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:

 

Sussex Ballroom                       Salle Sussex

Future Inns Cambridge                 Future Inns Cambridge

700 Hespeler Road                     700, chemin Hespeler

Cambridge, Ontario                    Cambridge (Ontario)

 

October 20, 2008                      Le 20 octobre 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:

 

Michel Arpin                      Chairperson / Président

Rita Cugini                       Commissioner / Conseillère

Elizabeth Duncan                  Commissioner / Conseillère

Peter Menzies                     Commissioner / Conseiller

Stephen Simpson                   Commissioner / Conseiller

 

 

 

ALSO PRESENT / AUSSI PRÉSENTS:

 

Cindy Ventura                     Secretary / Sécretaire

Joe Aguiar                        Hearing Manager /

                                  Gérant de l'audience

Anthony McIntyre                  Legal Counsel

                                  Conseiller Juridique

 

 

 

HELD AT:                          TENUE À:

 

Sussex Ballroom                   Salle Sussex

Future Inns Cambridge             Future Inns Cambridge

700 Hespeler Road                 700, chemin Hespeler

Cambridge, Ontario                Cambridge (Ontario)

 

October 20, 2008                  Le 20 octobre 2008

 

- iv -

 

           TABLE DES MATIÈRES / TABLE OF CONTENTS

 

 

                                                 PAGE / PARA

 

PHASE I

 

 

PRESENTATION BY / PRÉSENTATION PAR:

 

Sound of Faith Broadcasting                         5 /   25

 

Forest City Radio Inc.                             65 /  406

 

CTV Limited                                       138 /  819

 

Rogers Broadcasting Limited                       193 / 1125

 

Evanov Communications Inc. (OBCI)                 265 / 1553

 

 

 

 

 

 

 

 

 

             Cambridge, Ontario / Cambridge (Ontario)

‑‑‑ Upon commencing on Monday, October 20, 2008

    at 0930 / L'audience débute le lundi

    20 octobre 2008 à 0930

1                THE CHAIRPERSON:  Good morning and thank you for waiting.

2                Ladies and gentlemen, welcome to this public hearing.  My name is Michel Arpin and I am the Vice Chair of Broadcasting for the CRTC.  I will be presiding over this hearing.

3                Joining me on the panel are my colleagues, Rita Cugini, at the far end, Commissioner for Ontario; and Elizabeth Duncan, to my left, Commissioner for the Atlantic Region; Peter Menzies, to my extreme left ‑‑ I don't know if he's pleased to be at the extreme left ‑‑

‑‑‑ Laughter / Rires

4                THE CHAIRPERSON:  ‑‑ part‑time Commissioner; and Stephen Simpson, Regional Commissioner for British Columbia and the Yukon.

5                The Commission team assisting us includes Joe Aguiar, Hearing Manager and Manager of English‑Language Radio Operation; Tony McIntyre, Legal Counsel; and Cindy Ventura, Hearing Secretary.  Please speak with Mrs. Ventura if you have any questions with regard to hearing procedures.

6                At this hearing the panel will examine nine applications to operate a new FM commercial radio station in the London market, including an application for St. Thomas.

7                We will then study four applications to operate a new FM commercial radio station in Guelph, including an application to convert CJOY Guelph from the AM band to the FM band.

8                Certain applications are competing for the use of the same frequencies in London and Guelph respectively.

9                In light of the recent extraordinary events respecting world financial markets, the Commission wishes to ensure that any application it may choose to license to serve the London and Guelph radio markets have the financial capacity to succeed.  Therefore, the Commission requests that each applicant provide updated proof of financing for their proposals, consistent with the Commission's policy regarding documentary evidence to confirm the availability of financing.  A copy of this policy can be obtained from the public examination room.  Applicants will have 10 days to provide the necessary documentation.

10               I will now invite the Hearing Secretary, Cindy Ventura, to explain the procedures we will be following.

11               Mrs. Ventura...?

12               THE SECRETARY:  Thank you, Mr. Chairman.

13               Before beginning I would like to go over a few housekeeping matters to ensure the proper conduct of the hearing.

14               When you are in the hearing room, we would ask that you please turn off your cell phones, beepers and blackberries as they are an unwelcome distraction and they cause interference on the internal communication systems used by our translator.  We would appreciate your cooperation in this regard through at the hearing.

15               Le service d'interprétation simultanée est disponible durant cette audience.  Vous pouvez vous procurer un récepteur auprès du technicien à l'arrière de la salle.  L'interprétation anglaise se trouve au canal 4 et l'interprétation française au canal 5.

16               We expect the hearing to take four days, starting today until Thursday.  We will begin each morning at 9:00 a.m.  We will take an hour for lunch and a break in the morning and in the afternoon.  We will let you know of any schedule changes as they occur.

17               The Essex Room will serve as the examination room where you can examine the public files of the applications being considered at this hearing.  As indicated in the Agenda, the telephone number of the examination room is 519‑624‑6737.

18               There is a verbatim transcript of this hearing being taken by the court reporter sitting at the table to my right.  If you have any questions on how to obtain all or part of this transcript, please approach the court reporter during a break.  Please note that the full transcripts will be made available on the Commission's website shortly after the conclusion of the hearing.

19               Also, for the record, please note that there has been a change to the Agenda of the hearing.  Mr. Alan Lazar of the London Silverbacks football team, intervention number 270, will be appearing in Phase III instead of Power 4 Marketing Ltd.

20               Now, Mr. Chairman, we will proceed with Item 1 on the Agenda, which is an application by Sound of Faith Broadcasting for a licenCe to operate an English‑language FM specialty commercial radio programming undertaking in London.

21               The new station would operate on frequency 99.9 MHz, Channel 260A, with an average effective radiated power of 234 W, maximum effective radiated power of 500 W, with an effective height of antenna above average terrain of 107.5 m.

22               Appearing for the applicant is Mr. David MacDonald.

23               Please introduce your colleagues and you will have 20 minutes for your presentation.

24               Mr. MacDonald...?

PRESENTATION / PRÉSENTATION

25               MR. MACDONALD:  Good morning, Mr. Chairman and Members of the Commission.

26               My name is Dave MacDonald and I am the Coordinator of Applications for Sound of Faith Broadcasting.  I am also a member of the Board of Directors of Sound of Faith and I am the General Manager of our Kitchener station, Faith FM.

27               I have been a broadcaster since 1969 and have been involved with Sound of Faith for about 13 years.

28               Joining me, on my right, is Dr. Robert Reid from Woodstock, Chair of the Board of Sound of Faith.  On my left, from London, Dale Elliott, the General Manager of our London station Grace FM.

29               Sound of Faith Broadcasting is a not‑for‑profit corporation that operates three low‑power FM stations, Faith FM in Kitchener, Hope FM in Woodstock and Grace FM in London.  We are approaching our fifth year on the air in all three communities and we have been well received by the members of these communities.

30               We come before you today to explain why we have applied for a new operation in London to replace our existing facility.

31               Before we get to this explanation, I would like Dr. Reid to tell you a bit of the history of our ministry.

32               DR. REID:  Mr. Chair and Members of the Commission, my name is Dr. Robert Reid.  I am an orthopaedic surgeon from Woodstock, Ontario.

33               As Mr. MacDonald mentioned, I serve as Chair of the Sound of Faith Board.  I am also on the Local Advisory Board of Hope FM, that's the Woodstock Station; and I am one of the founding members of Sound of Faith Broadcasting.

34               In 1988 a group of four men had a vision and went out to Bower Hill Road near Woodstock to pray for a Christian radio.  We felt that there was a need for this kind of ministry in our community, but we were not broadcasters and we did not know how to make this vision a reality.

35               Our first plan was to get up a large receiving antenna at Bower Hill, pick up the signal of WDCX‑FM, a well‑known Christian radio station in Buffalo, New York, and rebroadcast that signal to the community.  However, we soon discovered that that would be illegal, so we decided to create a new station, a powerful one that would cover southwestern Ontario.

36               We began recruiting interested parties from other communities and held monthly meetings in Woodstock to see how this might happen.

37               After many meetings and many attempts at fund‑raising, we concluded that a 5000 W station was beyond our reach and it was suggested that we go into our own community and generate local support rather than apply for one large station.  We tried to establish a number of small stations that would better serve local markets.

38               This strategy was successful and on December 9, 2002 we received notification from the CRTC that a licence had been granted for a station in London.  This was followed on May 7, 2003 by approval for a station in Woodstock, and one week later, May 14, approval was given for our Kitchener station.

39               All three stations have been well received, but our London operation ‑‑ just as this morning ‑‑ had technical difficulties or problems from the beginning.

40               I will let Mr. MacDonald elaborate.

41               MR. MacDONALD:  A few months after we received approval from the CRTC we were ready to begin broadcasting our test signal in London.  We had acquired a 30 W transmitter from one of our Board Members who operated a company that specialized in professional audio installations.

42               Unfortunately, as soon as we switched the transmitter on, under the watchful eye of a representative from Industry Canada, we discovered that our signal was creating interference with avionics transmissions from the London airport and we were forced to turn it off.

43               We were then obligated to find a solution to this problem before we could begin broadcasting.  The solution we decided on was to install a filter on the output of our transmitter.  This filter was a special order item.  It took several weeks to get it and have it installed.

44               When we switched the transmitter back on we found the interference was gone, but the filter absorbed so much power that we were only getting about 6 or 7 W ERP at the transmitter rather than the 10 W we were licensed for.

45               We cannot yet afford to upgrade this transmitter, so we still operate at this reduced power level.

46               Our engineers tell me this reduced power level is not all that significant and even with full 10 W we would still have the same reception and interference problems.

47               In any case, this means that the coverage is not what we had hoped for and we have received many complaints from people that want to listen to us but cannot.  Especially in the downtown core area of London the signal is spotty at best and many potential advertisers will not buy from us because they can't get the signal in their place of business.

48               We also have problems with interference from other stations.  From the beginning we have had a lot of interference from a Detroit‑based station on 105.9.  There are times when their signal can be heard over ours in the west end of London.

49               Another problem was created for us in a CRTC Decision of May 18, 2005.  This Decision reads in part:

"The Commission approves the application by Aylmer and Area Inter‑Mennonite Community Council to amend the broadcasting licence for the low‑power ethnic radio programming undertaking CHPD‑FM Aylmer by changing the frequency from 107.7 MHz (channel 299LP) to 105.9 MHz (channel 290A1) and by changing the authorized contours through an increase in the effective radiated power, from 50 watts to 250 watts. The proposed Class A1 service is the lowest level of a protected FM service."

50               We were not aware that this application was even before the CRTC, but even if we had been made aware of it we are unprotected at our current power level.  This change to CHPD‑FM has created interference with our signal on the east side of London.

51               These are the technical reasons we are applying for a new operation on a new and protected frequency.

52               Dale Elliott, the Station Manager, will now tell you more about the vision we have for this new station.

53               MR. ELLIOTT:  Good Morning, Mr. Chairman and Members of the Commission.

54               My name is Dale Elliott, I am the General Manager of Grace FM.  I am also the host of the midday show from noon until 3:00 p.m.

55               We are here today because there are many things that we would like to change.  We think that the best way to start that process would be to have a new licence with different parameters.

56               You have already heard the reasons why we need a new frequency, more power and protected status, but we would also need to be able to sell more advertising.  Our current licence restricts us to four minutes per hour and we would like to have that removed.

57               We would like to also change our obligation regarding Canadian Talent Development to the current $500 annually for stations with under $625,000 annual revenue.  Our current Condition of Licence for CTD is as follows:

"The licensee shall contribute a minimum of $5,000 per year in direct cost expenditures toward the development of Canadian talent.  This would entail holding an annual talent contest for all styles of Christian music, with the winners having an opportunity to record a CD.  In addition, the licensee would put out a compilation CD of the top 18 artists in the talent contest."  (As read)

58               We have attempted to hold this contest annually, but unfortunately we have not had enough response to be able to consistently issue a compilation CD.  Our sister stations in Woodstock and Kitchener have also held this type of event, but with more success.  We plan on continuing with these talent searches, but we would like to have them removed from our Condition of Licence.

59               Our plan is to start fresh with a new station.  We will have a different name, logo and website, but we will continue to offer programming that is family‑friendly and we will continue supporting Canadian Christian artists.  These are people who have no chance of having their music played on any other stations in London and we are helping them to launch their careers in music.  We know that some of them have become very successful.

60               Here are some of the comments from Nathan Picher, singer and songwriter with the band Article 1:

"As a professional musician, born and raised in London, Ontario, I have witnessed the impact of local radio stations, particularly Grace FM, in developing Canadian talent.  Over the past few years my band, Article 1, has grown from a lofty dream into a full‑time professional career with a U.S. recording contract, world distribution through EMI, a Japanese mainstream release, a United States Christian CHR top 10 single, and hundreds of tour dates over hundreds of thousands of kilometres in front of hundreds of thousands of people coast‑to‑coast in both Canada and the United States.

Right from the beginning Grace FM offered their support.  They provided international exposure by hosting the Kingdom Bound Talent Search, which we won, allowing us to play our first concert in the United States.  They were also the first station to play our music and the first station to ask for an interview.

All of these experiences gave us a better understanding of the industry, helping us grow our career to where we are today.  In fact, in the past few years our music has gone from being played on just one station, Grace FM, to being played on four continents."  (As read)

61               We have also received some comments from a well‑known and respected musical icon and four‑time Juno award winner Skip Prokop.  Skip was one of the founders of the group Lighthouse and he was the drummer and a vocalist in the band as well.

62               He also played a large part in the formation of the CRTC, as he was invited by Prime Minister Trudeau to address Parliament at the Parliamentary Inquiry into Canadian music.  He spoke at length about what it was like to be a Canadian musician recording artist during a time when Canadian radio stations would not play or recognize the benefit of playing Canadian recording artists.  This inquiry resulted in the formation of the Canadian Radio and Television Commission.

63               Skip now resides in London and he drums for a Christian band named Mercy Train.  He had these comments about our application.

"Speaking as one of the most qualified pioneers and promoters of Canadian talent and Canadian music, I highly recommend the approval of the Sound of Faith application.  This can only result in a tremendous boost for local Canadian faith‑based music and musicians, not to mention the increase in a larger geographic awareness of this category of music and, as a result, the increase in sales of their recordings simply because they would be reaching a much larger audience of people of faith."  (As read)

64               In addition to our continuing commitment to the promotion of local artists, we will develop a local news service and we will continue to work closely with local organizations to help them promote their events.

65               We believe that the service we offer is unique but very much needed in the community.  We also feel that we are best to provide this service as we have been on the air for nearly 5 years and we know our community and its needs.  We also feel that in order to achieve these goals we require a new station with more power and a new frequency.

66               MR. MacDONALD:  Mr. Chairman and Members of the Commission, we know that there is a potential for Christian radio to do well in London, but so far, because of the problems we have talked about, that potential has been unrealized.  We know that the listeners of Grace FM are loyal and they are vocal in their support.

67               We have attached as Appendix 1 a letter from one of our advertisers, Rick Ho of London Audio.  Rick expresses his amazement at the response he is getting from his ads on Grace FM.  In this letter he states:

"At least once a month one of your listeners takes the time to draw me aside to thank me for supporting the station or to at least mention it's what brought them in to shop.  When it first happened I found it novel, but it has occurred with such frequency it has bloomed to complete amazement."  (As read)

68               He also calls the money he spends with Grace FM:

"... the best return on investment within our marketing budget."  (As read)

69               Grace FM has also been helpful in supporting other agencies in the community.  Dale Hunter, the President of the London Knights Hockey Club, in a recent letter said:

"I'm looking to expand our community support base and we are glad to be working with 105.9 Grace FM.  This fine station plays contemporary Christian music that is safe for the whole family, as well as community‑related programs concerning health and wellness."  (As read)

70               Dr. Barry Slauenwhite, the President and CEO of Compassion Canada had these comments:

"London has certainly benefited from having Grace FM's positive message and we have appreciated their commitment and efforts in our community over the past five years.  Grace FM has also partnered with Compassion, supporting our presence in the community and helping to bring exposure to our organization and the children we represent around the world."  (As read)

71               Mr. Bev Shipley, MP for Lambton‑‑Kent‑‑Middlesex, recognizes the value we bring to the community when he says:

"This station not only broadcasts contemporary Christian music, traditional hymns and country gospel, but has interesting, informative talk shows, children's programming, daily inspirational readings and more."  (As read)

72               We know that we have the potential to reach more people and increase our revenue because our sister station in Kitchener, Faith FM, serves a similar population base and they generate about three times the revenue that we do here in London.  Faith FM is a member of BBM and we have some hard numbers to show that a Christian station can attract a substantial following.  We have attached a sample of some of those numbers as Appendix 2.

73               We are confident that with this new operation we will be able to see similar results in London and we ask the Commission to grant us this licence so that we can finally realize our potential and allow us to properly serve the Christian community.

74               Thank you for your attention.  Now we are at your service to answer any questions that you might have.

75               THE CHAIRPERSON:  Thank you, Mr. MacDonald.

76               I want only to say for the record that I'm wearing this earpiece only because I'm deaf in one ear so that allows me to better understand what you say.  So I'm not listening to the translation, I'm listening to ‑‑

77               MR. MacDONALD:  I appreciate that, sir.  My wife is deaf and one ear, I appreciate what you ‑‑

78               THE CHAIRPERSON:  ‑‑ to the floor track.

79               We will first start with Commissioner Cugini.

80               COMMISSIONER CUGINI:  Thank you, Mr. Chair.

81               Good morning, gentlemen and welcome.

82               MR. MacDONALD:  Good morning.

83               COMMISSIONER CUGINI:  I have a few housekeeping items, some that have arisen as a result of your oral presentation this morning and some that are in your application.

84               The first one has to deal with the appendices that you have attached to your oral presentation.

85               Is this new information or is this information that was already included in your application?

86               MR. MacDONALD:  This is new information.  We didn't have this.  This is from our Kitchener station, the appendices.

87               I just wanted to show the potential that we have in London is not realized compared to what we are doing in Kitchener.  So this is new information which was not in our application.

88               COMMISSIONER CUGINI:  Okay.  I will let our legal counsel work out whether or not we can accept this information at this stage of the hearing process.  If we can, we will put it on the public record for all other applicants and interveners to examine and, if not, thanks and you can take the information home.  Our legal counsel will be able to verify whether or not we can accept it.

89               MR. MacDONALD:  Okay.  Thank you.

90               COMMISSIONER CUGINI:  The other item I would like to talk very briefly about ‑‑ and Mr. Elliott, you spoke about it this morning ‑‑ are the changes you would like to your current service.

91               Correct?

92               MR. ELLIOTT:  Yes.

93               COMMISSIONER CUGINI:  You do know that this ‑‑ I believe the licence is up for renewal within a year ‑‑

94               MR. ELLIOTT:  Yes.

95               COMMISSIONER CUGINI: ‑‑ and that is the time to address these changes if you would like those changes to be made, or you have to file an Application to Amend those conditions of licence.  It's not part of these proceedings because it deals with a current licence and we would have to allow the opportunity for interveners to comment ‑‑

96               MR. ELLIOTT:  Right.  Correct.

97               COMMISSIONER CUGINI: ‑‑ on those changes and there isn't that opportunity here now.

98               MR. MacDONALD:  Yes.  I think what we are stating, we formulated this as a new application because we felt ‑‑ there was a call issued and we felt if we waited until a renewal date there would be no frequencies available.  So we thought okay, if that's the case then we will make a new application for a new station and we will close down the old one.

