TRANSCRIPT OF PROCEEDINGS BEFORE

             THE CANADIAN RADIO‑TELEVISION AND

               TELECOMMUNICATIONS COMMISSION

             TRANSCRIPTION DES AUDIENCES DEVANT

              LE CONSEIL DE LA RADIODIFFUSION

           ET DES TÉLÉCOMMUNICATIONS CANADIENNES

                      SUBJECT / SUJET:

Various broadcasting applications /

Diverses demandes de radiodiffusion

HELD AT:                              TENUE À:

Quartz Ballroom                       Quartz Ballroom

Matrix Hotel                          Matrix Hôtel

10001-107th Street                    10001-107th Street

Edmonton, Alberta                     Edmonton (Alberta)

June 3, 2008                          Le 3 juin 2008

Transcripts

In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

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

and staff attending the public hearings, and the Table of

Contents.

However, the aforementioned publication is the recorded

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

either of the official languages, depending on the language

spoken by the participant at the public hearing.

Transcription

Afin de rencontrer les exigences de la Loi sur les langues

officielles, les procès‑verbaux pour le Conseil seront

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

membres et du personnel du CRTC participant à l'audience

publique ainsi que la table des matières.

Toutefois, la publication susmentionnée est un compte rendu

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

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

officielles, compte tenu de la langue utilisée par le

participant à l'audience publique.

               Canadian Radio‑television and

               Telecommunications Commission

            Conseil de la radiodiffusion et des

               télécommunications canadiennes

                 Transcript / Transcription

Various broadcasting applications /

Diverses demandes de radiodiffusion

BEFORE / DEVANT:

Elizabeth Duncan                  Chairperson / Présidente

Rita Cugini                       Commissioner / Conseillère

Candice Molnar                    Commissioner / Conseillère

ALSO PRESENT / AUSSI PRÉSENTS:

Cindy Ventura                     Secretary / Sécretaire

Lyne Cape                         Hearing Manager /

                                  Gérante de l'audience

Véronique Lehoux                  Legal Counsel

                                  Conseillère Juridique

HELD AT:                          TENUE À:

Quartz Ballroom                   Quartz Ballroom

Matrix Hotel                      Matrix Hôtel

10001-107th Street                10001-107th Street

Edmonton, Alberta                 Edmonton (Alberta)

June 3, 2008                      Le 3 juin 2008

- iv -

           TABLE DES MATIÈRES / TABLE OF CONTENTS

                                                 PAGE / PARA

PHASE I

PRESENTATION BY / PRÉSENTATION PAR:

Aboriginal Multi-Media Society of Alberta        1225 / 8138

Don Kay (OBCI)                                   1257 / 8370

Rogers Broadcasting Limited                      1346 / 8959

John Charles Yerxa                               1411 / 9369

Jim Pattison Broadcast Group Limited Partnership 1483 / 9801

               Edmonton, Alberta / Edmonton (Alberta)

‑‑‑ Upon commencing on Tuesday, June 3, 2008 at 0905 /

    L'audience débute le mardi 3 juin 2008 à 0905

8133             THE SECRETARY:  Good morning.

8134             We will now proceed with Item 18 on the Agenda, which is an application by Aboriginal Multi‑Media Society of Alberta for a licence to operate an English and native language FM Type B native radio programming undertaking in Edmonton.

8135             The new station would operate on frequency 98.5 MHz, Channel 253B‑.1, with an effective radiated power of 9300 watts, non‑direction antenna height of 162 metres.

8136             Appearing for the applicant is Bert Crowfoot.

8137             Please introduce your colleague and you will then have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

8138             MR. CROWFOOT:  Thank you very much.

8139             To my left is Allan Standerwick, the Director of Radio for Aboriginal Multi‑media.

8140             Good morning, Commissioners.  My name is Bert Crowfoot.  I am a Siksika Saulteaux from the Siksika Nation of the Blackfoot Confederacy in southern Alberta.  My Indian name is Cayastoya(ph) or Bear Ghost, which is one of my great‑great grandfather's names, and I am very proud to carry his name.

8141             This morning I had a smudge to ask the Creator that I might be able to stay the words to you that will best convey the message that we want you to hear.

8142             So the Aboriginal Multi‑Media Society, or AMMSA, is a not‑for‑profit corporation communication organization that consists of several divisions.  In addition to CFWE, The Native Perspective, AMMSA publishes Wind Speaker, Canada's national aboriginal newspaper, as well as provincial community news magazines, Alberta's Sweet Grass and Saskatchewan's Sage.

8143             Through the Buffalo Spirit Communications Foundation we produced a television pilot last summer for OMNI Television called The Quest of Buffalo Spirit, and it will be aired in the fall of 2008 in both English and Mandarin languages.

8144             AMMSA's mandate is inclusive of all aboriginal groups in Canada, including First Nations, Métis, Inuit and nonstatus Indians.  With this presentation we will describe our proposal to expand the native radio network of CFWE.

8145             For reference, our application is comprised of three parts:  the addition of a regional transmitter site to serve the aboriginal population of the Edmonton region; the addition of a transmitter to serve the aboriginal population at Fort McMurray; and the application for a Type B native radio licence.

8146             Prior to describing the reasons for the need to expand our network, it would be beneficial to provide the history of CFWE.

8147             AMMSA celebrated 25 years of community service in March of 2008.  We are committed to the continued development and promotion of the heritage of Canada's aboriginal peoples through increased access to communications.

8148             AMMSA established CFWE in 1987 specifically to serve the aboriginal population located throughout Alberta.  Initially the distribution system was unique through an arrangement with CBC TV in Edmonton.  The audio from the daily program known as The Native Perspective was broadcast by CBC TV weekday mornings.  We were known as the radio station on TV.  The Native Perspective was heard in aboriginal communities throughout northern Alberta.

8149             On August 31, 1987, CFWE‑FM made its initial broadcast to the town of Lac La Biche, Alberta, from a transmitter site located on the roof of a building across from the studios.  This was to signal the start of a new method of communicating with aboriginal communities in Alberta.

8150             Distribution of The Native Perspective program weekday mornings to remote communities via the CBC TV network continued simultaneously.  However, the limitations of this arrangement were becoming apparent.

8151             CBC network scheduling changes were making it impossible for AMMSA to reach its programming commitment of 20 hours per week as specified by the Northern Native Broadcast Access Program, NNBAP, which provided the funding for this program.

8152             In 1989 an alternative signal delivery system was established and was comprised of a small network of low powered FM transmitter sites all receiving CFWE program via satellite technology.  Ten communities in northern Alberta were selected initially.

8153             In 1990, 19 communities were added to the CFWE network.

8154             On November 1, 1991 the agreement between CFWE and CBC to air The Native Perspective program ended.  This added to the urgency to which CFWE pursued satellite distribution.

8155             To compound the problem, CBC, via CBC, was the only radio link for many communities.

8156             An additional 19 communities were added to our network in 1991.  This network now consists of 48 FM sites serving 55 communities throughout Alberta.

8157             Several of the communities expressed interest in producing their own programming through community radio.  Working with these community stations enables CFWE to strengthen the communication with rural areas by sharing information with the rest of the province.

8158             In 1993 AMMSA relocated the studios of CFWE to its administrative offices in Edmonton.  The primary purpose of the Northern Native Broadcast Access Program was to provide radio to isolated or underserved aboriginal communities.  Given the number of communities and budget limitations, it was necessary to use low‑power FM transmitters.

8159             While this type of installation does provide the community with radio, it limits the signal coverage to the central part of the community only.  Consequently, reception is poor or nonexistent for those people who live some distance from the centre of a community or travel between nearby communities.

8160             In 1990 the federal government cut back on funding for the Northern Native Broadcast Access Program.  It also completely eliminated the distribution program that helped expand our radio network, and it also cut the Native Communications Program that funded our print operations.

8161             AMMSA's print operations have since become self‑sufficient and Radio Bingo was introduced in 1996 to generate revenue to continue the expansion of the distribution of the radio network.

8162             The low powered 10 watt transmitters fulfilled our need to introduce CFWE's signal into northern communities, but many of our listeners were frustrated with the range of the low power transmitters.  Plans were developed to replace several low powered FM sites with one regional high power FM transmitter which would include signal coverage significantly.

8163             Standoff in southern Alberta was the first community to have this system installed in 1998 to provide coverage to the Blood Reserve and Peigan Reserve.  A second system was installed in the spring of 1999 at Joussard near Lesser Slave Lake.

8164             This higher powered system enabled CFWE‑FM to replace VLP FM very low power FM sites in the communities of High Prairie, Grouard, Sucker Creek, Driftpile, Joussard, Kinuso, Slave Lake, Peavine Métis Settlement and East Prairie Métis Settlement.

8165             A 100,000 watt FM site was installed in the Moose Hills Region of northeast Alberta in 2002.  This high powered FM site brings signals to the aboriginal communities of Cold Lake, Elizabeth, Frog Lake, Fishing Lake, Kehewin, Saddle Lake and it also serves the communities of St. Paul, Bonnyville and the City of Cold Lake.

8166             It should be noted that CFWE has essentially been operating as Type B native radio since we launched the FM sites at Joussard and Porcupine Hills in 1998.

8167             CFWE is keenly aware that the aboriginal people are increasingly moving from smaller rural communities to the larger urban centers.  There are likely many reasons for this, but the numbers shown in the most recent census indicate that this trend is likely to continue as aboriginal people seek out greater opportunities for education, employment, health services, and so on.

8168             Urban aboriginal population figures from the Statistics Canada Census data indicate that Edmonton ranks second only to Winnipeg and it continues to increase steadily.  Pegged at over 52,000 in 2006, recent estimates indicate that the figure could be approaching 58,000, due in large part to the city's post‑Census surge in economic activity.

8169             With respect to northeastern Alberta, 10 per cent of the population of Fort McMurray in 2006 indicated they are of aboriginal ancestry.  This figure does not factor in the considerable number of temporary workers migrating to the Wood Buffalo region to work in the oil sands.

8170             CFWE continues to grow its network to keep pace with the movements of aboriginal people.  It is critical to point out that we are not switching our priorities or switching our broadcast service, that being of Alberta; we are simply planning to expand our provincial radio network.

8171             CFWE wants to continue serving the needs of the audience we have developed over the past 21 years but also giving urban aboriginal listeners an opportunity to hear a friendly and familiar voice they may have heard months or years ago when they lived outside of Edmonton or Fort McMurray.

8172             In many respects the aboriginal culture and traditions are followed more routinely in rural regions and less so in the urban environment.  CFWE will serve as a cultural link for urban listeners.  We envision CFWE as a hub that connects listeners from a variety of aboriginal communities together.

8173             The audience of CFWE is extremely loyal and our intention is not to dramatically change or overhaul our programming in anticipation of our expansion to include urban listeners.  On the contrary, CFWE's unique radio programming and aboriginal cultural content will be a welcome change for aboriginal listeners now living in the Edmonton area.

8174             We have produced a three‑minute clip of what our sound has been over the past years and we would like to play at this time.

‑‑‑ Audio clip / Clip audio

8175             MR. CROWFOOT:  If you were wondering, that was our moose calling contest that we hold every year and he did the bull and calf.

8176             Anyway, the early stage of satellite distribution program sharing played a significant role.  Several native radio stations that were part of NNBAP, including CFWE, were responsible for the programming during certain portions of the broadcast day.  This often included the use of translators.  At that stage of our development and coverage, it made sense offering listeners a variety of aboriginal culture.

8177             However, the languages broadcast from other stations did not represent the majority of people listening to CFWE and resulted in significant tune‑out.  Dayparting language based on programming and an introduction of new programs that directly include listeners, such as Phrase of the Week, allow us to broadcast aboriginal language throughout the network with risk of alienating the listener.

8178             I must emphasize that our proposal does not include a separate local program to feed either Edmonton or Fort McMurray with this application.  Our local is the province of Alberta.  To shift our focus away from our existing market and concentrate on either Edmonton or Fort McMurray will alienate and destroy our bond with your existing listeners.

8179             Aboriginal people in rural Alberta know about CFWE.  For many it is their connection with home, a familiar voice speaking about people or locations they know.  As they visit family on other Reserves or settlements, they stay connected with CFWE.

8180             These family members are now starting to relocate in urban centers for employment opportunities or education and to Fort McMurray to participate in the oil sands development.  Without a signal to serve Edmonton or Fort McMurray, the connection is lost.

8181             As I stated, the program feed to proposed transmitter sites will be identical to that which is distributed to our existing network.  Our goal is to remain the same only on a larger scale, provide programming that is of interest and culturally relevant to the aboriginal people residing in Edmonton and Fort McMurray.

8182             The resources we have at our disposal, both financial and human, are better utilized by concentrating and expanding the program we currently produce.  We have demonstrated since the inception of CFWE our ability to adapt and present programs and music that appeal to a predominantly aboriginal listenership.  Lifestyles may vary depending on where one lives, but the values within our listeners remains constant.

8183             One reason for our success to date is that we listen to our listeners.

8184             Although a description of our music format is outlined in our supplementary brief, I will repeat the salient points today.

8185             The general format of CFWE is listed as Country.  The majority of our current listeners were raised listening to this genre of music.  It also mixes more naturally with the music of many of the aboriginal artists we play.  We acknowledge that some musical selections will be the same as that that is broadcast on commercial radio.  However, our focus will continue to be the aboriginal listener who grew up listening not only to Country music but to aboriginal artists who never played on commercial radio.

8186             We are not concerned with the charting hits and high turnover, nor do we actively pursue new music from established acts.  We do not use slogans like Today's Hot Country or The Best of Yesterday and Today.  Our station slogan, The Native Perspective, will continue to be used.  It does not promote, let alone mention, a format.

8187             Some of the music we play might appeal to a smaller portion of the incumbent station's share initially until musical selections that are only familiar or of interest to an aboriginal listener are broadcast in the same music set.

8188             Likewise, news and announcements that are broadcast during Country music programming are presented targeting the aboriginal listener of Alberta, which will have little appeal or relevance to the non‑native listener in an urban market.

8189             In addition to aboriginal artists, a portion of our current playlist is dedicated from independent emerging artists seldom played on commercial radio, at least until these artists have established themselves or are assigned by a major label.  This has been our experience that some of the music from these emerging artist complements our playlist nicely.

8190             Musicians who perform other styles of music that do not mix with Country format are not excluded from airplay.  Their music is scheduled at other times when the focus is more contemporary.  Music from aboriginal musicians is often added to our regular Country playlist, thus increasing the exposure of the song.

8191             As a point of fact, CFWE was promoting and playing Shane Yellowbird, a musician from Hobbema, Alberta, long before he charted mainstream.

8192             I must also mention that CFWE is a member of the Western Association of Aboriginal Broadcasters, WAAB, which includes five broadcasters from the Northern Native Broadcast Access Program.  These five broadcasters include Native Communications Inc. from Manitoba, Missinipi Broadcasting from Saskatchewan, Aboriginal Multi‑Media Society, CFWE, Northern Native Broadcasting Terrace, CFNR, and the Northern Native Broadcasting Yukon, CHON‑FM.

8193             We have been programming sharing for the past year and are looking at more shared programming in the coming year.  Quarterly meetings are held with all members to discuss strategy, share ideas and resolve problems.

8194             An example of shared programming is a live call‑in show on residential school survivors.  This program will be produced out of NCI Winnipeg and broadcast to all 250 transmitters of the WAAB network located in western Canada and Yukon.

8195             I am hopeful that I have demystified some of the confusion that is native radio.  We are proof that native radio works.

8196             We respectfully ask for your approval of our application to serve aboriginal listeners in Edmonton and Fort McMurray.

8197             Hei‑hei(ph).

8198             THE CHAIRPERSON:  Thank you, Mr. Crowfoot, for your presentation.  It is informative.

8199             Commissioner Cugini is going to lead the questioning.

COMMISSIONER CUGINI:  Thank you, Madam Chair, and good morning.

8200             I have to say I do appreciate the history of CFWE that you provided in your oral presentation this morning.  This is the first time that I have met you, so I certainly do appreciate the background.

8201             Your oral presentation does bring up one issue of housekeeping.

8202             You say on page 3 that the network now consists of 48 FM transmitters and, according to our records, we have a list of 35.  So I'm going to ask you, just for the sake of efficiency, if you could file with us a complete list of the 48 sites, perhaps by end of day tomorrow.

8203             MR. CROWFOOT:  Yes.

8204             COMMISSIONER CUGINI:  Is that doable?

8205             MR. CROWFOOT:  Yes.

8206             COMMISSIONER CUGINI:  Terrific.  Thank you.

8207             Now, we are going deal with your application in two parts.  First we want to deal with the application for the addition of transmitters in Fort McMurray and Edmonton.

8208             I guess at the outset I do have to make it clear and acknowledge that these applications are severable in that we could approve Fort McMurray and deny Edmonton, vice versa, or in your worst case scenario deny both.

