per cent being relevant news and information from British Columbia, Canada, and the rest of the world.  Combined with 126 scheduled surveillance reports, total news programming will exceed eight hours per week.

9801             Newscasts on The Peak will be geared toward news and information specific to Chilliwack.  Being so close to Vancouver, a community such as Chilliwack finds itself inundated by traffic and local news stories from the bigger city.  Our newscasts will be researched, written and produced by three local professional radio news journalists, who live and breathe the community they serve.

9802             But as important as it is, the local news we will put on the air is only a small part of what we will bring to Chilliwack.

9803             Consistent with Newcap's long tradition of providing intensely local service to the communities it serves, this new station will trigger a growth spurt in service and benefits to the local community.

9804             Hundreds of young people in the Chilliwack region participate in high school and college sports leagues, as well as minor hockey and little leagues, while senior teams are active in curling, soccer, baseball and more.  Every day thousands of residents cheer on their kids and their favourite teams.  Yet, little, if anything, is ever reported on radio.

9805             The Peak will work closely with the Chilliwack School Board, The University College of the Fraser Valley, and local community sports clubs to create a real‑time reporting system for scores and results which will be broadcast on The Peak.  Our goal will be to connect with the parents and fans, network with the organizers and establish roots in the community.  From the local games and road trips of the Chilliwack Bruins to the University Cascades and the teams of school district 33, we will provide coverage of the events our audience is taking part in and interested in.

9806             Each day The Peak will feature an hourly Pause for a Cause that will serve to further update our listeners on what is going on in their community by profiling different community groups, charity events, and other causes that are relevant to the local community.  One day might feature fundraising for the new Chilliwack Cultural Centre, and another the Chilliwack and district Crime Stoppers.  These will air seven days each week, around the clock, and will also be profiled on our website.  They will be immediately relevant to what is going on in the community that day.

9807             Other program features on the Peak Will include:

9808             Voices From Chilliwack, which is a unique concept to commercial radio, brought to life on The Peak.  Half an hour on the station will be handed over to the personalities that make up the community, whether it be coaches or politicians, farmers or call centre employees of Stream International.

9809             Peak Performances is a daily feature treating listeners to live music from their favourite artists.  Fantasy concerts could be high‑profile concerts such as Woodstock, or low‑key live recordings made in clubs.

9810             All together, The Peak's news and spoken word programming will be over 21 hours per week.

9811             Finally, if licensed, The Peak will complement its on‑air programming with a host of on‑line initiatives that go well beyond the typical radio station website.  Our on‑line content will take the interests of our target audience to heart, and present unique content such as:

9812             A detailed and updated interactive community events calendar allowing non‑profit groups to register and post their upcoming events on their own.

9813             Chilliwack Pics will feature listener pictures and video taken around the community.

9814             Our website will also feature up to the minute local news direct from our newsroom, and a local sports score board featuring minor hockey, little league, and school sports events.

9815             MS SPENRATH:  Newcap actively and aggressively employs an employment equity strategy dedicated to increasing representation of women, visible minorities, persons with disabilities and aboriginal peoples.

9816             This, we believe, is sound business practice in an industry where success depends heavily on how effectively we reflect the communities we are licensed to serve.  In our view, drawing on the talent found in the designated groups is a major factor in achieving success.

9817             Our approach in Chilliwack will have three key elements.

9818             First, our news and non‑news programming will be designed to reflect the reality of Chilliwack's cultural, ethnic, racial and aboriginal diversity.  Our spoken word will contain elements that appeal to our aboriginal audience, in particular.

9819             Second, our announcers and reporters will be representative of the mosaic that makes up Chilliwack.  Our audience will enjoy an association with the people delivering their daily entertainment and information.

9820             And third, both on and off the air, our staff will be representative of the demographics of the community we serve.  Our staff will be well‑versed in corporate policies designed to support cultural diversity in the workplace and the reflection of the diverse groups in our programming.

9821             We will be truly reflective of Chilliwack on and off the air, in our people and our programming, and in so doing, establish firm roots in the community.

9822             There is a phenomenal amount of musical talent in the Fraser Valley.  For example, five Canadian idol finalists in the past few years have come from the Valley.

9823             To support and help further grow this tremendous base of local talent, we have proposed a package of Canadian content development totalling over $700,000.

9824             First, Newcap will contribute $280,000 to the University College of the Fraser Valley in partnership with the Chilliwack Academy of Music, to expand their music program.  Monies will be used for new courses, graduate scholarships and support for local music festivals.

9825             A further $280,000 will go to FACTOR.  We will ask that FACTOR direct these funds toward artists and groups residing in British Columbia, with a preference to Chilliwack and the Fraser Valley.

9826             Seventy thousand dollars will go to the National Aboriginal Recording Industry Association, funding two scholarships to be awarded to aboriginal music artists residing in B.C., with preference to artists in the Chilliwack region.

9827             And finally, $70,000 will go to the Canadian Society for the Recording Arts for an annual recording grant to support an emerging artist in Chilliwack or the broader Fraser Valley.  These grants will provide concrete new opportunities for Chilliwack musical artists to advance their careers, directly benefitting the region.

9828             MR. MURRAY:  Given Chilliwack's strong economy and the clear market void for our proposed classic hits station, we strongly believe The Peak could be absorbed with minimal negative impact on the incumbent station.

9829             Indeed, as The Peak will attract its audience primarily from out‑of‑market stations, we project that the majority of our revenue will come from other sources.

9830             We will employ a team of five to six well‑trained and highly motivated sales people to monetize that repatriated tuning.

9831             Madam Chair, Commissioners, our company prides itself on a reputation of effecting significant and unequivocal contributions to the Canadian broadcast system wherever we hold licences.  We also strongly believe that applications for new licences must be based on sound research and realistic business plans.

9832             Repatriating out‑of‑market tuning and building local retail revenues will not be a cake walk, but with our experience and track record, we believe we are uniquely positioned to do both and provide a strong new radio voice to Chilliwack.

9833             Newcap's 89.5, The Peak will fill a local service void with exceptional commitments to local programming and reflection.

9834             We will provide a truly alternative local radio service that is not presently available in the market; offer a strong new editorial voice in the market, with 79 news packages, over eight hours of news content weekly, and 21 hours of spoken word overall; and contribute over $700,000 to Canadian content development initiatives designed to support future and emerging local Chilliwack and B.C. artists, including specific initiatives for aboriginal talent.

9835             We look forward to your questions.

9836             THE CHAIRPERSON:  Thank you, Mr. Murray and your panel.

9837             Commissioner Menzies will lead the questions.

9838             COMMISSIONER MENZIES:  Thank you.

9839             First of all, I would like to just clarify precisely the news presentation in terms of hours.  I see the sheet that you have provided us with has pure news at four hours and 30 minutes, sports at 1:37:30 and surveillance at 2:06 for 8:13:30 total.  That is consistent with your previous submissions regarding six hours, seven and a half minutes to newscasts including sports.

9840             In your supplementary brief, you mentioned that that 6/7th point five included weather.  I am just trying to find out where the weather belongs essentially.  Is it in the ‑‑

9841             MS SPENRATH:  It is actually dispersed throughout all of our newscasts, as well as being in the scheduled surveillance reports.  If you look at the deficiency letter, the first two lines together, weather is in amongst those two in total.  In amongst the newscasts, the total weather would be approximately two minutes.

9842             COMMISSIONER MENZIES:  It is bundled then between surveillance and the news portion?

9843             MS SPENRATH:  Yes, that is correct.

9844             COMMISSIONER MENZIES:  It is fairly straight forward in Chilliwack, isn't it, rain in the winter and sun in the summer.

9845             When you talk about 75 per cent ‑‑ and you have it here ‑‑ of your news being local, how do you define local?

9846             MR. JONES:  We define local as what happens in the community we serve, in the area covered by our signal footprint.  In the case of Chilliwack, 75 per cent of our news would be events that happened in the immediate region, and the remaining 25 per cent would be split amongst the area in the Lower Mainland, British Columbia, Canada and the rest of the world.

9847             COMMISSIONER MENZIES:  So, anything outside of your immediate area ‑‑ let me put it this way.  Chilliwack is your local and regional in that sense, and anything outside, the rest of the Lower Mainland, B.C. and Canada goes into the other 25 per cent?

