ARCHIVED -  Decision CRTC 88-794

Decision

Ottawa, 4 November 1988

Decision CRTC 88-794

CION FM Inc. Rivière-du-Loup, Quebec -873463400

CIBM-FM Mont-Bleu Ltée Rivière-du-Loup, Quebec -880717400

Following a Public Hearing on 5 July 1988 in Trois-Rivières, Quebec the Commission approves the application by CION FM Inc. for a licence to operate a French-language FM broadcasting transmitting undertaking at Rivière-du-Loup on the 103.7 MHz frequency (channel 279C), at an effective radiated power of 60,000 watts. The Commission will issue a licence expiring on 31 August 1991, subject to the terms and conditions set out in this decision and in the licence to be issued. This term will enable the Commission to consider the renewal of this licence at the same time as that of other radio stations in the area.

The Commission notes that CION FM Inc. proposed to operate the new station in a Group IV musical format. At the same public hearing, the Commission considered a competing application by CIBM-FM Mont-Bleu Ltée to amend the broadcasting licence of CIBM-FM Rivière-du-Loup to change the station's musical format from Group I to Group IV. The application by CIBM-FM is hereby denied.

The Parties Involved

CION FM Inc. (CION FM) is 70% controlled by Le Câble de Rivière-du-Loup Ltée, the cable television undertaking authorized to serve Rivière-du-Loup. Station employees, incorporated as a company, and members of the public, also incorporated as a company, will eventually each hold 15% of the voting shares. Mr. Pierre Simon of Rivière-du-Loup has indirect control of Le Câble de Rivière-du-Loup Ltée and of Télédistribution Câblouis Inc., the firm authorized to serve Cabano, Notre-Dame-du-Lac, Dégelis and Saint-Louis-du-Ha-Ha.

CIBM-FM Mont-Bleu Ltée (CIBM FM) is controlled by Mr. Luc Simard of Rivière-du-Loup. The Simard family of Rivière-du-Loup also controls Radio CJFP (1986) Ltée, the licensee of CJFP Rivière-du-Loup, CJAF Cabano, CHRT Pohénégamook and CJTF-FM Trois-Pistoles; Radio La Pocatière Ltée, the licensee of CHGB La Pocatière and CHAL Saint-Pamphile; C.K.R.T.-T.V. Ltée, the licensee of CKRT-TV Rivière-du-Loup, an affiliate of the CBC's French-language television network serving, through rebroadcasters, the counties of Rivière-du-Loup, Témiscouata, Kamouraska and Charlevoix; Télé-Inter Rives Ltée, the licensee of CIMT-TV Rivière-du-Loup, an affiliate of the TVA network serving, through rebroadcasters, the same area as well as northern New Brunswick; and the Société de Télévision MBS, which was authorized on 28 June 1988 to operate a new television station at Rivière-du-Loup to rebroadcast the programming of Télévision Quatre Saisons (Decision CRTC 88-438).

The Commission notes in other respects that the Rivière-du-Loup area was served by the community radio station CION-FM from 1982 to 1987. In Decision CRTC 87-754 dated 17 September 1987, the Commission decided not to renew CION-FM's licence, which was expiring 30 September 1987, because of serious and recurring non-compliance with its commitments.

The present application by CION FM is a proposal for an independent commercial FM station. The Commission also notes that CION FM has acquired all of the former community station's broadcast facilities and equipment and that the new station will operate with the same technical parameters as the previous station.

The Position of the Applicants

As previously indicated, both applicants proposed similar Group IV musical formats, with a very contemporary sound targeted to a young adult audience and consisting primarily of subcategories 51 and 52 (Pop and Rock -Softer and Pop and Rock -Harder). According to the information in the applications and in the applicants' statements at the public hearing, a large potential audience of listeners between the ages of 12 and 34 in the Rivière-du-Loup area remains unserved. The information submitted also indicated that a large portion of the young adult audience in this market currently listens to Group II and Group IV FM stations in the Quebec City, Chicoutimi and Rimouski areas which are available in Rivière-du-Loup, and that the establishment of a local Group IV FM station in Rivière-du-Loup would repatriate this younger audience.