8209             Do you acknowledge that that is in fact what is in front of us?

8210             MR. CROWFOOT:  Yes.

8211             COMMISSIONER CUGINI:  Okay.  Thank you.

8212             If we approve either Fort McMurray or Edmonton, you would become a Type B native service.

8213             MR. CROWFOOT:  Yes.

8214             COMMISSIONER CUGINI:  So, as a result, we are going to go through some very specific programming proposals that you have in your application, just so it's clearer to us and that we have a complete record.  So bear with me.

8215             Of course, you understand that it is because your .5 mV contour would overlap with commercial stations in Fort McMurray and/or Edmonton that you would become a Type B?

8216             MR. CROWFOOT:  Yes.

8217             COMMISSIONER CUGINI:  So from your application we know that AMMSA operates CFWE‑FM, a radio station with studios located in Edmonton and that the programming is distributed via satellite.  Of course, you went through great detail today in telling us that.

8218             MR. CROWFOOT:  Yes.

8219             COMMISSIONER CUGINI:  Do you consider the studios in Edmonton to be your main broadcast centre?

8220             MR. CROWFOOT:  Yes and no.  We only have one studio and that's where we produce it, but most of our listeners are in the north.

8221             So I guess the answer is yes.

‑‑‑ Laughter / Rires

8222             COMMISSIONER CUGINI:  Okay.  So it is all produced at the studios in Edmonton ‑‑

8223             MR. CROWFOOT:  Yes.

8224             COMMISSIONER CUGINI:  ‑‑ and the staff is located in Edmonton.

8225             MR. CROWFOOT:  Yes.

8226             COMMISSIONER CUGINI:  Thank you.

8227             MR. CROWFOOT:  Sorry, I'm a little ‑‑

8228             COMMISSIONER CUGINI:  Hey, so am I.

‑‑‑ Laughter / Rires

8229             COMMISSIONER CUGINI:  Would that change?  For example, if we were to say yes, we approve the transmitter in Fort McMurray, would that cause you to move that broadcast center to Fort McMurray?

8230             MR. CROWFOOT:  No, it wouldn't.

8231             COMMISSIONER CUGINI:  It would stay in Edmonton regardless of what we do.

8232             MR. CROWFOOT:  Yes.

8233             COMMISSIONER CUGINI:  Okay.  Thank you.

8234             Now, I know that in your oral presentation you did say that you are not going change the focus of your programming; that that is not your intention.  You are not going to overhaul the programming.  But if we do approve Fort McMurray and/or Edmonton, you would now go into the largest centers in Alberta that you would be serving.

8235             So you don't see yourself as competing at all with any of the incumbent Country music stations, the commercial stations in those markets?

8236             MR. CROWFOOT:  No, not really, because most of the listeners that we have are aboriginal.  I mean, I have a friend who was listening to us in St. Paul and they ‑‑ I mean, it's sad to say but he said "I love your programming because you have no commercials".

8237             He said, "You know, I'm listening to great music and all of a sudden a pow‑wow breaks out." So because our traditional music is kind of mixed in with our regular stuff, it's ‑‑ we are not Country.

8238             A lot of our music is Country.  On Saturday nights we have Hip Hop, we have Rock, because in some of the isolated communities the youth have no other signal to listen to.  So we are their source of entertainment on those nights.

8239             COMMISSIONER CUGINI:  And that is common.  I mean, I know that that's kind of the format that Aboriginal Voices Radio, for example, adopts as well, in that there is a mix of different genres of music.

8240             MR. CROWFOOT:  Yes.

8241             COMMISSIONER CUGINI:  You said you don't have commercials.

8242             MR. CROWFOOT:  No, we do.  We try to have commercials.

8243             COMMISSIONER CUGINI:  Right.

8244             MR. CROWFOOT:  I mean, since 1990 when we lost funding from the federal government, one of our goals was to become self‑sufficient.  At that time 80 per cent of our funding came from government funding.

8245             Today our budget is probably five times what it was in 1990, and now 86 per cent of our revenue comes from other sources other than ‑‑ out of a $3 million budget, $326,000 comes from the federal government for radio programming.

8246             We also have Radio Bingo which generates $1.5 million a year, and that is what we funded our distribution expansion, is with those revenues.

8247             COMMISSIONER CUGINI:  Okay.  What percentage of your revenue, if we grant you Fort McMurray and Edmonton, do you believe will come from advertising in those centres?

8248             I know you are not limited as a native radio to the amount of advertising but, again, it is just for the sake of completeness of the record.

8249             MR. CROWFOOT:  I would probably say that of our total revenue, about 30 per cent of it, 40 per cent of it, comes from advertising.

8250             COMMISSIONER CUGINI:  When you say 30 per cent, are you factoring in both Fort McMurray and Edmonton?

8251             MR. CROWFOOT:  Yes.

8252             COMMISSIONER CUGINI:  And if we were to grant one and not the other, do you have a split of how much advertising would come from just Fort McMurray or just from Edmonton?

8253             MR. CROWFOOT:  Most of the advertising that we would get from those communities we are already getting.

8254             COMMISSIONER CUGINI:  Okay.

8255             MR. CROWFOOT:  For example, we have a lot of government advertising, we have advertising from native organizations.  So a lot of, I guess, the clients that we currently serve are located in those areas.

8256             So that's why I'm having trouble with numbers.

8257             So for us to go after other clients that we don't currently have I don't think would make up a very large portion of the amount of advertising that we do carry right now.

8258             COMMISSIONER CUGINI:  Okay.  You did offer share projections in your application and they are quite modest.  They go from 0.1 per cent in year one to just 1 per cent in year seven.

8259             When you came up with those share projections, did you include both Fort McMurray and Edmonton?

8260             MR. STANDERWICK:  Yes, we did.

8261             COMMISSIONER CUGINI:  How much of a difference would that make if we were to approve one but not the other?

8262             MR. CROWFOOT:  It wouldn't be significant.

8263             COMMISSIONER CUGINI:  In your application you say that 20 per cent of all your musical selections will be performed by aboriginal talent.

8264             Is that Canadian aboriginal talent?

8265             MR. CROWFOOT:  Most of them are Canadian.  We do have ‑‑ with aboriginal people we don't really recognize the line, you know; like aboriginal people are aboriginal people.  So if someone is from the States and they know people up here, then we would play them.

8266             COMMISSIONER CUGINI:  Would you accept that 20 per cent level as a condition of licence?

8267             MR. CROWFOOT:  Yes.

8268             COMMISSIONER CUGINI:  What proportion of your musical selections are in aboriginal language?

8269             MR. CROWFOOT:  Are in aboriginal language?

8270             COMMISSIONER CUGINI:  Yes.

8271             MR. CROWFOOT:  Approximately 5 per cent.

8272             COMMISSIONER CUGINI:  And would you accept that as a condition of the licence?

8273             MR. CROWFOOT:  Yes.

8274             COMMISSIONER CUGINI:  Thank you.

8275             You just spoke about how some of your programming in the evening does skew younger.  Again, bearing in mind that we could approve Fort McMurray and/or Edmonton, do you think that that would change at all?

8276             MR. CROWFOOT:  No.

8277             COMMISSIONER CUGINI:  Not at all?

8278             MR. CROWFOOT:  No.

8279             COMMISSIONER CUGINI:  One more condition of licence with regards to music.

8280             As a Type B service would you agree to a condition of licence that requires that a minimum of 35 per cent of the musical selections from the content Category 2 music during each broadcast week be devoted to Canadian content?

8281             MR. CROWFOOT:  Yes.

8282             COMMISSIONER CUGINI:  Thank you.

8283             We are going to move on to spoken word.

8284             In your application I see that you have agreed already ‑‑ so this is an easy one ‑‑ to a condition of licence that you will provide seven hours of aboriginal language spoken word programming.

8285             MR. CROWFOOT:  Yes.

8286             COMMISSIONER CUGINI:  Okay.  Is this the amount of aboriginal spoken word programming that you currently broadcast?

8287             MR. CROWFOOT:  We currently carry about five hours.

8288             COMMISSIONER CUGINI:  So you would expand this to seven hours.

8289             MR. CROWFOOT:  Yes.

8290             COMMISSIONER CUGINI:  Is that dependant on approval of both Fort McMurray and Edmonton?

8291             In other words, if we were to approve one but not the other, would you still expand to seven hours?

8292             MR. CROWFOOT:  Yes.

8293             COMMISSIONER CUGINI:  Would you expand to seven hours if we denied both?

8294             MR. CROWFOOT:  No.  I mean, we would continue to do what we're doing.

8295             COMMISSIONER CUGINI:  You would keep it at five?

8296             MR. CROWFOOT:  Yes.

8297             COMMISSIONER CUGINI:  Okay.

8298             MR. CROWFOOT:  I mean, our eventual goal is to provide as much as we can, but because we have so many aboriginal languages ‑‑ we have seven different language groups ‑‑ and for us to carry a predominantly Cree language, then what would happen is the others would start tuning out.

8299             So we have always tried to walk that fine line.  That's why we do a lot of our programming in English.  We also do programming like Phrase of the Week, where we would say, "How do you say this in Blackfoot?  How do you say this in Cree?  How do you say this in Chip?  How do you say this in Dogrib, Slavey, Dene?"

8300             So those are the things that we have tried to do.  So we try to balance the amount of programming just to try to keep our listeners with us.

8301             COMMISSIONER CUGINI:  It's almost the challenges of programming an ethnic service ‑‑

8302             MR. CROWFOOT:  Yes.

8303             COMMISSIONER CUGINI: ‑‑ when you are trying to serve a number of languages and a number of groups.

8304             Again, if we were to approve either Fort McMurray and/or Edmonton, do you see that the focus of the spoken word programming would change in any way to attract more of an urban aboriginal population?

8305             MR. CROWFOOT:  No.  I mean, as in the presentation, we are trying to keep hold of those listeners that we have that moved to the city.

8306             We had a call one time from a person who was actually in Europe who was listening to us on the Internet and he e‑mailed us and said that it was so nice to hear just the slang, the languages and that sort of stuff from home.

8307             So that was a connection that was made via the Internet.

8308             COMMISSIONER CUGINI:  You are talking about aboriginal people who have moved to the urban centres, but what will attract the aboriginal people who have been living in Fort McMurray and Edmonton for a number of years to your station if you plan on keeping the focus of your spoken word to more of a rural aboriginal population in terms of residence?

8309             MR. CROWFOOT:  Yes.  A lot of the people that move still have connections to where they came from.  Their family still reside.

8310             During some of our request lines we have callers call in and say I would like to dedicate this song to, and they will list probably 80 relatives throughout the province.  So a lot of them do listen to those sorts of things.

8311             COMMISSIONER CUGINI:  Okay.

8312             Now, you did mention in your oral presentation that you have been sharing programming ‑‑

8313             MR. CROWFOOT:  Yes.

8314             COMMISSIONER CUGINI:  ‑‑ with other native broadcasters.

8315             MR. CROWFOOT:  Yes.

8316             COMMISSIONER CUGINI:  How many hours, approximately, of the shared programming is on your schedule right now.

8317             MR. CROWFOOT:  We do approximately four hours.  One of it is the Top 30 Aboriginal Music playlist that is produced out of NCI in Manitoba, but we all play it.  We also do the talk phone‑in show for our residential school survivors.

8318             We meet on a quarterly basis and try to look at what programs we have that would be of interest to all of us.

8319             We are also looking at maybe one of the options is to have, in the off hours when we are not on the air, a network feed that would cover the entire network.

8320             So those are the different ideas that we have explored.

8321             COMMISSIONER CUGINI:  And you would anticipate that this level of approximately four hours would continue?

8322             MR. CROWFOOT:  Yes, or increase.

8323             COMMISSIONER CUGINI:  Or increase.

8324             Do you source programming from any other radio stations, other than native broadcasters?

8325             MR. CROWFOOT:  No.

8326             COMMISSIONER CUGINI:  Okay.

8327             I believe in your application you also stated that you offer a number of hours of religious programming.

8328             MR. CROWFOOT:  On Sunday mornings we have approximately three hours.

8329             COMMISSIONER CUGINI:  And are these Canadian?

8330             MR. CROWFOOT:  Yes.  One is, I'm sorry.

8331             COMMISSIONER CUGINI:  Are these programs that you produce?

8332             MR. CROWFOOT:  No, they are pre‑produced by the client.

8333             COMMISSIONER CUGINI:  Okay.  You do know that sometimes the Commission will impose conditions on licence for balance and ethics in religious programming.  Basically we want to ensure that a balanced set of views is expressed over a reasonable amount of time on matters of public concern.

8334             With this in mind, I will read to you the text of a potential condition of licence and will ask then if you would agree to it.

"Where the applicant broadcasts religious programming as defined in the Religious Broadcasting Policy, Public Notice CRTC1993‑78, dated 3 June 1993, the licensee shall adhere to the guidelines set out in Section 3B.2.(a)..."

8335             Usually this is what the lawyer does.

"... and 4 of that Public Notice with respect to the provision of balance and ethics in religious programming as amended from time to time."  (As read)

8336             Will you accept that as a condition of licence?

8337             MR. CROWFOOT:  Yes.

8338             COMMISSIONER CUGINI:  Thank you.

8339             Now, at this time we are going to address something that may be unpleasant and that is in the event that we decide to deny both Fort McMurray and Edmonton.

8340             In your oral presentation, you say on page 5:

"It should be noted that CFWE has essentially been operating as a Type B native radio since we launched the FM sites at Joussard and Porcupine Hills in 1998."

8341             So is that an acknowledgment ‑‑ I need to know if that is an acknowledgment on your part that effectively the denial ‑‑ regardless of Fort McMurray and Edmonton, you are now operating as a Type B native service?

8342             MR. CROWFOOT:  Yes.

8343             COMMISSIONER CUGINI:  Then ‑‑ and she will correct me if I'm wrong ‑‑ as opposed to asking you to file with the Commission an application for a native Type B service, will you agree to the conditions of licence that we have just gone over that would be applicable to your current service regardless of Fort McMurray and Edmonton?

8344             MR. CROWFOOT:  Yes.

8345             COMMISSIONER CUGINI:  Will you agree to those conditions of licence?

8346             MR. CROWFOOT:  Yes.

8347             COMMISSIONER CUGINI:  Well, I would like to thank you very much.

8348             Those are all my questions, Madam Chair.

8349             THE CHAIRPERSON:  Thank you, Mr. Crowfoot.  I have no questions.

8350             Counsel...?  No?

8351             Thank you very much.  We appreciate your presentation.

8352             we are going to take maybe a 10‑minute break.

8353             Oh, you are entitled to two minutes, to be consistent with everybody else, if you're interested.

‑‑‑ Laughter / Rires

8354             COMMISSIONER CUGINI:  Even I forgot this time.  I apologize.

8355             THE CHAIRPERSON:  I don't know if you want to take two minutes to sum up?

8356             I'm sorry, I just overlooked offering it to you.

8357             MR. CROWFOOT:  I guess I said most of it in my presentation, but our goal is not to change our programming but to be able to reach more of our people that have moved to the urban centres.  I think that connection, as I explained with the person on the Internet, is important when people are not located here; that they can be able to listen and still get a sense of where they came from, to hear familiar voices, to hear the slang of the communities.

8358             I mean, when I listen to people, like I know there from Hobbema, I know they are from certain parts of the province just the way they speak, the way they look.  We are not on television so we can't really use those things.

8359             But I think it's important that we continue to reach those people in the cities and be able to continue to do the work that we do.

8360             One of our goals is to become self‑sufficient, but I don't envision us affecting the other broadcasters when it comes to revenue.

8361             That's all I have to say, unless Al has something he would like to add.

8362             MR. STANDERWICK:  No.

8363             THE CHAIRPERSON:  Thank you, both.

8364             We will adjourn for 10 minutes just to allow the next panel to set up.

8365             Thank you.

‑‑‑ Upon recessing at 0945 / Suspension à 0945

‑‑‑ Upon resuming at 1000 / Reprise à 1000

8366             THE SECRETARY:  We will now proceed with Item 19, which is an application by Don Kay on behalf of a corporation to be incorporated for licence to operate an English language FM commercial radio programming undertaking in Edmonton.

8367             The new station would operate on frequency 107.1 MHz, Channel 296C‑1, with an effective radiated power of 40,000 watts, non‑directional antenna, antenna height of 272 metres.

8368             Appearing for the applicant is Don Kay.

8369             Please introduce your colleagues and you will then have 20 minutes to make a presentation.

PRESENTATION / PRÉSENTATION

8370             MR. KAY:  Good morning, Madam Chair, Commissioners, Members of the Commission.

8371             Some of you have been here long enough in Edmonton to become residents now.  Welcome to our city, the City of Champions.

8372             My name is Don Kay and I will be managing partner of the station we are calling The Planet 107.1.  Over a period of 20 years I was on‑air, Assistant Program Director, then a sales representative and finally they made me Sales Manager at CHED here in Edmonton, which used to be right across the street.

8373             Subsequently, Moffat Communications asked me to manage stations in Winnipeg and in Hamilton.  We returned to Edmonton in 1994.  Since then I have worked as a radio programming sales and management consultant from here in Edmonton.