99               COMMISSIONER CUGINI:  Right.  But what I'm saying is, if you are not granted the licence ‑‑

100              MR. MacDONALD:  Right.

101              COMMISSIONER CUGINI:  ‑‑ for the new application and you continue operation ‑‑

102              MR. MacDONALD:  Right.

103              COMMISSIONER CUGINI:  ‑‑ of your station and you would like these amendments applied to your existing station, there would have to be a formal process in which you would have to request those amendments.

104              MR. MacDONALD:  Right.  Yes, we are aware that we would have to do that with our existing station, but if we get approved for this one then we can just close that one down then.

105              COMMISSIONER CUGINI:  Okay.  I understand.

106              MR. MacDONALD:  Yes.

107              COMMISSIONER CUGINI:  Okay.

108              Speaking of your existing station ‑‑

109              MR. MacDONALD:  Yes...?

110              COMMISSIONER CUGINI:  ‑‑ one of the things that has come to our attention as a result of examining this whole proceeding is that we are missing your annual returns for the broadcast years 2005 and 2006.

111              MR. MacDONALD:  Yes.

112              COMMISSIONER CUGINI:  Is our filing system not up to par or have you just been unable to file those annual returns?

113              MR. MacDONALD:  We have had some difficulties with our filing system, with our accounting procedures, which we have taken steps to fix.

114              We have a new bookkeeper who is doing both the books for Kitchener and London and she has been going back and trying to find all of the problems that have occurred.  We had some problems with some of the management earlier before Mr. Elliott came on board and these problems are being looked at and hopefully will be rectified in the very near future.

115              COMMISSIONER CUGINI:  Do you have an approximate date by which you can file those returns?

116              MR. MacDONALD:  I would think probably within the next 60 days.

117              COMMISSIONER CUGINI:  Okay.

118              The other issue, again dealing with your existing station, is that you are deficient in the commitments made to CTD as it was then known, CCD as it is known now.

119              I do appreciate that in your oral presentation you did in fact outline the financial difficulties that you were having.  However, the commitment to CTD or CCD is a condition of licence.

120              MR. MacDONALD:  Right.  We are aware of that and basically that's a reporting thing.  It's not that we didn't do the talent searches and spend the money, it's simply a reporting thing and we have been advised that we were in deficiency by the CRTC and we have been given the deadline of November 30 I believe it is to submit these reports.

121              COMMISSIONER CUGINI:  Okay.

122              MR. MacDONALD:  So we are working on that as well.

123              We did have the contest, we are just trying to find all of the proof of the money that was spent.  So that, by November 30, hopefully will be filed with the Commission.

124              COMMISSIONER CUGINI:  Yes.  It's not difficult to spend the money, it's just difficult to ‑‑

125              MR. MacDONALD:  Well, unfortunately yes.  A lot of the ‑‑

126              COMMISSIONER CUGINI:  ‑‑ to keep track of how much we spend.

127              MR. MacDONALD:  A lot of the filing was deficient and some of the receipts are still sort of ‑‑ where are they sort of thing, for things like the hall rental and things like that.  Dale is working on it very, very diligently to try and get that all sorted out so that we can submit those reports.

128              COMMISSIONER CUGINI:  Terrific.  Thank you very much for that.

129              We will move on now to the application that is now before us.

130              As you know there is another applicant in these proceedings for a Christian radio service, the United Christian Broadcasters.

131              Have you had an opportunity to look at their application?

132              MR. MacDONALD:  Briefly, yes we have.  And we are very aware of United Christian Broadcasters and who they are and we are going to address that in the intervention stage.

133              COMMISSIONER CUGINI:  Well, I was curious to know from your perspective.

134              I know in your oral presentation you said you have been in the market for five years, you know the community, but if you are us sitting up here, convince us that you are best served to serve the London market when comparing the two applications.  Like why should we pick you and not United Christian Broadcasters?

135              MR. MacDONALD:  That's a very good question.

136              I'm not sure what they are going to have to say in their presentation, but UCB is ‑‑ what's that?

137              MR. ELLIOTT:  I can address that.

138              MR. MacDONALD:  Okay.

139              MR. ELLIOTT:  I believe that we have a very strong relationship with the community who we broadcast to and in many talks that we have had since it has become known that there is another application for the London market of the same format it is my opinion, and it has been my experience, that many of these either churches or ministries or groups that are of interest to our format are questioning in their mind we already have a station.  So to them it has put a bit of a question mark on their mind.  It is sort of dividing their loyalties, like do they try and support two different stations?

140              A lot of our financial support comes from the listener base and it's a combination of advertising dollars plus listener donations.  So that's been my experience.

141              I believe we have a very strong relationship with the church community and that is our base.  So I think we are going to build on that for sure.

142              The only real big question in their mind has been the signal.  They have always had this question of, you know, we would love to support more, we would love to hear it more, but it's just very difficult to pick up the station.

143              We have made some advances with having the streaming broadcast on the Internet, that has really helped our listenership as well, but when it comes to putting out 10 W, or 6 to 7 W as it ends up being, there is not a whole lot we can do on that end of it.

144              We do have several people who actually will go and look for radios that pick up our station better as a result.  They will give them out to people so they can hear it.

145              People that we have listening to us are very loyal, they are very hungry for this type of format, so they will try and search it out any way they can.  In many cases it's only picked up in the vehicles.  People can only hear it in their cars.

146              COMMISSIONER CUGINI:  Do you think the London market is robust enough to support the licensing of two Christian radio stations?

147              MR. MacDONALD:  Absolutely not.  Our experience in Kitchener, when we applied in Kitchener, we made the argument that Kitchener was not big enough to support two Christian applicants ‑‑ there were two at the time, there was our station and one from Trust Communications in Barrie ‑‑ and the CRTC saw fit to license it to us because we were the local group.  We had been working in the community for five or six years to develop support for our station.  And the guys from Barrie, while they were very successful in Barrie, were coming in as outsiders and trying to establish a beachhead in Kitchener and the CRTC agreed with us that there wasn't room for two stations.  They licensed us and denied Barrie.

148              We see a similar situation here.  We are the local group, we have been working here for years and years and years in the London ‑‑ even before the station was licensed ‑‑ to build support and then UCB comes in from New Zealand and tries to put a beachhead in London, much as they have in Belleville and Chatham.

149              Make no mistake, UCB is based in New Zealand, they have stations all over the world.  The Chair of their Board is from New Zealand.  They are not local.  They may have local people that they hire and have working for them, but they are not a local group like we are.  We have been in the community all our lives.  I am born in ‑‑ I was actually born in London but raised in southwestern Ontario and I have lived in the Kitchener area since 1968.

150              So we feel that we are best equipped to handle this because we are local, we know the community, we all go to the churches that support us in our communities and we are not coming in from outside trying to establish a big network of stations across Canada.

151              It's just my feeling that there is not enough support for two stations doing the same format in a market this size.

152              I don't even think that there are two oldies stations in Kitchener.  If another came ‑‑ there's an Oldies 1090, if another station came in and wanted to do oldies, I don't think there would be support for that so there should be no ‑‑ there should never be too absolutely the same format stations in any market of this size.  And what they have come to the table with is basically the same format that we are providing.

153              MR. ELLIOTT:  Can I comment as well?

154              COMMISSIONER CUGINI:  Of course.

155              MR. ELLIOTT:  Additionally I would say that this type of format is still in the infancy stages in Canada.  In the United States there is about 80 years of history with Christian broadcasting, but we don't have that in Canada.  So as much as yes, it's probably ‑‑ of any sector in radio is one of the most fast‑growing divisions, it's still going to be tough to make things go.

156              Plus, the industry of musicians right now is somewhat in an upheaval as you look at the purchasing of music is on the decline in most cases.  I mean people are downloading individual tracks, but they are not buying full CDs.

157              So the music companies may be ‑‑ I mean they are definitely hurting, but they are not hurting nearly as much as what the artists are.  So I think it's very key that we have stability in what we have currently and I think it would be very detrimental to have two in this market.

158              That is just my feeling, and with what Dave said, as well, that if there was something being offered new or different in the programming, that would make more sense to me, but to offer a very similar format, that is almost identical in its programming, I don't understand that.

159              MR. MacDONALD:  The CRTC actually just turned down an application for an Ottawa station to have a second Christian station.  Even though the format was mostly talk, the CRTC determined that it wasn't that much different from what was on the original station.  It was the same company applying for a second licence, and the CRTC said there was no room for a second station in Ottawa.

160              So, if that is the case there, I am sure that it is certainly the case in London and Kitchener.

161              DR. REID:  Your Chairman made reference to the present economic situation.  That is not unique.  Sterling Trucks in St. Thomas has just closed its doors.  The amount of advertising dollars will be less in the next five years, so why would we bring in two stations and try to make them compete?

162              If we can survive for five years well with a 6‑watt signal, what can we do covering the whole of Middlesex with a good signal?

163              We are going to be fine.

164              COMMISSIONER CUGINI:  Thank you.  I don't think I need to ask the next question that I had, but I will ask it anyway.  I think I know the answer.

165              If we were to deny your application and award the licence to UCB, would you cease the operation of CHJX?

166              MR. MacDONALD:  My feeling is, with a 6‑watt station, with the limited resources that we have, compared with the unlimited financial resources that they have at their disposal, and the 2,000 watts, or roughly, that they are applying for, we would have no choice.

167              COMMISSIONER CUGINI:  Again, you have talked about the limitations of your signal strength, and I think in your application you actually said that listeners have given up on CHJX because of the poor quality of your signal.

168              So if we grant you this licence, what are you going to do to win those listeners back?

169              Are you going to start a marketing campaign?  Is it word‑of‑mouth?

170              If you have lost those listeners, how are you going to get them back?

171              MR. MacDONALD:  I think a marketing campaign, from my standpoint.

172              We just re‑branded Kitchener last year.  We put up a new logo and increased our marketing budget.

173              One of the things we did was to put up a couple of signs on the local transit buses.  It's amazing what impact that has had on the market.  People now know we are there.  People who said, "Faith FM, what's that," now know that we are there.

174              So, yes, we would start aggressive marketing to let people know that we are here in this market, and that we are here with increased power.  "If you heard us before and you couldn't get us in your home, try us now."  That sort of thing.  Absolutely.

175              We need to do that.  They are not going to find you by themselves.

176              COMMISSIONER CUGINI:  And if I happen upon your station, if I am flipping through the dial and I just happen upon your radio station, how do I know that I am listening to a Christian radio broadcaster?

177              MR. ELLIOTT:  That would depend on what time you would tune in.  I don't think it is always readily apparent.

178              In many people's minds, I would have to say that Christian music would be ‑‑ in their estimation, would be sort of old church music and very dry.

179              I think you would be surprised if you tuned into our radio station and found that it was very upbeat, very contemporary, very exciting.  However, the message is very clear.  It's very different.

180              That is not to say that there aren't many artists in the mainstream who are faith‑based artists, and we do play some of those as well.

181              There are cross‑over artists that we would play on our station.

182              I think, if you tune in during spoken word programming, you are going to definitely notice that the talk is centred around faith‑based topics.  It's very apparent in that regard.

183              It would depend on when you would tune in.

184              COMMISSIONER CUGINI:  You have anticipated the next line of questioning, which is your spoken word programming.

185              MR. ELLIOTT:  Yes.

186              COMMISSIONER CUGINI:  We do need a little bit more detail, because when I look at the application, I am still a little bit uncertain as to what the commitment is.

187              You say that 80 hours will be local, of which 28.5 will be spoken word.  Correct?

188              MR. ELLIOTT:  That's right.

189              COMMISSIONER CUGINI:  Of the 28.5 hours, just looking at those hours of spoken word, how many hours will be devoted to foreign‑acquired programming?

190              I saw the list of titles that you provided ‑‑ I think it was in your deficiency letter ‑‑ but how many hours does that mean per week of the 28.5?

191              MR. ELLIOTT:  It's in the neighbourhood of between 3 and 5 hours of broadcasting to different cultural groups.

192              For example, for Spanish and Ukrainian we have ‑‑

193              COMMISSIONER CUGINI:  No, I meant the American‑acquired brokered programming.

194              MR. MacDONALD:  Let me see if I can refer to the letter of deficiency that you are talking about.

195              COMMISSIONER CUGINI:  We are trying out a new system, and everything is on our computer, so I will try to call it up as well.  Bear with me.

196              MR. MacDONALD:  If you guys had Max, you wouldn't have this problem.

‑‑‑ Laughter / Rires

197              MR. MacDONALD:  We do have a number of local programmers ‑‑

198              THE CHAIRPERSON:  And we hope that you don't call us Mr. or Mrs. Toshiba ‑‑

‑‑‑ Laughter / Rires

199              COMMISSIONER CUGINI:  Yes.

200              For example, I have "Focus on the Family", "Insight for Living", "In Touch" ‑‑

201              MR. MacDONALD:  Yes.

202              COMMISSIONER CUGINI:  So of those 28.5 hours of spoken word programming, how many hours would be comprised of this type of programming?

203              MR. ELLIOTT:  It is in our application.

204              MR. MacDONALD:  Yes.

205              For instance, "Focus on the Family" is a U.S.A.‑originated program, but they have a Canadian division, and the programming that they do for the Canadian station is often somewhat different from the one they broadcast in the U.S., especially when the issues are political.  They don't necessarily talk about American politics on their Canadian broadcasting.

206              They may talk about the Canadian election, as opposed to the American election.

207              The same thing would apply to all of these ministries that are marked on here as U.S.A.  They originate in the U.S.A., but they will have Canadian divisions.

208              So it's kind of a grey area for us to say ‑‑

209              COMMISSIONER CUGINI:  I know, but I just need a number.

210              MR. MacDONALD:  I wish I could give you one.

211              MR. ELLIOTT:  I would say that it's in the neighbourhood of 75 percent U.S.‑originated, but 25 percent would be actually coming from Canadian programming, Canadian broadcasters, who would actually form the program here.

212              COMMISSIONER CUGINI:  Okay.  Does that mean that 75 percent of the 28.5 hours will be this type of programming, and that 25 percent of the 28.5 hours will be Canadian?

213              MR. ELLIOTT:  That's correct.

214              COMMISSIONER CUGINI:  That makes it a little bit complicated now, because you also made a commitment to news and sports.  You said, I think, that there would be 3 hours and 15 minutes of news, sports and weather.

215              Is this 3 hours and 15 minutes part of the 28.5 hours of spoken word?

216              MR. MacDONALD:  No, that would be in addition to.

217              COMMISSIONER CUGINI:  It's in addition to.  Okay.

218              So of the 3 hours and 15 minutes ‑‑ because you have said it would be sports and traffic ‑‑ how much is just pure news?

219              If we were to deduct the sports and traffic reports from the newscasts, how much would be pure news?

220              MR. MacDONALD:  I am not sure that we have actually laid that down in stone yet.

221              COMMISSIONER CUGINI:  What is it on your current station?

222              MR. MacDONALD:  It's a continually evolving thing with us.

223              What are you doing now for news?

224              MR. ELLIOTT:  We only have news, traffic and sports in the morning programming.  In the afternoon we have news and traffic.

225              Those would be in the 6 to 9 in the morning time slot, and 3 to 6 in the afternoon.

226              COMMISSIONER CUGINI:  And you don't do news on weekends, and you don't plan on doing news on the weekends if granted this licence.

227              MR. MacDONALD:  I would say not at first, although it's an evolving thing.

228              It's the same as Kitchener.  When we started we did no news, and now we have syndicated newscasts, plus we have a local guy that goes out and does local stories for us, plus we have a guy who does the sportscast for us locally.

229              It's an evolving thing, and as resources become more available to us, then we would certainly entertain hiring and establishing a local newsroom, and do news of not only interested Christians, but the whole community.

230              Our aim is to have a station that someone can tune into on their way to work, or on their way home from work, and not have to tune out to somewhere else to get the news, and to get the sportscasts, and that sort of thing.

231              That would be our aim, and that is what we are working toward in Kitchener, and that is what we will work toward in London.

232              Because of the problems we have had there, we haven't had the financial resources to make the expansion that we would like to make.

233              Certainly, it is our aim to follow the Kitchener model and do that.

234              DR. REID:  In our presentation we alluded to our relationship with the London Knights, and now that that relationship has been established, there is no reason why we cannot participate in more local athletic events.

235              COMMISSIONER CUGINI:  In order to close the circle on spoken word programming we have to talk about the Religious Broadcasting Policy.

236              I know that in your application you said that you will adhere to the guidelines of that broadcasting policy when it comes to providing balance and ethics in religious programming.

237              I would like to know what mechanism you currently have in place, or what mechanism you plan on putting in place, to ensure that, especially that acquired American programming, over which you have no control for content ‑‑

238              What mechanism are you going to put in place to make sure that you comply with those guidelines on ethics and balance?

239              MR. ELLIOTT:  It is our intention to have other faiths represented.  Currently we have a Jewish one‑hour program per week.  We also have a locally produced program, which is called "The Cross‑Current", and it is going out and getting different opinions on topical issues.  It is very much open to opposing perspectives and opinions.

240              We look to grow that aspect of the station further.  That is our intention.

241              I am not quite sure what you mean as far as the mechanism ‑‑

242              As far as a plan?  Is that what you are referring to?

243              COMMISSIONER CUGINI:  Yes.  How many hours of balanced programming, for example, will you provide?

244              What will you do if someone accuses you of airing a broadcast that is offensive?

245              Just this morning, on Canada AM, I heard that Sony has to pull one of their anticipated games because the music in the background has two lines that are offensive ‑‑ two lines from the brand that are offensive to Muslims.

246              What are you going to do to address those kinds of concerns from listeners who say, "You know what?  The guy I heard this morning, who said that gays should be" ‑‑ you know, "should not be part of this world," for example, what are you going to do about that?

247              MR. ELLIOTT:  Currently we do air a disclaimer before programs that may be considered that way.  That's a first step, I realize.

248              We intend to not air anything that will be too controversial, but yet we need to have, like you said, balanced programming.

249              So we are continuing with ‑‑ if we were to be approved, we would be continuing with the Jewish program that we have on currently, which is on all three of our stations.

250              MR. MacDONALD:  That's right.

251              It's a really high‑quality program, by the way.  He has interviewed Dr. Phil, he has interviewed all kinds of Hollywood people, Margot Kidder and that sort of thing, but it comes from a Jewish perspective.

252              My response, also, speaking from the Kitchener perspective, is that we make sure that these programs that we put on the air, such as "Focus" and "Insight", are from trusted ministries, who we think will not be doing things that are offensive to groups.

253              We had a case in Kitchener where we had a local pastor doing a show, and he started off one Saturday morning by running the disclaimer twice, and he said, "I had to do that, because I know that I am going to offend some people today."  He said, "The Roman Catholic Church, as an institution, is not Christian."