9848             MR. JONES:  That is correct.  With that other 25 per cent, we recognize that we live in a global village and to ignore what happens outside of our backyard is probably not the wisest move.  So, what we try to do with our news that happens elsewhere is find a way to bring it back our community.

9849             In the case of Chilliwack, events happening in Vancouver are very easy to relate back to Chilliwack because they probably have a much more immediate impact, events that happen in Victoria, in the capital city.

9850             But we do try to turn stories that happen elsewhere across the country or around the world and focus them back and how they impact the listener in our community.  That may be a story as encompassing as the war in Iraq affecting the gas prices in Chilliwack, for a specific example.

9851             COMMISSIONER MENZIES:  It is fairly clear from your presentation that this amount of news coverage and the resources you plan to put into news is very key to your sense of identity in terms of connecting with the community, and you presented yourself as a company that is interested in being very local in that sense.

9852             Can you take me through your ‑‑ actually, I will ask this question first.  I am curious to know, there is lots of research about the music format.  Have you done research on the news portion as well?

9853             MR. JONES:  In our research we did look at other programming elements that were important to our listeners.  For example, was it important to them that their radio station originated in Chilliwack or was it somewhat irrelevant because there are so many radio stations serving the market from outside.

9854             We found that it was very important for numerous listeners, especially those interested in our format, that their radio station be from Chilliwack.

9855             We also looked at non‑musical elements like traffic and weather and how important those things are to people, and we discovered they are quite important.

9856             COMMISSIONER MENZIES:  How important?

9857             MR. JONES:  They are a very high priority, indeed in all our markets.  Chilliwack is no exception.  Behind music, local weather and news generally ranks as the most desired elements in all of our stations across the country.  That very seldom changes.

9858             Things that you hear on radio stations like contests and promotions on the big scale of things generally rank quite low.  People want a format, a musical choice that appeals to them, and they want content in between the songs in the form of news and information and weather that is relevant to their local market.

9859             COMMISSIONER MENZIES:  What I am trying to get at is reasonably specifically what data or what feedback you are working from in building that newsroom and that news/sports/arts structure.  Where did you get that from?

9860             MR. JONES:  Within our research study of the 31,864 Chilliwack residents, we asked them questions about programming elements.  We asked them about Chilliwack area news, B.C. news, weather, traffic, how important were compelling announcers and personalities, how important was national and international news, how important was Vancouver area news to them, and how important was Vancouver area new to them, and how important was information on outdoor recreation because the area of the Fraser Valley is kind of a prime spot for a lot of outdoor recreation.

9861             So, we asked that question and we got the response that the number one most important thing to the audience was music, which collectively ranked a 4.4 out of 5, which means that, regardless of what kind of music you like, the most important thing to you is a format that appeals to you.

9862             Second to that among our entire panel was Chilliwack area news at 4.0.  B.C. was next at 3.8, followed by weather at 3.7, and traffic at 3.6.

9863             COMMISSIONER MENZIES:  Thank you.

9864             I know that you can't make news exactly fit a percentage format in any given day because you don't know what is going to happen, and different things happen.  But I would like one of you to be able to take me through the structure of your newsroom and give me a sense of the beats that you would be focusing on primarily and how much time would be devoted to that?  Will you have, for instance, one person or a percentage of an FTE devoted to city council, school board, regional, district, agriculture, business, whatever; if you can maybe take me through your beat structure.  I would like to know your staffing numbers and what your plan is on that.

9865             MR. JONES:  Glenda Spenrath can elaborate on the specific staffing numbers, but the structure of our newsroom is generally the same across the country where one news director within our building would lead a team of news journalists.

9866             They would be assigned based on their skill sets and various other criteria the different beats they would follow.  For example, you may be one of our news reporters who does a certain number of newscasts on the air and also covers the city council beat.  Another newscaster may do a different set of newscasts on the air and cover provincial information or, as you mentioned, agriculture and other issues like that.

9867             Each newscaster is generally assigned a specific challenge, a specific beat to follow.

9868             MS SPENRATH:  Additionally, to speak to your personnel question, we are looking at three full‑time news people, and often we do have stringers out in the community as well, and a producer that would assist with putting together the newscasts.  That would be the staff complement.

9869             MR. JONES:  I might also add that what listeners perceive as news and what we perceive as news sometimes is different.  We are talking right now, I realize, about structured newscasts and what might be considered hard news, the true news.

9870             But what happens in our community in all different forms is often information of interest to our listeners.  So by looking at some of the other options we have, like a street team of individuals who go out and cover community events and report back, while that might not be something that is quantified in our news numbers or in these particular staffing numbers, it is another way in which we are able to gather information from the community.

9871             COMMISSIONER MENZIES:  Thank you for that.

9872             What I am speaking of is more in terms of what I would call strategic news content objectives.  So, how much of it would be, let me put it this way, reactive so that it is what I would call cops and courts, that whatever happens that day is what happens, and would you have the resources or do you have the plans to do what I would call enterprise reporting, which is original work that is unique.  Everybody else has access to cops and courts and city hall and they decide whether they want it or whether they don't to a certain extent.

9873             Do you have the resources within this plan to do, like I said, enterprise reporting, original material that would be unique to you and unknown to other media until you broadcast it?

9874             MR. JONES:  Yes, we do.  We do recognize that we are a music‑based radio station and that to do long form in‑depth investigative reporting is probably out of our realm, but we do proactive, as you said, enterprise work.  A lot of that is through networking, establishing the contacts in the community.  So that you have inside information on what is happening, what sort of decisions are being made, what sort of projects are likely to come up, and you can get on those stories before your competitors do.  That is that original content that we are proactive to take.

9875             COMMISSIONER MENZIES:  With three announcers I am thinking that a lot of that or some of that or the time to do that would come from your part timers or stringers that you called them.

9876             What would the part timers and strangers amount to in terms of an FTE or full‑time equivalent employee?

9877             MS SPENRATH:  I would say probably at least half to three‑quarters of a full‑time equivalent person.

9878             COMMISSIONER MENZIES:  Where do you expect to obtain the talent to do this in terms of, well, your news staff to begin with, but not just your news staff.  In order to be effective and serve the Chilliwack market, these people will have to understand the nuances of the community.

9879             Where will you find them and how will you recruit them?  What will the job posting look like?

9880             MR. MURRAY:  We have had some experience in launching new stations in Kemptville and Sydney and Carbonear, et cetera.  We found that most often the people that are in the community now are the most skilled and equipped to provide that service.

9881             We often do have many people, close to 1,000 employees, in the company now, and quite often when we launch a new station in a Chilliwack or a Vancouver or wherever, many of our employees are from there and they do have a great deal of experience from that.

9882             I think I will ask Glenda Spenrath to talk about how we approach the employment equity aspect of that and how we reach out to the communities to make sure that we are reaching the representation that is in that community as well.

9883             MS SPENRATH:  We do have very well defined policies as far as recruiting and hiring personnel for our stations that are reflective of the communities that we serve.  We do go and speak to the educational institutions, the colleges, recruiting agencies and the like, and we have had success in this regard.

9884             I look at Alberta, for example, where a large part of our staff complement is in Alberta, and we have some 15 aboriginal workers in our stations across the province.  We find that it has been very successful.  It is good for your programming as well, because when you are looking at bringing in local people, they have the flavour of the community based on the relationships, based on their family, friends, experiences growing up in the communities.

9885             So, we find it is a successful way to get good programming out to our communities.

9886             MR. STEELE:  Mr. Menzies, maybe I can just comment on that, in terms of a practical approach or how we actually go about staffing stations, in practice what we find works for us is first we will hire the general manager.  We will look internally first before we look externally.

9887             Then we put that general manager on the ground in the community, like we did in Sydney, like we did in Kemptville.  That general manager is basically responsible for recruiting his staff in the area or wherever, through networking and that kind of thing, and it goes from there.

9888             COMMISSIONER MENZIES:  Those were all good answers, but I guess typically would these news people be people with one to three years of experience, three to ten years of experience, ten years plus?  Just give me an idea, I guess.  I should have been more specific in the beginning.

9889             MR. JONES:  It varies a great deal by market.  There are many cases where even in smaller markets there are veteran people with a great deal of experience who jump at the opportunity to go somewhere geographically they want to go.