8374             When the Commission issued its call for applications, well, it was like a dream opportunity for me to apply for and maybe even be awarded a radio licence in Edmonton.  Now, I knew that to put a credible application forward to you I would need some help, so I would like to introduce you now to the team that brought this application forward.

8375             My very first call was to my good friend Jim McLaughlin.

8376             MR. McLAUGHLIN:  Good morning.

8377             MR. KAY:  I have known Jim for many years.  He was my colleague here at CHED, me in programming, Jim in news.  Eventually he became my boss, as he went on to become the Vice‑President of Moffat Communications Group of Radio Stations.  In that capacity over the next 15 years he was also still very involved with CHED and the Edmonton market.

8378             Jim chaired the CAB's Radio Board for four years.  He also chaired the BBM Radio Board for four years.  Some of you may not know, but Jim was one of the original founders of what we now know as FACTOR.

8379             Jim then introduced me to Sukhvinder Badh.  Suki, as everybody calls him, is a Professor of Economics at Simon Fraser University and at Douglas College in Vancouver.  He is actively involved in Vancouver on a community, regional and national level.  He has been serving on the Western Economic Diversification Committee for over two years now.

8380             Suki and Jim had put together a team to apply for a licence in Vancouver, as you recall maybe back a few months ago in February.  So I decided to pick from them and get some good help.

8381             That included David Oakes of Oakes Research who I had worked with many times over the years with Moffat and whose research is exceptional.  David has over 30 years of experiencing, researching Canadian, U.S. and international radio markets, and he undertook the research that led to our format choice for The Planet 107.1.

8382             I already knew Liz Janik by reputation.  Liz is one of the pioneers ‑‑ I see a couple of people smiling up there.  She is one of the pioneers of Alternative radio from her beginnings as an announcer on CFNY‑FM in Toronto.  Liz has worked as a programmer and consultant in many radio formats, including Alternative radio in both Canada and the U.S.  Most recently she developed the 100 per cent Canadian music station on SIRIUS Satellite Radio.  Liz has served on the board of the Canadian Women in Communications and, should we be fortunate enough to win this licence, Liz will be moving to Edmonton and be a very integral part of the station as our Vice‑President of Programming.

8383             I also knew that we needed some local Edmonton helped to put together a good news team, so I reached out again and found Penny Craig.  Penny has spent more than 20 years in communications.  Eight of those years were at CHED and K‑Rock, both here in Edmonton.  Her most recent focus has been within Edmonton's health related nonprofit sectors.  If we are successful, she will be the News Director of The Planet 107.1.

8384             Now, I know radio inside and out, but I needed to find someone who knew the Edmonton music scene to help me put together and develop a meaningful package of Canadian content development initiatives.

8385             Barry Allen.  He is a native Edmontonian who has been active in the music industry since he was a teenager, starting out as a recording artist and becoming an acclaimed record producer.  Barry has operated his own recording studio, Homestead Recorders, since the mid‑1980s.  He has worked with a wide range of Canadian recording artists and particularly Edmonton and Alberta artists in almost every music genre there is.  Barry has served on the board of Music Alberta.

8386             We also needed someone to make sure that everything gets done and gets done on time, and that person is Jaspreet Gill.  Jaspreet is multilingual, currently works as the Marketing Manager of The Source/La Source, B.C.'s English/French newspaper which is dedicated to cultural diversity.  She will be responsible to oversee our CCD implementation and our outreach for the various cultural communities.

8387             To round out our panel, we retained Robert Buchan of Fasken Martineau as our legal counsel.

8388             Also here behind me, not sitting on the panel, but my son Rob is here because he has been a radio brat since he was born and knows all about radio.

8389             Now to present our ideas for the new radio station in Edmonton.

8390             The first step in moving forward was to be sure that the market was a viable one.  Now, as everyone is aware, the Alberta economy has been on fire for the past few years.  Edmonton's economy has also grown with it.  As the capital of the province not only does the city benefit from the oil and gas industry, it has a widely diversified economy, including a strong public sector and retail business.

8391             Here are just a few facts.

8392             Edmonton grew in population at double the Canadian average between 2001 and 2006 and is projected to continue to grow at 2 per cent per year.  The real GDP is projected to continue to grow at close to 4 per cent per year.  Per capita retail sales skew 44 per cent higher than the national average and are projected to increase by an average of 6.3 per cent over the next four years.

8393             Radio is very healthy in this market.  With most of the major broadcasters present in this market with multiple media arms, whether radio clusters or radio and television clusters, the stations in the Edmonton area are well positioned to accept new competition.

8394             The most recent news that is also very encouraging to us, TRAM tells us that the rolling year to date radio revenues in Edmonton are up a full 12.9 per cent over the same period last year.

8395             According to TRAM, the radio revenues for the 12 months ending April 2008 were $82 million.  Now, that is up from $65 million that the Commission reported for the broadcast year 2006.

8396             So once we were satisfied that the market could accept a new station, the next question was: Okay, what should that station be?

8397             Jim and I and Suki all sat around and talked and we agreed that we would have an open mind and not have any preconceived ideas of what kind of format we were going to throw in here just for the sake of the radio station.  So that was when we asked David Oakes to test a variety of music styles and formats to help us make our decision for The Planet.

8398             David...?

8399             MR. OAKES:  Thanks, Don.

8400             We surveyed a large sample of Edmontonians, 600 of them aged 15‑to‑69.  This gives a worst‑case reliability of plus or minus 4.1 per cent 19 out of 20 times the survey is replicated.  We asked respondents how likely they would be to listen to each of nine formats.  I asked two key questions on the formats to determine the listener's interest.

8401             The first was how likely they would be to listen to the format and the second was what one format they would prefer.

8402             What emerged from both questions were two formats not currently in the market, Adult Rock and another format, a mix of Blues, Folk and Reggae.  Twenty‑six per cent of the sample stated they were very likely to listen to Adult Rock and 18 per cent were very likely to listen to the mix of Blues, Folk and Reggae.

8403             We discovered that the fans for each of these two formats were often the same people.  In other words, there was a significant amount of overlap in these two audiences.

8404             We also tested interest in 26 different music styles.  I would like to explain the difference between the individual styles of music and the music format.

8405             Essentially, the music styles are the building blocks of the format.  So for example, if the format was Classical music, the music styles making it up might beat baroque, romantic, opera and modern classical.  When we then looked at the interest of the Adult Rock audience in the 26 music styles, there was a very strong correlation between the music style demands of the two audiences.

8406             They exhibited an unusually strong demand for Adult Rock along with the specialty music styles Blues, Folk and Reggae.  In fact, I identified five primary music styles they preferred and three secondary styles.  They were Adult Rock, Roots Rock, Blues Rock, Older Blues, Classic Folk, Classic Rock, Reggae and New Folk.

8407             Now to describe the sound of the station, here is Liz Janik.

8408             MS JANIK:  Thank you, David.

8409             Good morning, Madam Chair and Commissioners.

8410             The Planet's format is Edmonton's Adult Alternative.  It has been especially designed for older music fans in Edmonton who are looking for a wider variety of music styles that are out of the mainstream.

8411             Now, Adult Alternative is also known as AAA, Americana and Progressive FM, but regardless of the label there are four key characteristics to every successful Adult Alternative radio station.

8412             First, they play a wider very eclectic blend of music that is normally not played on commercial radio.  The fans are very passionate about music.  Even though they are older, they are still interested in hearing new music.  They would like to hear new music from heritage artists and they would like to hear new music from the artist of today.  They also want radio to play more than one song from an album.

8413             Second, the tone and the presentation of the station is friendly, sincere and intelligent.  These listeners want real people to talk to them about the music and about the issues that affect them.  They also have a higher than average demand for news and information.

8414             Three, this format appeals equally to both men and women.  Even when it is specifically designed, researched and programmed to appeal to women, it typically returns an audience that is evenly balanced between men and women.  It is the one format where both sexes can feel at home.

8415             Fourth, every station in this format must be fully customized to its market.  Every market has different musical histories and unique competitive influences that shape the overall sound of the station.  For example, here in Edmonton when we asked listeners about classic Alternative from the 1980s, artists like Sting ‑‑ pardon me, artists like The Clash and Talking Heads, we discovered that there was a lower than average demand for this type of music even among those listeners that would be Adult Alternative fans.

8416             Now, to give you a little sample of what the station will sound like, we would like to play a short audiovisual presentation.

‑‑‑ Audio clip / Clip audio

8417             MS JANIK:  In addition to the wider variety of music styles, Adult Alternative listeners want their radio station to give them more news and information.

8418             To detail our news programming here is Penny Craig.

8419             MS CRAIG:  Thank you, Liz, and good morning, everybody.

8420             The research that Mr. Oakes referred to earlier showed very strong interest in local news, weather, and sports.  Information on cultural activities was a strong second and local music information very close behind.  There is also a clear interest in our planet's ecology and the environment.

8421             The Planet 107.1 will hire four fulltime news reporters and announcers.  This will ensure that we have experienced journalists who will serve as anchors for 64 local newscasts each week, for a total of six hours 24 minutes per week; 75 per cent of that will be pure news, with the remainder being weather, traffic and sports.

8422             The large news staff will allow us to have one reporter who will specialize in cultural events and another who will become our environment specialist.

8423             The news department will also take the lead on producing our daily news magazine program, one hour per day, seven days a week.  The Planet Magazine will focus on three or four stories each day to provide greater depth.  The weekend shows will be a bit different, with the Saturday show putting a greater emphasis on entertainment, sports and culture stories.  Sunday will be a week in review.

8424             We will also provide a number of daily features as outlined in our application.

8425             In all, we will provide over 22 hours per week of compelling spoken word programming and I am thrilled to be part of it.

8426             Now here to talk about our CCD initiatives is Jaspreet Gill.

8427             MS GILL:  Thanks, Penny.  Hello, Commissioners and Madam Chair.

8428             Our CCD initiatives are a very important part of our radio station.  In each of the next seven years, The Planet will spend a total of $600,000 above and beyond the basic requirement, of which 80 per cent is directed to local initiatives.

8429             Here is how we would spend the money:

8430             ‑ $120,000 each year to FACTOR.  We will of course request that FACTOR direct these monies to Alberta artists, to the greatest extent possible.

8431             ‑ Musical scholarships of $75,000 each year, split evenly between Grant MacEwan College, the University of Alberta and the Harris Institute of Arts.

8432             ‑ An annual contribution of $50,000 to Music Alberta.

8433             ‑ $55,000 each year to hire Canadian musicians to play out our Planet Music and Green Festival;

8434             ‑ $50,000 annually to the Edmonton Folk Festival, one of Canada's premier folk events to hire emerging Canadian artists on a special stage;

8435             ‑ $250,000 annually for Independent Music Awards.

8436             Because we wanted to have a strong local input, our most important contributor to the concept of Independent Music Awards was Barry Allen.  We asked Barry to join us.

8437             Barry...?

8438             MR. ALLEN:  Thank you, Jaspreet, and good morning.

8439             When Don approached me to give him advice on initiatives to support the local music industry, I was impressed with the things that were already in place, but Don wanted me to provide him with guidance for a project that would truly further the careers of artists.

8440             The first thing I did was recommend an increase in the amount of money going directly to the artist so The Planet could provide them with financial assistance that will genuinely help the artists with their careers.

8441             I suggested to Don that The Planet divide the Independent Music Awards into two parts.  The first will give $10,000 prizes to each of the winners of 10 different categories of emerging Canadian artists.  An additional $40,000 will be spent to create a compilation CD of the winners and to produce a free concert highlighting all 10 winners.

8442             The second change resulted from my suggestion, based on my career experience trying to develop artists in Alberta.  The Planet will add an additional $110,000 each year to be divided among three of the 10 original winners.  At the final concert, we will ask prominent Edmonton music industry professionals to choose the three winners.  Each winner will receive an additional $36,667 beyond the original $10,000 prize to devote to the production and marketing of their next CD.

8443             I suggested this because I believe to really make a difference, The Planet needs the choose those artists with a chance at success and provide them with enough funds to produce a top quality product that they can take to labels, promoters, producers and audiences.

8444             By the end of the term of the licence The Planet will have provided 70 winners with a boost in their careers, with 21 of them receiving additional support to go on from being emerging to being part of the Canadian music landscape fabric.

8445             And now here to sum up is Don.

8446             MR. KAY:  Thanks, Barry.

8447             Madam Chair, Commissioners, Members of the Commission staff, I truly hope that we have been able to convey to you the excitement with which we are approaching this application.  The other day Jim, Penny and I reminisced about our days at CHED when it was a music station that had a 32 hours tune share.  I mean, that's incredible.  CHED was the station in the market.

8448             It was very successful because of a number of things.  It was fun.  The on‑air staff was live and not voicetracked.  We never voicetracked.  Announcers did more than intro and extro songs chosen by corporate programmers from elsewhere, when the announcers knew every musician in town because we hung out with them and we encouraged them and when listeners looked forward to something different on the radio, and they got it.

8449             But that was another era and we don't expect that one station today can have the rating that CHED did in those days.  But the nature of The Planet 107.1 will be similar.  It will be a station that loves music, a wide range of music, from artists like Van Morrison, Joni Mitchell to contemporary adult rockers like Dave Matthews or Colin Linden.  Our listeners will be delighted to hear a refreshing new mix of music, including Blues, Folk, and Reggae.

8450             Edmonton has a very rich and vibrant music scene, with festivals and concerts, talented artists from a wide variety of genres, professional recording studios like Homestead and The Physics Laboratory.  We have several labels in the city, including Barrypatch Records, Stony Plain Records.

8451             They produced albums from a wide range of artists with a particular emphasis on Roots artists from Amos Garrett to Alternative Country artist Corb Lund, to Blues and Folk artists.

8452             Edmonton is ready for a new fulltime eclectic radio station.  With a very strong economy reflected in strong retail sales, Edmonton's radio economy is well positioned to accept new competition.  The entry of a new player with experience in this market, with ownership in this market, will create a new editorial voice and new radio competition in a market presently dominated by the big eastern‑based players.

8453             We have produced a strong business plan with a format based upon extensive research by one of Canada's best researchers.  As we mentioned earlier, we did not go into this application with any preconceived ideas for the format, but rather tested 26 styles of music, nine formats for both interest and availability.  What emerged was how many Edmonton listeners really love the diverse music genres that The Planet will present, from Roots Rock to Blues, Folk, Reggae and Adult Rock.

8454             Our commitment to Category 3 music reflects their musical tastes and their demands.  We have made a strong commitment to new Canadian artists with 40 per cent Canadian content, of which half will be to new and emerging artists.  We also will make a significant contribution to emerging artists in the kinds of music we will play and the on‑air features that will expose and celebrate them, as well as a substantial financial contribution to their future success.

8455             I am very proud to have pulled together this group of people to appear before you with broad experience in radio, the financial resources to pull it together and the enthusiasm to know that we can make it work.

8456             Thank you for your attention and it's your turn.  We welcome your questions.

8457             THE CHAIRPERSON:  Thank you, Mr. Kay.

8458             MR. KAY:  Yes.

THE CHAIRPERSON:  We have lots of questions.  I am going start and I'm sure the others will have questions as well.

8459             MR. KAY:  Okay.

8460             THE CHAIRPERSON:  First of all, I am going to make sure I am organized here.

‑‑‑ Pause

8461             THE CHAIRPERSON:  As you know, a number of applicants have proposed a format similar to the format you are proposing and I'm wondering if we could start off with you describing the similarities and differences between your proposed Adult Alternative format and the AAA format proposed by the other three applicants ‑‑ if you wouldn't mind, if you could do each separately ‑‑ Jim Pattison, Harvard, Evanov.

8462             Whatever order you would like to go in is good.

8463             MR. KAY:  Yes.  Madam Chair, I haven't had the luxury of hearing their presentations.  I have looked over a little of their summaries and supplementaries.

8464             But at least the ones who are doing the AAA have proven with their research that that is the format of choice that needs to be in the marketplace, but I will ask Liz to expand on that little bit.  She studied the plans a little more than I have.

8465             Liz...?

8466             MS JANIK:  Thank you, Don.

8467             I have reviewed the research and the briefs that were presented online.  I wasn't able to find comprehensive information from all the applicants to speak with authority to each applicant.  I could address some of the key differences, from our point of view.

8468             The first thing that I recognized is the audience that we are seeking to serve with The Planet format is distinct from the audiences that the other applicants have identified.  The reason that can I say this with some authority is because our audience has a double key characteristic.  One is that they love the Adult Rock, and the second part is that they really do enjoy specialty music, the Category 3 music, including Blues, Folk and Reggae.

8469             I believe we are the only applicant that offers this particular combination.  So because we offer a very unique combination of music, we have an audience ‑‑ using David's research, we know that we have an audience of 140,000 people who will really love what it is that we are doing.

8470             Another aspect of ours that is different from the others is that because of this very diverse set of music styles that we are going to be playing, and because of our very strong belief in Canadian music, I believe that we will be able to open doors to artists who would otherwise fall through the cracks of the traditional Pop and Rock formats, even Country.

8471             Corb Lund, for example, is an Alt Country artist and because he is this slightly left of center Country sound, he doesn't fit on most Country formats according to those programmers; and because he has a little bit of twang to what he does, he doesn't fit on the Pop and Rock stations.