254              So, as you might expect, the phones and e‑mails ‑‑

255              COMMISSIONER CUGINI:  You think?

256              MR. MacDONALD:  ‑‑ started coming in pretty quickly.

257              Our response to that was to immediately pull his program off the air.  We will not tolerate that sort of intolerance to any group.  Whether it be Roman Catholic, whether it be Muslim, whether it be Jewish, we will not tolerate that.

258              We pulled him off the air immediately, and he understood the reasoning, and he apologized to me, and he said, "I am sorry if I offended someone."

259              I immediately contacted every person who had called and e‑mailed, and the response was overwhelmingly positive that we had dealt with the problem, that we had listened to their concerns.

260              That is how we deal with these things as they come up.

261              I have one question for you, if I might ‑‑

262              COMMISSIONER CUGINI:  I don't have to answer it, but go ahead.

‑‑‑ Laughter / Rires

263              MR. MacDONALD:  No, no, of course not.

264              COMMISSIONER CUGINI:  I'm just kidding.

265              MR. MacDONALD:  This issue of balance has come up time and time again in discussions around the table, and we are not sure exactly ‑‑ I understand that you are trying to be all‑inclusive here, but, as Christians ‑‑ there are 270‑odd Protestant denominations, all having a different perspective on Christianity.  Does balance necessarily have to mean non‑Christian, or can it mean different points of view within the Christian community?

266              We have programs that are from an evangelical point of view, we have programs done by Roman Catholics, we have programs done by the Lutheran church, we have programs done by many different denominations.  Would that also be a kind of balanced viewpoint, in your opinion, or do we always have to open the airwaves to non‑Christian‑type groups to be balanced in our programming?

267              COMMISSIONER CUGINI:  I am sure that legal counsel and staff will correct me if I got a wrong interpretation of it, but, to me, it is all those things, and it is the opportunity, however, for there to be expression of different points of view.

268              Let's take the Sony video game example from this morning.  As long as there is an opportunity to comment on whether or not those two lines of background music are, in fact, offensive to people of the Muslim faith, so that there is an open access policy between the station and the public ‑‑

269              "You know what?  This is a Christian station, and if you don't believe in what we have to say, that's just too bad.  Move on."

270              MR. MacDONALD:  No, we are not of that mindset at all.  In fact, in Kitchener we have a half‑hour program hosted by two Muslims, a husband‑and‑wife couple, who believe in promoting harmony between faiths.  They do an excellent program for us.

271              We have invited other groups who might be interested to have airtime.  Some of them have not responded to us.

272              We believe in being open to anyone in the community who has a point of view, and that is, I believe, how we have approached it.

273              I just wanted to clarify whether or not it simply meant that we had to go out and find a Muslim group to be on the air, or whether we could do it the way you have suggested.

274              DR. REID:  Let me illustrate that Cory McKenna has a show where he walks up and down the street and asks people questions.  The one that I particularly remember was a question of abortion, and it happened that he met three Muslims, and he got their views on abortion, and they were publicized.

275              What does balance mean?  They were different opinions, and they were on the air.

276              I think that Dale also failed to mention that he has a phone‑in show, where people phone in, and we don't have a special mic where you can cut them off, but it is recorded.  They phoned in, here are the answers, and that is published.  That is part of our presentation.

277              The phone‑in show does provide balance, as far as I am concerned.

278              COMMISSIONER CUGINI:  I would think that it would also make for more interesting programming.

279              MR. MacDONALD:  Absolutely.

280              COMMISSIONER CUGINI:  Just a couple of more questions, and then I will hand you off to my colleagues.  They may have further questions.

281              This question has to do with your business plan.  We have talked about both your spoken word programming, the acquired programming as well as your news commitment, and, of course, your music.  One thing I noticed in your business plan is that you have allocated $10,000 per year to programming.

282              Educate me.  I am not a radio broadcaster.  What is included in that $10,000 per year, and exactly how are you going to achieve all of these programming commitments with that dollar figure?

283              Do you have a lot of volunteers on staff?

284              It just doesn't seem like a lot of money to be able to pay people to do this kind of programming.

285              MR. MacDONALD:  No, paying the people to do the programming comes under "Administration and General", $170,000 for the first year.  No, that wouldn't come ‑‑

286              We don't buy a lot of programming.  We don't generate a lot locally that costs us a lot of money.

287              Most of the programming, like "Focus on the Family", pays us to be on the air, so that comes under "Revenue" rather than under "Programming Expense".

288              Programming expenses might include upgrades to our studio and stuff, so that we can have people come in and record programs locally, in the studio, and that sort of thing.

289              MR. ELLIOTT:  Equipment costs, software ‑‑

290              MR. MacDONALD:  Equipment costs.

291              It's not necessarily staffing costs at all there.

292              COMMISSIONER CUGINI:  So all of your staff would be in "Administration and General".

293              MR. MacDONALD:  That is where we put the staffing cost, yes.

294              COMMISSIONER CUGINI:  And the brokered programming, you said that they actually pay you, and that is the nature of brokered programming.

295              MR. MacDONALD:  Yes.

296              COMMISSIONER CUGINI:  Is there revenue sharing with the brokered programming?

297              MR. ELLIOTT:  It varies.

298              MR. MacDONALD:  Some are revenue shared and some are flat rate.

299              COMMISSIONER CUGINI:  The Chairman this morning, in his opening remarks, talked about these economic times, which are precarious, at best.

300              Your revenue projections ‑‑ let's take worst case scenario ‑‑ or let's take a scenario.  What if you only achieve half of your revenue projections?

301              MR. MacDONALD:  We are operating now on about half of the numbers on Year 1 for Grace FM.  We are projecting that in the first year our revenue would double because of the increased power.

302              Because we are operating on a lean budget right now, we are capable of doing that.  The only real cost to this upgrade would be a new transmitter, a new antenna.  We would continue to operate out of our existing facility.

303              We just moved to a new facility, where we reduced our rent by about half.  So we are working on a lean budget.

304              If the revenue stream were to decrease, so that in the first year it was only $150,000, we wouldn't be in a worse position than we are now.  The only thing we are going to have to raise money for is a new transmitter, and we have some sources for that.

305              We just had a transmitter donated to us for our Woodstock operation.

306              We think that financially we are fairly solid, because we have been there for five years.  We already have a base of clients who are supporting us.  We have church support already.  I don't think that would be a major problem for us.

307              It would be a bigger problem for us in Kitchener, where we have a bigger operation, if, suddenly, the revenue stream dried up there, where we have 11 employees.

308              That would be a bigger problem for us, but in London it is not going to be that major a problem.

309              COMMISSIONER CUGINI:  Gentlemen, thank you very much.

310              Thank you, Mr. Chairman, those are my questions.

311              THE CHAIRPERSON:  I would now ask Commissioner Menzies if he has questions.

312              COMMISSIONER MENZIES:  Thank you.

313              Just to follow up on that quickly, do you think the revenue forecasts ‑‑ not the overall business plan, but strictly the revenue forecasts that you have in your plan right now ‑‑ do you think those still stand?

314              MR. MacDONALD:  If conditions don't change appreciably.

315              I based those figures on our Kitchener operation, which has had a little more success, right from Day 1; not because we have more power, but because we are in the same position as London, we have areas where we are not received well.

316              But because we had infrastructure in Kitchener for six or seven years ‑‑ we had a program on the air in one of the local stations in Kitchener before we got our licence ‑‑ people knew about Faith FM.  So we started on the ground running in Kitchener, and these projections are sort of based on the numbers that we have been able to achieve in Kitchener from the beginning.

317              Obviously it is difficult, when you are projecting seven years out, to say what you are going to do, but we think that, with the increased power, with the better signal in London, we should do at least as well as our Kitchener station, in a similar population area.

318              We already have the base of support there, as I mentioned, and we think that will increase.  I don't think we will have any trouble reaching these projections, again providing that the economy doesn't go completely in the tank.  Hopefully Mr. Harper will be able to stop that from happening.

319              DR. REID:  I am totally amazed that we have had the success that we have with 6 watts.  I can tell you that our salesman is bringing in two or three new advertisers every week.  If he just maintains what he is doing, and brings in two or three new advertisers every week, that business plan will be fulfilled.

320              COMMISSIONER MENZIES:  Which actually segues nicely to my other question, which is why, in your business plan ‑‑ and this is not atypical or untypical of faith broadcasters ‑‑ why is your main source of advertising ‑‑ it appears to be, from the application, just within the Christian community, in terms of approaching Christian business people to advertise.

321              I mean, Christians buy gas, they eat, they do all of the other things that ‑‑

322              MR. ELLIOTT:  I can address that.

323              I think that, initially, it has a lot to do with the signal and the wattage being so low.  It is hard to convince someone who may not even know what a faith‑based or Christian radio station sounds like or looks like ‑‑ it is hard to convince them more so than someone who is already backing you, listening to you already.

324              I don't think that's where we intend to stay at all.  Now that we do have a full‑time salesperson, he has really expanded our clientele in a lot of ways.

325              By no means do we intend to stay under that umbrella.

326              I am fully in support of what you said, that we buy gas, that we buy groceries; it is tough to get national accounts though.  It's very tough.  We don't have the benefit in London, as of yet, of the BBM ratings.

327              Dave mentioned, however, that Faith FM does have it.  So we have a general idea, in the same market size, with roughly the same coverage area, of what our numbers should look like.  We won't know that for a fact until we get the rating system working for us.

328              That is kind of my feeling on it, that we have started there, with the Christian business owners, but by no means do we intend to just air commercials and seek their business only.

329              MR. MacDONALD:  If I could also address that; in Kitchener, for the first couple of years, it was the same thing, we talked mainly to Christians.

330              But we were very fortunate, in that a Christian lady, who is a registered sales marketeer, was working for the number one station in our market and came to us and said, "I think I would like to work for you."

331              So she did, and when she came to us she had eight and a half years of experience as a sales representative, and she has been with us now for about two and a half years.

332              She doesn't just call on Christian businesses.  As a matter of fact, some of our biggest accounts are non‑Christian, and some of them are singing our praises to such a degree that they have gone out and got some of their friends to advertise with us.

333              We do not intend to restrict ourselves strictly to Christian business in any way.  Some of our best successes ‑‑ the one that I included in our proposal here is not a Christian business, but it is a very successful business in London ‑‑ London Audio.  It is one of my favourite stores, actually, in London, because I am an audiophile.  Rick is just amazed by the loyalty of our listener base.

334              One of our advertisers sells windows and doors ‑‑ replacement windows and doors ‑‑ and he convinced one of his friends to come on with us recently, a guy who originally, when he was approached, said, "What, me advertise on a Christian station?  You've got to be kidding."

335              But his friend said, "Listen, it works.  It works for me, you should try it," and now he is one of our advertisers as well, and a non‑Christian.

336              So, certainly, we are not restricting ourselves in any way to Christian businesses.

337              COMMISSIONER MENZIES:  Thank you very much.

338              THE CHAIRPERSON:  Commissioner Duncan?

339              COMMISSIONER DUNCAN:  I have a couple of quick questions on the projections ‑‑ and I apologize if it is already in the filing, but I just want to make sure that I leave here with a complete understanding.

340              On your revenue lines, the line that is called "Other (Donations)", is that all brokered programming, or do you actually receive donations as well?

341              MR. MacDONALD:  No, the donations come from ‑‑ actually, they are donations from businesses and from individuals.  The brokered programming would be included under ‑‑ I included it under the "National" area.

342              "Local" would be the local advertisers, and the donations are actually from ‑‑ we have fundraising campaigns every year, and we encourage people to donate whenever they can; and if a church gives us a $1,000 donation, it would come under that line.

343              It has been our experience that the split has been about one‑third, one‑third, one‑third of donations, corporate and individual, and local advertisers, and the brokered programming.  That's where the split is, about a third each.

344              COMMISSIONER DUNCAN:  Thank you.  That, actually, answers my second question as well.

345              THE CHAIRPERSON:  If I pursue your business case, Mr. MacDonald, you said that all of the staff costs are shown under "Administration and General".  Are you able to break it down, between the various components of the radio stations that you are planning to operate, between programming ‑‑

346              I see some numbers for "Technical".  Do you have technical staff on hand or ‑‑

347              MR. MacDONALD:  For "Technical", we have an engineer under contract, who works only when needed, at an hourly rate, and ‑‑

348              THE CHAIRPERSON:  Is he forecast in your Technical line expense?

349              MR. MacDONALD:  Yes, he would come under "Technical"; his cost, plus any cost of gear that we might require.

350              THE CHAIRPERSON:  And regarding sales, I would suspect that it is pure commission?

351              MR. MacDONALD:  "Sales and Advertising and Promotion" would include the salesman's commissions, and then "Administration" would be like Dale's salary and that sort of thing ‑‑ and rent.

352              THE CHAIRPERSON:  And you said that if you were to have any programming costs, you would incorporate them under "Administration".

353              Do you have employees other than your general manager on a full‑time basis, or on a part‑time basis?

354              MR. MacDONALD:  At this point in time ‑‑ well, Dale can answer.

355              MR. ELLIOTT:  Currently, there is myself, we have one other fulltime on‑air announcer and then we have one part‑time on‑air person and one part‑time salesperson and one that works fulltime on commission.

356              THE CHAIRPERSON:  And could you account for that part‑time programming person as a programming cost?

357              MR. ELLIOTT:  We haven't in this report, that would be under the administration.  That is where it has come under.

358              THE CHAIRPERSON:  If I was to ask you to re‑file your economic data, could you move out of administration the payroll costs of programming and put them under programming expense?

359              MR. MacDONALD:  We could do that if you would like.  I mean, it is certainly ‑‑

360              THE CHAIRPERSON:  It will then give us a better picture of where the money will be spent.  Obviously, when I am looking at the current data that I have, over the seven‑year period you are going to be spending $10,000 on programming.  And what is radio if it is not programming?

361              MR. MacDONALD:  Well, then it comes down to a misunderstanding of how you wanted this presented.  Because, you know, programming, I just took that as a the ‑‑

362              THE CHAIRPERSON:  Oh no, you gave the explanation or I heard you.

363              MR. MacDONALD:  Yeah, I took ‑‑ yeah.

364              THE CHAIRPERSON:  But what I am saying is that if I wanted to have a real picture of what you are contemplating as your real programming costs, if it is buried somewhere else, who could I make that assessment?

365              MR. MacDONALD:  Okay, I understand where you are coming from there.  We can certainly modify that to reflect that.

366              THE CHAIRPERSON:  Now, earlier, Mr. MacDonald ‑‑ well, could you re‑file within a couple of days or very quickly?

367              MR. MacDONALD:  Before the hearing is over I could redo this sheet, yes.

368              THE CHAIRPERSON:  Yes?  And could we have it say before we undertake Part III of the hearing?

369              MR. MacDONALD:  I will attempt to redo this this evening and bring it back tomorrow.

370              THE CHAIRPERSON:  Okay, fine, thank you.  Well, I am taking it as a commitment and I am sure the lawyer will register it.

371              Second, you said that you have 60 days to completing filing of financial statements for 2005 and 2007.  As you know, the expected date is the end of November of each year.  Do you think you could make them within the next say 40 days, rather than 60 days, so you will be filing before the end of November?

372              MR. MacDONALD:  We will commit to that.

373              THE CHAIRPERSON:  Okay.  I will ask the legal counsel if he has any further questions.

374              MR. McINTYRE:  Thank you, Mr. Chair.

375              I just have two housecleaning questions relating to the weekly programming commitments.

376              You submitted in your application that you would provide 28.58 hours of spoken word programming.  Could you inform us as to how many of those hours per week would be considered religious programming?  Would that be the entire amount or is there some different number?

377              MR. MacDONALD:  I would say most of that would be religious programming with the exception perhaps of the ones we have already referred to; Barry Shainbaum interview program and the Man On The Street program, a couple hours of that would be totally non‑religious.

378              MR. ELLIOTT:  There is some programming that is health and wellness related, more of a general topic but, as David mentioned, it probably would be in the 90 to 95 per cent of that 28.5 amount, yes, so a high percentage.

379              MR. McINTYRE:  Okay.  My second question relating to programming is how many hours would you undertake to provide balanced programming?

380              MR. MacDONALD:  Well, again, that comes down to the definition of what balanced programming is.  We consider that our Man On The Street program is balanced programming.  We consider that Barry's Jewish program is balanced programming.  But we bring many different perspectives to the table, even from the religious standpoint of different of denominations who might have a different viewpoint.

381              For instance, I think someone here on the Commission mentioned that, you know, somebody said something about the gay community, there are many churches who support gay marriage, many who do not.

382              So you have balance there between ‑‑ opinions between one church and another church even though they might both be considered religious programming, it is still a balanced issue because the different denominations take a totally different view.

383              So it is kind of a grey area for us as to exactly what that constitutes, because we feel we are representing a large and diverse group of Christians who come at their faith from a totally different perspective.

384              DR. REID:  At a previous hearing I asked if we could get a definition of balance.  And the commissioners all pointed to a gentleman. I asked the gentleman if I could come to Ottawa and meet with him and take our representatives with him so we could finally pound out what it means to have balanced programming.

385              In spite of multiple letters, I never received any reply or any attempt at a meeting to define what balanced programming is.  And I will put out the same challenge to you; we will go to Ottawa, we will sit down with you until we find out what balanced programming really is.

386              Thank you.

387              MR. McINTYRE:  Okay, thank you.  I just want to read into the record the undertakings that were committed to.  The first one relates to providing proof of financial capacity in light of the current market situation, and that will be for 10 days which would bring us to October 30.

388              You committed to providing your annual returns on your current undertaking and I think you provided 60 days to give us that information.  It looks like we would need that information actually quite a bit sooner.  Would it be possible for you to provide it within 30 days?

389              MR. MacDONALD:  Is November 30 the deadline, is it ‑‑ is that what I was ‑‑

390              MR. McINTYRE:  I believe the November 30 deadline was for the CCD shortfall.

391              MR. MacDONALD:  Okay.  Thirty days then, we will certainly make that commitment.

392              MR. McINTYRE:  I think the last undertaking relates to re‑filing the financial brief as per the Chair's request.  I think that is it.

393              MR. MacDONALD:  Okay.

394              MR. McINTYRE:  Thank you.

395              THE CHAIRPERSON:  Mr. MacDonald, Dr. Reid and Mr. Elliott, thank you very much for your presentation this morning.

396              We will take a 15‑minute break.

397              MR. MacDONALD:  Thank you.

398              THE CHAIRPERSON:  We will resume at 11:10.

‑‑‑ Upon recessing at 1055 / Suspension à 1055

‑‑‑ Upon resuming at 1110 / Reprise à 1110

399              THE CHAIRPERSON:  Order, please.

400              Ms Secretary, could you introduce the next applicant?

401              THE SECRETARY:  Thank you, Mr. Chairman.

402              We will now proceed with item 2, which is an application by Forest City Radio Inc. for a licence to operate an English‑language FM commercial radio programming undertaking in London.

403              The new station would operate on frequency 98.1 MHz. (channel 251B1) with an average effective radiated power of 4,000 watts, (maximum effective radiated power of 7,000 watts with an effective height of antenna above average terrain of 106.5 metres).