The evidence and opinions of the two applicants differ significantly, however, on the possibility of successfully implementing a second commercial FM station at Rivière-du-Loup without causing undue hardship for existing radio and television services. The Commission notes in this regard that, as indicated above, all of the region's radio and television services, with the exception of radio stations CFVD Dégelis and CIHO-MF La Malbaie, are owned by interests related to the Simard group of Rivière-du-Loup.

At the hearing, CIBM-FM stated that its application to change the station's musical format from Group I to Group IV was part of an overall plan to restructure the Simard group's radio stations and was intended primarily to offer programming complementary to that offered by its AM stations, to repatriate listeners who tune to stations located outside the area, and to re-establish the station's financial stability. It emphasized that its radio stations had accumulated an operating deficit of almost $300,000 as of 31 August 1987, and that its plan to integrate services previously authorized by the Commission was the only way to provide this market with a high-quality, complementary radio service. Citing the conclusions of a market study it had commissioned, CIBM-FM stated that due to the lack of economic potential in the market and the precarious position of its existing radio stations, notably CIBM-FM and CHGB La Pocatière, it opposed CION FM's application.

CION FM asserted that its application to carry on a radio station operating in a Group IV musical format at Rivière-du-Loup would offer a genuine alternative to existing services and would counteract the concentration of electronic sources of information at the local level. It also noted that its proposal responds to a need clearly expressed in the numerous interventions from individuals and organizations in the community in support of its proposal. It also stated that it would have a minimal impact on existing radio services.

To substantiate its statements, the applicant pointed to the BBM audience ratings and the results of its own market study. It pointed out that more than 54% of the total population of the area is between the ages of 12 and 34. It also noted that the disappearance of the former community station in the fall of 1987 had resulted in the loss of that station's audience, a large portion of which has not been recovered by the Simard group of stations. The applicant also indicated that, in light of the recent experiences of some new FM stations, not only in Rivière-du-Loup but also in the Outaouais and Saguenay markets, the establishment of the proposed Rivière-du-Loup station would increase total listening time and repatriate a substantial portion of the audience that had, in any case, abandoned the existing, local, stations. As for the stations potential impact on the local economy, CION FM stated that the advertising revenue of the defunct community station as of 31 August 1987 was approximately $240,000, and in light of the fact that the proposed station would fill the void left by the former station and appeal to an audience that was currently unserved, it noted that more than 80% of the projected $325,000 in advertising revenues in the first year, would be derived from the market served by the community station little more than a year ago.

With regard to the competing application, CION FM stated that CIBM-FM's proposal would neither complement nor add to the diversity of the existing radio services in the area as it would mean the disappearance of the currently authorized Group I musical format of CIBM-FM. Its proposal would also prevent the realization of the CION FM proposal which, it stated, actually offers real diversity. Concerning the reasons for CIBM-FM's opposition to the CION FM application, CION FM stated that when the overall resources at the disposal of the Simard radio and television interests are taken into account, there can be no doubt as to the survival of the existing broadcasting undertakings. According to the information in its market study, CION FM indicated that it would account for about 3.3% of total advertising revenues in the market and that, in the worst-case scenario described by CIBM-FM, CION FM would account for about 3.6% of total available revenues in the area. It therefore concluded that the proposed station would have a marginal impact on the market as a whole.

The Commission's Position

When in the past, the Commission has considered the provision of broadcasting services to small secondary markets such as Rivière-du-Loup or Abitibi in the province of Quebec, the Commission has been careful to ensure that the proposals before it would be implemented under the best possible conditions. Accordingly, it has allowed substantial concentration of ownership by licensees of radio and television undertakings in the regions concerned in order to ensure that audiences in these areas receive, at the earliest possible date, the basic services already available in urban areas with more substantial resources. This has also ensured that these services would be firmly established. In recent years, however, with the growing demand for more and varied broadcasting services, the Commission has authorized new FM stations, notably in the Beauce, Saguenay/Lac Saint-Jean, Outaouais and Abitibi regions of Quebec, not only on the basis of the soundness of the projects and the availability of the necessary resources to ensure their success, but also taking into account the fact that these proposals can stimulate a new dynamism in terms of increased listening time and advertising revenues, as well as the invigorating effect of new competition on existing services, which is in the best interest of the audiences served.