8472             So the fact that we have this wider diversity in music styles means that we will bring artists that live and work here in Edmonton and across Canada, we will give them a chance to get to the airwaves.  This I think makes us distinct from the other applicants.

8473             One area where I did observe there was some common ground is that it seems that our research among all of us indicates that we will appeal to pretty much an even split between men and women.  I think we are all in the sort of 48 to 52 per cent range, which statistically, given margin of errors, means we are almost 50:50.  None of us are leaning 65 or 70 per cent male or female.  So we all tend to be gender neutral.

8474             That I think is the most that I can do with great authority at this time.

8475             THE CHAIRPERSON:  Thank you, Ms Janik.

8476             I'm just going to take a second here and just check something, if you don't mind.

8477             MR. KAY:  There is a little bit of a comparative thing, Madam Chair, where Harvard is proposing 20 per cent emerging and so are we.  Pattison and CTV and the Evanov ones are lower in emerging artists, but there are some.

8478             The Yerxa application of course is younger Friday.  The Harvard and Evanov are skewing towards female listeners and I suppose will have a softer sound as well.

8479             THE CHAIRPERSON:  So maybe just sort of to jump ahead in the order that I don't normally ask the question, but which of the applicants then would you view as most competitive with yours or would you think they are all very, very similar?

8480             MR. KAY:  Competitive?

8481             THE CHAIRPERSON:  Of the ones you have mentioned, yes.

8482             MR. KAY:  I guess ‑‑ Jim, have you got a thought on that?

8483             MR. McLAUGHLIN:  Madam Chair, in fact, the others are competitive with each other, but we are actually quite different.  When you take the 30 per cent specialty music that we are playing, that really moves us into a different area and we will have quite a different sound and really appeal to very much a different audience.

8484             THE CHAIRPERSON:  I actually in my notes have them all having some Category 3 music.  So we will see that as we go along and I will check my notes, too.

8485             But at any rate I appreciate that.  Thank you.

8486             What about then a comparison with the station currently in the market, Alternative Modern Rock, which I understand is a Rogers CHDI‑FM.

8487             Did you compare your format to theirs?

8488             MS JANIK:  Yes, I did.  What they are doing is a younger Alternative mix.  They are playing a wide variety of music styles.  They are playing primarily Pop and Rock music styles, and the type of music styles that they are using and age of songs and artists that they are using indicate to me that they will definitely track younger in their audience.  I would imagine mostly under 35 would be their primary audience base.

8489             THE CHAIRPERSON:  I'm wondering then, did you calculate the percentage of your proposed playlist that is not currently being played in the market?

8490             MS JANIK:  I did have access to a Mediabase when we were preparing this application so I pulled up a 12‑week report.  Because of the nature of Mediabase, it doesn't allow me to generate percentages readily.

8491             I did go through and I looked at the artists that would be core to our sound, so when I looked at ‑‑ to give you some idea, Corb Lund, who I mentioned already, in a 12‑week period was never played on Pop and Rock Edmonton radio.  He was never played.

8492             I love Van Morrison and Van Morrison is played here in Edmonton, and he is played about four times a week on four different radio stations, which means I as a fan would have to wade through 1,500 songs before they would get to that one song.

8493             Neil Young is played here in Edmonton, but the issue with this is that although he is played here almost all the songs that you will hear on the radio here are pre‑1980.  Well, that's nearly 30 years ago and it doesn't take into account the fabulous albums he has released just in the last couple of years, the very political one from 2006 and the more romantic Prairie Wind.

8494             We love Joni Mitchell.  You can hear Joni Mitchell once a week.

8495             Bruce Cockburn, who was a staple of this format in the United States, is one of the celebrated artists for this format in the United States, is heard twice a week on Joe, which is a format of Classic Hits.

8496             Sting.  I can hear Sting in this market.  He is played once a day on one radio station.

8497             But I cannot hear all these artists together in any great frequency on any one radio station in this market.

8498             THE CHAIRPERSON:  I think that answers the question very well.  Thank you.

8499             Now, you have proposed 30 per cent Category 3 music to be offered during the broadcast week.

8500             Are you willing to accept that as a condition of licence?

8501             MR. KAY:  Yes, absolutely.

8502             THE CHAIRPERSON:  You may have said that this morning.

8503             MR. KAY:  Yes.

8504             THE CHAIRPERSON:  How many hours per broadcast week are you proposing to devote to Category 3 music?

8505             MS JANIK:  Well, at least a minimum of 30 per cent evenly distributed through all dayparts.  We don't look at this music style as a negative; it is something that our listeners really want.

8506             So part of our strategy to be successful with the 140,000 people who want the special blend of music is to include it through all dayparts.

8507             We do have some specialty shows in addition, but it is part of the mix; it is part of the sound of the station.

8508             MR. McLAUGHLIN:  Could I jump in here, Madam Chair.

8509             A really interesting thing came out of David's research and it was one of those eureka moments.

8510             I have been working with David for years and he is a fabulous researcher and there is always more in the research than dummies like me can get out of it.  But we were talking about Category 3 and I suddenly realized something that was in front of us for quite a while.  When David does the research, he asks a very interesting question and that is:  How much do you like, how much do you want the various categories or the various styles that qualify as Category 3?  And you get truly tremendous strong results.  People want to hear that music.

8511             But then he asks the question ‑‑ all right, let's say you picked that Folk was your very favourite.  He then asks the question:  Well, do you want us to create a Folk radio station?

8512             And the answer is invariably no, I don't want a Folk radio station.  I want the music I love as a spice inside, you know, a broad spectrum of the music.  Which I think may go a long ways to start explaining why for those of us in the industry and for the Commission too, for that matter, licensing Category 3 stations, the success of them has been so difficult.

8513             Really only Classical stations are the only ones that have had real success over the years, and that is because if you pick a target, like I suggested Folk, they don't want that.  The listeners aren't looking for that.  They love Folk music, but they don't love a Folk radio station.

8514             So that's why our 30 per cent has so many different genres in it, so that we can create that spice and weave it in with all the other music.

8515             We are very confident of our success.  David's research has never steered me wrong in years, believe me.

8516             MR. KAY:  We also said to ourselves the other day, okay, let's look at our collection of CDs or albums at home.  What do you have?  What do you have?  Okay.  Do you have some ‑‑ oh, you do.  So we all have this little bit of Blues, a little bit of Folk, a little bit of whatever.  And that is part of the basis again where you say hmmm, that makes sense.

8517             THE CHAIRPERSON:  Collection of albums speaks to our age, I think.

‑‑‑ Laughter / Rires

8518             MR. KAY:  Yes.

8519             THE CHAIRPERSON:  I think your comments, though, Mr. McLaughlin, segue into my next question.  I should probably have asked the first question a little better.

8520             What percentage of subCategory 3, Jazz and Blues, Worldbeat and Folk, how would you break that down?

8521             MS JANIK:  When we asked about the general concept of playing a station with Jazz ‑‑ pardon me, with Blues, Folk, and World beat, we got a very strong response to that.  So we looked a little further and because we do this thing of looking at 26 distinct music styles, what we came to understand was that what they really preferred was the Blues and the Folk and not so much Worldbeat.

8522             So we're looking at about, almost 15 per cent Blues and 15 per cent Folk and a little bit above that for the Reggae.

8523             THE CHAIRPERSON:  Thank you very much.  I'm just making notes here to myself.  Thanks.

8524             MR. OAKES:  If I could just, as the researcher, discuss this a little bit, when we were trying to figure out the Category 3 music styles and how much they would be played, it was a bit difficult because of the top five musical styles to be played on station, two were Category 3 music styles.

8525             So obviously we would play those more than the Reggae and newer Folk.  So out of those it becomes very difficult to try to predict what would be the best composition of those.

8526             All I can say is that when you have two of your top five that are Category 3 music, you have to put them in there and you have to feature them.

8527             THE CHAIRPERSON:  So it sounds like the 30 per cent will definitely be a minimum, or there is a good possibility it will be a minimum.

8528             MR. McLAUGHLIN:  That's why we have no problem making the commitment to the 30 per cent as a condition of licence.

8529             THE CHAIRPERSON:  Thank you.

8530             As I'm sure you know, in the 2006 Radio Policy the Commission indicated it would amend the current Canadian content regulation for Category 3 music, Canadian content for Category 3 music, requiring at least 20 per cent of subCategory 3 for Jazz and Blues selections during the broadcast week be Canadian.

8531             Would you anticipate any problems satisfying that requirement?

8532             MR. KAY:  None whatsoever.

8533             THE CHAIRPERSON:  No.  And if the Commission were to decide to impose that new minimum 20 per cent as a condition of licence, would you agree to that?

8534             MR. KAY:  Absolutely.

8535             THE CHAIRPERSON:  Thank you.

8536             Now, just specifically, I noticed your program Pick of the Week which you described in your brief ‑‑ I'm just going to turn to it actually.

‑‑‑ Pause

8537             THE CHAIRPERSON:  You indicated that you will highlight 52 emerging artists every year and I was curious to know, first of all, how the artists will be picked.

8538             MS JANIK:  We will pick the artist based on the music that is submitted to us throughout the year.  We will be looking for the best sounding, most appealing releases that are available and we will take into consideration their experience and audience appeal.

8539             THE CHAIRPERSON:  So you will be actually soliciting this type of submissions.  Maybe you get them automatically anyway, but you will be actively encouraging it.

8540             MS JANIK:  We will be actively soliciting.  In the past when I have launched local independent‑type programming, typically what I will do as I will create a press release for all the people who are part of the infrastructure in the music industry and advise them of our programming policy and encourage them to send us submissions.

8541             When I launched the 100 per cent Canadian channel on Iceberg, with the help of Indie Pool, they distributed a letter for me to their membership, and within a few weeks I received 500 independent releases.

8542             THE CHAIRPERSON:  So you won't have to ‑‑

8543             MS JANIK:  So I am quite confident and very actually excited at the opportunity to open the door to radio to artists from a wide variety of genres.

8544             And personally I have a collection at home of 1,500 Canadian artists.

8545             MR. KAY:  You know, it is one of those fun things too, where other stations ‑‑ every station has people knocking on the door and say look, would you please play my record.

8546             Well, it gives us a way to expose them and do more than just play their record and make the whole week‑long thing for them.

8547             Also, with our Hey Mom I Have Taken over the Planet program, we can have someone like Sara Philasani(ph) come in and take over the show.  And she doesn't have to play just her music, she can play Canadian stuff.  But it is a musician who is going to come in, have an open door thing and really do what they want to do.

8548             Burton Cummings, for example, is a closet disc jockey.  When I was in Winnipeg when he would come into town I would say, hey Burton, do you want to come in and take over?  That would be great for us.

8549             But a lot of these people don't have a chance to do that.  We want to give them that chance.

8550             THE CHAIRPERSON:  In your deficiency response March 7th, you indicate that you may occasionally run some Canadian syndicated programs.  I think you just wanted to leave yourself some latitude there.

8551             MR. KAY:  Exactly.

8552             THE CHAIRPERSON:  Is that still your same position?

8553             MR. KAY:  Exactly, yes.  Just some latitude.  If there was, for example, a Blues festival and somebody came to us and said we produced this blues program that fits with what is going on in your community, in your city, do you want to listen to it and maybe run it?  Sure, we will listen to it.

8554             That would be the only kind of thing that we are planning at this point in time.  Other than that, nothing.

8555             THE CHAIRPERSON:  Still staying with the 120 hours of local programming?

8556             MR. KAY:  Yes.  Absolutely.

‑‑‑ Pause

8557             THE CHAIRPERSON:  I've got so many applications you can't get them all on one schedule.  I just have to flip around here.

8558             126 hours live‑to air, would that be a correct statement, then, if six hours is allowed for syndicated?

8559             MR. KAY:  Yes.

8560             THE CHAIRPERSON:  Okay.

8561             Now, with respect to your CCD initiatives, I'm assuming because it is quite a lengthy list ‑‑ I didn't have a chance to check your comments this morning with what has been submitted, but I'm assuming there is no change.

8562             MR. KAY:  No change.

8563             THE CHAIRPERSON:  All right.  So with regards to the Music and Green Festival...?

8564             MR. KAY:  Yes.  The whole concept of green of course is growing everywhere and we certainly plan to be a green radio station.  We are going utilize the best practices and ecofriendly right things to do.

8565             And as far as the Green Festival, do you want to talk about that, Liz or is it Jas?

8566             MS JANIK:  I can talk about the concept or did you want the details of the finances?

8567             THE CHAIRPERSON:  Actually, what I was interested in was how the artists were going to be selected.

8568             MS JANIK:  For showcasing on The Planet Music and Green Festival?

8569             THE CHAIRPERSON:  Yes.

8570             MS JANIK:  Because we have this ongoing dialogue with artists from the community and from Edmonton specifically, we will get to know the artists that are available in our community and we will be able to identify those artists that our audiences particularly prefer.

8571             So we will hire local Edmonton artists that are part of our playlist to be part of the showcase.

8572             We would look for one artist that was a little higher statured to be the headliner and the others would be the emerging artists.

8573             THE CHAIRPERSON:  I guess I was ‑‑ and I can see, Ms Janik, with you being involved that you probably don't need any outside expertise.  So when I was writing the question I was kind of contemplating were you doing it internally, but I can see that you will be.

8574             And a similar question that I had with respect to the Independent Music Awards, the first phase of that, where there are 10 artists selected, I gather that is as well selected internally?

8575             I know the prize winners are not, the three are not.  But will the initial 10?

8576             MR. KAY:  Yes, the initial 10 ‑‑ sorry , Liz, did you want to go ahead?

8577             MS JANIK:  Yes.  Because we will be playing these artists as part of our rotation, what we will do internally is we will identify I would expect the top three from each of the music styles that we have identified.  Then we'll take it to the audience and we'll let the audience have their input to pick the top of those three in each of the categories.

8578             MR. KAY:  Okay.  Would you like further explanation on the top three or...?

8579             THE CHAIRPERSON:  No, that's very good.

8580             MR. KAY:  Okay.

8581             THE CHAIRPERSON:  I don't know, I think we see from these American Idol‑type or Canadian Idol‑type shows, you have to be careful when you ask for audience because you can sort of stack the deck.

8582             MS JANIK:  Hence our preselection of them.

8583             THE CHAIRPERSON:  Yes, and the final selection.

8584             Now, with respect to the Independent Music Awards Phase 2, as we have just mentioned, you will have a panel that will select the three grand prize winners.  You mentioned that each will receive an additional $36,667 for the production of the CD and, if they wish, a video, for a total contribution of $110,000.  I have a couple of questions in this regard.

8585             MR. KAY:  Sure.

8586             THE CHAIRPERSON:  First of all, I'm wondering how these funds will be disbursed.  Like would it be ‑‑

8587             MR. KAY:  I'm going the turn things over to Barry Allen here in a second.  That is the area where, as Barry said earlier, I went to him and said Barry, how can we do more than just the token thing that radio stations do?  What can we do that is going to impress the Commission, that is going to be good for the community, going to be good for the musicians?

8588             And then Barry was the one who came up and said okay, Don, here is what you really have to do.

8589             Barry...?

8590             MR. ALLEN:  Thanks, Don.

8591             Madam Commissioner, I just felt with the initial in Phase 1, the $10,000 to each, to 10 winners, for $10,000 it is very difficult for a band to record and produce a state‑of‑the‑art piece of product.  For $10,000 you would be lucky if you get it completed and get it to the mix stage.

8592             What I suggested to Don was that well, maybe we should take it another step further where we offer a couple of prizes with some substance to it where it would give the bands or the artists the opportunity to not only finish recording their album but also have money in there to manufacture product, to have a professional graphic artist design it, then have money also in the recording process to bring in an outside producer.  Those expenses can vary anywhere from $5,000 to $15,000; but to bring in a name kind of producer to help them take their music to a next level, take it to a higher level than they already are, and then also to have enough money to pay a publicist and a tracker and then have money left to do some marketing and promotion.

8593             That has been the big downfall with acts at this point, is we just run out of money.  We end up we have enough money to make a record, make a good record and then there isn't money left there to take it to the next most important stage:  get it out to the audiences.

8594             That was the reason that intrigued me with this entire application, is that I love the idea of the 40 per cent Canadian content, 20 per cent emerging artists.  It means they have some meat on the bone here.  They are putting some funds into the community that will in turn filter into the music industry and Edmonton, in Alberta, and it helps people like me; it helps artists; it helps producers.  They then have money to hire a manager instead of their friend.

8595             I was real excited about this because I think it works.  They need more money.

8596             Without these types of initiatives I'm not so sure where our industry would be today, because to work in the music industry ‑‑ I have worked in the industry for upwards of 40 years, and I mean I love making music, it is the greatest thing anybody can do, to be able to produce artists.  It is absolutely magical.  I can't tell you how much I love doing it, and I want to be able to keep doing that and I want to get better at what I do, as all artists want to get better at what they do.

8597             They want to write a better record.  This program I feel offers them to do that.

8598             Then once that record is completed, then we have a friendly radio station that is eager to play and approachable on a local level.  It is very exciting for me and that's why I love this application.