404              Appearing for the applicant is Mr. Doug Kirk.  Please introduce your colleagues and you will have 20 minutes for your presentation.

405              Mr. Kirk.

PRESENTATION / PRÉSENTATION

406              MR. KIRK:  Thank you, Ms Ventura.

407              Good morning, everyone, good morning, Vice‑Chairman and Chair Arpin, Commissioners Cugini, Simpson, Duncan, Menzies.

408              My name is Doug Kirk, I am the Chairman and CEO of Durham Radio Inc. and Forest City Radio Inc.  This is a new company which is proposing an exciting new radio station from London.

409              We currently operate four radio stations in Hamilton and Oshawa and are looking forward to the opportunity to of expanding to London and Guelph.

410              I have been a passionate participant in the broadcasting business for over 30 years, a station owner for over 20 years and I am here to continue to build and grow.  As part of my personal commitment I have recently taken over the job of running the Ontario Association of Broadcasters as President.

411              Before we share highlights of our application with you, let me take a moment to introduce our panel.  Before you sit a dedicated group of individuals who are engaged and excited about the proposal we are going to present to you.

412              To my right and your left is Dean Sinclair.  Dean is the proposed President and General Manager of Forest City Radio.  He is a 30‑year experienced broadcaster, a long‑time resident of London, Ontario and previous General Manager of Corus' multi‑station cluster in London.

413              To my left and your right is Steve Kassay, who is Vice‑President, Programming and Operations of our four Durham Radio stations in Oshawa and Hamilton, Ontario.  To Steve's left is Andrew Forsyth, our Programming Consultant.  Durham Radio stations have benefitted from Andrew's expertise for over 15 years.  And behind me is my associate of many years, John Wright, who is controlling shareholder and President of K‑Rock and KIX Country in Kingston, Ontario.

414              As the Commission is aware, John Wright was to have been our President of this application.  For personal reasons John has withdrawn from his day to day operation and responsibilities in this application.  He will participate as an investor.  Since John was actively involved in the preparation of this application, I have asked him to appear with us at the hearing today.

415              And just a note, Dr. Liesa Norman, a proposed Director or Forest City Radio and an accomplished classical and pop musician from Vancouver, B.C. could not make it to this hearing because of a timing change of a concert she is involved in in Vancouver.  Liesa, with her husband and partners, will own one‑third of the station.

416              The applicant, Forest City, is headed by me.  Mr. Sinclair and I will make the day to day operating decisions relating to the station.  And along with Dean and me, the board of directors will include Mr. Kassay, Mr. Wright and representatives of our investor partners.  I will have the casting vote in order to control the board of the applicant.

417              Forest City brings together the operating experience and background of Durham Radio along with Mr. Sinclair, combined with the experience and counsel of Mr. Wright.

418              Now you probably want to hear about our application.

419              Boomer 98.1 will be a very different station from existing London radio stations and very different from other stations being proposed by other applicants at this hearing.  Forest City represents a strong combination of broadcasting experience and expertise based on successful radio operations in Southern Ontario.

420              Earning a licence in London provides our group with the opportunity to expand to a larger regional platform, which will compliment our Durham Radio stations in Oshawa and Hamilton.

421              Dean Sinclair's history in London, both as a broadcaster and a resident, provides local leadership for Forest City Radio.  Together with the panellists before you here you have over 150 years of Canadian broadcasting system experience.  I can't believe it.

422              We offer firsthand experience, both in London and in operating successful radio stations in similar‑sized markets in Southern Ontario.  Forest City Radio understands London.

423              Dean Sinclair will now describe to you London's Boomer 98.1.

424              MR. SINCLAIR:  Thank you, Doug.

425              Boomer 98.1 offers a Pop/Oldies music, local news and information station and a unique plan for emerging artists all packaged to target adults 35 to 64 years of age.

426              Our application meets the needs of the London marketplace.  Fifty‑five per cent of the population is over 35 and 25 per cent are over the age of 55.  Our research clearly shows that there is a demand for news and information programming.

427              Anecdotal evidence gathered from our one‑on‑one visits with civic officials, local business owners and community members indicates that the quality of news and information available from the London media has deteriorated dramatically.

428              Where our proposed Pop/Oldies format will add much needed musical diversity in London our independently owned and operated station will add a fresh and distinct news and editorial voice to the market while broadening the ownership base of the London radio landscape.

429              Approval of Forest City Radio's application will repatriate out‑of‑market tuning and serve a large and prosperous under‑served market.  It will increase ownership diversity, will increase editorial diversity, will increase musical diversity and will provide substantial new support for Canadian content development and, in particular, for new and emerging Canadian talent.

430              It will provide much needed financial and promotional support to the Kiwanis Music Festival of London and Orchestra London.  And it will not have any significant economic impact on existing local radio stations.

431              London can support another radio service.  Radio revenues in London have grown by an average of 7.3 per cent annually.  Operating margins, PBIT margin and pre‑tax margins are well above the national averages.  Retail sales are projected to grow at an average of 4.7 per cent annually over the period from 2008 to 2013.

432              MR. FORSYTH:  As Dean has indicated, London is a vibrant radio market served by first class operators.  The London FM stations provide their audience with primary music formats such as rock AC, country, top 40 hits and most recently adult hits, the 1980s, 1990s or whatever format.

433              We know that to offer diversity the new station would have to offer something very different from the existing formats, yet be a viable business service serving a sizeable audience.

434              Our financial analysis of the market convinced us that only a format with broad appeal across the 35 to 64‑year‑old audience would be feasible as a standalone entity in London.  Hendershot Research was commissioned to determine listening habits, perceptions of the current services and determine the appeal and attraction for three formats not present in London; smooth jazz, triple A, Pop/Oldies and the availability of CHR.

435              The results show Pop/Oldies is of greater interest to older listeners with one in three respondents in the 45 to 64‑year‑old group likely to listen more often to a radio station with this format, while 36 per cent of the 25 to 64‑year‑old respondents preferred Boomer 98.1's Pop/Oldies over smooth jazz, triple A and CHR.  Two‑thirds of 35 plus respondents wanted to hear more variety.  Boomer 98.1 addresses that demand.

436              Boomer 98.1's programming philosophy is simple, provide the 35 plus London audience with the music that was a big part of their lives in their formative years and present the information that is relevant to their lives today.  Steve will outline the exciting spoken‑word programming ideas in a moment.

437              Today's 35 to 64‑year‑olds grew up listening to a broad canvas of musical styles that fall into the general adding of pop music.  The heyday of that music was from the late 1950s through the 1960s and 1970s.  That is when the pivotal changes in pop music happened for Canada's largest generation, the baby‑boomers.

438              This essential music is not getting regular airplay in London.  Older listeners can't find the music they grew up with on the radio.  London is well served with stations playing newer music, the bulk of which comes from the 1990s and the present decade.

439              A one‑week BDS radio analysis shows the average year of the music aired by London's FM stations is 1996.  And over 70 per cent of the spins came from the 1970s and today.

440              In a moment, we will play a sample for you of the music that will make up the Boomer 98.1 playlist.  You will hear musical styles that I know you will recognize, but they receive no airplay in London; music from Motown, the British Invasion, the Stax and Atlantic labels.  Let's reminisce by presenting a snapshot of the music that will fuel the Boomer 98.1 brand.

‑‑‑ Audio presentation / Présentation audio

441              MR. FORSYTH:  There is Boomer Ian Thomas's part of a 60‑second sample of what we are going to play on a regular basis.

442              But there is more.  You hear from girl groups like The Ronettes and The Crystals, the Phil Spector sound, R&B from Otis Redding and Sam & Dave, the Philly sound, more mainstream pop like we heard from Tommy James and The Shondells. The Brill Building sound of early Neil Diamond and of course Neil Sedaka, and naturally California's surfing pop from the Beach Boys/Jan & Dean, folk rock from The Bird's, Ian & Sylvia and Leonard Cohen.  Now, that is really variety.

443              All of these styles make up the exciting world of Pop/Oldies from the golden generation of the 1960s to the early 1980s.  These styles appeal to the 35 to 64 year age demographic whose formative musical years span the span the 1970s and the 1980s.  Great music from an exciting time for an underserved baby‑boom audience.

444              MR. KASSAY:  Now, Boomer 98.1 will offer a fun, informative and local listening environment ideally suited to London's over‑35 population.  It will focus on the music while emphasizing news and information that addresses the needs and the interests of the mature adult segment.  Boomer 98.1 will present over 20 hours per week of spoken‑word programming.

445              You see, spoken word is what brings intelligence and relevance to the radio.  It is the instrument through which will bring London to Londoners.  It is what makes Boomer 98.1 London's radio station.

446              Spoken word content will compliment the audience demographic, the music and the on‑air presentation style.  Boomer news will present over 11 hours of news and information weekly with pure news accounting for 3.5 hours of that weekly total.

447              Reporting on stories about the launch of Diamond Aircraft's new D‑Jet or the Talbotville Ford plant future or the ongoing water issues in town, Boomer news will devote 75 per cent of news air time to items of local importance and interest.

448              To give live to Londoners' demand for more in‑depth information programming each weekday morning we will engage in lively conversation with featured guests selected from the array of elected officials who serve London residents.

449              Music and entertainment spoken word will reflect the personality of the station designed to primarily serve the audience segment 35 to 64.  The music mixture customized to identify with the life experiences of baby boomers will present an energetic environment, it will be supported by format elements that contribute motion and relevance and excitement to the overall presentation.  Music and entertainment spoken word will compliment the listening environment and its attributes through a fun and upbeat delivery of entertainment information.

450              Lifestyle oriented spoken word programming will address the interests of those Londoners attracted to the Pop/Oldies format.  We will offer information on the environment in Boomer's Mother Earth segments, small business interests on Business is Booming, and life's finer pleasures on Boomer's Wine & Dine Show.

451              Our foremost commitment is to the community and that will be done through the unique Boomer community initiative.  Everyday we will share important information, community information, about local organizations and events.

452              We will open our doors to local groups, we will open our doors to local groups, we will offer combinations of live primetime interview opportunities, online listings, regularly scheduled on‑air interviews and announcements and on‑site station visits to promote events and messages of a non‑profit and charitable nature.

453              Londoners can keep up‑to‑date with the information about area fundraisers and charity events, such as campaign drives for the LHSC, events and happenings for Big Brothers and Big Sisters.  We know the people involved in these organizations and we will build relationships that benefit London.

454              MR. SINCLAIR:  Approval of Forest City Radio's application will have a significant benefit for musical talent in London as well.  Boomer 98.1 is committed to $1,609,179 of direct cash in the first licence term.

455              In addition to over $350,000 committed to FACTOR Boomer 98.1 will undertake four local London initiatives targeted at the development and the promotion of new and emerging local talent.  These projects include the Boomer Festival, MusiCounts, Orchestra London, and the Kiwanis Music Festival.

456              The Kiwanis Music Festival of London has just celebrated its 48th year and the Festival drew 2,950 entries from over 99 different categories with nearly 12,000 participants, 18 top adjudicators, 17 separate hall locations and the help of over 400 volunteers.  These stars of tomorrow are non‑professional emerging artists and history shows many have gone onto musical prominence.

457              Boomer 98.1 is pleased to commit over $274,000 for annual scholarships.  Jim Scott will be speaking with you further about the festival and those who benefit from it during Phase III of this hearing.

458              We are also pleased to support Orchestra London with a commitment of over $274,000.  Orchestra London has a long proud heritage within the community and we are particularly excited to partner with them through funding them with their special program initiatives which include the community programs and Red Hot Weekends.

459              Rob Gloor, who is the Executive Director of the Orchestra, will share his insights with you on these plans and others and the importance the Orchestra plays within London's cultural mosaic during Phase III of the hearing.

460              Boomer 98.1 is also pleased to partner with MusiCounts through CARAS.  Their mission is to make sure that young Canadians have access to a comprehensive music program through the school system.  MusiCounts includes Band Aid as well as scholarships and music education initiatives.  Boomer 98.1 will spend nearly $400,000 on these projects designated through MusiCounts for London CMA schools, which include London, St. Thomas and Strathroy.

461              And finally, the Boomer 98.1 Festival will develop and showcase new talent through a local London competition.  Winners will have studio‑quality demos done, produced to their events to advance their careers within radio and the music industry, and the overall winner will open for a major act playing in London.  We have committed $300,000 in direct funds to this initiative.

462              MR. KIRK:  Thanks, Dean.

463              Members of the Commission, Canada has seen an unprecedented number of new FM licences issued in the past years.  Many markets have been diversified through issuing new licences to establish new operators or establish new formats.  We think this is just such an opportunity for London, which saw its last new licence issued over eight years ago.

464              Forest City is an independent regional broadcaster which does not have, and has never had, licences in the London market.  We know how to operate radio stations in this scale of market and we believe the market is currently underserved.

465              I would like to finish by recapping three key points pertinent to the Forest City radio application.  The first is diversity.

466              Forest City will increase diversity in the London market through introducing a new owner with no other media or cable or telecom interests in the market.  Licensing us will provide London with its only independent radio station.

467              As pointed out earlier, our news and spoken‑word commitments are very substantial.  Forest City will provide an independent news voice in the market.

468              We have also articulated how our format will add music diversity to London.

469              The second area is contributions to the community.  Forest City will provide over $1.6 million of direct contributions over the first term of licence to four major initiatives, which Dean articulated and I will recap:  Orchestra London, over $274,000; the Kiwanis Music Festival of London, over $274,000; MusiCounts, this is the London band aid project, which goes out to schools and helps them equip bands, over $391,000; and the Boomer Festival, over $313,000.  Also, FACTOR will receive in excess of $350,000 as part of this proposal.

470              You will hear more about these initiatives in Phase III, but I must emphasize, right, that these are sizeable and needed initiatives for the music community in London.

471              Finally, the third point, viability.  Forest City has proposed a format which will serve a demographic which is valuable to advertisers.  You have to get advertisers that can spend money on the radio and it has to be pertinent at this time.  We are not getting into any easier economic times.

472              We will repatriate out‑of‑market tuning and have an independent station which will be strong enough to be viable in London.

473              Current market conditions have bred a group of independent broadcasters ready for growth.  I have spent 15 years with Durham Radio building a company which is serving markets of this size.  We need growth opportunities like this to continue to challenge and build on our people ‑‑ most importantly our people ‑‑ and our staff, and we have to have those opportunities to keep them growing with us.

474              This kind of opportunity is exactly the kind of thing that we need.  We are up to the challenge and we are ready to grow.

475              Thank you.  We as you to approve our application for Boomer 98.1 to serve London.  Thank you for your time and we will take questions.

476              THE CHAIRPERSON:  Thank you, Mr. Kirk.

477              I will ask Commissioner Menzies to do the first round of questions.

478              COMMISSIONER MENZIES:  Thank you.

479              I thought maybe we would start with the three key points you made at the end of your presentation and ask you to try to be as precise as you can in the responses because I'm trying to get a grip on some of these things and be as subjective as we can about it.

480              You say you are going to have an independent news voice and you articulated that mostly in terms of your ownership structure being independent versus some of the other applicants and incumbents.

481              Other than the fact that your ownership structure is different, how else would somebody determine that your news voices is independent?

482              MR. KIRK:  Okay, let me try and answer that and I will ask Steve, particularly, and Andrew and Dean, to contribute to fill out the answer.

483              First and foremost, by being new to the market and having no other interests, you will be a new entity; the number of the voices in the market owned by distinct companies will go up by one.  So by that nature you have a new entrant, a new voice, without other connections in the market.

484              But secondly, and importantly, is how we do news.  News and local information and connection to the community are extremely important, particularly in the context of the markets that we serve.  Oshawa and Durham Region is one example ‑‑ Oshawa, Ajax, Durham Region ‑‑ and in Hamilton, the west side of the GTA, and we have to be able to produce news that's connected to that community.

485              You know, redoing national news, rereading the wire copy, isn't going to do it for us.  We have to get in and get into the real context of the community.

486              So I would like Steve just to fill out a little bit on how we produce news to give you an idea of the kind of depth of the news and spoken word that we produce in our current stations and as part of this application.

487              MR. KASSAY:  Well, thanks, Doug.

488              Commissioner Menzies, I think I'm going to expand a bit, but, you know, support a lot of what Doug said.

489              We have experience working in markets that are unique, yet in the shadow of big cities.  It's very competitive.  We know that in order to be successful and to achieve the success we have had, we have had to develop a news process where we are very local, outbound, on the streets, small but effective teams.

490              When the Bowmanville propane fire occurred, we had to be there right away.  We were there right away.  Residents want to know.  We are there to help.  When the downtown fire occurred, coincidentally in Bowmanville ‑‑ we are starting to see a trend.  And what happened there?  Retailers:  I'm taking emails from retailers, phone calls from retailers contacting us saying, you know, "Appreciate the coverage".  In step, because we have built a reputation, "Now would you go on‑air and please let people know we are reopening tomorrow because my family has been out of business for four months".

491              This is ‑‑ I use an old phrase ‑‑ the touchy/feely, the very ground level on which we operate with clientele, the community.  We are part of the community.  Our philosophy is we are part of the community.  We can't succeed if we are not.

492              Hamilton, it's the same type of situation.

493              And I think, to answer your question on independent voice, we are not affiliated with any other organization.  There's no agenda.  If it's happening, we want to be there to cover it fast, correctly and then get armed and ready to go for the new occurrence.  It's a busy place where we live and a very large market, and neighbouring markets, in which we do business.

494              COMMISSIONER MENZIES:  Okay.  I don't want to belabour the point, but just on that, I'm pretty sure that if we ask the others and the incumbents, they would say much the same thing:  that they are dedicated to local news.  They would probably bristle at your referenced to an agenda.

495              I mean just what do you see that happens in chain news that you can do better?  I mean if we are talking about a large operator versus your small independent, why are you ‑‑ let me put it this way:  how do you add diversity beyond just adding another voice with a different ownership structure?

496              MR. KIRK:  I think it's got be in the independent approach.  You know, we ‑‑ for example, Dean, who will be the general manager of the London station, has been a resident here for eight years now ‑‑ sorry in London.  I'm thinking about London, we are in Cambridge.  But has been a resident there for eight years, knows what's going on in the local community.

497              We are not trying to say that, you know, the local operators, I think, are doing a bad job, I think they do a credible job.  But we are a new entity, we will have different levels of contacts, different experiences in the market and priorities with the format we are serving to cover items that may not be on everybody's agenda.

498              MR. SINCLAIR:  Thanks, Doug.

499              Commissioner Menzies, if I could just maybe jump in for a second.

500              One of the things that's interesting in the market, Doug's correct, I have been there for eight years.  I left another company three years ago and I have worked independently since then, but have still maintained many of the contacts that I have in the marketplace, especially civic people.

501              When we were assembling this application ‑‑ and John and Doug both came down and we did a whirlwind tour through the city over a few days ‑‑ I met several people:  economic development ‑‑ spoke with them again this morning ‑‑ tourism, city hall, it was interesting in speaking with them and other business people in the marketplace.  And we have great respect for what the radio stations in the marketplace do, but there is a sense of staleness overall in what the media provides in the market.