9890             So, if there was someone from the Lower Mainland elsewhere in our company or in a different company, they may have a great deal of experience but come back to a smaller market because it affords them the opportunity to go home and, in other cases as you said, in a small and medium market you are hiring people with maybe slightly lesser experience in that 1 to 3 range.

9891             We would strife to put together a team that was complementary to each other.  If we had a junior person, you would want a more senior person on the staff to be able to mentor them and develop them.

9892             MS SPENRATH:  In that regard, we have some strong relationships built over a long period of time with organizations such as NAIT in Edmonton and SAIT in Calgary, training facilities that are specifically for broadcast talent.  So, we have the resources at hand and we use them.

9893             COMMISSIONER MENZIES:  Thank you.

9894             Concerning synergies, reading your material, I am working on the assumption, and I would just like to confirm that this assumption is correct or incorrect, that you won't be benefitting from a lot of programming synergies within your 126 hours of programming which is all being locally produced; is that correct?

9895             MR. MURRAY:  That is correct, 100 per cent of that will be locally produced.

9896             COMMISSIONER MENZIES:  Given the size of your company, where do you expect to most experience corporate synergies, in what areas?

9897             MR. MURRAY:  I didn't quite catch that.

9898             COMMISSIONER MENZIES:  What sort of synergies do you hope this new station would enjoy from your other properties?

9899             MR. MURRAY:  Certainly being part of a larger company and being part of 1,000 employees, we will provide many training synergies, exchange of best practices, opportunities to meet regionally with ‑‑ the program director will meet with the other program directors in the region.

9900             You heard us say last week that actually more than half of the company now is in western Canada, and we have regular meetings with our program director; our internal news meeting where all the news directors will go.  Just yesterday and today, we had a sales training conference in Edmonton.  It is based in Edmonton, and all of the sales people in Alberta attended that conference, not just the sales managers.

9901             So, we have those types of synergies.

9902             Having said that, most of the synergies that we bring to the table are those of an administrative nature, like payroll and accounts payable and human resource benefits, things of that nature.  We have come to learn over the years that local radio is local radio, that Chilliwack signal only goes 50 kilometres, sort of thing.  This particular one is actually fairly quite small, the 3 millivolt curve, and everything that happens happening inside that footprint.

9903             So, other than some exchange of news stories, where a regional or national news story might be of interest and can be localized and of interest to Chilliwack, it is really a local business.

9904             COMMISSIONER MENZIES:  In terms of your business plan, especially with the administrative synergies, were you able to put a number on that and include it in your calculations of your business plans?

9905             MS SPENRATH:  Yes, it is in there.  Again, it is very nominal.  We run a very lean head office.  I think most of us are here today.

9906             COMMISSIONER MENZIES:  Is this it, everybody?

9907             MR. MURRAY:  All the good ones.

9908             MS SPENRATH:  It is in there, but again it is in administration; it is in the other category.  It is very nominal.  The strength of our business is right at the station level.

9909             COMMISSIONER MENZIES:  You better hope they weren't listening.

9910             MR. MURRAY:  They know I was kidding.

9911             COMMISSIONER MENZIES:  I thought I would give you the chance to...

9912             How much time do you plan to devote to syndicated programming in any given week?

9913             MR. JONES:  At this point we don't have any syndicated programming as part of our programming schedule.  That is not to say that something wouldn't come up down the road, but if it did it would be extremely small.  It may encompass an hour or two a week.  So the answer to your question right now is none at all, and if it happens it will be minimal.

9914             COMMISSIONER MENZIES:  If it happened would it be Canadian content, music, spoken word?

9915             MR. JONES:  It would most likely be music programs and most likely Canadian‑generated music programs to allow us to meet the regulations effectively.  But that is my best guess at this point.

9916             COMMISSIONER MENZIES:  Your median age target is a 45 year old, correct, skewed slightly male?

9917             MR. JONES:  Yes, 55 per cent male.  Consider the listener himself is 100 per cent male but the demographic is skewed slightly.  Just for the record.

9918             COMMISSIONER MENZIES:  Thanks for that.  It helped.

9919             What I am trying to get at is the broader range, if you can just broaden that range.  That is the number 45, but your core demographic, is it 40 to 50?

9920             MR. JONES:  We look at programming targets like a bulls eye, and the centre is that 45 year old male, and the rings as we go out would be 45‑54 and 35‑64 and 25‑54.  So, 25‑54 is our broad goal.  It is where the vast majority of advertising money lies; 35‑65 is a little tighter target.  Then we get down to that bulls eye of that 45 year old male listener.

9921             COMMISSIONER MENZIES:  How would you describe your ideal listener to an advertiser?

9922             MR. JONES:  We usually put together a profile of who that target listener is.  My end as the VP programming I do that for the benefit of the on‑air people so that they have a firm grasp on who it is they are speaking to.  If it is that 45 year old listener, we may go as far as to create an individual and give that person a name and what they do for a living, what kind of income bracket they are in, all of this based on who we are after.

9923             From a sales point of view, some of that may be applicable.  We would develop a profile and, as I mentioned, come up with that income bracket and that job and try and create as clear a picture as we can based on our target listener for our advertiser who is likely to be reached by their message.

9924             COMMISSIONER MENZIES:  A little bit more detail on that.  How much money does he make?  Where does he or she work?  Are they a commuter?  Are they a resident?  It doesn't have to be to the advertiser, but if you have just hired me to be your on‑air talent, what are you telling me to shape it to?

9925             MR. JONES:  We would be looking at that 45 year old male who is a resident of Chilliwack who works in the community, is employed, likely is married with children, considering the age of our listener, the children are likely in their later teens or possibly even going into college.

9926             We try to use information like that to create that profile.  To create it here on the spot might be a little difficult, but those are the kind of elements that would go into that.

9927             MR. MURRAY:  We are talking pretty finite here, of course, this is a broad‑based format.  We are hoping to attract a fairly large segment of that community and very many females, very many males.  I don't know that we would nail it down that finely for sales, or we wouldn't.

9928             COMMISSIONER MENZIES:  Thank you.

9929             What specifically is it about your proposal that would convince us would bring diversity into this market?

9930             MR. JONES:  You mean musical format?

9931             COMMISSIONER MENZIES:  Music and spoken word.

9932             MR. JONES:  Definitely Josie Geuer can jump in with some elements of our spoken word programming, and if we want to address some cultural diversity, Glenda Spenrath would have that information.

9933             But purely musically, we have put together a format that our research shows is in high demand and is missing from the market.  Those are the two keys when we look at what format choices are available.  How many people are really interested in it and do they think they can get it right now.

9934             This classic hits proposal encompasses a variety of different formats, 60s, 70s, oldies, 70s pop music, classic rock and some 80s and 90s hits.  So, it is fairly broad.

9935             What is important is that it is not being heard in the market right now.  We need to put something on the air that is unique and something that is relevant and topical and local.  So, from a musical point of view, I believe our format is entirely unique.  There is no station like it in Vancouver and certainly it is very, very different from what is being heard on STAR, the present station serving the market.

9936             There are elements of our format being heard on various Vancouver stations, but no one station doing it.  That is important because so many out‑of‑market signals get into Chilliwack.  Listeners do have a lot of choices.  If they choose not to listen to a local station, there is a great deal of choice.  So, putting on a format that is unique to Chilliwack and unique to Vancouver is vital.  The second part of that, though, is making our spoken word content relevant and topical and local, and maybe Josie can provide some examples of that.

9937             MS GEUER:  Sure.  The way that we would do that, for example, is through one of our features called Voices From Chilliwack.  This would be a half hour show that we would put on the air once every week.  This is really neat because you have to remember sometimes we are so close to radio, we forget what a thrill it is for someone in the community to even hear a song that they requested being played on the station.  That can be a real thrill.  That can be something that they share with their family and friends and colleagues, hey, did you hear when they played my tune on The Peak today, that was so awesome.

9938             The fact that we are actually going to bring a member in to our radio station from the community to have their own half hour show is really something very special and unique.  For example, if The Peak was on the air right now, we may ask Bruce Renwick to come in.  Bruce is the manager of the Chilliwack Curling Club.  He is going to act as the coach for the Chilliwack secondary senior boys curling team because they just made it to the provincial curling championship, which is going to take place this weekend.