8599             I hope I have answered your question.

8600             THE CHAIRPERSON:  I can appreciate it is obviously a very thoughtful approach.  What I'm really wondering is how the funds will be controlled to ensure that somebody doesn't take a trip to Winnipeg ‑‑ to Winnipeg, to Mexico ‑‑ although they might take a trip to Winnipeg from Mexico.

8601             MR. KAY:  Madam Chair, we have spoken about that one, too.  Knowing musicians and knowing radio people, we decided that we would distribute the money in accordance with some kind of plan.  I don't think it would be wise to give anybody $36,000 or $46,000 right now and let them make their own decisions if they don't have good management and good ethics or whatever.

8602             So we would distribute that money in accordance with the plan.  Once the winners are chosen by an independent body of known musicians probably and radio people in the city, then we would say okay, what is our plan here.  That is where Barry knows that industry inside and out.  He will suggest things and they will come up with a plan.

8603             We will then say okay, it's going to cost "X" dollars for this recording session, "X" dollars for the mastering, "X" dollars for the making of the CDs.  Well then maybe here is some money left over for a management thing.  Maybe here is the money you need for a tour.

8604             But I think it has to have a business plan and sometimes we all need that input.

8605             MR. ALLEN:  It would be progressive.  It would be initial funds to get the project going and then as it is completed along the way, funds will be then issued to pay for those portions.

8606             THE CHAIRPERSON:  So you probably ‑‑

8607             MR. ALLEN:  Rather than just handing over ‑‑ I totally agree with you, you can't do that.

8608             THE CHAIRPERSON:  So you would probably end up then with some type of agreement with these winners or a contract.  Maybe not as formal as that, but...

8609             MR. ALLEN:  Yes.

8610             MR. KAY:  Let me get Jaspreet to answer a little bit of that too, for you, because she is going to be supervising and staying on top of that.

8611             Sorry, Jas.

8612             MS GILL:  I will be supervising all the CCD initiatives so the money just doesn't go wandering where it is not supposed to go.  So it will be monitored by me and the team, and I will be reporting back and forth.  So there is an open communication and we know it is just not being used for, you know, travelling somewhere.

8613             THE CHAIRPERSON:  Thank you.

8614             Just let me ask you one question on that, then.

8615             Would you expect to be issuing the cheques directly to a third party or is that just too far down the road to even ‑‑ directly to a third party?

8616             MS GILL:  Yes.

8617             THE CHAIRPERSON:  You would, okay.

8618             I'm just wondering, under the new regulations video would not qualify as an eligible CCD initiative, so the CCD funds would have to be directed to the production of audio content.

8619             In that case, would you propose to eliminate the option of using these funds to produce a video or would you propose to redirect the funds?

8620             MR. KAY:  We wouldn't be doing any videos.  If it doesn't qualify, then we will have to let them know that upfront.

8621             THE CHAIRPERSON:  Okay.  Good enough.  Good enough.

8622             In your brief, at page 22, you refer to additional potential significant back‑office and management synergies if your application for The Planet in Vancouver was approved, which unfortunately it wasn't.  As you know, we had very few frequencies there, one.

8623             But at any rate I'm wondering, were these synergies or are the synergies that you anticipated incorporated in the financial projections that you submitted with this application?

8624             MR. KAY:  No.

8625             THE CHAIRPERSON:  No?

8626             MR. KAY:  No.  We were only talking about possibly doing that syndicated show would run in Vancouver and here, but there was nothing this far.  We just thought okay, can we do this as a good business plan?  We have the experience, we have the knowledge and we can certainly do it.

8627             THE CHAIRPERSON:  That's great. Thanks.

8628             Now, you gave a little more information in your brief this morning but maybe we can just repeat.  I will ask my question, although I think you might have given me some of the answer.

8629             In your March 7th deficiency you refer to hiring specialists to write, produce and host your special interest music programs and you refer to them as a freelance producers.

8630             I'm just wondering, to assist in comparing your financial projections to those of other applicants, how many fulltime equivalents would these freelancers equate to?

8631             MS JANIK:  I didn't quite hear the last part of your question.

8632             THE CHAIRPERSON:  I'm just wondering, to assist in comparing your financial projections to those of the other applicants, how many fulltime equivalents these freelanceers would equate to.

8633             MS JANIK:  How many fulltime equivalents?

8634             THE CHAIRPERSON:  People.  I'm talking about people.

8635             MS JANIK:  Oh, we are only looking at some of the feature programs.  Specifically the one that comes to mind is Planet Pow‑wow, because there is a gentleman that I had the pleasure of working with on SIRIUS Satellite by the name of Brian Wright‑McCloud and.  He is a noted author of the Encyclopedia of Native Music.  When we would work with him it would be a nominal amount of money that he would receive.  Even all three together wouldn't even add up to I would say at best maybe half a person.  If we had three people being paid fees, it would be minimal.  It's really just a one‑hour show and it is a small cost.

8636             THE CHAIRPERSON:  Okay.  Thank you.

8637             Can you just describe for me the total number of employees that you expect to have and how they will break down?

8638             MR. KAY:  Yes.  Exactly, we are going have four people in news fulltime; there will be seven announcers; plus a PD, and that being Liz; one production manager; one traffic person; two writers, who we intend to keep very busy; one promotion manager; one accountant; one receptionist.  I will be general manager and general sales manager, and we will have five sales people.

8639             So that's a total of 25.

8640             THE CHAIRPERSON:  Okay.  Thank you.  I was missing a few.

8641             MR. McLAUGHLIN:  I should point out that Liz has told us she intends to do an air shift.

8642             MS JANIK:  Yes, it's time to have fun again.

8643             THE CHAIRPERSON:  I recall Commissioner Cugini saying how much she enjoyed your programs years back.  I'm sure she will comment on that anyway.  At any rate, I recall her telling us that.

8644             I just want to look at your financial projections, so I have some kind of involved questions.  Maybe we will just work our way through them and see how it goes.

8645             In your brief you indicate your research found your format could produce at maturity a maximum potential 12‑plus audience share of 7 per cent, and in your application at section 6.1 you project reaching a 6 per cent share in year four and 7 per cent in year five.

8646             I'm wondering, given the somewhat narrower appeal of the Category 3 portion of your musical selections ‑‑ and you are free to disagree with that if you don't think it is narrower appeal ‑‑ and the highly competitive nature of the market, could you elaborate as to why you feel your projected market share is achievable?

8647             MR. McLAUGHLIN:  First, may I start by disagreeing with your position on Category 3?

8648             THE CHAIRPERSON:  Certainly, yes.

8649             MR. McLAUGHLIN:  David can give us exact details.

8650             When we looked at the Category 3 music genres, they scored exceptionally high.  In other words, there is really genuine interest out there for this kind of music.

8651             You recall I said they dropped way down when you asked if they wanted a specific radio station in those genres, and they don't, but they want to hear that music.  And two of the categories tested in the top five.

8652             So in other words, you know, when we were picking the key categories of music to play, two of them tested in the top five.  That means our audience is asking us for 40 per cent or they are asking for at least 40 per cent.  We are only looking to go to 30, I admit, but we do respectfully dispute that it is a lesser desired music style.

8653             THE CHAIRPERSON:  So you feel confident that those are achievable?

8654             MR. McLAUGHLIN:  We are very confident.

8655             Also, you know as we started out in those, we took that seven share and cut it in half and then reduced that a little bit to be very conservative in our first couple of years.

8656             MR. OAKES:  If I could add to that, the audience reach at 14 per cent was relatively ‑‑ not relatively, it is very conservative.  The 7 per cent hours tuned share is very conservative.

8657             I have taken out every possible person out of the audience potential that even has a hint of, well maybe, maybe not, and I have basically got the core there that is very passionate about the music.

8658             THE CHAIRPERSON:  Thank you.

8659             Your PBIT levels in years four through seven increase from 42.3 per cent in year four to 50.6 per cent in year five to 54.2 per cent in year seven.  I'm just wondering if you could explain why you believe you can achieve these PBIT levels given the Edmonton market's 2007 PBIT level was 26.7 per cent and considering the highly competitive nature of the market.  And of course there is a good likelihood some other service or services will be licensed into the market.

8660             MR. KAY:  Jim, are you going to answer?

8661             MR. McLAUGHLIN:  Yes, Commissioner, I will attempt to take a swing at that to start with.

8662             First of all, because we were so conservative in the first few years, we ramp up rather substantially each successive year.  So we only get to our 7 per cent, I will call it our full audience if you will, in year four.

8663             The other issue is we have worked very hard to keep our costs down.  When you are a stand‑alone operator, you must keep your costs in check or you will get yourself in trouble.  You know, the big guys have 12 other radio stations to send money when they get in trouble or when they are starting out.  We don't; we have what is in our pocket.

8664             So by keeping our costs down and being aggressive sales people, we are quite confident that we will have above‑average performance with this radio station.

8665             I managed a stand‑alone FM in Vancouver against all major competition and we took it to the number one sales FM station in the city in two years.  We went from $4 million in sales to over $12 million in sales in two years, and I assure you we were making out like a bandit on the bottom line.

8666             MR. KAY:  I also want to check ourselves.

8667             For example ‑‑ and I don't want to confuse you with a lot of figures.  But, for example, the year one sales we projected in our application was $2,220,000, I believe.  So I did some research and talking to people I know in the marketplace and also Liz and I talked about program clocks and how much commercial inventory we were going to have.

8668             Now, obviously we won't have for the first year ratings and numbers to work with, but we said we want to play the game and give people a lot of music and also know that we are going to have to be conservative here.  So we came up with a total of 720 minutes of commercial time per week.

8669             Now, in this market the going rate for a 30‑second spot, if you check, is $100 to $110 on the key, the number one stations, the big boys.  That is in a full reach plan, 6:00 a.m. to midnight.

8670             So we are basing our sellout component of commercial time at 50 per cent of our available inventory.  So that brings it down to 360 minutes.  And our spot rate initially of $60 per spot as opposed to the $100 or $110 that the other guys can qualify for.

8671             So when you do the math and the numbers come out ‑‑ we did that to check ourselves ‑‑ the number I came with is $2,246,000 for the first year.  So it gave us a feeling of comfort that, okay, we have to play in here.  We have to know what we are working with and these numbers seem to me very reasonable, having been on the street here in Edmonton and selling before.

8672             THE CHAIRPERSON: I notice, I guess it is to Mr. McLaughlin's .2, that your revenues are really taking quite ‑‑ like they are increasing almost 50 per cent in year three.

8673             MR. KAY:  Yes.

8674             THE CHAIRPERSON:  I take it that is just because you will have your ratings and you will be able to raise your rates?

8675             MR. KAY:  Yes.  We have the ratings and also, you know, the high cost of spots in this market, you know, when I first started researching and I thought well, if the going rate was $60 it is going to take us a while to get up there.  But with the going rate being as it is, if we provide a good product and get some numbers, we can certainly do what Jim was able to do in Vancouver.  I want to show him we can do that.

8676             THE CHAIRPERSON:  I'm just going to digress a little bit here then because I think it is a test to your numbers.

8677             How many licensees did you assume we might grant in your projections ‑‑ just yourselves?

8678             MR. McLAUGHLIN:  I would like to answer that this way.  We assumed multiple licences.  We left it up to you how many.

8679             THE CHAIRPERSON:  So regardless of how many we licensed, you still feel comfortable with these numbers?

8680             MR. KAY:  We are very comfortable with these numbers.

8681             MR. McLAUGHLIN:  Let me just give you a little piece of information.  When we actually filed these applications, the 12‑month running TRAM report, Edmonton was a $79 million market.  When I pulled the TRAM to come to this hearing, it is an $82 million market.  That was only three months ago that we pulled that first TRAM at $79 million.

8682             As we said, it is growing this year, at this moment, at 12.6 per cent.  That is phenomenal.

8683             The fact is, Madam Chair, at your discretion you can license what you want and all the newcomers won't use up all the market growth this year.

8684             THE CHAIRPERSON:  Thank you.  Just as I say, I wanted to just test the revenue lines.

8685             I want to now talk about the expenses, because I noticed in year three that your programming expenses, for example, are ‑‑ I have so many pieces of paper here.

‑‑‑ Pause

8686             THE CHAIRPERSON:  Yes, your programming expenses are 27.1 per cent which is considerably less ‑‑ I know it is difficult to ask somebody to speak to somebody else's projections because you weren't in their head; you don't have any idea really or as much of an idea what they were doing.

8687             It is just that Harvard is forecasting 46.6 per cent and Evanov 46.9 per cent for programming expenses.  So I'm just wondering if you would care to comment on why your programming might be less or the degree of confidence you have in your number?

8688             MR. McLAUGHLIN:  As I explained to you, when you are a little stand‑alone guy ‑‑ I know I'm not so little but the company is.  When you are a little stand‑alone guy, you have to control costs.

8689             We have the luxury of having a program director like Liz who both can and apparently will do an air shift.  So that covers off, you know, one of those big salary people.

8690             MR. KAY:  I might do want to, Jim.

‑‑‑ Laughter / Rires

8691             MR. McLAUGHLIN:  Yes, Don was on the air for years, too.

8692             MR. KAY:  I will have fun.

8693             MR. McLAUGHLIN:  But the fact is we have to control our costs.  So we are not going to have the big‑name morning show.  We are not going to have the big‑name afternoon drive show.  We're going to have, you know, very good talent on the radio station, but not the ego talent.  It's not that kind of a radio station.

8694             Our audience is coming for the music, not for the fun and games.

8695             THE CHAIRPERSON:  But you did mention in your comments earlier, though, that they are very interested in the news and spoken word programming.

8696             MR. McLAUGHLIN:  Yes.  And we are investing in the newsroom relative ‑‑ you know, if you are a small music‑based radio station, we have put a lot into our news department so that we do fulfil our listeners' request in that regard.

8697             MR. KAY:  Other than the news talk station, CHED and 880, who have just converted to news headlines, I mean, I don't think there are other music stations doing news seven days a week in this market like we will.  That is again based on the research and the fact that we truly trust the fact that our listeners want that kind of thing.

8698             THE CHAIRPERSON:  That doesn't necessitate hiring these really expensive on‑air people?

8699             MR. KAY:  No, that's a different thing.  You know, as Liz said earlier, we certainly don't want the juvenile antics.  People don't want that with this format.  They want a good person who tells them what the music is, but we don't need to do the rah‑rah morning shows.  It is all based on the good programming ideas that we have and the research.

8700             THE CHAIRPERSON:  I will add that in fairness ‑‑ I don't know if "fairness" is the right word ‑‑ I notice that the Canadian average for programming expenses is 25.9 per cent all cross Canada, and yours is 27.1.  The Alberta percentage is 28.3 and comparable markets is 29.5.

8701             So what I'm seeing is that you are not out of whack but the other two are very high, so we will have an opportunity maybe to discuss and get a better appreciation for that later.

8702             MR. KAY:  You bet.

8703             THE CHAIRPERSON:  Now, with respect to the admin and general, sort of a similar question, because your admin and general are 6.1 per cent.  I will give you a number of different numbers here, because I started off, Harvard's are 17.6 per cent of gross revenue; Evanov, 12.8 per cent; comparable markets, 24.2 per cent; and Alberta is 26.2.  Yours is 6.1.

8704             That does seem to be a significant difference.

8705             MR. McLAUGHLIN:  I think one of the keys there, Commissioner, is the key administration people are all owners and the payment will come off the bottom line, not the middle line.

8706             THE CHAIRPERSON:  And later possibly.

8707             MR. McLAUGHLIN:  Much.

8708             THE CHAIRPERSON:  Well, it depends on how conservative you were.

8709             MR. McLAUGHLIN:  Yes.

8710             THE CHAIRPERSON:  All right.  So you are feeling that that is the explanation for that.  That's fine, thanks.

8711             With the strength of the competition in the Edmonton market again and your very substantial losses, especially in the first year, I'm just wondering how you would propose to fund any unexpected losses and for what period of time you would be proposed to fund these shortfalls.

8712             You know, you are showing almost a breakeven in year two.  But if that didn't happen, how would you fund and for how long would you be prepared to put in additional monies?

8713             MR. KAY:  Well, I know that the three of us certainly it is all ‑‑ we haven't had to go to institutions to get funding; we can do that.

8714             I will let Suki respond to that, if you will.

8715             THE CHAIRPERSON:  Thank you.

8716             MR. BADH:  Thanks, Don.

8717             Madam Chair, if I look at the Edmonton economic numbers ‑‑ and as Jim McLaughlin just pointed out, the money is already there if you look at it.

8718             If I look at the Edmonton economy, it has the most national, regional retail headquarters, third‑largest number of small businesses in the country, public companies with 10 billion in market capital located in the city, over one billion ‑‑ and it can go on and on and on, all right.

8719             The money is already there.  The population growth is there.  The income growth is there.  The building permits are there.  Retail sales are there.

8720             In addition, as Don Kay has just indicated, I am prepared, as are my partners Jim and Don, to subsidize this.  We love this business.  We are here because it is fun and it's a hobby for us.