502              One of the challenges you have is when you have three good operators in the marketplace, two of them with multiple stations, it's difficult to start creating ‑‑ you will find that there's a sense of sameness in stories ‑‑ not exactly the same, but a sameness in stories ‑‑ that may go with inside a cluster of stations.  That's just common and that happens over a time.

503              And I think, to a large degree, and what happens with this city, you know, I would challenge people, "How many people do really cover city hall any more or cover those issues?"  The only time we talk about a water problem in the city, which is huge in London, is when we get a gapping sink hole that a crater goes through, and then all of a sudden it's the big news of the week or for the next month and that's all we focus on.

504              Those issues have been around for a long time.  And I think that one news service will jump on it, whether it's electronic or print media, and then all of a sudden everybody does that.

505              But I think that, you know, the sense of staleness, this was the feedback we got from people within city hall, we got from business owners, we got from tourism, downtown economic development.  People just said, you know, "What are you offering in terms of news and information?"

506              We said, "Look, you know, we're fresh, we're an independent voice for the marketplace.  We're hungry, we're going to hunt down what's going on and we're going to work with the stories and make the links there."

507              They said, "That's fresh because we don't get that now.  Nobody talks to us.  People don't call us to find out.  Everything is an after‑the‑fact situation."

508              So I think that we took that to heart.  I think that some of the letters that have been provided by the people that have intervened on our behalf have indicated interest in what we are doing in that way, and I think that that's a big part of it.

509              COMMISSIONER MENZIES:  Okay.  Thank you.

510              MR. KIRK:  Steve Kassay just wanted to finish a point on that.

511              MR. KASSAY:  Your question made me think of two things, just to answer it quickly.

512              Number one, we consider ourselves community leaders in the stations in which operate, a philosophy that we have presented to you, too, today, because it's honed and it's effective.  We are talking to different people.  We are very close with a certain group of people:  politicians, community leaders, leaders of organizations.  This also affects the input that we receive and helps us shape how we deliver news.

513              Secondly, we are talking to a completely different target.  I mean we presented to you Boomer 98.1 based on an opportunity to serve a segment of the population that we think is underserved, possibly not served in some areas.

514              Our attack to cover news would reflect that in that the advantage to licensing us to, indeed, start this news endeavour is we are associating with a group of people that we have found are underserved.  And we are just basically talking to a different target.  So we add texture simply by serving a segment of the populace that we feel are not being served now.

515              COMMISSIONER MENZIES:  Okay.  Thank you.

516              And just on a technical matter, when you refer to "pure news", I just need to confirm that you are referring to the CRTC's definition of "pure news".  You have three hours and 36 minutes listed ‑‑

517              MR. KIRK:  That's correct.

518              COMMISSIONER MENZIES:  ‑‑ so you are familiar with the definition, then?

519              MR. KIRK:  That's the "pure news" commitment, yes.

520              COMMISSIONER MENZIES:  Okay.  Thank you.

521              Again, on the diversity issue, in terms of format, notwithstanding what you have just said ‑‑ and this is where I just need you to expand and clarify on that a little bit ‑‑ on the face of it, if you a drive‑by look at the market, it appears to me there's stations already targeting the mature demographic that you are going after as well:  CFPL, CJBK and CKSL and, to some extent, maybe even CIQM and CHST.

522              Help me understand more fully how your business plan evolves in terms of building your audience in the demographic you are seeking.

523              MR. KIRK:  I will start this and we will have some other inputs.

524              COMMISSIONER MENZIES:  Or it's okay to tell me I'm wrong, too, on that.

‑‑‑ Laughter / Rires

525              MR. KIRK:  No, you are not wrong.  Obviously, people in the market are listening to the radio and they are landing on radio stations.

526              But our approach to finding a viable, strong business opportunity for London was to do research and find out.

527              There are a number of formats.  As you know, there are eight originating stations in the market now and they are all doing various formats and that serve their university campus stations and the CBC.  So there's radio being consumed.

528              But our approach was to do a very intensive research, outbound research, to find out what people would like.  There are unserved formats.  What do people want to listen to in the market?  So that was really the starting point.

529              We believe starting the station will gather that listenership because there is a focus and an orientation to the programming based on the music, complemented by the news and community approach to the station that will gather audience together.  There's some audience that we can repatriate from out of the market that are listening to stations not originating that format in the London market.

530              So, I mean, that's really the approach to finding it.

531              Dean.

532              MR. SINCLAIR:  Sure.  Thanks, Doug.

533              Commissioner Menzies, I think you had mentioned ‑‑ I'm trying to remember your list ‑‑ a couple of stations, CJBK, CFPL, both news/talk AM stations in the market, and though they do cater to an older audience to some degree, they also ‑‑ once of them carries ‑‑ well, they both carry sports properties, one carries the local London Knight's hockey team broadcast, as well.  They don't provide music to that audience either.  CKSL is a standard station, it's an AM station, as well.

534              And then some of the older tuning that we see in the marketplace actually goes out of market to stations within an hour away.  So that's sort of our buzz of why we want to put this station on and the audience that we are going after.  You are going to have a little bit of interest, there's a little bit of tuning in the market with a couple of the other incumbents, but not to any large degree, in terms of the definition of the audience we are going after.

535              COMMISSIONER MENZIES:  Okay.

536              MR. FORSYTH:  If I may just add one point to that, I hope this clarifies it, too, that I think the general target of this radio station, which is, in large terms, 35 to 64, is different from the existing stations in the market, where, generally, the big target is a 25‑to‑54‑year‑old audience.  And that's just targeting and that's looking at where the numbers fall out of BBM.

537              But when you take it down another level and actually take a look at the components of the programming ‑‑ and Dean has spoken to that ‑‑ where some of it is talk and sport oriented, which does attract an older audience and some of these out‑of‑market stations that do skew a lot older, one of the other components we look at is just the music and what's available, what's being played within the market.

538              And as I had mentioned in my part of the presentation, we looked at it and we discovered that 70 percent of the music that you hear on London radio is recent music, "recent" in the sense that it's the nineties and today.  So when you go back to looking at the musical components of what's being played on the radio, there's a large hole of music that's really not getting a lot of play.

539              So that sort of comes back to, again, talking to an older audience, and the older audience is the 35‑to‑64‑year‑old audience.

540              COMMISSIONER MENZIES:  Okay.  In terms of that, I noticed, though, too, where you will get your audience from, you came to the conclusion that 20 percent of your year‑two revenues would be at the expense of the existing radio stations in your application.

541              I just want to know how you came to that conclusions, that's the (a) part of the question, and (b) who do you think you will get the most from?

542              MR. KIRK:  The year‑two projection, the 20 percent, relates to out‑of‑market stations.

543              COMMISSIONER MENZIES:  Out‑of‑market?

544              MR. KIRK:  Out‑of‑market.

545              COMMISSIONER MENZIES:  Okay.  So that's existing out‑of‑market?

546              MR. KIRK:  Yes.

547              COMMISSIONER MENZIES:  Thank you.

548              And 25 percent, you say, is going to come from new advertisers to radio.

549              Is that people who haven't advertised in radio before or people who are ‑‑ or let me put it this way, new advertisers to radio or new advertisers period, like growth in the market?

550              MR. KIRK:  That could be in both categories.  These might be advertisers that haven't found a station that really is efficient for them.

551              And we are designing this station to a little older skew.  As you know, the aging of the Canadian population is moving into that, the bubble is moving through to that 35 ‑‑ or 45‑65 market.  Just let time evolve and the baby boom is moving into that area and this station provides a way to access that market.

552              It's a market with people that are probably in the mature part of their careers, they have paid for their homes, they have a ratio of their income ‑‑ more of it's disposable and are willing to spend on, you know, some of the good things in life that they feel that they have earned, and there are retailers there that want to reach those.

553              They may not have found a very efficient vehicle.  That's what we look to as new advertisers.  These are retailers that may have used radio in the past but have slowed down or moved off radio because it wasn't as efficient as other media.  This provides a very highly targeted media that could get them back into the market.

554              There may be also accounts that have never used radio before, but if you find the appropriate target audience that's something that we can develop and use.

555              And that's the whole secret of this:  finding the right advertisers to bring onto the station, creating new advertisers or new advertising dollars for radio.

556              COMMISSIONER MENZIES:  Okay.  I just want to go back for a second to the out‑of‑market.

557              Were you talking about local advertisers who are currently advertising with out‑of‑market stations or were you talking about advertisers outside of the current market?  That's the 20 percent?

558              MR. KIRK:  This would be the repatriation argument, where there is tuning in those demographics to out‑of‑market stations.  Establishing an in‑market station serving those demographics would allow you to go ‑‑

559              COMMISSIONER MENZIES:  Sure.  I'm just talking specifically about the advertising dollars.  The source of the advertising dollars, would they ‑‑

560              MR. KIRK:  Advertising dollars that are now moving out of the market being brought back to the market.

561              COMMISSIONER MENZIES:  Right.  Thank you.

562              What's the one factor, in 10 words of less, that gives you confidence that your business plan's going to succeed in that demographic?  You can go 25 if you want.

563              MR. KIRK:  It's still going to be hard.  Sorry, I will start now.

‑‑‑ Laughter / Rires

564              MR. KIRK:  We have the experience to deal with setting up radio stations in these markets.  We are highly experienced in developing retail advertisers.  I have no problem with programming.  We have done that, we can do that.  The key to having a station like this succeed in London is finding the right market for it, getting the right people listening to it and being able to translate that into advertising dollars, and that's where I think we are ‑‑ we have done that, we can replicate that in the London market.

565              COMMISSIONER MENZIES:  Okay.  And what would be the one thing that would come to mind, if you were successful ‑‑ or first thing that would come to people's mind?  If you were successful in this application, and I went out and asked them, "How are these guys, how is Forest City different from CKSL?", which also offers an oldies format, what would you hope would be the first thing that they would say?

566              MR. KIRK:  At the risk of getting people at CKSL mad, I think we would be a new entity, very energetic, on FM, we provide a high quality product and we really connect to the community.

567              That's the reason why we have been able to build the Oshawa cluster of three stations, which is in the shadow of a lot of stations in the Toronto area.  That's why it works out there:  you get in and connect.  And we are everywhere and we are representing the community.

568              COMMISSIONER MENZIES:  Sorry, were you interrupted or were you done?

569              MR. KIRK:  No, no, something went off back there ‑‑

570              COMMISSIONER MENZIES:  Yes.

571              MR. KIRK:  ‑‑ but I don't know whose it was.

572              And with that approach you can develop sales.  This will be primarily a retail sales‑based radio station.  That's going to be the key to do it is getting into the local market and developing the right listenership, and translating that into sales.

573              COMMISSIONER MENZIES:  Okay, thank you.

574              Now, just on your business plan ‑‑ and you quoted some economic forecasts in your presentation and they are in your business plan, as well ‑‑ how confident are you that those still stand up, given, I'm assuming, that the application was done was some months ago?  And you referred to it again this morning.  You talked, Mr. Sinclair, about having met with people in economic development as recently as this morning.

575              Does your brief use the FP survey of markets, which showed an annual growth in this market of 4.2 percent till 2013 and average growth in retail spending of 4.7 percent?

576              On Friday, FP reported that the consumer confidence index dropped to 67.9 from 84.5, in Ontario, and that was the largest drop on record and low since 1982.  So given all that, any second thoughts?

577              MR. KIRK:  Second thoughts, third thoughts, fourth thoughts, they are all good thoughts.

578              You are right, everybody in the room did their projections last spring probably, we filed in May, and the world's a different place today than it was last May.  So with regard to the FP ongoing forecasts, probably revised downward would be guess if we had to put a bet on it.  But I think we have to understand how that works and how it might fit in with what we are proposing.

579              Our projections were based not on 4.7 percent or 7 percent, which the London market had been growing, we did our expectations on a 3 percent market growth.  One thing, the market's not going to disappear.  It will be there.

580              COMMISSIONER MENZIES:  Good.

581              MR. KIRK:  It may flatten ‑‑

‑‑‑ Laughter / Rires

582              MR. KIRK:  ‑‑ it may be tougher, but it's not going to disappear and there will be a substantial base.

583              And I recall you mentioned 1982.  Looking back at radio, and, sorry, I don't have that 30‑year series of Canadian radio revenues, but just my recollection from it back in the eighties, even though we went through a pretty severe recession in 1982, radio revenues didn't disappear, they flattened out for a while.  They had been growing quite strongly for a number of years prior to that, they flattened out for a year or two and then continued to march upward.

584              We have had lower inflation expectations, certainly in the late‑eighties and nineties.  We still had very strong ongoing growth in radio revenue.  So I could see that this could flatten out here, you know, maybe drop a little bit, but, you know, we are not going to see, as I think the question was posed earlier, "What if they go to half?", I don't think that's going to happen.

585              So there's still a very, very substantial revenue base in the market on which to build a business.  The question is:  how much do we repatriate and how hard to we have to work in building a sales team, and really focus on that.  It's a bit market.  There are lots of potential advertisers in it.  It's really just getting in there and developing that.

586              COMMISSIONER MENZIES:  Sure.  And you based your business plan on ‑‑ or your financial plan, at least, on 16 assumptions that you listed.

587              MR. KIRK:  Yes.

588              COMMISSIONER MENZIES:  Are you confident all of those still stand and, if not, are there any that you have had a chance to look at and revise?

589              MR. KIRK:  I can't say that we have sort of looked at 16 and here they are.

590              We assumed annual expenses for example increased 3 per cent as well.  Well, if we get into a low growth, potentially low inflation or a deflation environment, that offsets it.  So a large part of the costs of running the radio station would reduce in tandem with lower sales expectations.  You would have probably lower expense expectations as well.

591              As we mentioned, the market revenue we assumed at 3 per cent, which was more conservative than the FP series forecast outlook, so that might be toned down to 1 per cent or 2 per cent.

592              I think the other items, interest rates, we had assumed 6 per cent on loans.  Well, interest rates, as you know, have come down I guess two points now from their peak, the prime rate and the Bank of Canada is talking about reducing it again.  Across the world we are talking about reducing rates to try and stimulate the economy.  So there are balances to the revenue side.

593              Our job here is by establishing a radio station to go out there and find the revenues.  There are revenues to repatriate which going out of market for starters and, within a market revenue of about in the $25 million range, find our share of it.  I think that's our job and we just have to work harder.

594              Dean mentioned in his piece, talking to the economic development people in the city of London, we had met with them on our get to know the market tours as we were developing the application and London is a very interesting market.  It may have ‑‑ if you looked at it 20 years ago it was more of a manufacturing‑based economy, but it still had a pretty broad base of financial services industries.

595              I think in the last two decades London has even further diversified.  The big growth in London has been in health services, in some biotechnology, and it has really added, along with a growing educational side of it with large universities and other institutions in the market, there really is a very, very solid broad base to the economy.  So it's not as exposed to the manufacturing problems that some specific towns are experiencing.

596              The London Economic Development Corporation is a group that really keeps tabs on all that.  We talked to them.  The future looked bright when we were talking to them earlier in the year, and we talked to them this morning again, just to bring you up to date if we could, give you a flavour of what they were thinking about the market.

597              Dean has some specific notes from that conversation that he would like to share.

598              MR. SINCLAIR:  Commissioner Menzies, Staff, I think it was an interesting phone call.

599              First thing, I had talked with these folks a couple of weeks ago and the key person I was looking for was in today and I think the first question was, she says, "Oh, you are the fellow" ‑‑ because I was looking for the Executive Director, she said "You are the fellow that visited us a few months ago and got your truck stuck underneath City Hall wasn't it?"  I said, "That's true."  She says "How is that going?"  I said "Good.  I'm curious about how things are going in the city otherwise."  She said "You should buy a smaller car I think."

600              The quick update from the London Economic Development Corporation simply was, despite some of the things I think that have been inferred in the last application you heard about the Sterling Truck Plant which is down in St. Thomas closing at the end of the year, some 2,300 jobs.

601              Of course Talbotville, which is right near London, which is the Ford plant which makes Crown Victorias and now the Lincoln Town Car, is working on some reduced shifts, as a lot of plants are right now, the CAMI Plant by Ingersoll as well.

602              Those of course are the auto manufacturing corporations and the economic development watches those and certainly there is some concern.  Those people live inside London as well, many of those people.

603              But on the uptake is, we talked about it this morning, you know, we have several new industry startups happening in London.  As Doug mentioned, manufacturing is huge and continues to grow.  We have large companies like General Dynamics which are hiring constantly and have a big push right now.  They are building more vehicles that they are sending across the world.  3M of course, McCormick's are expanding their operations.

604              And one of the cool companies that's opening up nationwide is called The Original Cakerie, which makes cakes across Canada and they are hiring over 400 people right now.  We have organizations like Hanwha, the large countertop company, hiring 200‑plus people right now that build countertops that distribute red across Canada.

605              IT is huge.  International Peavey is hiring 150 people and there's a lot more IT development happening inside the market.

606              And of course the hospital system which is big in London, which is continually hiring new doctors and expanding their services.

607              COMMISSIONER MENZIES:  Okay, good.  Thanks.  I mean, it's your money, so as long as you feel good about it I guess.

‑‑‑ Laughter / Rires

608              MR. KIRK:  We try and invest it carefully and make a return on it in the long term.

609              COMMISSIONER MENZIES:  In year five in your forecast or your financials you forecast a growth in national revenue of $165,000.  It also just kind of caught my eye that it appeared to be forecasting a $76,000 drop in local revenue from $2.5 million to just over $2.4 million.

610              Is that just a rounding off of things for the purpose of putting the thing together?  Was there something that you saw there?

611              MR. KIRK:  It was actually just a ‑‑ if I can use the word ‑‑ a proportionalizing of revenue.

612              COMMISSIONER MENZIES:  Okay.

613              MR. KIRK:  We had made some assumptions that the national would be a growing.  National requires that you get established, get ratings and we had made some assumptions of converting those ratings to more national dollars ‑‑

614              COMMISSIONER MENZIES:  Sure.

615              MR. KIRK: ‑‑ and really to keep the overall revenue at an expected ‑‑ you know, without it popping up.  It took away a bit from the local and in fact I think it's just a cautious assumption.

616              COMMISSIONER MENZIES:  Okay, thanks.

617              Just to clear up a perception of inconsistency in a couple of numbers, but just for the Boomer Festival, moving on to that, your supplementary brief allocates $45,000 for year one and in Appendix 8.1A it lists it as that allocation as varying from $40,000 in year one to $48,400 in year seven.

618              I just want to clear that up, whether it's $45,000 or $40,000 and, if need be, could you file an amended financial projection just so we get the exact number?

619              MR. KIRK:  Yes, the 8.1A is the revised.

620              COMMISSIONER MENZIES:  So it's the $40,000?

621              MR. KIRK:  We ended up recalculating the FACTOR contributions because of the start‑up year and ended up reallocating that.  We wanted to keep the total commitments the same.  Our FACTOR numbers dropped a little bit so we added and revised the numbers for the other.