9939             First of all, it is a thrill because the senior boys team, as well as the senior girls team, made to it the provincial championships.  So he can talk about that.  But he can also talk about what it is like to be a member of a curling team.  A lot of people might be interested in that.

9940             My dad, he is a little bit older than 45, but he is under 64 and he actually just started curling.  He just took it up.  This is something that, besides the music ‑‑ he would love the music that would be played on The Peak ‑‑ he would also be interested in listening to Bruce talk about how he got involved with the sport and perhaps how he could get involved in the community of Chilliwack as well, if my dad lived in Chilliwack.

9941             MR. JONES:  I might also add that some of our public service programming I think is fairly unique and will add a lot of diversity.  Right now with one local radio station serving the market, no matter how good they may be at public service, there is simply not enough hours in the day to cover off every single thing going on in the community.  Certainly the Vancouver stations have very little interest in covering specific public service and community events going on in Chilliwack.

9942             So, we have created Pause for a Cause which is a one‑minute feature running hourly 18 hours a day, seven days a week.  That Pause for a Cause is a comprehensive and always updated listing of important community events and not‑for‑profit initiatives, things like sports registrations and school events and just things that are important to the community on a very local level.

9943             This kind of public service programming is a cornerstone of our programming everywhere.  A good example might be in Charlottetown at K‑Rock, which we applied for a few years ago and were fortunate enough to be awarded that station.  In the application we made a significant commitment to public service and it has paid off.  Our station in Charlottetown has become a template for our company to use when we look at how to create that important bond between the community and the radio station.

9944             COMMISSIONER MENZIES:  What are the top three items that you would list that would differentiate you from the other applicants that you would most want us to remember, but also that would be of most importance to the people of the Chilliwack area?

9945             MR. JONES:  Top three.  I think we start with, as I mentioned earlier, that when you put a new radio station on in a community you have two things to make you unique.  One is what music do you play.  FM radio stations are mainly music based.  That is sometimes the first thing that sets you apart from every other radio station.

9946             I believe that our format from our research is the one that is in most demand in Chilliwack.  It is a broad format, about to reach a wide variety of listeners, yet have a very specific appeal.  It is unlike anything on the air in Chilliwack or in Vancouver.  It is entirely unique to the market from a musical point of view.

9947             I think our spoken word and news programming is very, very local, very, very relevant.  Our approach is very, very topical.  We have a tremendous track record of public service, of comprehensive news coverage.  We recognize that even as music‑driven radio stations, we have not only an obligation, but we need to make smart business decisions and that means being incredibly comprehensively local 24 hours a day.

9948             Possibly the third element is our business plan and hiring practices.  Maybe, Dave, you can elaborate a bit on that.

9949             MR. MURRAY:  When I think of the answer to that question, I think of the licensing criteria.  We take a lot of time and we look at that market very carefully before we apply and we create a business plan that we believe in and we believe we can do and provide the service.  At the cornerstone of that is the format, and I won't repeat that.

9950             Another very important criteria is not affecting the existing stations in the market, and clearly with only one station, STAR, it is not even the number one station ‑‑ it is not even the number two station in the existing market.  The country station from Vancouver is the top and then ROCK 101 is the next stop station in Chilliwack.  And STAR, the local station, is the third station.

9951             So, Chilliwack is screaming for a new local station, and we think that our format is so different from STAR, we will get completely different listeners and completely different revenue and have very little impact on them.

9952             Then another element is, not to repeat our whole application here, but the local Canadian content development.  Clearly 60 per cent or really 100 per cent of it is local because we are asking FACTOR to direct their funds to Chilliwack and to British Columbia, and then we have all of the other very important aspects of the CCD as well.

9953             COMMISSIONER MENZIES:  Thank you.

9954             Your audience share projections show you immediately grabbing a 10 per cent share and then basically holding flat at that throughout the rest of the licence term.

9955             That, on the face of it, appears initially audacious and then suddenly modest.  Can you help me understand how you came to those conclusions?

9956             MR. JONES:  Certainly.  As I have mentioned I believe last week in discussing Vancouver, our belief is that when you provide a product that is not there, something that is unique, people will gravitate to it and you will get your audience quickly.

9957             Our research estimates have indicated that this is the audience we can expect and we shouldn't have expectations on doubling that or tripping that.  And to build a business plan wisely, we need to keep our expectations somewhat modest.  So, we have developed those projections to launch with our ratings share and sustain it.

9958             It is worth noting, though, that that 10 share isn't carved in stone.  One ratings period it might be a 12 and the next it might be 8.  We realize there will be fluctuations, and it is likely an average.

9959             MR. MURRAY:  The excellent radio stations that are in Vancouver now and coming into Chilliwack are going to continue to get substantial share of audience.  They are spending millions and millions of dollars on these products.  They are researching their music intensely two and three and four times a year.

9960             To see STAR's share being 12 and our research telling us we are going to get a 10 is very logical because that is the type of things you would expect when you have so many out‑of‑market, very good out‑of‑market signals coming into the market.  We are not going to go 10 and no one is going to get a 30 share ever in the shadow of Vancouver.

9961             COMMISSIONER MENZIES:  How much of your tuning then do you expect to win by converting Chilliwack listeners from Vancouver stations?

9962             MR. JONES:  The majority of our share would come from converting people who aren't listening to Chilliwack radio stations.  STAR doesn't lose a great deal of tuning to our radio station.  They are a very different format.  They have their distinct mission and we would have ours.  Our mission would be to repatriate out‑of‑market tuning to bring back listeners who are listening to Vancouver and Washington state radio, satellite ratio or internet radio or possibly have given up on local radio.

9963             COMMISSIONER MENZIES:  How big a majority, 60, 70, 80 per cent?

9964             MR. JONES:  I would say at least 80 per cent.

9965             COMMISSIONER MENZIES:  Thanks.

9966             In your revenue per audience share predictions, what you have outlined appears from our staff analysis to be almost twice as much per percentage point as what is currently being achieved in the market.  I need you to help us understand why we shouldn't consider that a little optimistic.

9967             MR. MURRAY:  Are you saying twice as much as the existing broadcasting in the market or are you saying as the other applicants?

9968             COMMISSIONER MENZIES:  No, it is what is happening in the current market, not of the other applicants.  This is 69,000 per 1 per cent.  And yours is more like 143,000 per 1 per cent.

9969             MR. MURRAY:  I understand the question, thank you.

9970             When we prepare our application and we determine we are going to apply in a particular market, one of the things that we do initially is try to determine what we think the market revenue is.

9971             Somewhere in our supplementary brief we said we thought the market was $7 million.  I think that is not accurate.  But the reason we think that that number is a real number is that we look at markets in similar sizes and where we do operate and where we do know pretty much where the revenue is.

9972             For example, in Fredericton with a very similar population of 80‑some thousand, retail sales of $1.5 million, the market revenue is around $7 million.  Moncton, with 130,000 people and $1.8 million retail sales, we know the market revenue is around $12 million.

9973             So, with Chilliwack with around 80,000 people and $1.2 million retail sales, we said we assume it might be more prosperous than New Brunswick or Nova Scotia, and we said, could it be $6 million or $7 million, and we thought, yeah, it should be.

9974             So I think that is the potential.  But what we then did ‑‑ I am losing my train of thought here a little bit ‑‑ I think that is the potential if there were the proper number of local services.  For example, in Fredericton there is four local radio stations; in Moncton there is eight or nine local radio stations.

9975             In Chilliwack, because of the inability or the lack of availability of frequencies and because of all the out‑of‑market tuning, the retailers are advertising in other means.  Perhaps it is billboards, perhaps it is the weekly newspaper, it is Yellow Pages, things of this nature.  With only one format, they are not able to reach the target customers that they want to reach.

9976             I think where I am going with this is that when we launch a completely unique product, we will generate, through a great deal of activity and having five or six brand new sales reps on the street, knocking on doors, we will grow very quickly and probably equal, close to equal what Rogers is doing in the market locally now.

9977             COMMISSIONER MENZIES:  Just on that, your business plan shows about 70 per cent of your revenue would be generated from people who aren't currently advertising on radio.  So those would be people who, if they are advertising, are using out door or print or some other vehicle or simply aren't advertising.