8721             THE CHAIRPERSON:  Great.  Everybody is very bullish about the market, there is no doubt about that.  So it is not likely you will be called upon to put more money in; and you have it if you have to.  Okay, that's great then.

8722             MR. KAY:  Yes.

8723             THE CHAIRPERSON:  I'm just wondering, then, with respect to market impact.  You note in your executive summary that you will have little impact on the existing stations and yet you are forecasting that you will derive 50 per cent of your year two revenue from the incumbents, which is $1.5 million.

8724             I'm just wondering if you could give us a breakdown by incumbent.

8725             You can submit it; or if you have it, you don't have to.

8726             MR. KAY:  We are going to impact ‑‑ if we are going to have impact, it is going to be on the people who are an adult format such as, I'm sorry to say because I am a good friend and appreciate his talents, of Marty Forbes at EZ Rock and even CHED when they want music and they don't want to be listening to talk all the time.  But I think the impact is going to be minimal on the rest.

8727             But, you know, those would be probably the two that we are going to have an impact on.  There is no way to measure that at this point.

8728             MR. McLAUGHLIN:  with sales really following demographics, as they do, it is going to be the older ‑‑ the stations that currently have older demographics.

8729             THE CHAIRPERSON:  Which were the two stations again that you expected?

8730             MR. KAY:  EZ Rock and CHED.

8731             THE CHAIRPERSON:  Is CHED the ‑‑

8732             MR. KAY:  CHED is the all‑news, talk, sports.

8733             THE CHAIRPERSON:  Okay, CHED.  And the EZ Rock one is...?  The call letters, do you know?

8734             MR. KAY:  Yes.  EZ Rock is Astral's station that does very well in this market that is managed by Marty Forbes, and I can't think of the call letters.

8735             THE CHAIRPERSON:  Okay.  I can find that.

8736             So then if those are the stations that are going to be affected, are they solely the ones or a little bit from everybody else?  Or is $1.5 million going to come from those two?

8737             MR. KAY:  No, it is going to be a little bit from everybody.  You know, everybody is going to try us, I mean, the novelty.

8738             We have some money in the marketing plan for promotion to get people to try the radio station.  So, you know, some clients are going to jump on the bandwagon of novelty.  You know, if they see a busboard and a lot of advertising and we take the time to spend the money that we have allocated, that is a combination of the listeners who are going to try to tune us in.  Also the advertiser might be saying, okay, I may not use them forever, but I want a piece of that and I'm going to dedicate some of my budget toward it for the time being.

8739             So it is going to happen.  There is going to be a novelty buy and a novelty tune‑in.

8740             MR. BADH:  Don, can I interrupt for a second?

8741             MR. KAY:  Yes, sure.

8742             MR. BADH:  Madam Chair, I just want to go back to the earlier question.

8743             I have sat in hearings and I have listened to your questions and concerns and I generally do believe that they are issues that need to be addressed with respect to stand‑alones and independents.

8744             If I look at Milestones Radio in Toronto, FLOW, which is doing very well ‑‑ there are other examples such as Paul Larche in Kingston and John Wright ‑‑ sorry, Paul Larche in Kitchener and John Wright in Kingston and so forth.  I do understand your concerns about stand‑alone stations and having the ability to finance.

8745             I do have business background.  Yes, I am an economist but I also have a business background and I would like to propose something to the Commission, and that is I understand ‑‑ and Mr. McLaughlin and I were also in the running for The Beep.  We were just outbid by the bigger boys.

8746             I would like to put forward the following, and that is that in the first term of the licence, all right, I am 100 per cent confident that we're going to be successful, then the value of the licence I understand does go up.  And if we are not successful, the value is still there.

8747             I am willing to take as a condition of licence that if we decide to sell that the licence be returned back to the Commission.

8748             THE CHAIRPERSON:  That is a very good offer.  I don't know that we would go that far, but certainly it shows your level of commitment.

8749             MR. BADH:  Thank you.

8750             MR. KAY:  And I'm not sure my son will allow that anyways, Suki, so be careful.

‑‑‑ Laughter / Rires

8751             THE CHAIRPERSON:  You are not certain, did you say?

8752             MR. KAY:  I can hear him right now in the background saying hold it, dad.

8753             THE CHAIRPERSON:  Okay.  Thank you very much.

8754             So I think we have covered how many licences ‑‑ maybe not.

8755             How many licences do you think the market could support?  I know you said it is up to us, but that's not my question though.

8756             MR. McLAUGHLIN:  You have four signals I will say in play at this hearing.  Is that a good way to describe it?

8757             THE CHAIRPERSON:  Yes.

8758             MR. McLAUGHLIN:  I would suggest to you that all four are certainly licensable.  The aboriginal folks who were up here just before us certainly ‑‑ now, I am giving you my humble opinion, not fact, but certainly seemed deserving of some consideration.

8759             If you choose to license an ethnic station, you have some good applicants there and you have a whole gang of us looking for a couple of other signals.

8760             THE CHAIRPERSON:  Okay.  Thank you very much.

8761             MR. McLAUGHLIN:  We would be very comfortable with a decision that licensed all those for signals.

8762             THE CHAIRPERSON:  Thank you very much.

8763             Commissioner Cugini...?

8764             COMMISSIONER CUGINI:  Thank you.

8765             You sort of gave me no choice but to ask further questions of Miss Janik with your comments earlier.

8766             But I do have ‑‑ in all seriousness, I noted in your comments that you say each station must be completely customized for its market and that every market has different music histories and unique competitive influences.

8767             What are the music histories and competitive influences of the Edmonton market that make this format so fitting?

8768             MS JANIK:  Well, even though this is wearing the label of Adult Alternative, and we use that word "alternative", I was very surprised to see a relatively low overall demand for the Classic 80s Alternative.

8769             COMMISSIONER CUGINI:  So Girlfriend in a Coma by The Smiths won't cut it in Edmonton?

8770             MS JANIK:  I certainly won't be playing it.

‑‑‑ Laughter / Rires

8771             MS JANIK:  And the format, the older versions of the Alternative format have their roots in the glory days of early FM, which I can remember, where progressive radio was a mix of Rock plus other styles like your Joni Mitchell and Crosby, Stills and Nash, but that Classic Rock base is the base here in Edmonton for our format.

8772             This is for people who grew up in the 70s, 60s and 70s, who loved listening to music, still enjoy those artists that they listened to back then, but would like to hear the music from today.

8773             So some of these formats are based on the 80s gold of Alternative and some of them are based on the FM progressive, progressive FM days of the 70s.

8774             In this case we are on the earlier body of music that comes from the 70s.

8775             In Vancouver there was an especially high demand for World Beat, flabbergasting actually.  We can't find the same response here in Edmonton.  There is some demand but it is so low overall for the general population and for our audience that it doesn't fit.

8776             Here in this market there is a really strong interest in what we are calling Roots Rock, or Alt Country is another label that is common in our industry.  These are for the artists that have a bit of a ‑‑ even Country is not quite the right term, but let me use it so it gives you an idea of which direction it goes in.  So that is unique to Edmonton.

8777             So I hear this station as been influenced by the music that came of the Classic Rock era and picking the artists of today that are compatible with that sound, including the Blues and the Folk that in the early days of progressive FM we all heard.  I mean, that's how I discovered so many of those artists when I was a ‑‑ okay, can I say teenager?

8778             So those are some of the key characteristics here that would shape the sound of the station.  It would sound like an oh wow station to people who grew up with Classic Rock.

8779             COMMISSIONER CUGINI:  Well, I find that interesting ‑‑ and thank you for that for that further verification ‑‑ because when I look at the formats of the incumbents in the market, you know, at first blush it seems to be covered because we have Classic Rock, we have Rock, Classic Hits, Country, New Country.

8780             Why do you believe that the people that you surveyed have identified the format that you are proposing, that you are proposing as one that is absolutely appealing in Edmonton, given the formats that we have here already?

8781             MS JANIK:  Well, if I wanted to hear a mix of Neil Young and Bruce Cockburn and Blackie and the Rodeo Kings and Van Morrison and Joni Mitchell and that great track by I think it is Yael Naim, I would have to bounce around a lot of different radio stations.

8782             Those artists are here, but they are in such minimal exposure to them that there is nothing that suits my taste.

8783             Now, I am a representative of this audience, but I am using the solid statistical information from David Oakes to reassure you that there is 140,000 people like me here in Edmonton that cannot find this blend of music other than sporadically across the board of the Pop and Rock stations that are here.

8784             I don't know if you would remember ‑‑ it feels like ancient history now ‑‑ the early days of FM radio when we would license a Pop station, a Rock station, a softer music station and then we had this sort of other category for things that didn't fit into the first 3 ‑‑ we also had Country in the other one ‑‑ where things that didn't fit in the first four would end up.

8785             That is how CHUM‑FM was born and CHEZ‑FM in Ottawa, CHOM‑FM in Montreal.  Later, in later years, CFNY was a Category 4 I think it was radio station format.

8786             So it is not an unusual part of our format history in Canada.  It just hasn't been brought into the foreground in recent years.

8787             MR. OAKES:  In Edmonton I found this very interesting, when I test the 26th styles for demand, for example I will use one, let's say Reggae, when I ask the demand for it, would you very likely or would you strongly or slightly agree to this type of music style on radio, then I ask what one station in Edmonton comes to mind when you hear that name?

8788             With the Category 3s, huge demand for them, yet well over 80 per cent couldn't mention a station in Edmonton that would play it.

8789             So there is quite a gap between the demand and the perception of the audience out there of does it exist, does it not.  They don't think it exists.

8790             So this is going to be something fresh for them because they don't feel they're getting it right now.

8791             COMMISSIONER CUGINI:  One follow‑up question to the comparison issue that was discussed with the Chairperson earlier.

8792             One application that you didn't mention was the application we heard yesterday for The Dawg, because I noticed in the video, both videos played Muddy Waters, B.B. King, Stevie Ray Vaughan.

8793             Do you see that as perhaps being the most competitive application to yours?

8794             MR. OAKES:  No.

8795             COMMISSIONER CUGINI:  So you would be comfortable with us licensing both?

8796             MS JANIK:  I would agree with you that because they are playing Blues and Blues Rock and those are two styles that are part of our mix, that they do overlap us to a certain degree.

8797             But again, when they asked the audience what the audience wants, Classic Folk was as big a component as the Blues.  So for our audience, they want that fuller mix and they also want the newer music of today and the adult Rock artists like Dave Matthews and Sting, and so on and so forth.

8798             So yes, there is some overlap.  I would guess that yes, they would probably be the closest competitor.

8799             Could we survive together in this market?  Absolutely.

8800             COMMISSIONER CUGINI:  Thank you.

8801             Thank you very much.

8802             THE CHAIRPERSON:  Commissioner Molnar...?

8803             COMMISSIONER MOLNAR:  Thank you.

8804             I just have two questions for you today.  One is just a follow‑up on your CCD commitments.

8805             I note that you say you will provide $120,000 each year to FACTOR and it says:

"... will request that FACTOR direct these monies to Alberta artists to the greatest extent possible."

8806             You know, it is something I have heard in the past, some concern as to how much of FACTOR's money actually ends up here in the West.

8807             One of the things I have heard is that to some extent that may be because the artists in the West aren't aware of FACTOR or aren't aware of how to go about getting at the FACTOR money.

8808             So where you say it will be directed to Alberta artists to the greatest extent possible, I wondered if you had any plans in order to promote and to have people made aware of this money?

8809             MR. KAY:  Let me let Barry answer that.  He is the guy who has been involved and he knows, so he is the guy to give us the answer to that.

8810             MR. ALLEN:  I'm not sure if I can answer it specifically, but I can certainly enlighten it a bit.

8811             The funding bodies, in particular FACTOR, have been majorly important, as you know, for Canadian artists to get us where we are and I know their job is really, really difficult to keep it fair and equitable across the country.  But I think they are really conscious of trying to keep it so it is fair for all the regions, and I think they would be most receptive to the fact that if a local radio station in Edmonton earmarks them a considerable amount of money, and the simple question is can we work on something that would earmark this money where Alberta artists could have an insight into it, I think that would be a simple matter of just dedicating it to the region.

8812             You know, there would be conditions of course, but I think it could be developed by working that money so it goes into this area, gets into the local artists' hands from a local radio station.

8813             Part of the problem with FACTOR and Canada Council and Starmaker is out here for some reason Alberta artists, they just don't tend to apply for these grants, the opportunities that are there.  I think we have done a poor job as an association and as an industry to make them aware that those monies are there.

8814             You just have to apply, and you have to apply en masse.

8815             Even though you think you may not get it, if you keep throwing it in there, eventually, wow, this guy is pretty good this time. Let's give them some money.

8816             But if we work with The Planet as an industry and we know there is that amount of money there that could specifically be dedicated to the Alberta industry, I think we could do ourselves proud by getting with it, you know, get on the wagon and get those applications in there and I think we would be rewarded, especially if there is a bit of a framework in there where we could have the inside track in there.

8817             I know it is really difficult because you have to keep it fair and equitable, and I think FACTOR has been fair and equitable over the years.

8818             MS JANIK:  To specifically answer your question in terms of how we would promote it, we have a show planned on this radio station based on the model of a show that I created for CFNY "X" decades ago called The State of Independence.

8819             The State of Independence is for the local music community.  It is scheduled early on Sunday evening, because that is the one day of the week that the entire industry isn't working.  The bands come off the road; they come back into town.  And this is the place where news and information about independent recording practices and opportunities would be delivered.

8820             So we have the power of our radio station to put the word out there.

8821             We can also work with local music associations, I believe it is the Alberta Music Association to help them inform their members to get the message across that way, and we have other places throughout the day where we can bring in references to various funding as we also would for the scholarships at the schools.

8822             COMMISSIONER MOLNAR:  Thank you very much.  That is exactly the kind of answer I was looking for.

8823             Just to be clear, I not in any way was suggesting that FACTOR wasn't fair and doing all they could.  It was more what I had understood was perhaps the artists were not aware of the ability and weren't getting in their applications.

8824             So promoting it on your station is I think a great way of having that occur.  Thank you.

8825             MR. KAY:  Yes, teaching them and helping them.  You know, as Barry said, sometimes young musicians don't think about business things like that and that is part of our job.

8826             COMMISSIONER MOLNAR:  Thank you.

8827             My final question relates to new distribution platforms.

8828             I note in your application that you say you will stream audio.  We have heard about the opportunities of new media, both to promote and complement the radio station to create rich, rich content on the web.  You know, it is a win‑win situation and I wondered what sort of plans besides streaming audio you might have related to your new station.

8829             MR. KAY:  And I'm going to turn that over to Suki.

8830             MR. BADH:  Thank you, Don.

8831             Madam Commissioner, Jaspreet and I attended the National Association of Broadcasters meetings this year and that was the theme over there.  The Web has the increasingly developed not only as a medium to reinforce existing media, but more importantly as a separate means of providing content and of reaching consumers with advertising.

8832             An interesting study from the Canadian Radio Marketing Bureau 2008 indicates that radio's value rises as Internet usage increases.  The radio and Internet are very compatible.

8833             A few facts from the study.

8834             Almost 40 per cent of Canadian adults listen to radio as they surf the Web.

8835             Second, radio and Internet outperform other media in time spent.

8836             Third, radio ads prompt web visits and purchases.  Radio advertising has a strong influence on Internet usage further increasing radio's value.

8837             Fourth, over 40 per cent of Canadian adults have typed in a website address into their browser after hearing it on radio.

8838             Five, 57 per cent of adults indicated that a radio ad had prompted them to learn more about the product or service on the website.

8839             Jas can address to that in a bit.

8840             Six, 37 per cent of listeners who actually visited a website prompted by a radio ad actually bought online.

8841             Seven, radio ads are least avoided.  Listeners are increasingly accustomed to have content available to them on demand.  40 per cent of all Canadian adults have visited a radio website and the numbers increase with younger adults.  The radio website increases listener loyalty, which in turn brings greater value to the station.

8842             While radio is the theatre of the mind and has some advantages, at the same time listeners cannot visualize the product, the hosts, the station.  Website gives him that opportunity to see the announcers, to click and see the product that they're interested in.

8843             Our audience is not the younger generation who want contents into their phones or their mobile devices, but they are net savvy and used to reach out to find the content they want.  Many of them have blackberries and are able to use the most recent models to surf the net for more information.

8844             We will have to therefor find ways to get them on the net.

8845             Jas is going to comment on that.

8846             I would like to address the other theme that NAB was monetizing this and I would like to address that in a bit.

8847             Jas...?

8848             MS GILL:  Yes.  So we will be streaming audio, but as you guys heard last week more and more people are accessing signals by their computers in office buildings and sometimes homes and pockets of many cities.

8849             FM signals can experience multipath and other interference so streaming the signal on the net is one way to overcome those problems, or at least in part.

8850             So there is one major concern here, and that is copyright issue.  So we certainly don't want to breach any of those copyright rules and neither do we want to have any retroactive rights payments.  But if that issue is resolved, we can go and explore that.