622              COMMISSIONER MENZIES:  Okay.  So if staff requires it you don't have any problem just refiling that?

623              MR. KIRK:  Absolutely.  No problem.

624              COMMISSIONER MENZIES:  Thanks.  You would do that pretty much right away?

625              MR. KIRK:  We can do that this afternoon, sure.

626              COMMISSIONER MENZIES:  Okay.  Thanks.

627              Can you just talk about your association with the orchestra a little bit?  Particularly there is a reference to an outreach program and I just want to know  a little bit more about that regarding its giving school children access to the orchestra.

628              MR. KIRK:  Sure.  I will ask Dean to really fill this out, but the whole idea of supporting Orchestra London was the complementarity.  The orchestra has a lot of young musicians coming up and exposure to the community and we thought it would be a good fit with the demographics we were pointing at.

629              The orchestra always needs support, it is very active in the community.  So that was why we picked that project.

630              I will turn it over to Dean to give you the flavour on the outreach program.

631              MR. SINCLAIR:  Thanks, Doug.

632              Commissioner Menzies, Rob Gloor will be down this week, who is the Executive Director as well from Orchestra London, excited to talk to you about the programs as well.

633              But the quick thumbnail of it, the two big projects that the orchestra does, the outreach program takes the music and the musicians out to people that normally can't afford to go and see the orchestra or have any experience with it.  It's not just necessarily young people, but they go through the school system, through the music programs.  They will actually do little concerts, little shows.  And it's people, like I say, that normally don't have access to what the orchestra is about or get introduced to it, even though they are interested in it.

634              So that's where some of the funding goes in terms of that particular outreach program.

635              It also takes it to other groups away from just the schools that have no accesses again to the orchestra program.  So it's an initiative they have started a few years ago.  It's not as big as they would like it to be.  They have a funding problem right now overall.  They are in the middle of a big drive campaign right now and it's a challenge.

636              When we sat down and spoke with them about getting together and supporting the causes, it was one of the initial causes that they linked right away where they really could use some help.  It really raised the profile for Orchestra London and really reached out more in the community.

637              The other one that we talked about, too, are the special projects, some of the red hot weekends they have.  We had real interest.  Their gala events were supporting the Motown weekend that they had several months ago.  So there is a real nice tie‑in in terms of what we do formatically with this organization.  You will find when you speak with him they are very eager to get involved.

638              COMMISSIONER MENZIES:  Okay.  Thank you.

639              Another quick question here on specifics:  Are you willing to accept your over and above annual contributions as detailed in Appendix 8.1A as a condition of licence?

640              MR. KIRK:  Yes, we are.

641              COMMISSIONER MENZIES:  Thank you.

642              In your business plan again, the current market average for revenue is $360,000 for each point of market share.  Your business plan proposes $286,000 per point.

643              Prudence is always a good thing.  It seems pretty conservative.  Just help us understand why you foresee collecting $74,000 per point less than the average?

644              MR. KIRK:  Prudence is probably a good thing, particularly today.

645              COMMISSIONER MENZIES:  Yes.

‑‑‑ Laughter / Rires

646              COMMISSIONER MENZIES:  Yes, it is a good thing, but I just need to understand where you ‑‑

647              MR. KIRK:  That's normally how we ‑‑

648              COMMISSIONER MENZIES:  ‑‑ how you came to that.

649              MR. KIRK:  First of all, I think it's a process of a station maturing in the market and it takes a while to get a station from establishment to maturity and in protecting that your initial audience has to be plumbed and mined and developed with advertisers.  So it takes a while.

650              So even though you might have the rating points in the market, it takes a while to convert those rating points into their full dollar value.  That's how we approached it.

651              COMMISSIONER MENZIES:  Okay.  Thank you.

‑‑‑ Pause

652              COMMISSIONER MENZIES:  Those are all my questions.  Thank you.

653              MR. KIRK:  Thank you.

654              THE CHAIRPERSON:  Thank you very much.

655              I will ask Commissioner Simpson...

656              COMMISSIONER SIMPSON:  Thank you.

657              I would like to go back to the programming part of your proposal for a second and I would like to get from you a better understanding of what you see as the principal difference in your music programming with pop and oldies as defined against something like a CKSL programming which is, by definition, a standards or oldie format.

658              Where I'm going with this is to try and understand what you see as the magic bullet in the formula for your success.

659              What I'm seeing in the market right now is I think what you perhaps have seen in that the demographic you are targeting is a fairly hefty chunk of the overall CMA.  It's well in excess of 40 per cent of the market.

660              What I am perplexed by is how existing or incumbent radio stations that are programming to this group, either with news or oldie format, are not enjoying what I would ‑‑ what would seem to be a considerable success.  If you took the market share of CFPL, CJBK and SL and added them up, they don't reach the percentage of share of any of the top three stations in the market.

661              So I guess my question is this:  In programming the music component of your station could you better explain to me what you are going to be doing that is substantially different than the traditional oldies format?  I know that you have made reference to pop, but explain to me how you see this is going to make the difference.

662              MR. KIRK:  One of the major differences, if I can start there ‑‑ and I see all this activity around me, people wanting to chip in.  The programming experts will chip in.

663              First of all, some of the stations you were mentioning, I guess the three in particular, are AM only stations in the market.

664              And I think a direct comparison between CKSL and the pop oldies format that we are proposing is not an apples to apples comparison.  The CKSL format could be called I think more of a standards or music of your life feel to it, older music.  It would not be in this ‑‑ the rock 'n roll era, the pop oldies definition that we are using.  So that's one factual difference in terms of music eras being put on the station.

665              We are really trying to target the station, as Andrew articulated earlier, to really fit in with boomers.  The boomers were from 1946 to whenever, '60‑something.  They have now moved through the system and the music choices, the context of the station is the music they grew up with from the start of the rock 'n roll era in the mid‑'50s up until the late '70s, early '80s.  That's really where the flavour of the station exists.

666              So it's highly targeted.  It's not older than that.  It's not 10 years older than that, it's on that demo as they have moved through life and now have more disposable income and are reaching to the bubble of the population that's moving through the city of London.  So that's an attractive target.

667              It's an FM station and it will be more effective in translating a music format into listenership and therefore dollars in the market.  I think that's my quick overall 30,000 foot view of the picture.

668              I will turn it over to I think Andrew and Steve who want to make some supplementaries and later Dean.

669              MR. KASSAY:  Thanks, Doug.

670              Commissioner Simpson, it's not music alone either.  I just wish to make the point in the presentation of the package we put before you today the whole idea and the reason we are excited about it is because it's not music alone.  It includes the components, and to a large degree, of community.  I come back to spoken word again, but community.  It's a whole new personality.  The music is important.  Everything we do is important, yet everything supplements all the key areas.

671              So the way I look at it, music supplements the community aspect of the station.  By virtue of who we will be, who this baby will grow up to be and what kind of person will it be.  It will grow into its own distinct personality.  Music is a supplement when it comes to adding up all the traits and getting the unique package.

672              MR. FORSYTH:  To try and sort of get back to your point about the three stations in the marketplace that you feel, you know, may have some overlap, again I go back to the point that Doug raised.

673              Number one, this is FM not AM.

674              Number two, the AM stations are operating, one is basically sports, one is news/talk and the other is an adult standards.  Adult standards, I think again Doug very correctly identified it, it's not rock 'n roll.  That would be the big difference.  It is Tony Bennett, who is a fabulous performer and Perry Como and Frank Sinatra.  And there may be some contemporary artists like Diana Krall who may end up on that format.

675              We are not about that type of music at all, we are really talking about music that came right after ‑‑ you know, right on the tail of rock 'n roll opening up in the mid‑'50s.  So it's post Buddy Holly and Elvis Presley and that sort of stuff, but it's the material that sort of comes in starting with the '60s.  So musically there is quite a difference.

676              As Steve has said, I think the big difference also is the spoken word.  When we compare what we are trying to accomplish with Boomer, what we are really trying to do is address an audience that, as we said, is under served.  One of the reasons we feel it is under served with the existing FMs is that they do target 25‑54 and that is because that's where the so‑called advertising dollars are, certainly from the national side.  That forces those radio stations to target younger.

677              That targeting comes out in the music, which we have already discussed.  You know, it comes from a newer age of music.  It also comes about from the talk content.  You know, you can probably go to four or five radio stations and you hear the latest story about Britney Spears, or whomever it is, but there is not necessarily a lot of depth in content, which is what Steve was talking about, for the 35 to 64‑year‑old audience.

678              So I think what we are bringing to the table is a very different animal to what already exists in the marketplace.

679              MR. KIRK:  Dean has a little supplement from personal experience in London.

680              MR. SINCLAIR:  I was just going to add, the three stations you mentioned, Commissioner Simpson, we talked ‑‑ as the other fellows have mentioned, they are AM stations.

681              The two news/talk stations have been within those formats for several years now in the market.  I managed one of them.  There has always been a see‑saw battle back and forth between them in rating periods.  It depends on news of the day, it depends on sports.  And the share levels that they enjoy now and have enjoyed probably the last five years have been fairly consistent.  So it's a punch in for what's happening in terms of information.  I want to hear the Tigers, I want to hear the Blue Jays or the Leafs or the Red Wings or the London Knights hockey game.

682              CKSL, with respect to the station, in respect to it in the marketplace now, it would be my experience that from a programming standpoint it is a fairly stripped‑down radio station now.  It's not on autopilot, but it's a fairly stripped‑down radio station.

683              So what we are proposing is substantially different.  And we talked about I think everyone has tried to put a spin on the music and we have talked about we really call it old oldies, really old oldies.

684              So I hope that helps.

685              COMMISSIONER SIMPSON:  If I may, just one more piece of information, please, to help me totally understand this distinction.  It's not due to programming but back to your determination of where your income is going to be derived from.

686              I'm just going by memory here, but I think you had said that about 25 per cent of the revenue captured for the station would be coming from essentially new business to radio advertising.

687              Is that correct?

688              MR. KIRK:  Yes, that's correct.

689              COMMISSIONER SIMPSON:  Have you researched or do you have a fairly good gut instinct as to where that money is being spent now outside of radio?

690              MR. KIRK:  I will ask Dean for some local flavour on it.

691              We have seen a lot of experience ‑‑ not directly in London but in our other stations ‑‑ serving those demos.  It comes out of print.  There is an ongoing slope for print products and high quality magazine products that there are just more magazines, free magazines.  They are not having the effectiveness.  We see conversion of dollars out of print as an ongoing trend.  That's one area.

692              If you put up the right audience on the radio, then serving it through a print product becomes a reasonable case to take them from that print product onto the radio.  We have seen that particularly with our Hamilton station which is targeted at this demo, into the 45‑65, 35‑65 demo, that that has been a source of being able to plumb advertising dollars out of different print products and move them into the radio, or at least split, split their budgets to give them better overall circulation.

693              I think that's maybe a big picture trend.

694              Dean may have some specific points from the market.

695              MR. SINCLAIR:  Sure.  I think what you have to remember or keep in mind that what radio tries to do is connect advertisers with their audience.

696              Advertisers specifically in London there has been some pull back in the last few years from a couple of standpoints.  One is not the satisfaction necessarily of serving some of the audiences that they want.

697              Radio stations in London ‑‑ it's an opinion only as a former manager here and a resident ‑‑ can tend to be a little wider in terms of scope, in terms of serving audiences outside of just their pure core and sometimes advertisers don't necessarily buy into that.

698              There have certainly been some cutbacks, some of the money has gone out of the market to out‑of‑market stations.  Some of the money has just been put back in the bank at this point or they have found alternative sources.  For example, there is a lot of funding that goes on with local sports teams, local sports initiatives, hockey especially, but there is an issue of dissatisfaction in terms of trying to reach some of their particular clients.  So it's just kind of not there, it's on hold.

699              And in speaking with some of those people, some are former clients of mine and other new clients in the marketplace, there is a general malaise in terms of what they should do with those dollars at this point in time.

700              When you talk to them about this older audience there is a fair bit of excitement that comes into play because, see, I can understand that, I can relate to that.  I like that kind of music, I like what you are proposing.  So we know that it's out there.

701              COMMISSIONER SIMPSON:  Thank you.

702              THE CHAIRPERSON:  On the same topic, you also are forecasting that 20 per cent of your revenues will be coming from radio stations out of the market.  When I'm looking at the table that you have filed on page 7 of your supplementary brief, I'm looking at radio stations that are from Toronto or from Kitchener, Tillsonburg and Woodstock, and except for the Tillsonburg radio station ‑‑ which is an easy listening type of a format, which I guess is also playing some pop music that you are aiming at ‑‑ which other radio stations are you aiming at when you are saying that it will come from existing radio stations out of market?

703              MR. KIRK:  The prime sources for repatriation of out of market revenue, not tuning but revenue, would be to the Tillsonburg and Woodstock radio stations.

704              THE CHAIRPERSON:  Now, according to BBM Woodstock is registered as a London radio station.  Even if you go on the BBM website today and you check the London numbers that are released by BBM you will see that they are attributing Woodstock to the London market.

705              MR. KIRK:  In terms of revenues?

706              THE CHAIRPERSON:  Well, in terms of BBM as well.

707              MR. KIRK:  In terms of BBM tuning, yes.

708              THE CHAIRPERSON:  Yes.

709              MR. KIRK:  Obviously our understanding is that the Woodstock station is a Woodstock‑licensed radio station and it has bought into the BBM London survey.

710              THE CHAIRPERSON:  Some other applicants are saying that a significant part of the revenues from Corus in Woodstock is coming from the London market.

711              That's not in your supplementary brief, but it's in the supplementary brief of other applicants.

712              MR. KIRK:  Yes.  I think they have probably come to that conclusion from fairly good knowledge that there is a lot of revenue from London on Woodstock and Tillsonburg.  Their advertisers on the ‑‑ they are out of market stations.

713              THE CHAIRPERSON:  Obviously both have ‑‑ well, all together they have more than 11 share.

714              MR. KIRK:  Sure.  Yes.

715              THE CHAIRPERSON:  What you are aiming at is to repatriate part of those revenues from those stations.

716              MR. KIRK:  Yes.  We would attribute all of them, but certainly in the year two revenue we are assuming 20 per cent.

717              THE CHAIRPERSON:  Yes.

718              MR. KIRK:  That would represent $378,000.

719              THE CHAIRPERSON:  Yes.

720              MR. KIRK:  Which would be just a proportion, a fraction of what they are getting.

721              THE CHAIRPERSON:  I'm working out of that table.

722              MR. KIRK:  Yes.

723              THE CHAIRPERSON:  Now, you are saying "Other", which you have attributed a percentage of 10 per cent of your revenue ‑‑ and by "Other" are you saying ‑‑ you have already said new advertisers will be coming to Mr. Simpson partly from the press.  So "Others", what are you talking about here?

724              MR. KIRK:  Those would be other advertising media.

725              THE CHAIRPERSON:  Well, a source.  Television?

726              MR. KIRK:  It could be television, people spending money on Internet advertising.

727              THE CHAIRPERSON:  I have Commissioner Duncan who has some questions.

728              COMMISSIONER DUNCAN:  I have a few questions.

729              First of all, Mr. Sinclair, you referred to a fairly stripped down approach.  Can you just explain?  I'm just not familiar with the lingo.  I just wanted to know what you meant by that.  I thought you said that in relation I think to see CKSL.

730              MR. SINCLAIR:  I did.

731              With respect to that company, a stripped‑down approach would be a form where you would have very few people involved in putting the product on the air, probably a fair amount of automation.

732              In terms of presenters ‑‑

733              COMMISSIONER DUNCAN:  I thought perhaps you were meaning that they had fewer spoken word content, or less ‑‑

734              MR. SINCLAIR:  That could also be part of it, yes.

735              MR. KIRK:  I think it is just a business reality.  If you have a cluster of stations and one of the stations is not well positioned in the market, and has low revenue streams, the natural thing to do, particularly because this is an AM station, would be to cut your costs.  That is really ‑‑

736              We may have used the vernacular, but it is really to have a low cost operating strategy for the station, to try and bring those two ‑‑ the revenue and the expense lines as close together as possible.

737              COMMISSIONER DUNCAN:  That segues into my next question, in a way, because there are, of course, clusters in the market, as you mentioned, and they are benefiting from efficiencies in the market, and you are going to be an independent station competing with them.

738              I am wondering, your projections, do they reflect the synergies that you might expect to realize because of Oshawa and Hamilton, or is it completely stand‑alone in your projections?

739              MR. KIRK:  These projections are, essentially, stand‑alone, and I could ask Andrew and Steve to give you a little flavour of what the staffing matrix looks like.

740              You bring up a good point, we do have synergies, potential, between the Oshawa and Hamilton stations right now.

741              Currently we do operate Oshawa and Hamilton with some sharing of resources.  In fact, we amalgamated the Hamilton and Oshawa companies last year, and the Commission is aware of that.  That allowed us to rationalize our administration costs materially enough that it's noticeable.

742              We were able to do it with one less position overall in the companies, and we have refined the positions.  We have an administration person in Oshawa, for example, doing all of the billing and accounts receivable collection, and payroll, and an administration person in Hamilton doing all of the corporate accounting.

743              So we have been able to be more efficient as a company by looking at the four stations as a group.

744              That is one area that would be a potential add‑on.  We haven't really factored that in there, but it's possible.

745              In addition, we feel that it is very, very crucial that we have, on the ground, programming people and news people in the market ‑‑ and sales people.  You have to have that in the market.  You can't do sales from an hour away very well, so you need that in the market.

746              So the programming and sales expenses are pretty true, because they have to be staffed within the market.

747              But there are the availabilities ‑‑ and we do this currently ‑‑ of having a larger pool of talented broadcasters to do commercial production, and we use the resources in Hamilton and Oshawa, basically, as one pool.  Steve can fill you in on that.  That allows a greater variety of voices on the air, and talent to do better commercial work ‑‑ again, taking the cost, but being able to work a little more efficiently.

748              That is the approach.  I wouldn't say that there would be huge efficiencies in the sales and programming elements, but certainly on the admin side, and production costs could be lowered, having the station operated on a platform.

749              COMMISSIONER DUNCAN:  I understood you to say that those are not, at this point, included in the projections.

750              MR. KIRK:  No.

751              COMMISSIONER DUNCAN:  Is that your answer?

752              MR. KASSAY:  Yes, that's the answer.  There is nothing hidden here.  We have built this proposal to work in London, by people employed in the building, ensuring that we have a greater range of voices, so we can have greater depth when it comes to producing retail announcements.

753              But, no, not living in one and sitting and voice‑tracking in the other.  We have learned that local works; that's how it's built.

754              COMMISSIONER DUNCAN:  Because we often hear applications where somebody is an independent in the market, and they could operate much more efficiently if they had, yet, another licence.  That is sort of where I am coming from.  I am wondering about that.

755              MR. KIRK:  Certainly that brings in a whole other question.  You can, by adding in clusters ‑‑ and you see it in London.  At least two of the operators are operating large clusters ‑‑

756              COMMISSIONER DUNCAN:  Yes.

757              MR. KASSAY:  ‑‑ and Dean managed one of those.  It sure is easier to allocate if you have three engines pulling the train rather than one ‑‑ to operate more efficiently.

758              COMMISSIONER DUNCAN:  That leads into my next question, because, obviously, by your projections, you are not intimidated by any advantage that the others might have as a result of those efficiencies, because I see that you are projecting a positive operating income in Year 3.