When it authorized CIBM-FM on 29 January 1985 to disaffiliate from the CBC's French-language radio network (Decision CRTC 85-61) and to broadcast 50 hours a week of local programming and 76 hours a week of FM programming originating with Télémédia, the Commission stated that this approval would have the effect of "increasing the diversity of radio services available in the area by adding a regional FM station which will broadcast in the MOR format" (which is included in the Group I format) and of "consolidating [CIBM-FM's] position in its primary market" by acquiring a much more commercial image. For various reasons, however, it was not until nearly 18 months later that the licensee began to broadcast 50 hours of local programming, thereby taking advantage of the full potential of this station.

In this regard, the Commission notes that CIBM-FM stated at the hearing that its revenues had more than doubled from 1987 to 1988. The Commission notes that, according to BBM, during this same period, the station's audience also almost doubled. The Commission also notes that these improvements in CIBM-FM's operating results were due to the licensee's efforts to improve its local service and thereby better serve its listening audience at the local level. However, as CIBM-FM stated at the hearing, these results occurred after the community station CION-FM had ceased operation. In view of the fact that, as indicated by BBM data for the fall of 1987, the Simard group of stations made a modest recovery of some of the listeners of the former CION-FM station, and also of the listening time to stations outside this market, the Commission considers that the vastly improved performance of CIBM-FM is proof that there is a potential local audience that is interested in the service offered by the station. It also considers that this station has further development potential on the basis of an improvement in its local orientation.

Concerning the potential effect of this increased competition on the Simard group's undertakings, the Commission notes that, despite the levelling-off of the group's total revenues since 1985 and the substantial loss incurred in the radio sector in 1987, due largely to the performance of CIBM-FM, the combined radio and television divisions of the Simard group have performed well over the six-year period between 1982 and 1987. The Commission has also considered the strategic and dominant position that the Simard group's broadcast undertakings maintained for a considerable time in the counties of Rivière-du-Loup, Kamouraska, Témiscouata and Charlevoix in terms of broadcast facilities, studios, personnel, radio and television sales staff and audience share, and has concluded that these undertakings will not suffer undue harm.

In denying the proposed changes to CIBM-FM's Promise of Performance, the Commission has also taken into account the weaknesses and shortcomings that characterize these proposals, including a clearly inadequate forecast of the human resources required to meet the very demanding commitments it made.

In this respect, CIBM-FM had proposed to increase local programming from 50 to 111 hours a week, thereby decreasing its use of outside programming to 15 hours per week. Programming would no longer originate from Télémédia; instead it would be received from CFIX-FM Chicoutimi, a station operating in the Group II musical format. The station had also proposed to increase its spoken word content from 20 hours 25 minutes to 32 hours 30 minutes per week while assigning only one additional part-time researcher. News programming would be increased from 7 hours 56 minutes to 13 hours 9 minutes per week, which is more than double that proposed by most FM stations in Montreal and Quebec City, but by assigning only one full-time journalist and one part-time stringer and rebroadcasting the Télémédia news, its local news would account for only 23% of the total. The licensee also proposed to broadcast 20% foreground programming, including 12 hours 55 minutes produced locally by one part-time researcher and three of the station's program hosts who would devote part of their time to this task, and the remainder which would originate from CFIX-FM.

Further, in approving the application by CION FM, the Commission has considered the apparently limited impact that the establishment of this new station will have on the Rivière-du-Loup market, the broadcasting expertise in this market, the resources at the applicant's disposal, and the additional diversity it will offer in terms of existing local services.

CION FM stated at the hearing that it will target its programming to listeners between the ages of 12 and 49 and that its audience will consist primarily of young adults. As indicated above, both applicants stated at the hearing that this segment of the audience is currently not well served at the local level, and that a large portion of this audience group listens to stations outside the Rivière-du-Loup market. The Commission is therefore of the opinion that a substantial portion of the new station's listeners will be achieved at the expense of outside stations, which will limit the station's negative effect on existing services in the area. Taking into account the former station's advertising revenues, and given the fact that the community station ceased operation in this market little more than a year ago, the impact of a new commercial station in the area should also thus be further reduced.