8851             Second, in a world where content is king we need to find a way to repurpose our unique content to make it available on demand.  So to do this we are going to make our news and other spoken word content available online, on demand.

8852             We will do this a number of ways. Like news stories, weather and other content will be posted in text on the website.  Our daily magazine programs will be available to download onto computers and MP3 files.

8853             Weekly Blues, Folk and original programming or our specialty programs again will be on our website, but we have to explore the copyright issues there again.

8854             Third, we would use our Web to provide more services to our listeners, community billboard kind of type we want, entertainment news, update on upcoming concerts by Blues or Folk, Adult Rock and Roots musicians.  We can also direct our listeners toward environmentally friendly products and services and information.

8855             As Suki was saying, they go to the website and once we promote it on our radio, they actually going check out the product and they have a higher percentage of purchasing after that.

8856             So we would use the website to promote and explain our CCD initiatives.

8857             As well, we will also have our announcers, bios and blogs so they feel like they are part of the community, they are part of the radio station and in turn all these kind of things actually bring in monetization because you get more ad revenues and stuff.  That's what really happens.

8858             We are also going to provide hotlinks to the artists and stuff like that to facilitate downloading and we can probably work something with that.

8859             We are also going to have like contestants and winners' blogs, et cetera, and stuff like that.

8860             Suki...?

8861             MR. BADH:  Thanks, Jas.

8862             One of the interesting facts I picked up that NAB this year was that U.S. online revenues have surpassed radio revenues and this includes a healthy chunk of activity on radio websites.

8863             We will provide value‑added services for advertisers with banner ads, hot links to their sites, coupons that listeners can download and through podcasting.

8864             Podcasting brings the power of voice delivered directly to our prospects, customers, employees, partners.  While text might still be the most usable format, it is easiest to consume, voice itself has a unique feature of being able to express emotion and being personally in touch.

8865             Monetizing podcasting won't come through ads sales or content sales but through opportunities to enhance their marketing communications with the power of emotion.

8866             A number of different ways podcasting can generate revenues, in press releases, direct marketing, customer relationships, management user support, promotion, e‑commerce, branding, et cetera, and so forth.

8867             And we do recognize the opportunity that new media will bring to us.  As we noted, there are some issues to be resolved, but we believe that radio can drive people to our website and our website can drive people to our radio.

8868             Does that answer your questions?

‑‑‑ Laughter / Rires

8869             COMMISSIONER MOLNAR:  Yes, it does.  It is obvious you have done a lot of work in understanding this.  So thank you.

8870             Just one quick question.  If you were to be awarded this licence ‑‑ and it is a twofold question ‑‑ how long do you think it would take you to operationalize it; and would you see having your full rich web experience available at that same time?

8871             MR. KAY:  Jim, you have had more experience at this than I have as far as getting ‑‑

8872             MR. McLAUGHLIN:  We likely could get the station on air early spring of 09.  I need six months, let's put it that way.  So from decision date to on‑air, six to seven months.

8873             I think that's ‑‑ in my head bone that is spring of 09.

8874             We would have a great deal of our Internet linking done, but the one area that concerns us greatly, again partly because we are a little guy, is the copyright issues, some of which appear a little cloudy at the moment.

8875             We are not afraid of them, but we need to be confident that we are on solid ground.

8876             MS GILL:  Actually, the website can probably put up earlier for promotions, probably like two or three months, but all of the working things like podcasts, those things we wouldn't have aired yet either.  So those things will be, you know, we will work with copyright issues, but the community links and developing that community feel, that can be started earlier on.

8877             COMMISSIONER MOLNAR:  Thank you very much.  Those are my questions.

8878             THE CHAIRPERSON:  Thank you.

8879             I just have a couple of questions, just quick questions following out of Commissioner Molnar's questioning.

8880             With respect to the FACTOR application process, is it a relatively simple process for musicians or is it a complicated application?

8881             MR. ALLEN:  The application itself?

8882             THE CHAIRPERSON:  Yes.

8883             MR. ALLEN:  Not really.

8884             THE CHAIRPERSON:  Not really.

8885             MR. ALLEN:  They have various categories that are applicable to bands at their various levels where they are at in their careers in terms of if they are just looking for a demo award or if they are looking for a travelling award or if they're looking for an independent release.  There are various levels of funding.

8886             THE CHAIRPERSON:  So the issue is really just awareness?

8887             MR. ALLEN:  I'm sorry?

8888             THE CHAIRPERSON:  The issue then is just awareness?  The problem is awareness?

8889             MR. ALLEN:  Absolutely.  I just really feel that if we did a better job promoting the fact to Alberta musicians that there is money out there, go for it, but it's a hard thing to do.

8890             I think with the station doing it helping, along with our provincial industry association, I feel we can get the job done and get money that is deserved to be getting out here, because our artists are just as good as anywhere.

8891             THE CHAIRPERSON:  Great.  Thanks.

8892             MR. ALLEN:  Thanks.

8893             THE CHAIRPERSON:  Thank you.

8894             MR. McLAUGHLIN:  Commissioner, if I may ‑‑

8895             THE CHAIRPERSON:  Sure.

8896             MR. McLAUGHLIN:  ‑‑ just a little point of interest.

8897             Our CCD commitment in this application is larger than our original seed money when we created FACTOR.

‑‑‑ Laughter / Rires

8898             THE CHAIRPERSON:  Interesting.  You have to think about that; interesting.

8899             I just wanted to follow‑up, Mr. Badh, on your point about monetizing the Internet and the potential that is there.

8900             Would I be right in assuming that those dollars, revenues and expenses, are not reflected yet in your projections?

8901             MR. BADH:  You are correct, Madam Chair.

8902             THE CHAIRPERSON:  Premature.  Okay.  Thank you very much.

8903             Legal has some questions.

8904             MS LEMOUX:  Thank you.

8905             I have a follow‑up question to Commissioner Molnar's first question.

8906             You have indicated in your supplementary brief at page 19, and I will quote:

"We will request that where possible FACTOR direct these monies to independent artists from Alberta."

8907             Have you done so yet?  No?

8908             MR. McLAUGHLIN:  No we have not, but we will commit to doing so.

8909             MS LEMOUX:  Okay.  If you do so, could you provide us with the letter when you do so?

8910             MR. McLAUGHLIN:  Sure.

8911             MS LEMOUX:  Thank you.

8912             The second question ‑‑ and I'm sorry because there is no link between the questions.  It is in answer to Madam Chair's question in relation to the level of Category 3 music to be aired per broadcast week.  You have stated that you would devote 30 per cent.

8913             However, it is not that clear if this 30 per cent is based on the 126‑hour broadcast week or if it is based on the number of hours of music programming to be offered.

8914             For the purpose of the condition of licence, could you clarify this for us, please?

8915             MS JANIK:  Would you mind, I'm not quite sure specifically what you are asking me.

8916             MS LEMOUX:  Okay.  What I am asking you is:  Is it based on the hours of music programming overall or just the 126 hours broadcast week?

8917             If it is based ‑‑

8918             MS JANIK:  It would be based on the total amount of music that we play.

8919             MS LEMOUX:  Okay.  Could you provide us with the estimated number of hours of music programming to be offered over the broadcast week?  And then we will figure out how much 30 per cent will be.

8920             But we need to figure out how many hours.

8921             MS JANIK:  Oh, how many hours of air time will be devoted to the 30 per cent ‑‑

8922             MS LEMOUX:  Yes.

8923             MS JANIK: ‑‑ based on the number of hours that are ‑‑

8924             MS LEMOUX:  Exactly.

8925             MS JANIK:  I would have to step aside to do the math.

8926             MS LEMOUX:  No problem.  Could you provide us by tomorrow or maybe Thursday?

8927             MR. KAY:  Yes.

8928             MS JANIK:  Absolutely.

8929             MS LEMOUX:  That's great.  Thank you.

8930             MR. KAY:  Absolutely.

8931             MS LEMOUX:  Last, just because your speaking notes will be added to the public file, I have noticed in your summary of application that you have deposited with your speaking notes that in the section spoken word you have not included the 60 minute Planet Pow‑wow spoken word programming.  That was indicated in your application.

8932             So we just want to know for the public record if you still intend to pursue that program.

8933             MR. KAY:  Yes.

8934             MS LEMOUX:  You do.  Okay.

8935             And lastly ‑‑ and it is a very minor thing ‑‑ with respect to the music commitments, at the Canadian content level commitments you wrote 40 per cent Category 2, that's great, but 40 per cent Category 4.

8936             Our understanding is Category 3, but we just want to clear that up for the public record.

8937             MR. McLAUGHLIN:  Obviously a typo.  It's 3.

8938             MS LEMOUX:  Thank you very much.  That's all.

8939             THE CHAIRPERSON:  Thank you, Mr. Kay.  So this is your two minutes.

8940             MR. KAY:  Boy, I do have a good team.

8941             Madam Chair, we believe that our application responds extremely well to the Commission's criteria for new radio stations.

8942             First, the Edmonton market is more than robust.  It has experienced, as we said earlier, incredible growth in recent years, to the extent that we are confident that the Commission could issue several licences as a result of this hearing, particularly if one is an ethnic station and one is an aboriginal station.

8943             Second, the licensing of an independent station, Planet 107.1, with local resident owners available to run the station, will have little negative impact on any existing Edmonton station.

8944             Third, the level of ownership diversity will be increased by the addition of a new independent station.

8945             Fourth, editorial diversity will also increase.  Licensing The Planet will provide Edmonton with a new, independent editorial voice, one with a very well staffed local news department.  We will not only provide 64 newscasts per week, we will also provide that daily ‑‑ and I mean seven days a week ‑‑ hour‑long magazine program.

8946             Fifth, our business plan is very strong and well financed.  Moreover, the financing all comes from the shareholders Jim, Suki and myself.  We have not had to seek out institutional financing of any kind.  We can weather any storm using additional shareholder financing, if required.  And we don't think it will be.

8947             Number six, our format is based on comprehensive research.  We did not go into this application with a preconceived idea as to any musical format.  The Oakes research, as we said, reviewed nine different formats, identified 140,000 music lovers in the Edmonton region who will make up the core of our audience on The Planet.

8948             Number seven, our strong faith in the quality of Canadian musical artists is reflected in our very broad CCD proposals.  The wide variety of music styles that will be played on The Planet will allow us to include Canadian emerging artists that would normally fall through the cracks of mainstream formats, and they have in the past.

8949             Number eight, our team has significant experience in building and in managing innovative and successful radio stations throughout Canada and, in Liz's case, in the U.S. as well.

8950             Madam Chair, Commissioners, we appreciate that diversity in all its aspects is a very important concept.  In an increasingly consolidated Canadian radio industry we now have stations in major markets across Canada that are owned by a diminishing number of multiple station owners, playing music in the same small number of generic formats, and we believe that you have the opportunity to counter that trend by licensing a new, independent broadcaster in Edmonton was a highly diverse programming format and a commitment to diversify in employment.

8951             Thank you, Madam Chair, Commissioners and Commission staff for the generous and open reception you have given us.

8952             Most important, thank you for this opportunity to outline our dream to you.

8953             THE CHAIRPERSON:  Thank you, Mr. Kay and your team.  We appreciate it.

8954             We are going to take a break now for lunch and resume at 1 o'clock.  Thank you.

‑‑‑ Upon recessing at 1150 / Suspension à 1150

‑‑‑ Upon resuming at 1305 / Reprise à 1305

8955             THE SECRETARY:  We will now proceed with Item 20, is which application by Rogers Broadcasting Limited for a licence to operate an English language FM commercial radio programming undertaking in Edmonton.

8956             The new station would operate on frequency 102.3 MhZ, Channel 272C‑1, with an average effective radiated power of 51,000 watts, maximum effective radiated power of 100,000 watts, antenna height of 240 metres.

8957             Appearing for the applicant is Paul Ski.

8958             Please introduce your colleagues.  You will then have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

8959             MR. SKI:  Thank you very much.

8960             Madam Chair and Members of the Commission, my name is Paul Ski and I am the Chief Executive Officer of Rogers Radio.  We are delighted to be here today to present our application for an all news radio station in Edmonton to be known as News 102.3.

8961             I am pleased to have with me today to talk about our all news proposal some true experts in the format.

8962             To my far left is Karen Parsons, News Director 660 News, our all news station in Calgary.

8963             To my immediate left is John Hinnen, Vice‑President of News and General Manager of 680 News.

8964             To my far right is Tom Bedore, General Manager of our Edmonton stations.

8965             And to my immediate right is Susan Wheeler, our Vice‑President Regulatory Affairs.

8966             In the back row, starting from my far left, is Shelley Ruis, General Sales Manager for our Edmonton radio stations.

8967             Next to Shelley, Derek Berghuis, Executive Vice‑President Sales, Rogers Radio.

8968             Next is Rael Merson, President, Rogers Broadcasting.

8969             Next to Rael is Matthew Mitchell, Business Manager for our Calgary all news station.

8970             Madam Chair and Commissioners, our presentation today will focus on three key points.  First, why a major metropolitan center like Edmonton needs an all news station.  Two, why Rogers would be the best licensee of an all news station.  Three, why this application is in the public interest.

8971             One of the attributes of a world‑class city is that it has a critical mass of stories and culture that looks to itself for reflection rather than to other media centers.  As Alberta's capital city and the economic center of northern Alberta, Edmonton has that foundation of stories and culture that is perfectly suited for an all news station.

8972             Edmonton is one of Canada's fastest growing major metropolitan centers and has an increasing demand for timely, relevant around‑the‑clock information.  Whether it is up to date traffic information in commute times or information on the city's changeable weather conditions, the people of Edmonton will find all news radio an incredible resource as they go about their daily lives.

8973             Industry data shows that Edmonton's economic growth is outperforming that of most other urban centers in recent years and that this healthy economic growth is forecast to continue.  The Edmonton radio market has also experienced strong revenue growth and last year was the fastest growing radio market in Canada.

8974             News 102.3 will follow the path of our other all news radio stations and will grow radio revenue in Edmonton by attracting advertisers who have never used radio before.

8975             News 102.3 will be the only all news station in Edmonton that offers live local information 24 hours a day, seven days a week.  With reporters on the street around the clock throughout the week and on weekends, residents of Edmonton will know they can rely on News 102.3 to break and track the stories they care about.

8976             With its reliable and consistent news wheel, News 102.3 will offer Edmonton listeners timely news, traffic, weather, sports and business information.  News 102.3 will also bring an entirely fresh news voice to the Edmonton market, ensuring comprehensive coverage and reporting on key issues of interest to the people of Edmonton.

8977             Here is how we will do that.

8978             We will have the largest radio newsroom in the city, including 39 fulltime journalist, a dedicated legislative correspondent at the provincial government, a dedicated airborne traffic resource and meteorologist who will ensure up‑to‑the‑minute traffic and weather information and an enhanced online and multiplatform content offering.

8979             MS PARSONS:  One of the key things for us whenever we launch an all news services is to explain the format to our listeners.  Many think it is just a radio station that does more talk.  In reality, all news is as different from talk radio as Country music is from Rock.

8980             Our all news station is consistent every hour, 24 hours a day, seven days a week.  Our all news stations feature some core elements.

8981             If you look at the news wheel or the clock that we have appended to the back of our oral presentation, you will see how we propose to run our all news station here in Edmonton.

8982             It looks like this.  I don't know if you want to reference it.

8983             We will broadcast six traffic reports per hour, one minute past the hour, 11, 21, 31, 41 and 51 minutes past.  As we say, we have traffic and weather together on the ones every hour.

8984             We also broadcast sports twice hourly, at 15 and 45 minutes past every hour.  Edmontonians are avid sports fans and our sports segments will broadcast more than just the score.

8985             We also broadcast business reports twice hourly, at 26 and 56 minutes past the hour every hour.  A few years ago when the stock markets became more volatile, we felt running business reports twice hourly might not be enough, so we added what we call market minutes twice hourly, at 13 and 43 minutes past the hour.

8986             Our all news stations are all based on a similar news wheel or clock, but the content is customized to each specific market.  Our lead stories will always reflect what people are or will be talking about in the community.

8987             News 102.3 will focus more on breaking news than any other station in the market.  Unlike news talk stations that normally wait for a newscast at the top or bottom of the hour, we will break in at a moment's notice.

8988             For example, earlier this year when an Air Canada plane was forced to make an emergency landing at the Calgary International Airport injuring 10 people on board, our 660 news team was the first to break the story, arriving on the scene even before the emergency response teams.

8989             As we say, you can read about it tomorrow, see it tonight or hear it now.

8990             We will also place considerable focus on traffic.  Like many major metropolitan centers, the residents of Edmonton are concerned about traffic and commute times.  We know that one of Edmonton's biggest local issues is that its infrastructure has not kept pace with its economic and demographic boom.  Our in‑depth and consistent traffic reporting will make News 102.3 the go‑to station in the market for traffic information.

8991             When it comes to traffic information, we are constantly looking for ways to improve our traffic surveillance.  In fact, we have a number of very exciting developments on that front.  We are launching a new service that will allow us to measure the speed of traffic on any road or street in this country by utilizing the speed at which cell phones are travelling.  This will allow us to provide a unique and personalized service to our listeners.