759              I just have one quick question. Further to your discussion on the current downturn in the economy, what would you say ‑‑ when would you now expect ‑‑ or would you change your forecast with respect to the year that you might see positive net income?

760              You still have quite a substantial amount in that year, so we will just stick with that year.

761              MR. KIRK:  It begs the question, obviously.  Times have changed and we have to be realistic about it.

762              First off, in terms of timing, we are sitting in this room in October, and it will be a while before ‑‑ you have to do a lot of debriefing in the process, so it will be a while before a decision comes out, and it will take a while to build a station.

763              We don't have a cluster in the market, or facilities in the market, so we have to build it from scratch.

764              That will take a while, so launch is really, probably, a year or two ‑‑ 18 months away.  From what I am reading, hopefully we will be through ‑‑ it may not be a "V" this time, it may be more like a "U".  There will be a bumpy period for a while before it starts to roll.

765              All I am reading is that expectations for late 2008/early to mid 2009 ‑‑ it could slow down a bit, but we should be trying to uptick, at least, by late 2009 and into 2010.

766              That would maybe pause radio revenue growth in London, or slow it down a bit, but, in our launch, we are probably launching into an uptrend rather than a downtrend.  That's one point.

767              I think that the commitments made by the shareholders ‑‑ if we put a prudent set of projections in front of you ‑‑ the shareholders, in our experience ‑‑ and you have known our operating procedures now for 15 years.  We do what we say.  If it takes a little more, the shareholders step up and provide the capital to see it through.

768              That's what we would do.  It's hard to give a hard forecast.  I don't hear a lot of hard forecasting yet going out, other than it's probably going flat, or we may be in a recession for a couple of quarters.

769              But I think that the timing of this is good, in that it is further out.

770              And in terms of adjustments, our cost elements may come down if we do get a recession, and a bit of that "biz" will be out of the market, and salary expectations will be lower, so all in all ‑‑ and interest rates will be lower.

771              So there are some offsets to a slightly slower revenue outlook when you are starting a radio station.

772              We are comfortable, I think, that we can run the radio station, and in the third year from start‑up we could be reaching the top break‑even level.

773              COMMISSIONER DUNCAN:  Thank you.  We are actually thinking now in terms of probably launching in 2010, so I am sure that you are probably on the money ‑‑

774              MR. KIRK:  Our assumptions ‑‑ you asked in the deficiency questions, "Which year do you anticipate starting," and we said that 2010 would be the fiscal, so it may be late fiscal 2009/early 2010, meaning the mid‑year.

775              COMMISSIONER DUNCAN:  I have one last question.  I noticed in your presentation that you didn't talk about new media, or using the internet, or streaming your station.  Do you do that, or intend to do that, or you don't think there is a market for your audience?

776              MR. KIRK:  Four lights go on.  Wait a second.

‑‑‑ Laughter / Rires

777              MR. KIRK:  New media are very crucial and very important to what we do and how we operate today.  All of our radio stations stream audio.  We all have active websites.

778              For an independent company, we devote a lot of resources to websites.  About half to two‑thirds of a staff position in each market that we operate is devoted specifically to web activities, and we post, daily, changes to community events.  We post news every day on our websites.

779              So you can take your local radio station ‑‑ if you go down to Missouri and attend a rally down there, you can take your local radio station with you.  Just call it up and get all of the local news, on a daily, updated basis, via the web.  You can listen to the station anywhere.

780              We didn't dwell on that, but it's part of what we do, and Boomer would have the same approach that we would have, a very active local website.  We would have streaming available, and a lot of components in it, too ‑‑ all of the community information and news updated on a daily basis.

781              Steve supervises that activity every day, so maybe he should comment.

782              MR. KASSAY:  I don't want to use the word "oversight", but, yes, that is exactly what we do.  We stream.  It is very interactive, especially ‑‑ I guess that the Wave case is a little different, where it is very interactive musically with the artists and having the online store.

783              All of these ideas we do daily.  I guess it's not top of mind as a bright light bulb idea because we have been doing this for year.

784              To answer your question:  yes, it's a component; yes, we will take what we do and what we have learned and apply it here as well; and hopefully it will be an opportunity to learn even more.

785              COMMISSIONER DUNCAN:  That's great.  Thank you very much.

786              MR. FORSYTH:  To add to that, if I might ‑‑ and this is more for the Commission's knowledge, not only these particular licensees ‑‑ I think that the radio industry recognizes that the web and new media is where we are going.

787              THE CHAIRPERSON:  It is very well documented.

788              MR. FORSYTH:  It is, and it is radio's ‑‑

789              THE CHAIRPERSON:  I appreciate that.

790              MR. FORSYTH:  It is radio's advantage in being able to engage its audience.

791              THE CHAIRPERSON:  If you were to be granted the licence, what would be the role of the London investors' group?

792              MR. KIRK:  The London investors' group is a group of people who are very interested in the broadcasting business.  They are participating primarily as a way to finance the company.  They are putting share capital in, primarily as preferred share capital, and that provides a very solid base for the company to develop.

793              We put that together earlier in the year.  I am even happier today that we have it there.  We are not highly levered to debt, it is primarily an equity base.

794              These people will have representation on the Board.  They will not control the Board.  They are very interested broadcasters.  I think they are good partners, and they are there primarily for financing.  They will have a one‑third equity participation in the company.

795              THE CHAIRPERSON:  It's an investment ‑‑

796              MR. KIRK:  It's an investment for them, yes.

797              THE CHAIRPERSON:  Again, if you are granted the licence, but the economy keeps going down, could they elect to drop out?

798              MR. KIRK:  Would we elect to drop out?

799              THE CHAIRPERSON:  No, could they, themselves, elect to drop out, even if you are granted a licence?

800              Or, are they bound?

801              MR. KIRK:  They have committed in their arrangements with us to fund on the award of a licence.

802              So, if we win the licence, they commit to fund the amounts ‑‑

803              THE CHAIRPERSON:  They are committed.

804              Legal counsel?

805              MR. McINTYRE:  Thank you, Mr. Chair. I don't have any further questions, I just want to read into the record, or to confirm two undertakings.

806              The first one is for the Applicant to re‑file financial projections for the Boomer Festival CCD initiative this afternoon, and the second one is to provide updated financing for the application, in accordance with the Commission's policy, by October 30th.

807              Thank you.

808              MR. KIRK:  Yes, we commit to filing the revised Boomer Festival commitments, and to the financing commitments, in the timeframe you mentioned.

809              THE CHAIRPERSON:  Gentlemen, thank you very much.

810              We will break for lunch, and we will return in an hour's time, at 1:45 p.m.

‑‑‑ Upon recessing at 1245 / Suspension à 1245

‑‑‑ Upon resuming at 1400 / Reprise à 1400

811              THE CHAIRPERSON:  Order, please.

812              Madam Secretary.

813              THE SECRETARY:  Thank you, Mr. Chairman.

814              Just a reminder to please turn off your cell phones, beepers and BlackBerrys, as they are causing interference on the internal communications system used by our translators.  Thank you.

815              Also, for the record, we wish to inform you that the Applicant Forest City Radio Inc. has submitted Appendix 8.1(a), "CCD Initiatives for Boomer Festival", in response to undertakings.  This document will be added to the public record, and copies are available in the Public Examination Room.

816              Now we will proceed with Item 3 on the agenda, which is an application by CTV Limited for a licence to operate an English‑language FM commercial radio programming undertaking in London.  The new station would operate on Frequency 98.1 MHz, Channel 251B, with an average effective radiated power of 6,600 watts, maximum effective radiated power of 20,000 watts, with an effective height of antenna above average terrain of 132.6 metres.

817              Appearing for the Applicant is Mr. Chris Gordon.

818              Please introduce your colleagues, and then you will have 20 minutes for your presentation.

PRESENTATION / PRÉSENTATION

819              MR. GORDON:  Thank you.

820              Mr. Chair, members of the Commission, Commission staff, my name is Chris Gordon and I am the President of CHUM Radio.

821              Before we begin our formal presentation, I would like to introduce my colleagues on the panel today.

822              To my left, your right, is Jim Blundell.  Jim is the Vice‑President and General Manager of our station 102.3 BOB‑FM in London.  Jim has been with CHUM Radio for 20 years, and before then owned and operated several radio stations across Canada.

823              Next to Jim is Kerry French, Vice‑President of Business Analysis, who oversees our market and economic research, and provides our business development analysis.

824              To my right, your left, is Rob Farina, Vice‑President of Programming.  Rob works with our program directors across the country, as they innovate with new formats and build multi‑platform connections with listeners.

825              Next to Rob is David Jones, Program Director of BOB‑FM.

826              Behind us, in the second row, is Lenore Gibson, Director of Regulatory Affairs, and Jim Fealy, our Vice‑President of Finance.

827              I will now begin our opening statement.

828              Today we are here to tell you about The Curve, an innovative new radio station that we want to bring to London.  Our market research and our eight years of experience and in‑depth involvement in the London community demonstrate that this station will resonate with Londoners between the ages of 13 and 34.

829              This audience is not served by the current London radio stations, even though more than one‑quarter of London's population falls into this age group.

830              Tailor made for young listeners in London, licensing The Curve will respond to their musical tastes and to their desire to be part of a social network of music and local reflection.

831              CHUM Radio has a proven track record of bringing young people to radio in other cities.  We will do the same in London, with an innovative station that uses leading edge technology to marry the internet, mobile devices and over‑the‑air radio.

832              In addition, The Curve will correct a serious competitive imbalance in the London market, an imbalance that is negatively impacting our existing station and our ability to serve London listeners.

833              Jim Blundell will return to these two critical points ‑‑ one, our proven ability to serve young listeners; and, two, the significant competitive imbalance that we face.  Before he does, I would like to ask Rob and Dave to explain our innovative approach to music and spoken word programming on The Curve, and to highlight our commitments to emerging artists and Canadian Content Development.

834              MR. FARINA:  The Curve's musical format will be modern hit radio, a mix of pop, urban, alternative and alternative pop music that targets listeners from 13 to 34.

835              This format does not currently exist in London, and will fill a void in this market.  In fact, we polled all radio stations for the week of October 4th and found that over 76 percent of The Curve's playlist consists of music not currently being played in London by any of the commercial radio stations.

836              As well, we found no airplay for emerging Canadian artists like Danny Fernandez, Faber Drive, the Royal Society, The Midway State, Shiloh and many, many more.

837              A minimum of 40 percent of the musical selections on The Curve will be Canadian, and a minimum of 25 percent of these selections will be from emerging Canadian artists.

838              It sounds simple, but in this day and age it is anything but simple to create attractive programming for our target demographic.

839              The Commission recognized this complex and dynamic situation in the 2006 Commercial Radio Policy, stating that the tuning decrease to radio was most notable in our target audience, the teen demographic and young adults 18 to 34.

840              As the Commission indicated, the tuning decrease coincides with the advent of new technologies, such as internet music services and personal media devices.

841              CHUM Radio has successfully addressed this tuning decline by young listeners in other markets, and we will bring this success to London.

842              We would like to explain how London's radio listeners will give life to The Curve.

843              The Curve will be an interactive experience, where listeners have unprecedented power to influence the music, stories and community reflection, both on‑air and online.  After giving express and informed consent, listeners download The Curve software from the station's website.  This same application is available on iPhone and iPod touch platforms.

844              The software analyzes what songs and artists London listeners support.  It sends this information to our database and forms the basis of the music we play on the radio.

845              We will, of course, exercise oversight to ensure that we meet our Canadian content and emerging Canadian artist commitments.

846              The Curve software augments our ability to identify new Canadian artists that our listeners have found online, and whose music they have stored on their computers.

847              This is an important benefit, because the days of relying on record labels to identify, nurture and promote emerging artists are over.

848              Today, young people regularly discover new talent online, and spread the word through chat rooms and blogs.  The Curve will directly plug into this immense change in how new artists break through to commercial success.

849              As each listener becomes part of The Curve community, the playlist becomes reflective of the pulse of the city.

850              To add value to the experience, The Curve listener gets new music recommendations targeted to their individual music tastes.  The ability to make these recommendations will enable The Curve to become CHUM's latest launch pad for emerging Canadian artists.

851              In addition to giving young London listeners unprecedented input into the programming of our radio station, The Curve will be the hub for London music fans.  Online they can connect with each other and share or comment on news and community events, post their playlists, exchange ideas, interact with The Curve personalities, and upload content such as podcasts, audio shout outs and video.

852              The Curve programming team will moderate the online community and select elements of that content for airplay on the radio station.

853              MR. JONES:  I want to turn now to The Curve's spoken word programming.

854              Delivering a deep and meaningful radio experience to our audience is not limited to the music.  The Curve will increase not only the diversity of music available in the London market, but will also increase the diversity of spoken word programming.

855              The Curve will have an intensely local focus.  We will provide 12 hours and 48 minutes of spoken word programming each week, in a presentation style targeted to young listeners.  This programming will include a minimum of 4 hours and 25 minutes each week of locally produced news and information programming.

856              Reaching young listeners with news and information programming is a challenge.  They do not plan their days around the morning paper or newscasts.  As a result, The Curve's presentation style will be a "news you can use" approach, covering stories that London youth are passionate about ‑‑ for example, social issues and the environment ‑‑ framed in a way so that they can connect with the story and see its relevance in their lives.

857              In addition, The Curve's news will be presented in a round‑table setting, with our hosts using a conversational approach.

858              Is this a traditional approach to news?  No.

859              Is this a relevant and useful approach to news for young people?  Yes, and we have successfully applied this approach in other cities, like Vancouver, Edmonton, and, most recently, Halifax.

860              The interactive component of The Curve, which we discussed earlier, will extend to the local news and information programming of the station.  Our listeners will be able to comment on news stories, post their own stories, and upload blogs and podcasts relating to a variety of local issues.

861              The Curve is all about people in London aged 13 to 34, listeners that are not served today and that CHUM Radio has successfully brought back to radio in other cities.

862              Our focus on London's young people extends to the $3.5 million that we will invest in Canadian Content Development initiatives, including funds that will benefit students at Fanshawe College, the University of Western Ontario, and the arts‑focused H.B. Beal Secondary School.

863              These local initiatives reflect our longstanding philosophy that a CHUM radio station is a local experience, and that our responsibility is to serve the local community.

864              Now, to give you more insight into The Curve, we have prepared a short video.

‑‑‑ Video presentation / Présentation vidéo

865              MR. JONES:  The youth audience craves hit music and wants to be on top of hot new artists as they emerge.  Music from emerging Canadian artists will be featured prominently on The Curve.  The Curve will also participate in the CHUM Emerging Indie Artist Initiative.  This initiative has created huge national profiles for artists such as Suzy McNeil, State of Shock, Elise Estrada and Shiloh.

866              CHUM Radio helped launch Shiloh's career and we are thrilled that she has signed an international recording contract.  Since its inception almost a year and a half ago we have selected 17 emerging Canadian artists which, due to their selection as CHUM's emerging artist of the month, have received a total of thousands of spins across all Canadian radio stations.

867              CHUM Radio also discovered and helped launch Kreesha Turner's career.  She now has an international recording deal with Virgin Music and an album that was released last month.  CHUM has made a huge contribution to emerging Canadian talent.  The Curve will be a key part of our emerging artist success story.  The Curve will give young Londoners the music, the information and the social network they demand.  One, where they can hear the new music they choose, stay informed about what is happening in their city and connect with each other through their shared musical tastes and experiences.

868              MR. BLUNDELL:  CHUM Radio has reinvented the radio experience for successive generations of young Canadians.  The most recent example of this is the creation of our station The Bounce, a new style of youth oriented, urban, contemporary hit radio station in Edmonton.  In four short years The Bounce has changed the local radio landscape and is the most popular station in Edmonton with young listeners.

869              CHUM knows how to connect with Canadian youth and it has proven success with repatriating disaffected young listeners to the radio dial.

870              To do the same in London we need a frequency.  The only viable commercial frequency left in London is 98.1 and we have presented to the Commission the best proposal for the use of the single frequency.  While we have applied to use this frequency, its use will cause a third adjacent interference with Astral's CIQM‑FM.

871              We have taken the initiative and found a solution.  We have reached an agreement with Astral that if our application to launch The Curve is approved both stations will co‑site their transmitters in London.  This proactive approach by CHUM Radio will remove any possible interference by our proposed station with Astral.

872              CHUM Radio is facing a serious competitive disadvantage because Corus and Astral own eight of the 10 stations serving London.  CHUM Radio owns one station.  This is the only market in Canada where a single FM operator competes with two multiple station operators; one with four stations and one with three stations, plus another licence for Woodstock that competes directly in the London market.

873              In developing common ownership policy in 1998 the Commission expressly recognized that the ownership consolidation would strengthen the radio industry's overall performance, allow it to compete more effectively and enhance its support of Canadian cultural expression.

874              Corus and Astral are able to achieve marketing and sales synergies and economies of scale that we, only operating a single station in London, cannot.  Each group of four stations serving the London market has the opportunity to share technical, administrative and sales operations, an opportunity not available in CHUM's standalone radio station.

875              In addition to these operational synergies Corus and Astral are able to provide more well‑rounded support to the local London community through promotions for community and charitable events.

876              Our standalone station supports many community groups, such as the Thames Valley Children's Centre, the London and District Distress Centre.  A second station would allow us to enhance our support for these and other valuable community organizations such as Youth Opportunities Unlimited and Big Brothers and Sisters.

877              CHUM Radio needs two stations to compete effectively in the London market and better serve London listeners.  Licensing another single FM station does nothing to correct the serious competitive imbalance in London, rather the situation would be made considerably worse.  The London market would have two standalone stations facing all the same competitive disadvantages that we do today, and that would make our situation significantly worse.

878              MR. GORDON:  The Commission said in the 2006 Commercial Radio Policy the key challenge facing the radio industry is to keep radio relevant and local in an environment of rapidly changing technology and consumer behaviour.  We agree.

879              The Curve will embrace technology and the dynamic online behaviour of young people to meet the challenge set out by the Commission with an innovative station serving listeners from 13 to 34.  This group represents 27 per cent of the London population and they do not have a radio station programmed for them.

880              With The Curve these young residents and the 44,000 fulltime students that arrive in London each year will not only have a radio station, they will have a radio station that they can help program and one that meets their technological expectations.

881              Of all the applicants proposing to serve the London community, our application represents the best opportunity to attract young people back to radio.  We have the best business plan, we will invest in the community, we are local London broadcasters.  Our knowledge of this market gives us the expertise to create a radio station for London listeners that truly reflects the city and its citizens.  For these reasons, our application should be approved.

882              Thank you and we will be happy to answer your questions.

883              THE CHAIRPERSON:  Thank you very much, Mr. Gordon.

884              I will start with the first round of questions and my fellow colleagues I am sure will probably want to supplement.

885              I will start by ‑‑ you have covered it in your oral presentation, but that really was an intriguing thing, that when I read your application and some of your supplementary replies to some Commission questions you dealt with the music programming of your proposed station.  And particularly, you stated that ‑‑ and again here in your oral presentation, you make the statement that you will be seeking from your listeners the information to fill your database in order to do your ongoing music programming.