9978             MR. MURRAY:  Right.  That number is probably higher than 70.

9979             COMMISSIONER MENZIES:  I guess what I am trying to get to is do you have any commitments or anything from people or any shoe leather being applied to having talked to some of these people that would give you confidence that they do have potential as a source of revenue for you?

9980             MR. MURRAY:  We haven't talked to potential clients in Chilliwack, but we would rely on our experience of launching Sydney and Fredericton a couple of years ago and Kemptville.  We have talked to clients there now in anticipation of the launch, and those are very similar markets, not inundated with local services now.

9981             We are getting an extremely positive feedback and we believe our revenue numbers in those markets will easily be achieved.

9982             COMMISSIONER MENZIES:  There is no specific research but experience is what you are depending on.

9983             MR. MURRAY:  For example, in Fredericton, when we launched, our application I believe said we would do about $1.1 million in the first full year.  In Fredericton we did $1.8 million.  So, that is just an indication of how we approach a market and partner with the clients in that market.

9984             I think our revenue here is slightly conservative, but you don't want to go in and promise the world.

9985             COMMISSIONER MENZIES:  Just to go back a few minutes, we spoke earlier about so much of your tuning coming from people who are currently listening to Vancouver radio stations.  You don't have to be, but it would be helpful if you could be a bit more specific about which of those stations you think represent the lowest hanging fruit.

9986             MR. JONES:  We do have in our research a ranking of what Vancouver stations are listened to the most in Chilliwack.

9987             The number one station in Chilliwack is the country station, Pattison's JR Country out of Vancouver, followed by ‑‑ let me just cross‑reference that information so I don't quote something inaccurate to you.

9988             The most listened to radio station is JRFM, followed by ROCK 101, The Beat, JACK‑FM and CBC.

9989             Definitely ROCK 101 and JACK‑FM both play elements of our format.  We would be a broader format than they are.  So in terms of lower hanging fruit, I guess bringing listeners back to Chilliwack stations who have turned to stations like ROCK 101 and JACK‑FM for their music is probably the first place we would get out‑of‑market tuning.

9990             MR. MURRAY:  I thought this page in our research went deeper, but for example, where we have our share projected in our research, it shows that 2 per cent of our 9 per cent would come from ‑‑ or 2 per cent would come from STAR, 2 per cent would come from ROCK 101, nothing would come from JR.  I thought this spreadsheet went a little deeper, but it doesn't.  We could certainly get that from Mark Kassof if you think you would like us to do that, but all we are showing is that 4 per cent, 2 from STAR and 2 from ROCK 101 of the 9.

9991             COMMISSIONER MENZIES:  Thank you very much, Madam Chair.  That concludes my line of questioning.

9992             THE CHAIRPERSON:  I am sure you have gone through this, Mr. Murray and Mr. Jones, with Commissioner Menzies, but I missed this.  At any one time what amount of tuning, according to your estimate, will always be to Vancouver?

9993             MR. JONES:  I think that is hard to say.  We don't have a specific number, but there will always be a significant amount, it is unavoidable, but we don't have a specific number.

9994             MR. MURRAY:  This won't be exact because there is tuning from other sources like Washington, et cetera, but we are showing that we would have, after we launch, 18‑64, which is what our research was, a 9 share, STAR would have a 9 share.  So there would be some tuning from Washington and then pretty much the balance would be from Vancouver, so 70‑some per cent.

9995             THE CHAIRPERSON:  One aspect of your presentation and your application I just wanted to chat about.

9996             It is the cultural diversity of the Chilliwack population.  I think the agriculture industry there employs a significant number of farm workers who, for example, are South Asian.

9997             In your market research, did you find out whether there will be any programming for the different cultural groups, how you are going to incorporate those into your programming or there is really no need to target this group because they are well‑served by the ethnic stations.  Could you comment, please?

9998             MS SPENRATH:  In our research of the demographics and the diversity in this market, there really is quite a bit smaller component to the visible minority than, say, Vancouver.  I think it was like 5 per cent as compared to Vancouver which is, as we know, 50 per cent.  I do know that the trend they say over time will be that the visible minority population will increase over time as people spread out and move away from Vancouver.

9999             We certainly will have an ethnic component in our station.  Again, we are always looking to be representative of the community and our programming to be as well.

10000            To answer your question, yes, we would have an ethnic person on staff and we would certainly be looking to make connections in the community with organizations that have an interest in programming that would be directly related to their interests.

10001            MR. JONES:  I may also add to that.  Our initial research is designed to be as representative as possible of the population so we do not exclude anyone from our research.

10002            Our ongoing research would be that way as well.  So, if there was a significant portion of the population, they would in all likelihood in a random sample be represented.

10003            Also, in our spoken word programming, in Voices From Chilliwack, you mentioned the South Asian workers or there may be migrant farm workers from other parts of the world who come to Chilliwack.  It may be a perfect opportunity in a program like that to discuss their arrival in Canada and their impressions of the country or the different challenges and issues they may face as newcomers.

10004            THE CHAIRPERSON:  Thank you.

10005            Questions from legal counsel, please.

10006            MS PINSKY:  Yes, thank you.

10007            I just have a few questions of clarification.

10008            With regard to your CCD commitments, in your application it indicates that there would be $420,000 allocated to FACTOR.  In your presentation today, you state that $280,000 would go to FACTOR and I assume the difference is $70,000 would go to the National Aboriginal Recording Industry Association and $70,000 would go to the Canadian Society for the Recording Arts; is that correct?

10009            MS SPENRATH:  Yes, that is correct.  At the time that we were doing this application, over time our CCD has grown and we have a lot of other opportunities that come up since we have put together this application.  So, for that reason we have been in contact with a couple of very good organizations that specifically are head officed in western Canada and they had some really good interesting opportunities that we thought would allow us to better direct our CCD funds to artists in B.C. and, in particular, to Chilliwack.

10010            So, those two organizations we felt could more pointedly direct our CCD funding at a grassroots level to artists residing in the area.  That is why we have done that.

10011            Having said that, we still have our FACTOR commitment at double what the requirement is.

10012            MS PINSKY:  Thank you.  So, as I understand it, the money would specifically be allocated for scholarships in the one case and grants in the other case?

10013            MS SPENRATH:  Yes, that is correct.

10014            MS PINSKY:  Would you be able to provide for us letters from both of these organizations indicating that the money would be dispersed according to CRTC criteria?

10015            MS SPENRATH:  Yes.  Actually we do already have letters from both of those organizations, so I can provide them to you.

10016            MS PINSKY:  Okay, thank you.

10017            Just a very technical point of clarification.  In the handout that you provided today, it identifies the core audience as 35 to 54 and just in your discussions you were mentioning 35 to 64.  I just wanted to clarify for the record which one we should be using?

10018            MR. JONES:  Certainly.  Discussion of radio targeting can get into all kinds of different demographics, but the research we did was 18 to 64.  The core of that was 35 to 64.

10019            MS PINSKY:  To 64?

10020            MR. JONES:  On that sheet, 35‑54 is right.  It can be classified any number of different ways, but 35‑54 is correct.

10021            MS PINSKY:  Thank you very much.  Those are all my questions.

10022            THE CHAIRPERSON:  Thank you, Mr. Murray.

10023            Would you like to give us your two minute pitch on why you believe you should be licensed.

10024            MR. STEELE:  Madam Chair, members of the Commission, and Commission staff, thank you for considering this application for a new FM radio station to serve Chilliwack, British Columbia.

10025            We believe 89.5 The Peak, is the right station for Chilliwack, striking the right balance with your licensing criteria.

10026            First our proposed broadbased classic hits format is specifically designed to appeal to the widest and most complementary set of Chilliwack music preferences.  This will maximize our listener base and minimize their tuning back to the narrower formats available from Vancouver, as we discussed earlier in our presentation.

10027            Secondarily, our share projections and revenue estimates are realistic and they recognize that repatriating out‑of‑market tuning and building local retail revenues will not be easy and our business plan is sound, and that we will dedicate the resources necessary to deliver on it.

10028            Just for the record, it certainly isn't any kind of back door attempt to gain access to Vancouver, as was suggested by the earlier applicant.

10029            Third, our over 21 hours of weekly spoken word, including over eight hours of news, is the highest before you.  This reflects an unparalleled commitment to local programming, as well as a distinct and necessary competitive advantage for 89.5 The Peak in competing with out‑of‑market stations.