8992             The other great strength of our service, which will be of particular value to Edmonton listeners, is our weather reporting.  News 102.3 will have a dedicated meteorologist to track Edmonton's changeable weather patterns because we understand the value in getting weather information out to the public that is timely and accurate, particularly during severe weather conditions.

8993             Again, due to the fact that our format is so consistent, people can rely on us to give them weather when they want it.

8994             Consistency is the key to our format.  We know that our listeners rely on our stations to be on time with our various information elements and we always are.  You can set your clocks by it.  As news professionals we know that news never stops.  That's why we place such importance on the fact that News 102.3 will be live 24 hours a day, seven days a week.

8995             We know that an emergency can strike at any time and we want to be the station of record when it comes to any major breaking story, whether it happens at 3:00 in the afternoon or 3:00 in the morning.

8996             We also recognize that in today's information‑based society people expect to get news information when and how they want it.  That's why News 102.3 will also have a strong online and multiplatform content.  News 102.3 will make its content available on demand using a variety of customizable distribution platforms, including Internet streaming, SMS text messaging, podcasts and audio clip downloads.

8997             News 102.3 will have an extensive Web component that provides listeners with the opportunity to subscribe to features such as breaking news alerts or the latest traffic reports via the Internet or mobile phone.

8998             News 102.3 will also have a dedicated staff responsible for updating its website on a regular basis as news stories and information come into the station.

8999             For example, News 102.3 reporters will carry cameras in their kit bags so they can post pictures of breaking news stories while they are on location.

9000             In short, our local news and information content will be available any time, anywhere, by whatever means the listener prefers.  Our goal is to make News 102.3's website an information portal in Edmonton that complements and builds on our on‑air news content.

9001             I am particularly proud that my station, 660 News in Calgary, won the award for best newscast in a major market in the Prairie region from the RTNDA in its very first year of operation.

9002             MR. HINNEN:  At Rogers we believe in the all news format.  In fact, it was June 7, 1993, 15 years ago this week, that Rogers Broadcasting made the bold move of switching a profitable AM radio station, CFTR, to 680 News.  At the time CFTR was a successful Top 40 radio station and was earning around $1 million a year.

9003             It was at that point that Tony Viner, President and CEO of Rogers Media, went to Ted Rogers and said Ted, I have a great idea for you.  I know we are profitable but I have this plan to launch an all news station that will lose $3 million next year.  He explained our plan for 680 News and Ted said of course, go for it.

9004             Today 680 News is one of Canada's most successful radio stations and has become a template for similar stations around the world.  In the last BBM ratings 680 News set a new Canadian ratings record with nearly 1.3 million listeners tuning in each week.

9005             Two and a half years after the launch of 680 News we launched News 1130 in Vancouver.  Like Toronto, it took many years for the station to become profitable, but by last year News 1130 had more listeners than any station in Vancouver.

9006             Building on that success, we launched our third all news station in Calgary, 660 News, which has now been operating for just over two years.  While not yet profitable, it too is performing according to our projections.

9007             Today Rogers Broadcasting operates seven award winning all news and news talk radio stations across Canada.  No broadcaster has more experience at all news than we do.  Through years of hard work and considerable investment, Rogers has established unparalleled expertise in this format.  In fact, we have been asked by broadcasters from around the world to assist them in developing this format in cities such as London, Moscow and Beijing and many have visited our stations to learn more about how we deliver this format.

9008             Our all news stations are also regularly recognized by the industry for their broadcasting excellence, having received a number of local, regional, national and international awards year after year.

9009             For example, this year Vancouver's News 1130 received an Excellence in News Reporting Award from the British Columbia Association of Broadcasters.  Toronto's 680 News received America's RTNBA Edward R. Murrow Award for best newscast in a major market and also this year was named At Canadian Music Week's best news/talk/sports station of the year.  It is the fourth year in a row we have won that award.

9010             Just this weekend News 95.7 in Halifax received the Gordon Sinclair Award for best live special event coverage from the Atlantic region's RTNBA for its tracking of the tropical storm Noel.

9011             We are truly proud of these accomplishments and have attached a partial list of some of the awards that our news stations have won.

9012             MR. BEDORE:  We believe there are four important reasons why licensing this application is in the public interest.

9013             Number one, editorial diversity in the market will be enhanced.  News 102.3 will bring a fresh local news alternative to the Edmonton market by expanding and enriching the news and information sources available on radio.  The result will be a richer and more diverse marketplace of editorial voices.

9014             The Edmonton radio market is currently served by two information stations.  However, their content is derived from essentially the same source.  So while Edmonton radio listeners may appear to have a choice of two stations, they are hearing largely the same editorial perspective and content on both.  With live 24‑hour local programming, News 102.3 will bring a new and independent voice to the radio market and offer a true news alternative to what is currently available to Edmonton radio listeners.

9015             Number two, we will grow radio revenue in Edmonton.  All news more than any other format can bring new advertising categories into radio because of its high impact performance results.  Traditional advertisers on radio target consumer segments like adults 25‑to‑54 and buy their advertising on the basis of ratings.  All news radio advertisers target other businesses and owners, managers and professionals and buy based on results and the quality of the audience rather than ratings.  These advertisers tend to come from the financial, business to business, advocacy and automotive categories.

9016             All news is also a different format for advertisers because it offers active listening unlike most music formats, which tend to be listened to passively.  This is particularly attractive to small and medium sized local businesses as it gives them an accessible platform to market their businesses in their community and allows for more targeted advertising.

9017             Also, no commercial break will be longer than 60 seconds.  That means more commercial impact for advertisers.

9018             The Edmonton market continues to experience strong growth and the revenues earned by our all news station will only be a small share of the expected revenue growth in the market.  As a result, we believe our station will have a minimal impact on the existing stations.

9019             Number three, we will make substantial long‑term investments in capital and human resources.  Our proposal involves a level of investment and long‑term commitment that is not easily matched by other broadcasters.  The fact that we are the sole applicant in this proceeding to propose a spoken word specialty format clearly supports this assertion.

9020             In licensing News 102.3, the Commission will ensure Edmonton has a live, local, 24 hours a day, seven days a week radio station with the largest radio newsroom in the market.

9021             Few broadcasters are willing to sustain the losses required to establish this unique type of service in the community.  Rogers has the business acumen, the expertise, the resources and, most importantly, the commitment to make News 102.3 a viable radio service that truly reflect the needs and demands of the people of Edmonton.

9022             Number four, our benefits package is directly targeted at the training and development of local spoken word and journalistic talent.  In addition to the significant investments in capital and human resources associated with offering this type of format, we also propose to make tangible contributions to Canadian Content Development initiatives, over and above basic requirements, totalling $1.5 million over the seven‑year licence term.

9023             Our proposed tangible benefit commitments are designed to strengthen the quality and diversity of news voices in the system through training and development opportunities for spoken word and journalistic talent on four different levels.

9024             At the grassroots level Rogers will direct $300,000 to the Radio in the Schools Program to support the creation of radio and multimedia content and skill building by Edmonton public high school students.

9025             Second, we propose to direct $175,000 to the Northern Alberta Institute of Technology in support of journalism workshops at the university and college level.

9026             The third level, the Rogers News Access Program will provide $525,000 in funding to enhance the provision of diverse and alternative points of view by campus and community radio stations.

9027             Finally, we will direct half a million dollars to the Canadian Media Research Consortium in support of mentoring programs for practising journalists to enhance their knowledge and improve their skills.  This funding will also support the production of the consortium's State of the Industry Report on trends affecting journalism in Canada.  This will be extremely useful to the industry and the Commission in evaluating the health and quality of editorial voices in the system.

9028             We are confident these tangible benefit contributions will have a positive impact on the development of spoken word and journalistic talent.

9029             However, the true value of the benefits of this application is the community service role this station will have in the Edmonton market.  No other station will offer the same level of investment and commitment to local programming and community reflection as News 102.3.

9030             MR. SKI:  Madam Chair and Members of the Commission, the Edmonton radio market needs the type of live local around‑the‑clock news service News 102.3 will provide.  Our proposal will enhance diversity of voices in the market and balance the editorial perspective currently available to Edmonton radio listeners.  We will provide support for community broadcasting and promote the development of young journalistic and spoken word talent.

9031             As a specialty licence, the Commission can be confident that Rogers will adhere to its commitments to this format throughout its licence term.  As an FM station, News 102.3 will be accessible on new and portable devices, giving it the ability to reach a larger portion of the population and be of greater value to emergency response services.

9032             News 102.3 will have a minimal impact on incumbent radio stations, given that our projected annual advertising revenues can be accommodated largely within the natural growth of the market.  And we have the experience, the resources, the expertise and the commitment to deliver on the promise of this proposal.

9033             As we have done in Vancouver, Calgary and Toronto, Rogers will establish a strong and respected news presence in the community with highly visible local on‑air talent, a seasoned professional news staff and experienced local traffic reporters.

9034             With approval of this application, we will provide a high quality, timely and relevant news and information service that by focusing on breaking news, traffic and weather is responsive to the needs of the people of Edmonton.

9035             We have a winning formula for News 102.3 and we are eager to get on with the challenge.

9036             Thank you for your attention.  We would be pleased to answer any of your questions.

9037             Thank you.

9038             THE CHAIRPERSON:  Thank you, Mr. Ski.

9039             Commissioner Molnar will be leading the questions.

COMMISSIONER MOLNAR:  Thank you and welcome here this afternoon.

9040             I appreciate your opening remarks.  They help me somewhat in what I'm going to frame as my first question to you.

9041             I was looking through your application and I was looking at the financials and, frankly, it is a bit astounding to see what a large investment it takes to operate a news format.  Looking at Edmonton and the growth in this market, one of my questions, one of the things that came to me quickly was why would Rogers choose to do news with all the opportunities and all the potential revenues that could be generated in this market?

9042             You know, you can please answer.  I see in your opening remarks clearly you are very proud of what you can do with your news program but were there any other reasons why you chose this format?

9043             MR. SKI:  Thank you, Commissioner Molnar.

9044             As we said, this particular format is part of the DNA of Rogers.  We believe we are the experts, as we said.  I won't go over the opening comments.

9045             As someone who is somewhat new to Rogers from another place, I watched from afar and quite admired the fact that they were willing to take a format that was new to Canada and develop it and stay the course for 15 years; I mean, tremendous losses over that time.

9046             So the question is:  Why would you do that?  There are a couple of reasons.

9047             One is that this is the type of format that is very durable.  Yes, you have losses in the first few years, the first several years, depending on how things happen, but at the end of the day, once it becomes profitable, it can become quite profitable if you are willing to stay the course, as I think Rogers has proven that it has done.

9048             The other part of that too is that it is a format where there are some barriers to entry for others if you are successful in it.  So unlike a music format that can be changed actually by tomorrow morning, this type of format can't be and it is very difficult for others to duplicate this format.  So it is durable over time.

9049             I think the other point is that in the future, as now, we are looking for other platforms to make this more of a multimedia experience for listeners.  This type of format gives us content that's not easy to duplicate and from that standpoint it helps to put us in a better position for the future.

9050             So that's why, for all those reasons and a few of the others, that's why we think it is certainly worth the investment.

9051             COMMISSIONER MOLNAR:  Thank you for that.

9052             One of the questions that is first and foremost is what is the impact, what do you perceive to be the impact on the incumbent news talk station CHED?

9053             MR. SKI:  Commissioner Molnar, it's a different type of radio station.  It is a news talk radio station and our experience ‑‑ and this particular group has had lots of it and I will have Derek give you an idea of what happens from a revenue standpoint.

9054             But if you look at our ‑‑ and I know you have looked at our financials.  I think the revenue that we plan in the first year, first couple of years, as we have said, I think will probably be absorbed by market growth to begin with.

9055             The other aspect of this is that by and large past experience shows that no one radio station is hurt that much because it is a different type of format.

9056             This format is based largely on results and relationships with clients and different clients.

9057             I will have Derek kind of give you maybe a broader perspective because he lives and breathes this every day.

9058             MR. BERGHUIS:  Thank you, Paul.

9059             I suppose in answering the question, Madam Commissioner, history is always a good indicator of what is going to happen and we can really speak to our experience in Toronto, Vancouver and Calgary.

9060             When I returned home to Canada some 13 years ago this month to help with a little 680 project in Toronto, it really was quite amazing to me.  We couldn't get arrested in the major agencies in Toronto.  As much as I would like to have had Eaton's on the air back then, they were a huge advertiser in Canada.  The Bay.  The Bay to this day is not on 680 news.  We don't get Listen up Canada.  We very rarely get Sleep Country Canada on our all news station.

9061             So we don't get the conventional radio advertisers.

9062             Back to Edmonton specifically, this is an $82 million market.  If you look at our first year projected revenues of $1.2 million ‑‑ and we were conservative with a 40 per cent coming from existing stations, conservative meaning high.  It may be closer to 30 per cent, but we wanted to be saying that it's the low hanging fruit.  Of course we will pick off the trees first and we will go around and canvass all of our existing relationships that SONiC‑FM has and that World FM has in the market.

9063             But what news does, and I saw over the years, is there was very little overlap in Toronto between the 680 advertisers and the CFRB 1010, the news talk advertisers.

9064             The same was borne out with News 1130 in Vancouver and then the competitor, if you will, News Talk CKNW, again, very, very little overlap.

9065             News is uncanny in its ability ‑‑ and we work with a lot of formats, and I have over the years.  My love is all news obviously and that is known to all my colleagues, and I don't want to be too partial to it.  But they would agree with me that news brings more advertisers into radio than any other format on the planet.

9066             When I came back to Canada 13 years ago I looked at a lot of the all news formats are around the States, and Detroit fascinated me because in Detroit they had business‑to‑business like crazy on the all news station.  Automotive Parts Suppliers advertising to reach the purchasing departments in the big three automotive manufacturers.

9067             Again, it is not like Sears advertising its weekend sale.  It was very specific targeted business‑to‑business advertising.

9068             That came to pass in Toronto too, obviously a different type of business to business.  In Toronto you can't turn on 680 News without hearing some very technical advertising that sometimes I don't even understand what they are advertising.  It is a very complicated technical services that companies are selling into the financial industry in Toronto to the service sector.

9069             Shelley will speak in a minute about how that may manifest itself down the road in Edmonton.

9070             Edmonton is an oil and gas center and it is quite likely that we will have a lot of business‑to‑business advertising; again, totally new advertising to radio.

9071             The other thing, I mean the other huge category for us in the all news sector is financial.  Financial is broad, but it is retail banking, it is commercial banking.  It is mortgages.  It is all kinds of insurance products, not only retail insurance products but business insurance products and mutual funds, investment products.

9072             Business‑to‑business, I'm just going to go back to that for a minute.

9073             One of my favourite early advertisers in Toronto that that became an advertiser in Vancouver with us was the British Trade Commission, and they were advertising site selection.  So they want to reach chief executive officers and chief operating officers in companies who would be locating manufacturing or distribution arms of their companies in the European market and saying hey, come to Britain.

9074             We helped them develop that campaign.  Q9 Networks which stores data for companies, as soon as we launched in Calgary, they said can we be on that station as well.

9075             So business‑to‑business is a huge part of what we do.

9076             Admittedly a big, big category for us is automotive and the dealers love this format.  That is the part of what we do that intersects with other radio stations because auto dealers do love the format.  In the early days we couldn't get the manufacturers on because they were all coming through the agencies and, again, we couldn't get arrested in the agencies because we didn't have a lot of ratings and we didn't have gross rating points.

9077             Our advertisers in all news usually don't know what gross rating points are.  They want results and they are grassroots owner operators in many cases.

9078             We do have consumer advertising and a lot of it is all news exclusive.  It is a decision made grassroots by local owner‑operators.

9079             One example in Toronto which I think is kind of funny is Short Man Brown's.  It's a store that sells clothing to short men.  And I would often say why are they on the air with us with just two stores and we can't get The Bay.

9080             But it is, again, Short Man Brown the proprietor is making the decision and he measures his response by how his sales go and who comes in the door.

9081             Another thing, advocacy advertising.  It was totally new to Canada really when 680 launched.  Didn't get a whole lot of advocacy advertising in radio.

9082             Toronto is the provincial capital.  A lot of decisions are made at the economic and political center of Ontario.  Advocacy allows unions to get on the air, public interest groups and there's no reason why Edmonton, being the provincial capital in Alberta, would be any different.

9083             I'm going to let Shelley talk a little bit more to the Edmonton market.  She has been here her entire career and will speak to some of the areas where she thinks there is great opportunity in this format.

9084             MS RUIS:  Thanks, Derek.

9085             I have lived in Edmonton my whole life and I have spent the last 13 years selling radio in this market.  The first 10 of those years actually was with World FM, our station in the market.

9086             With that particular station where I see some similarities with our all news station is that we were looking for nontraditional revenue advertising.  So we went and we learned how to sort of dig up the businesses that would be looking for sort of a more specialty audience, looking to reach a very specific market.  We have seen some success in doing that and so we certainly are the experts in the market in finding that niche type of advertising formats.

9087