CION FM acknowledged at the hearing that it will face stiff competition in establishing this new station as a successful undertaking, but it maintained that it has at its disposal the necessary resources. The Commission notes that the initial outlay for capital equipment and facilities is projected to be $100,000 and that the applicant has submitted a bank letter confirming that financing in the amount of $200,000 is available for the project. The Commission has also taken into account the very good financial situation of Le Câble de Rivière-du-Loup Ltée and the applicant's promise, made at the hearing, to cover any revenue shortfall incurred during the first few years of operation. Further, the Commission is of the view that the applicant's broadcast experience and extensive knowledge of the market and of its competitors lend credibility to the proposal.

Further, the Commission considers that the establishment of a new Group IV FM station, offering a very contemporary sound in Rivière-du-Loup, will effectively complement the services currently available in this market. In adding this new service to that provided by CIBM-FM in the Group I format, the Commission considers that these two FM undertakings will be able to satisfy the musical preferences of a broad sector of the listening audience and achieve the musical diversity advocated in the Commission's FM policy.

CION FM's commitments as set out in its Promise of Performance are typical of a regional station in a small market. Given the limited resources in this type of market, the applicant is relying to a significant extent on Radiomutuel's FM radio group for music, news, foreground and night-time programming. The licensee stated at the hearing that it plans to offer a "dance music" sound, a format which has proven successful for Radiomutuel in several markets in the province of Quebec. Its category 5 popular music programming will consist of 42% from subcategory 51 (Pop and Rock -Softer) and 51% from subcategory 52 (Pop and Rock -Harder), and will be composed of a maximum of 49% hits.

CION FM further proposed a level of 13.8% spoken word programming, including 5 hours 33 minutes a week of news, of which at least 33% will focus on local and regional events. Daily newscasts and a weekly review of current affairs will be provided by Radiomutuel. The applicant also proposes to broadcast a minimum of 10% foreground and 35% combined foreground/mosaic programming. Eighty percent of the foreground programming is to be produced locally, with the remainder to be provided by Radiomutuel.

The Commission notes that CION FM has signed an agreement with a corporation comprising several of the persons having worked with the former licensee, Communications communautaires des Portages Inc. (CCDP), and has undertaken to reserve at least twelve hours each week for commercial-free CCDP community programming, of which at least six hours will be produced by volunteers not employed by the station and, as a minimum, a further six hours produced by community groups. A signed copy of the agreement dated 8 June 1988 was appended to CCDP's intervention in support of CION FM's application. In this regard, the Commission notes the statements made at the hearing regarding the responsibilities to be assumed by both parties, and it reminds CION FM that under the Broadcasting Act each licensee is ultimately responsible for the program material it broadcasts.

With regard to the promotion of Canadian talent, the Commission notes that the applicant proposes to promote Canadian artists through interviews, features and coverage of special events. It also indicated that it will allocate $1,500 annually for prizes and scholarships, although the specific nature of its projects in this regard is "yet to be determined". In view of the importance accorded by the Commission to the development of Canadian talent, the licensee is required to report to the Commission within three months of the date on which the station begins operating, outlining its specific commitments in this regard.

The Commission has considered the numerous interventions relating to these applications, the great majority of which supported the application by CION FM. With regard to the intervention presented at the public hearing by Radio MF Charlevoix Inc., the licensee for CIHO-MF La Malbaie, the Commission notes the undertaking by CION FM at the public hearing that it will not solicit advertising on the north shore of the St. Lawrence River.

It is a condition of licence that construction of this undertaking be completed and that it be in operation within twelve months of the date of this decision or, where the applicant applies to the Commission within this period and satisfies the Commission that it cannot complete implementation before the expiry of this twelve-month period and that an extension of this period is in the public interest, within such further period of time as is approved in writing by the Commission.

It is a condition of licence that the applicant adhere to the CAB self-regulatory guidelines on sex-role stereotyping, as amended from time to time and approved by the Commission.

Fernand Bélisle
Secretary General