10030            Finally, we will make a significant contribution of over $700,000 to Canadian content development, initiatives designed to support the future and emerging local Chilliwack and B.C. artists, including specific initiatives for aboriginal talent.

10031            Madam Chair and Commissioners, with our experience and with our track record, we are uniquely positioned to provide a strong editorial radio voice to Chilliwack and to fill a clear format void with exceptional commitments to local programming and reflection.  We are pretty excited about this market, if we were fortunate enough to receive this licence.

10032            Thank you for this opportunity to present our application.

10033            THE CHAIRPERSON:  Thank you, Mr. Steele and your panel.  Thanks for your application.

10034            We will take a lunch break now and be back at 1:30, please.

‑‑‑ Upon recessing at 1233 / Suspension à 1233

‑‑‑ Upon resuming at 1330 / Reprise à 1330

10035            THE SECRETARY:  We will now proceed with item 20, which is an application by Radio CJVR Limited for a licence to operate an English‑language FM commercial radio programming undertaking in Chilliwack.

10036            Please introduce yourself and your colleagues, and you will then have 20 minutes to make your presentation.  Thank you.

PRESENTATION / PRÉSENTATION

10037            MR. FABRO:  Good afternoon, Madam Chair, Commissioners and staff.  Thank you for allowing us this opportunity to appear before you once again.

10038            Before we begin our presentation for the new FM licence for Chilliwack, I would like to introduce the members of our team.

10039            My name is Gene Fabro.  I am the President and owner of Fabmar Investments Limited of Calgary, Alberta.  My family and I have been in business for over half a century and through our holding company, Fabmar Investments Limited, have for the past 21 years invested heavily in a broad cross‑section of industrial activities, including land development and home building, manufacturing, wood lot management, oil and gas exploration, coal resource holdings, office and retail buildings and for the past 17 years radio broadcasting.

10040            To my left is Dean Sinclair, a broadcast veteran whose 30‑plus years in the business includes programming on‑air, sales and senior management experience.  Dean has provided us input and direction for our proposed diversified rock musical format.

10041            To Dean's left is Lang McGilp.  Lang has over ten years of market research experience, working with some of the largest research firms in Canada, including Ipsos‑Reid.  Currently Lang is Vice‑President of Research for Insightrix Research Services, a national marketing research firm with offices in Saskatoon, Saskatchewan and in Australia.

10042            On my far right is Linda Rheaume, our administrative manager for Radio CJVR's two Melfort stations, CJVR and CKJH and our FM station in Whitecourt, Alberta, CIXM‑FM.  Linda has been with our company for 16 years.

10043            Next to Linda is Kevin Gemmell, station manager and sales manager of our two  Melfort stations.  Kevin was raised in the Lower Mainland and is a graduate of the B.C. Institute of Technology radio program.  Kevin visits the area often and he has immediate family in Chilliwack.  He has been with our company for over 11 years.

10044            To my right is Ken Singer, who is Radio CJVR's Vice‑President of Broadcast Operations.  Ken has been in the broadcast business for over 40 years and is currently a member of the CAB's Radio Sector Board.

10045            MR. SINGER:  Madam Chair and Commissioners, Radio CJVR Limited is pleased to introduce ROCK 89 and its unique programming format, which, if approved, will provide important benefits to Chilliwack and surrounding Fraser Valley communities, strengthen British Columbia's private radio sector and further advance the objectives of Canada's Broadcasting Act.

10046            After extensive market research and consultation with a diverse cross‑section of Chilliwack's broader community, CJVR has tailored ROCK 89s programming to meet the specific needs and stated listener preference of those underserved radio consumers aged 18 to 54 who currently have access to only one local radio station.

10047            CJVR's diversified rock format will, among other objectives, enhance the level of programming diversity and listener choice in the market; add a distinct alternative editorial voice; champion the development and on‑air exposure of new and emerging Canadian artists; significantly reduce the level of out‑of‑market tuning by local residents; and draw lost listeners from other audio sources back to local radio.

10048            ROCK 89 will also establish competitive balance in the market, increase ownership diversity and ensure the presence of a strong independent radio voice within Chilliwack's private radio sector.

10049            Further, approval of CJVR's proposed diversified rock undertaking will optimize the utilization of the 89.5 frequency through extension of its unduplicated music format to the more than 81,000 persons living within the station's principal marketing area.

10050            MR. GEMMELL:  Madam Chair, CJVR's commissioned market studies, along with our own direct interventions in the marketplace, clearly illustrate the needs of residents and the business community alike, for an additional FM station.

10051            Given its close proximity to Vancouver, Chilliwack is bombarded by out‑of‑market stations whose dominating presence is due to accidental spillage of their signals into Chilliwack, rather than by any design or intent on their part to provide service to the local market.

10052            In view of the fact that the distant signals are devoid of any locally relevant content and given that the market has only one originating station, Chilliwack and area residents suffer from a number of music and programming voids.

10053            Dissatisfaction among residents relative to their local radio choices is evidenced by the fact that while CKSR‑FM is the most listened to radio station with a weekly reach of 48 per cent, 73 per cent of local listeners tuned to at least one out‑of‑market station during the past week, while only 25 per cent named CKSR‑FM as their favourite.

10054            Further evidence is reflected in the fact that 62 per cent said they would listen to radio more often if the programming they liked was available, 47 per cent said there is often little on radio that they like to listen to, and 69 per cent wished there were different types of music available on local Chilliwack radio.

10055            As well, 38 per cent stated they frequently or sometimes listen to music on an iPod or similar device, 37 per cent said they access their musical preferences through cable or satellite TV, and a similar number download music from the internet.

10056            With respect to Chilliwack's business community, 70 per cent of retailers surveyed said they were not satisfied with existing local radio advertising choices, and 50 per cent stated they do not advertise on local radio.  Many ruled out advertising on Vancouver stations simply because of the cost.

10057            In the fact of such dissatisfaction on the part of listeners and the business, ROCK 89, if approved, will fill the programming voids, answer the needs of the underserved 18 to 54 listenership and provide and cost‑efficient advertising vehicle for local businesses to target their preferred demographic.

10058            MR. FABRO:  Madam Chair, like our Kelowna and Red Deer proposals, Chilliwack is integral to CJVR's broadcast development plan in terms of growing our company's critical mass, increasing operating efficiencies between existing and proposed new stations and extending a strong independent radio voice to other western Canadian markets.

10059            As the broadcast arm of Fabmar Investments Limited, an Alberta based corporation engaged in a diverse mix of commercial activities, CJVR is fully committed to growing its radio business through acquisitions and the pursuit of new broadcast licences.  Our level of commitment can be measured in part by the number of recent Commission calls in which CJVR has been a participant.

10060            CJVR's 41 years of broadcasting experience, coupled with Fabmar's business acumen, financial strength and entrepreneurship, places our company in an ideal position to extend its brand of radio across western Canada.  But.

10061            As a dedicated radio company, CJVR brings to Chilliwack a nationally acclaimed reputation for programming excellent, a proud record of achievement in development new Canadian talent, a corporate culture which embodies a deep‑rooted sense of communities and owners committed to making a difference in the lives of their employees, their listeners and their communities.

10062            My family believes it is important to Canada's broadcasting system that strong independent radio voices like CJVR be encouraged to play a continuing role at a time when ownership diversity within the private broadcasting sector is being seriously diluted by major media corporations.

10063            CJVR was therefore encouraged by Broadcasting Public Notice 2008‑4, which introduced a series of new policies to ensure that a "diversity of voices is maintained in the Canadian broadcasting system."

10064            We also took heart with the CRTC Chairman's statement that the new policy initiatives "is an approach that will preserve the plurality of editorial voices and the diversity of programming available to Canadians, both locally and nationally, while allowing for a strong and competitive industry."

10065            Consistent with the policy objectives, ROCK 89, if approved, will bring to Chilliwack's private radio sector a fresh alternative editorial voice, both heightened programming and ownership diversity and competitive balance.

10066            MR. SINGER:  Madam Chair, the economic analysis conducted by Insightrix Research Services clearly shows that Chilliwack has enjoyed continuous growth in its population and local market economy over the past 15 years.

10067            More than 260,000 people live within a 30‑minute commute of Chilliwack and over 865,000 people live within 90 kilometres of the city.