886              Could you tell us more how it is going to be working?  And as a matter of fact, you are saying ‑‑ I think you are already doing it in other markets, but for the record could you give us much more details?

887              MR. GORDON: Yes, thank you, Commissioner Arpin.

888              It is a very innovative approach to using the internet and using interactive information and technology to help program the radio station.

889              Rob Farina has been working directly on this project and he can fill you in on exactly the parameters of how this database works.

890              MR. FARINA:  Thank you, Chris.  I will explain it in real simple terms.  So a listener discovers this new radio station in town, listens to it, they go online to find out more and they find out that they can actually contribute to shaping the sound of the radio station.

891              So they download the radio station software.  And what that software does is it goes into their music library.  So for the sake of clarity, let's say it is their iTunes library.  It looks at the music in their iTunes library, but it also looks at the amount of times that music has been played and it categorizes it based on what music they use heaviest to what music they use the lightest.

892              That information then goes to our database and, culminated with all the other listeners in the community of the database, it starts to form the basis of the music heard on the radio.

893              Now, the music director at the radio station and the program director at the station obviously continue to curate the music, but they are able to use the listener's actual habits, actual music consumption habits to not only put a radio station reflective of the city on the air for them, at the same time the software is able to really fine tune music recommendations.

894              So, for example, if one of the listeners listens exclusively to hip‑hop music we know the software allows the emerging hip‑hop music artist to be recommended directly to that listener and that would be personalized when they go on the website and log in.  With their sign in there would be a sign, you know, 'Hey, Jane, here's your new music recommendations.'  And it will be new music recommendations in sync with their actual music habits.

895              THE CHAIRPERSON:  And how did you make sure that you are always within your format? Because the software that goes through the iTunes list of all you listeners only picks the sounds that are already listed in your database or is it contributing new material to your database?

896              MR. FARINA:  It is pulling all the information.  The Job of the program director and music director of the station is to curate that sound to make sure it is focused on the format.  But further to that, Commissioner, in our experience with youth audiences, the vast majority of those listeners are going to be listening to a certain kind of music.

897              And the people that have more narrow music tastes, things that fall outside of those huge parameters, because the sheer number is smaller that stuff is going to fall lower on the list and probably never make it onto the ‑‑ I shouldn't say probably, will never make it onto the air.

898              THE CHAIRPERSON:  It is probably true what you are saying, but at Western University they have a music program which is catering to those who are studying classical music.  They will be in the same age group than then the listeners of your radio stations.  You will be purging out all classical music that will come up from their own database?

899              MR. FARINA:  Right.  Well, I would wager to guess that even the students in the classical music program probably aren't listening to that much classical music.

‑‑‑ Laughter / Rires

900              MR. FARINA:  But we will be able to tell you that with great accuracy.

901              THE CHAIRPERSON:  With greater accuracy.

902              Now, in your written presentation, and you alluded to it in this oral presentation, to emerging artists.  And obviously the Commission has not yet come up with a definition of what is an emerging artist.  You have provided us with your own definition and you are obviously coming with a fairly significant number of emerging talent in your format.  And obviously the format that you are proposing really caters a lot to the emerging talent.

903              So it is surely not an issue to understand, but since there is not yet a policy and that the CHUM group, as a party to the CAB, has provided a definition that the Commission is still reviewing, what is going to happen if we come up with the CAB definition of emerging artists with respect to your plan?

904              MR. GORDON:  We would adapt to whatever the CRTC regulation, if and when that happens would adapt to our radio station.

905              THE CHAIRPERSON:  We may end up adopting a policy that is less generous than yours.

906              MR. GORDON:  That would be terrific.

‑‑‑ Laughter / Rires

907              THE CHAIRPERSON:  I thought you were to make a commitment keeping the definition that you have provided us.

908              MR. FARINA:  Just for clarity, our definition is in line with the CAB's definition.  We have obviously been very involved with participating in that definition with the CAB and also with the music industry.

909              THE CHAIRPERSON:  It is not exactly the same definition.  I think it is ‑‑ yours is more generous, if my memory serves me.  I don't have the document here, and it's something that I have already read sometime ago.  But when I read yours it struck me that you were somehow much more generous to the definition than what the CAB has provided.

910              And I can understand that there will be numerous definitions, depending on format and type of audience that you are catering to.

911              MR. GORDON:  Well, we would be prepared for a licence term to commit to 25 per cent emerging artists.

912              THE CHAIRPERSON:  And whatever the definition be, you are aiming at having a quarter of the music played, not necessarily the playlist, but the music played coming from emerging artists.

913              MR. GORDON:  A quarter of the Canadian content, that is fair.

914              THE CHAIRPERSON:  Okay.  Of the Canadian content?

915              MR. GORDON:  Yes, that is right.

916              THE CHAIRPERSON:  Of course, yes.

917              Now, you also talk ‑‑ let me make sure that now with those hearings everything is ‑‑ I am the one who had the problems with the system. And I am trying to figure out ‑‑ probably I am the youngest around the...

‑‑‑ Laughter / Rires

918              THE CHAIRPERSON:  So I have to figure out where my things are.

919              How many new stations do you think will ‑‑ if the Commission was to grant more than one licence, how many new stations do you think will survive and will make their way in London ‑‑ my question will be including yours?

920              MR. GORDON:  Two points to your question, Commission Arpin.

921              One is that we are looking at the frequencies and none of us up here are engineers, but London is a different market in the way that the frequencies are allotted, not just necessarily just in London, but in the surrounding area.

922              So we fully believe that 98.1 is really only the true frequency that a radio station can operate.  You know, in the surrounding area it is not just Sarnia and Windsor and Leamington and Chatham and Stratford and Kitchener‑Waterloo, there is Port Huron, there is Erie, Pennsylvania, there is Cleveland, there is signals that are coming in from all over.  We are completely surrounded in the London market.

923              So for that reason we believe that really there is only one frequency available and that one stations should be licensed.

924              THE CHAIRPERSON:  I see.  But if in its wisdom the Commission thought that ‑‑ well, from a programming standpoint, how do you differentiate yourself from the applications filed by Rogers and Evanov?

925              MR. GORDON:  There is a number of differentiations.  I think the first one is our track record at putting these kinds of radio stations on the air.  We have tremendous success in Edmonton, in Vancouver and most recently in Halifax where we have launched a brand new radio station called The Bounce.  We have an incredibly complex and exciting and very innovative, interactive platform with listeners.

926              You know, the evolution of hit radio, we firmly believe it is moving into what we call modern hit radio, which draws on more musical genres than strictly top 40 or CHR.  And we are committed to providing an unparalleled level of support for emerging Canadian artists.

927              THE CHAIRPERSON:  And how do you see yourself different from CFBL‑FM and CHFK‑FM?

928              MR. GORDON:  I am going to ask David Jones to respond to that question, Commissioner.

929              MR. JONES:  If I may, Commissioner, just to describe the London market to you.  As mentioned, there is a competitive disadvantage that we have identified.  You could also extend that to the formats and the market itself.  Astral has the four stations, of which two are on FM, CIQM which is an AC and then they have their country station.  Corus has four stations essentially in the market; three FMs and an AM, one licensed actually to Woodstock.

930              What has happened over the past several years which we feel has created our hole. Fresh FM previously was known as Energy FM many years ago, they have moved to a slightly older demographic and self‑describe as Hot AC.  FM 96, which is CFBL‑FM, probably as early as two years ago was a very youth‑oriented new rock radio station, and they had The Hawk out of Woodstock, which basically is a London radio station, as a classic rock station.

931              What we found over the last year and a half is that the classic rock station has migrated slightly older to now describing themselves as 1960s, 1970s and 1980s, more oldies based and FM 96 has now taken on both the role of the younger rock, but they have also added a lot of classic rock titles.  So you have a hole under the age of 34 that truly we feel we can serve.

932              THE CHAIRPERSON:  Let's now get to news.  In your oral presentation you are talking about a new type of setting and conversational approach to news rather than traditional.  But on a day to day basis, and since you are doing it in other markets, how does it appear to be different than the standard newscast that we hear on radio stations?

933              MR. GORDON:  Thank you, Commissioner.

934              It would be dramatically different sound to what we would normally hear on a typical radio station where an anchor is reading the news. I will ask David Jones to jump in here to explain how we would do it specifically in London.

935              But it would involve all the cast members say of a typical morning show with the newscaster reading the top story, providing some background on it and then at that point the other hosts on the show would weigh in with their opinions on it.  And then we would get interactive with the audience and be able to take text messages or emails or phone calls and be able to fully integrate the audience into the news in a way that traditionally it is not done.

936              We found in the other markets that we have done this our youth audiences are responding very very favourably to it and really enjoy the conversation style.

937              David.

938              MR. JONES:  We are calling it News That You Can Use.  So what we are going to try to do is frame the cause and then the effect it will have on our audience.

939              So in a roundtable setting, as Chris mentioned, we are going to have various people discussing the news stories.  And through our online platform, the website of the radio station, we can get reaction to that, bring that to air, or telephone conversations, bring those to air from our listeners and that will be either further news stories or provide conversation in that roundtable environment.

940              THE CHAIRPERSON:  Now, you are also in your written submission talking about a different manner to collect the news allowing ‑‑ but having people collecting the news, your reporter on the road collecting the news.  But you seem to have a fairly small staff to do what you are planning to do under that theme.  You have a news director and two journalist reporters who are working split shifts and they also are working Saturdays and Sunday morning.

941              So in daily life how are you able to make it up?  Since you are doing it elsewhere, so maybe Mr. Gordon or other members of the team who are much more knowledgeable of what is going on in other locations, is it the same type of settings; one director and two reporters, and they will also go on air?

942              MR. GORDON:  Yes, that is correct. That is similar in other markets that we employ this type of approach to news.  And how we do it is we rely on our audience to provide a lot of the colour and a lot of the information and a lot of the background, you know, while we are doing the news.  But they can also post it onto our website, they can post blogs on our website, they can provide us with information on a 24‑hour, you know, basis as they deem necessary.

943              Then our news director and our journalists are able to disseminate that information and bring it to the airwaves.

944              THE CHAIRPERSON:  Our reliance to information provided to various ways, messages and creates a problem of reliability.  How do you make sure that the news that you are finally broadcasting are accurate and reliable?

945              MR. GORDON:  Well, we would adhere to all journalistic practices and follow up with sources.

946              THE CHAIRPERSON:  So that requires time, and if it requires time it requires people and you appear to have a fairly small staff.  Unless you will be working with the newsroom of your existing radio and television station, which is contrary to what you say in this paper.

947              MR. GORDON:  We will not be working with our exiting television station in our news environment.  We will have, you know, some information shared back and forth between our two radio news departments.  But we have employed this system in other markets and we feel three journalists for a youth‑based format is a very reasonable number.

948              THE CHAIRPERSON:  And how many ‑‑ I have to find out where ‑‑ I apologize, I have yet to find it myself with the new technology.

949              Okay, well I have another question, all related to news, but not specifically the one that I had in mind, but it is related.  Can you help us in breaking down what is between news, sports and business information?  Because you seem to have staggered that information altogether in your supplementary brief.  So could you help us in saying how much will be pure news and how much will be sports and business information?

950              MR. GORDON:  Absolutely.  David Jones can answer your question, Commissioner.

951              MR. JONES:  Certainly, Commissioner.

952              We filed news, sports and business would be four hours, 25 minutes.  And I believe in the supplementary brief it also states three hours of pure news, so we will do three hours of pure news.

953              THE CHAIRPERSON:  Another thing, I noticed that you have 17 newscasts ‑‑ so three hours will be strictly news.  Because altogether it totals four hours and 25 minutes.  So what you are saying three hours is what we call pure news and the rest will be shared between sports and business.  And what is the business attraction for the young audience that you are aiming at?

954              MR. GORDON:  Well, it would depend on the day.  Certainly, the environment of the last couple of weeks ‑‑

955              THE CHAIRPERSON:  Maybe.

956              MR. GORDON:  ‑‑ would push the business news, you know, much higher up on the scale of relevance.

957              THE CHAIRPERSON:  But it will have then been covered by the general news?

958              MR. GORDON:  Generally it would be, yes.

959              THE CHAIRPERSON:  They certainly are less keen at hearing the quote from the TSX and how the TSX has climbed and who has climbed and who has furthered their losses, whatever happens on that day.

960              So what kind of business news are you talking?  Because the general business ‑‑ the general economy will have been covered within the newscast by itself.

961              MR. GORDON:  Those business stories would be strictly 100 per cent local business stories, whether they were plant closures or new investments into new local businesses.  Certainly with the educational institutions, funding, transfer payments, those kinds of things.

962              THE CHAIRPERSON:  So that will enter into what you qualified here as business ‑‑

963              MR. GORDON:  That is correct.

964              THE CHAIRPERSON:  ‑‑ rather than the overall news of the day, even if a major local employer is closing down their plant?

965              MR. GORDON:  That is right.  I mean, in a roundtable approach we would look at news in a different way.  We wouldn't just talk about the fact that a plant was closing.  We would be able to talk about what impact that would have on all of our listeners within our target demographic.

966              THE CHAIRPERSON:  And the human interest out of that.

967              MR. GORDON:  That is right.

968              THE CHAIRPERSON:  Now, again, I am back with your staff; director and two reporter journalists who will at the end of the day have the responsibility of altogether 27 newscasts: 17 Monday to Friday and 10 on the weekend.  And the hours are limited because they are in split shift.

969              So there's almost no news during daytime, except ‑‑ well, between 9:30 in the morning and 3:30 there is no news, in accordance to your plan, except one at noon.  And then over the weekend you have news between eight and noon.  What happens if there is a big, big new breaking out of the hours for which you have scheduled news.

970              MR. GORDON:  I will ask Rob Farina to answer your question, Commissioner.

971              MR. FARINA:  Thank you, Chris.

972              I think in a case like that, maybe to take a step back from this, you know, one of the things we are finding with engaging young people with news and public affairs programming is what's really helping us do that is demystifying the news.

973              In the old days, you know, the news anchor would come down from the mountain top and the sounder would ring and, you know, they had one hand over the ear and delivered the news.  Well, that's not connecting with young audiences any more.  So the nature of how news is delivered has changed, and also the nature of who delivers that news has changed, too.

974              So when we look at our entire line‑up of The Curve on‑air personalities, which we prefer to refer to as multimedia personalities because they need to engage with our listeners on several levels, The Curve is very much about having personalities that add, you know, a deeper connection to the listener other than telling them, you know, what the last record was and what the next record is.

975              So in the case of being reflective of something big happening the community, that's a case of the live person on the air being able to relay that to listeners and, at the same time, being able to call in, you know, resources to help uncovering the story.

976              THE CHAIRMAN:  Okay.  Well, we will move now to your Canadian content development program.  I know that we have had exchange of letters with you regarding some of your projects, and particularly the Fanshawe Faculty Music Program and Western University, for which you are contemplating giving a significant contribution, and also I remember the H.B. Beal Secondary School, where you are talking about musical instruments.

977              Help us to understand, really, what you are planning to do regarding, say ‑‑ let's start with the Fanshawe Music Faculty.  Obviously, when we are reading your submission, we are noting that this program is more related towards management of a music career rather than supporting and developing new talent, because when I have read the list of the music industry arts graduates that you have provided us, my own understanding of the list of names that you have provided is that only Yurko Mikaluk will meet the definition of a new artist.  The others are in production, in management and in copyright matters.

978              So how will you make sure that the money that you are contemplating granting to the Fanshawe Music Faculty will really go to what the CRTC has defined as "Canadian development"?

979              MR. GORDON:  We had many discussions and conversations ‑‑ and David Jones can step in here any moment ‑‑ with Fanshawe.  We have a long relationship with them in the music industry arts program.  The discussions have been about evolving their technology and their music production facilities from analogue to digital and those are the areas that we would look at supporting them in.

980              THE CHAIRPERSON:  But if, at the end of the day, the Commission was to conclude that this is not a CCD‑eligible program, what will you do?

981              MR. GORDON:  We would divert the money into one of our other programs.

982              THE CHAIRPERSON:  You will divert the money to...?

983              MR. GORDON:  Into one of our other programs at ‑‑

984              THE CHAIRPERSON:  Other program.

985              MR. GORDON:  Yes.

986              THE CHAIRPERSON:  Now, we seem to have the same type of difficulty with the Western University program that you are contemplating also giving money, and, again, with the H.B. Beal Secondary School.

987              What will you do if the Commission was to come to the conclusion that those are not eligible CCD?

988              MR. GORDON:  Well, we would ‑‑

989              THE CHAIRPERSON:  Because they are significant sums that you have committed.  I'm sure that you surely have already spoken with those institutions and they will be at your doorstep if you are granted the licence.

990              MR. GORDON:  Certainly we would ‑‑ you know, we are confident that these programs will meet the CCD requirement, and if they were not we would fund other initiatives, such as FACTOR and MusiCan and MusiCounts and those things, but we are very confident that these do meet CCD regulations.

991              THE CHAIRPERSON:  Surely I don't think it's for me to make suggestions here, but those institutions have broad programs which are mainly, from what description you have provided us ‑‑ take the Don Wright Faculty of Music, in that faculty of music I'm sure that they have other things than production courses.  They do have also talent, they do give also straight music courses to eventual performers.

992              MR. GORDON:  David Jones can add some colour to this, Commissioner.

993              MR. JONES:  Let me just tackle a couple of things.

994              I believe the list you are referring to with Yurko on it is some of the faculty members that would teach some of these courses.  So they wouldn't be directly impacted by this, it would be the students that would be taking the courses.

995              Let me take one and just give you an example:  the H.B. Beal scenario.  We approached them ‑‑ and I was lucky enough to tour the facilities ‑‑ and the intent is to give money to MusiCounts and let them do their thing to purchase musical instruments for the students at H.B. Beal.

996              I toured their facilities, and while Beal is a fantastic heritage school in the downtown core and they have had money to upgrade their facilities, their actual building, so that it's really a nice building right now, they are in need, as we hear every year on the Junos, every year on the Grammies and from every Canadian artist that ever speaks about education, they are in need of money to upgrade the actual instruments that their students use.

997              So when you walk by a couple of stand‑up pianos that are certainly a lot older than I am and guitars that are really held together by duck tape, I mean there really is a need there.  So that's how we came about with that specific initiative.

998              MR. FARINA:  And just for clarification, MusiCounts, for anybody that may not be aware, is the new name for MusiCan.  There was a dispute issue, so MusiCan recently changed its name to MusiCounts, which has been an eligible CCD recipient up until then.

999              THE CHAIRPERSON:  Right.

1000             If those were eligible under the prior definition of CTD, but when we redefined CCD, we came  with a much narrower definition than the one we had previously, in a way, but we have expanded it towards journalism, as well, not only the music but also towards journalism and other related talent, but it's really talent driven, and rather than sustain ‑‑ and I hear what you said regarding music instruments because, at the end of the day, they go in the hands of those who are learning music, but the two programs, the one from Fanshawe and one from the Faculty of Music at Western, obviously it has numerous components, because some could take more managerial orientation, another production, another one will study instruments to eventually become a performer whatsoever, because you