10068            Other key indicators which reflect Chilliwack's healthy and expanding market economy are the following:

10069            The population grew 43 per cent between 1991 and 2006 and is projected to increase by 42 per cent over the next 15 years; local retail sales are estimated to be over $1 billion for 2007, some 18 per cent above the national average, with a spend of $37,000 per household; unemployment rates are the lowest Chilliwack has experienced in the past 18 years; since 2000 the number of business licences distributed in Chilliwack has increased by 35 per cent; and housing starts have increased by 126 per cent between 2003 and 2006.

10070            MR. GEMMELL:  Madam Chair, CJVR's analysis estimates that total market advertising expenditures are approximately 4 per cent of retail sales, indicating that total advertising dollars available to all media in the Chilliwack market in 2007 would amount to $46 million.

10071            CJVR concludes that 11 per cent or $5.6 million of that $46 million should be obtainable by local radio.  We believe CKSR‑FM garners about $2.5 million, leaving $2.6 million in untapped revenue.  CJVR's estimated revenue in year 1 is $1.5 million, of which we anticipate only 3 per cent will come from CKSR‑FM.

10072            CJVR believes the appeal of its diversified rock format will result in more local hours tuned and the generation of new radio dollars, neither of which will come at the undue expense of CKSR‑FM.  In fact, ROCK 89's unique format will be more complementary than competitive with CKSR‑FM's AC/pop format.  As such, the biggest winner at the end of the day is the listening public.

10073            MR. SINCLAIR:  Madam Chair, approval of ROCK 89 will introduce to Canadian radio a unique new music programming format known as diversified rock, which was developed by CJVR for its proposed new Chilliwack station.

10074            CJVR's diversified rock format was born out of the eclectic musical tastes of Chilliwack's underserved 18 to 54 listenership spectrum, that in large part are forced to tune out‑of‑market or seek other audio sources to satisfy their musical needs and interests.

10075            In assessing the music voids in Chilliwack's radio market, CJVR employed a multi‑level approach to identify the most preferred format for a new local station.  Diversified rock was the clear choice over its nearest competitor, country music, by a margin of 62 per cent to 34 per cent.

10076            It is important to note that while classic rock led through all stages of the format selection process, there was a consistent interest shown by respondents in 70s rock and modern rock.

10077            This fact, coupled with the question of whether a more narrowly focused music format could be sustained in a market the size of Chilliwack, led CJVR to conclude that broadening the station to include classic rock, 70s rock, modern rock and current based rock would offer a more diverse rock station that would appeal to a wider audience and ultimately better serve the musical interests of the various age groups within the broader 18 to 54 demographic spectrum.

10078            CJVR's diversified rock programming approach will be developed from an encyclopedia of rock music that spans over five decades.  We will blend diverse genres from rock legends and introduce and help develop new and emerging artists.

10079            In step with our targeted 25 to 44 male leaning core audience and a large playlist of over 1,000 titles, no less than 35 per cent of our music will be new and recent, released within the past four years, while established and legendary tracks of the last 50 years will complete our diversified rock sound.  Here's ROCK 89.

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10080            MR. SINCLAIR:  A further key component to our diversified musical agenda evolves around the creation of a series of special music‑based programs that will be produced and aired on ROCK 89.

10081            These special programs, in keeping with CJVR's approach to Canadian content development, combine on‑air exposure of talent along with financial support through a series of direct expenditures on a diverse mix of initiatives.

10082            The following programs, as detailed in our supplementary brief, will feature many new and emerging artists:  Rock 89's Release Party; Canadian Rock Coast to Coast; Great Western Rock; Rock N' Roll Roots; Canadians On Track; and BC Rocks.

10083            Over the course of a week, ROCK 89 will have a total of 13 hours and 50 minutes dedicated to 100 per cent Canadian music.

10084            MR. SINGER:  Madam Chair, to define CJVR's overall commitment to Canadian performers and to new and emerging artists specifically, ROCK 89 will play a minimum of 40 per cent CanCon applied to both the entire broadcast week and the period between 6:00 a.m. and 6:00 p.m.  As such, CJVR has no objection to this being a condition of licence.

10085            Of the 40 per cent CanCon, no less than 25 per cent of the selections played will be by new and emerging Canadian rock artists.

10086            MS RHEAUME:  Madam Chair, in applying a community oriented approach to its broadcasting responsibilities, CJVR views its relationship with each community served as a partnership forged on the basis of mutual trust, commitment and respect.  The following are brief comments from but a few of those community partners.

10087            Pat Dolo, manager of the Northeast Unit, Canadian Cancer Society in Melfort writes, "If the CRTC was to approve CJVR's application, clearly the citizens of Chilliwack will be gaining a true community partner, committed to serve and inform, as they have in northeast Saskatchewan for over four decades."

10088            Whitecourt, Alberta Mayor Trevor Thain states, "Since its inception, the station has proven its commitment to the community and surrounding area by establishing itself as a community‑minded corporate citizen and continually provides support to local initiatives and projects."

10089            Curtis Knight, President and Governor for the Humboldt Broncos Saskatchewan Junior A Hockey Club states, "We have a unique situation where CJVR covers the Humboldt Broncos, the Melfort Mustangs and the Nipawin Hawks.  This works well for us as the play‑by‑play allows our fans to stay up to date on how the team is doing."

10090            Chilliwack's Mayor Clint Hames writes, "I understand that Radio CJVR Limited has a great track record for real local service in the communities where they have stations...and I know that such a station would receive strong support in the community."

10091            Brian Antonson, Associate Dean of the B.C. Institute of Technology writes, "The Radio CJVR folks have established an enviable reputation for solid broadcasting in their work in Saskatchewan and can be expected to bring similar focus, enthusiasm and experience to bear in establishing a first rate operation in Chilliwack."

10092            Finally, Tisdale, Saskatchewan Mayor Roland Zimmer writes, "Northeast Saskatchewan is indeed fortunate to have a radio station with the calibre of Radio CJVR Limited.  CKJH‑AM and CJVR‑FM have played an important role in keeping the 100 Saskatchewan communities they serve informed entertained and connected."

10093            MR. SINGER:  Madam Chair, ROCK 89 will provide listeners with locally relevant, community‑driven spoken word programming that will portray Chilliwack, its people and its culture through the daily coverage of local events and activities happening in the city and surrounding communities including play‑by‑play of Chilliwack Bruins hockey games.

10094            To ensure its spoken word programming objectives, CJVR has developed an inclusive plan to keep a steady finger on the daily pulse of life and times within Chilliwack and surrounding communities.  This will be achieved in a number of ways, including the production of special features, ranging from 60 seconds to 60 minutes in duration.

10095            As well, ROCK 89 will provide five hours and 17 minutes of regular local news and surveillance information packages across the broadcast week.  In all, ROCK 89 will provide 14 hours and 40 minutes of spoken word programming each week.

10096            CJVR is also strongly committed to reflecting the diversity of the Fraser Valley region's cultural heritage through its daily musical and spoken word programming, as well as through vignettes provided by groups and individuals from various backgrounds with stories to tell.

10097            Furthermore, CJVR, in recognition of the importance that Chilliwack places on culture, will establish an arts and culture beat that will keep residents well informed of all cultural activities.

10098            MR. GEMMELL:  Madam Chair, the history of Chilliwack stretches back thousands of years beginning with the first nations community who lived in this beautiful area and gave it the name Chilliwack, meaning quieter water at the head.

10099            Today it is left to young aboriginal story tellers to perpetuate their stories, culture and traditions of the Sto:lo Nation, as passed down through the centuries to the present.  It is important that such a richness of culture traditions and history be preserved for future generations of the Sto:lo Nation and for the broader Chilliwack community to gain greater insight and understanding of the aboriginal community.

10100            With this in mind, CJVR will appoint a full‑time aboriginal news and community reporter and develop a series of first nations initiatives, both in the context of spoken word programming and CCD undertakings that are directly relevant and beneficial to Chilliwack's aboriginal population.

10101            MS RHEAUME:  Madam Chair, approval of CJVR's application will significantly impact Canadian talent in Chilliwack and the Fraser Valley as ROCK 89 implements its meaningful array of direct and indirect spending initiatives and special program undertakings.

10102            CJVR brings to Chilliwack a proud legacy of excellence, achievement and commitment to talent development that has advanced the careers of many successful Canadian artists.  It will be ROCK 89's goal to build on that legacy which first took root on the Saskatchewan prairies 41 years ago.

10103            CJVR's CCD plans over seven years call for a minimum direct expenditure of $1 million, plus an indirect on‑air expenditure budget of $1 million.

10104            The ten direct initiatives ranging from $28,400 to $276,000 per initiative are detailed in the supplementary brief and include:  FACTOR Talent Fund; Music Business 101; Opening Act; Horizons Unlimited; aboriginal and non‑aboriginal journalism scholarships; Sto:lo Nation Act III on the air; blue grass festival; Canada Day Rocks Stage; and Chilliwack Symphony.

10105            MR. FABRO:  Madam Chair, central among the many positive elements that CJVR brings to the table is my family's firm commitment as owners to provide a high quality, locally relevant programming service to the residents of Chilliwack that will be second to none.

10106            Chilliwack, for its size and prosperity, is one of the most underserved radio markets in Canada.  With only one originating service, Chilliwack is besieged by out‑of‑market stations whose program offerings do little to reflect the identity of the community and the real listening needs of its residents.

10107            Approval of ROCK 89 is important to the residents of Chilliwack who have been left thirsting too long for a local FM service that represents true musical diversity and spoken word programming that will reflect daily the unique character of their communities and the richness of their cultural heritage.

10108            It is my family's firm conviction that ROCK 89's diversified rock music format, locally relevant spoken word programming and substantial CCD initiatives truly reflects our commitment to Chilliwack's residents, its businesses and cultural communities and emerging local talent.

10109            In turn, approval of ROCK 89 is very important to CJVR as its need to expand our business, enhance our competitiveness, achieve greater operating efficiencies and position ourselves as a viable licensing alternative with a strong independent radio voice.

10110            For all these reasons we respectfully urge you to approve our application.

10111            My colleagues and I will be happy to answer any questions that the panel may have.

10112            Merci, thank you.

10113            THE CHAIRPERSON:  Thank you.

10114            Commissioner Williams will lead the questions.

10115            COMMISSIONER WILLIAMS:  Good afternoon, Mr. Fabro and CJVR Limited panellists.

10116            MR. FABRO:  Good afternoon.

10117            COMMISSIONER WILLIAMS:  In reading through the material and some of the history of your company, I notice that over the past 18 months you have applied for nine separate licences, with seven of them being unsuccessful and two applications, including the application currently before us today, under consideration today, being the final two.

10118            Radio CJVR Limited describes itself as a determined career broadcaster.  Could you give me some indication of the average cost involved of applying for licences in the various markets?

10119            MR. FABRO:  It depends on the level of application and some of the ones you see are pretty minimal; some of them are pretty upscale.

10120            I would say our average application cost would range from $70,000 to $120,000, depending on how much research we have to do in the market.

10121            COMMISSIONER WILLIAMS:  So, you have invested over $1 million in application fees?

10122            MR. FABRO:  Well, less than a million, but we are up there for sure.  We haven't got anything yet, but we are tenacious, we are going to keep trying.

10123            COMMISSIONER WILLIAMS:  A determined independent broadcaster I think you described yourselves.

10124            MR. FABRO:  "Determined" is the right word, yes.

10125            COMMISSIONER WILLIAMS:  In your supplementary brief you talk about the importance of licensing small or independent broadcasters.  Could you tell the Commission why applicants like Radio CJVR Limited are good for the Canadian private radio sector?  What would they add?  We hear much of companies consolidating and purchasing and buying others, and I guess does size matter, and if size doesn't matter or if small size is better or large size, I would like to hear that.  But most importantly, I would like to know what Radio CJVR Limited sees as licensing a company like theirs is so good for the Canadian private radio sector.

10126            MR. FABRO:  It is my belief that the smaller broadcasters, they can react quicker in the market.  Their programming isn't done from some central headquarters in central Canada.  The way we operate is our managers on site have a great amount of responsibility to manage what goes on the air.

10127            We have quicker response.  We can move and adjust according to what happens in the local market.  We don't have a plug and play cookie cutter programming.  We manage it according to what the community wants, much more than a program book that is defined very clearly on what can happen across multiple markets a lot of times with the larger broadcasters.

10128            In short, I guess we are not just a voice in the box.

10129            In addition, we really strive to hire locally so that it is in the life blood of those people on the air and in the back office in terms of how they speak to the community.  They understand, they grew up in the river swimming, they played hockey with the local arena, they collected eggs from the henhouse in the local community.  They are not from some far away place.

10130            So, they have a belief in the culture of the area that they serve.  So, I think the smaller broadcaster and, specifically CJVR Limited, is more in tune with the market.  That way, I think too, our news and information package is much more focused on local than I think the large broadcasters.

10131            Maybe Mr. Singer, Ken, can add something to that or anybody else on the panel.

10132            MR. SINGER:  I guess when we talk about ownership diversity, we also just talk about something that is unique to the marketplace.  I think if you review the many applications that you referred to, Commissioner Williams, you will see that in each case, CJVR has not come to the table with a reworked version of our last application.  We begin from the ground and build the application based on the community's needs.

10133            Conversely, when we view our competitive applications, especially the bigger ones, we see a tremendous similarity, that the name of a community may have been changed and for the most part it is pretty well the same game plan.

10134            Just diverse thinking and building our game plan based on the needs of the community is quite unique as compared to the way that the bigger players do it because understandably they are operating in many larger markets and they are employing those ideas in many cases that work for them very well in very, very huge markets and also just reapplying kind of the corporate traditional programming ideas, whether it be a market of 50,000 or a market of several million.

10135            MR. FABRO:  Also, I would like to add that, as you may know, and some of the panellists and the staff may know, is that our applications were not second rate.  They were just as good or better than some of the larger broadcasters.  We didn't come here with a cap in hand today.  We have the largest CCD commitment because we believe in what we are doing is right.  You will hear more of that probably in the question period here.

10136            So, it is not a second‑rate application.  We are small, but we can compete.  But we need to grow in order to reach a critical mass to make this business a success, and we are not there yet.

10137            Just another thing on the large broadcasters, I think what happens is they tend to concentrate on their network and how the network operates and how they can become more efficient.  You know, you can't blame them for that because it is all about return on investment and keeping the shareholders for some of these public companies happy.  So, they tend to try to bring costs down and bring margin up and that is where they focus on the network and try to make it work for them more than work for the people, where I think where we come from, we believe if we service the people, the money will come.

10138            COMMISSIONER WILLIAMS:  Earlier today one of your competitors, Golden West Broadcasting, put forward the notion that how you service a market is equally, if not more, important than how much CCD you put into a marketplace in order to get a licence and, further, that the licensing process shouldn't be in the nature of an auction procession, where the highest bidder, I guess, takes all.

10139            What would your comments be on that notion?

10140            MR. FABRO:  I tend to agree with that.  If it was all about an auction, then we probably couldn't stand a chance because some of these larger broadcast companies have big and deep pockets.  But what we did was we went back and looked at what the CCD commitments were for other markets of this size, and we believe in what was offered in other cases and we came up with what would be fair and reasonable for this market.

10141            We truly believe what we have in our CCD commitments is going to come more locally focused than some of the other applicants here today.  So, the injection will be good for us anyway in the long run because what we will get back is more following from the community.

10142            I don't know if Ken or somebody else wants to add anything to that.

10143            MR. SINGER:  I think the comments made by Mr. Hildebrand were valid, as well.  But at the same time, I also think that broadcasting today, to hold a licence today is a tremendous privilege.  We certainly wince a little bit when we think how much of every dollar is going back to service the CCD initiatives, but we built our game plan for this particular application in Chilliwack based on that commitment.

10144            We are not going to suggest a CCD figure that we can't live with.  We can live with that figure.  We think that it complements our all inclusiveness of our approach to serving the community.  Every one of our initiatives is directed locally.  That includes the FACTOR funding with their letter of commitment that they will endeavour to spend the money in the market.

10145            I think it is very important that those initiatives work hand in hand with our overall mandate of locally relevant service to the community.

10146            MR. FABRO:  May I just add one more thing?  I believe, and I couldn't swear on it, but you may want to check this, we were the first ever to schedule our CCD commitments as we grow our business in any application.  So, that would give the operation a little more leeway to pay it out and to make both investors and the public happy.