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Decision
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Ottawa, 5 March 1990
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Decision CRTC 90-216
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Arthur J. Hustins, Jr., on behalf of a company to be incorporated
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Halifax, Nova Scotia - 883092900Finlay MacDonald, on behalf of a company to be incorporatedHalifax, Nova Scotia - 891564700
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At a Public Hearing commencing 21 November 1989 in Halifax, the Commission considered applications by Arthur J. Hustins, Jr. (Hustins) and Finlay MacDonald (MacDonald), both representing companies to be incorporated, competing for a licence to carry on an English-language (Group I - Pop and Rock - Softer) FM radio broadcasting transmitting undertaking at Halifax, operating on the frequency of 96.5 MHz (channel 243C) with an effective radiated power of 100,000 watts.
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The Commission, for the reasons set out herein, approves the Hustins application and will issue a licence expiring 31 August 1994, subject to the conditions specified 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 FM radio stations in the region. This authority will only be effective and the licence will only be issued at such time as the Commission receives documentation establishing that the company has been incorporated in accordance with the application in all material respects.
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The competing MacDonald application is denied.
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Some 20 months prior to the November 1989 hearing, the Commission held a public hearing in Sydney, Nova Scotia to consider representations submitted by the public concerning a change made to the musical format of CFDR Dartmouth by the station's new owners in the summer of 1987. CFDR, which had operated for many years in an MOR format with a significant instrumental component, and which had established a large and loyal audience of primarily older listeners, switched without notice to a contemporary hit radio format, one designed to appeal primarily to a much younger audience. This change prompted the submission of letters and petitions from more than 850 area residents, 87% of whom expressed opposition to the change. These matters were addressed by the Commission in Public Notice CRTC 1988-135 dated 10 August 1988. The Commission, while noting that AM licensees are at liberty to alter the musical format of their stations as they see fit, reminded such licensees "... of their accountability to the public whenever substantial changes are proposed in the service they provide".
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Subsequently, in November 1988, an application for a new FM station to serve Halifax was filed with the Commission. Following the Commission's call for other applications to serve Halifax (Public Notice CRTC 1989-39 dated 1 May 1989), two more applications were submitted. All three proposals were treated as competing applications at the November 1989 hearing. A separate decision denying on its own merits one of the three applications, that by the Radio St. Mary's Association for a new student FM station at Halifax, is also issued today (Decision CRTC 90-217).
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At the November 1989 hearing, both Hustins and MacDonald emphasized that their proposals were designed specifically to fill the niche for easy listening music vacated by CFDR in 1987. Both applicants presented the results of market studies to support their claims regarding the suitability of their proposed musical formats to older Halifax listeners and the ability of the market to absorb the impact of a new, commercial FM station. The studies conducted on behalf of the Hustins group with respect to the audience and advertising potential of the Halifax market were particularly comprehensive.
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Based on all of the available evidence, including that presented by the applicants and interveners at the November 1989 hearing, the Commission considers that a substantial demand exists within the Halifax market for a Group I radio station targeted to listeners 35 years of age and older. Evidence of this demand was reinforced by the many interventions submitted to the Commission; the vast majority of these were in support of the Hustins application. The Commission is also satisfied that the Halifax market can support a viable, new and independent FM station operating in a Group I format without creating undue hardship for existing stations.
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Of the two proposals, the Commission is convinced that the conventional easy listening format proposed by Hustins, featuring a minimum of 50% instrumental selections, reflects more closely the musical tastes and preferences of those who, in the Commission's view, are the most underserved segment of the Halifax radio audience, namely listeners over the age of 45. The Commission also considers that the program plans put forward by this applicant would make a greater contribution to the diversity of radio services available to residents in the Halifax area. Moreover, the Commission is satisfied that this diversity, coupled with the many other strengths present in the Hustins application, outweigh the potential concern raised at the hearing, and discussed further in this decision, regarding the staff resources proposed by Hustins. In this context, the Commission has taken note of the applicant's firm undertaking to hire any additional staff that may prove necessary in order to meet all of its programming commitments.
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Hustins will offer Halifax radio audiences music of a type that, to a very great extent, is not available from the city's other stations. The applicant intends to re-introduce a number of special music features, including "The Tartan Hour", "Candlelight and Wine", "Music From the Heart" and other programs of a type that had been popular with CFDR listeners prior to the station's format change. According to the applicant, enhanced diversity is guaranteed by the fact that "... in excess of 80% of the selections of our proposed playlist are not currently played in the market."
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Hustins made the further observation at the hearing that adherence to its chosen musical format, as established by its selection of such musical discriminators as a maximum vocal:instrumental ratio of 50:50, was a commitment contained in its FM Promise of Performance. Specifically, the Commission notes the applicant's acknowledgement that it "... would be bound to maintain an easy listening programming format" as defined by its Promise of Performance.
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The applicant stated that the various proposals for spoken word programming are "... designed to be of interest to the 35-plus market in the Metro area". These plans include a commitment to broadcast a total of 7 hours 30 minutes of news each week, together with a half-hour public affairs magazine program each weekday, a weekend magazine and a number of weekly foreground features exploring such areas as gardening, home improvements and recreational activities in the Halifax area.
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Hustins' commitments to provide support for Canadian talent development consist of an annual contribution of $5,000 to FACTOR, the funding of a scholarship to assist music students enrolled in fine arts at Mount St. Vincent University ($2,500 in the first year, increasing thereafter by 5% annually), and direct annual expenditures of $10,000 to cover the costs associated with the production for broadcast of live performances by local performing groups such as Symphony Nova Scotia, the Metro Halifax Youth Band and the Neptune Theatre.
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The applicant company will be controlled by Arthur J. Hustins, Jr. who will own 66.6% of the voting shares. Mr. Hustins, a long-time resident of Halifax, is a successful businessman involved in the local hospitality and service industry. The remaining voting shares will be owned by experienced Yarmouth broadcaster Michael J. Trask (22.2%) and by Halifax businessman Roland T. Martin (11.2%). The Commission is satisfied that the applicant is adequately financed and that, through Mr. Hustins and the other proposed shareholders, it has access to additional sources of funding sufficient to ensure that all of its programming and other commitments are respected should advertising revenues fall short of projections. In this regard, the Commission notes the following statement by Mr. Hustins:
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I would pledge my own personal resources to any shoring up requirements that may be needed financially for the commitments to carry this radio station through during the course of its licence. At the hearing, the Commission was nevertheless concerned that the number of program staff proposed by the applicant appeared to be too small either to produce all of the high quality foreground and mosaic programs described in the application or to ensure that the overall program service, including the musical component, is of sufficient quality to attract the audience and the revenues needed to compete successfully in the Halifax market. The Commission also examined at the hearing whether the applicant may have underestimated the number of production staff required to prepare the volume of high quality commercials that will be required to generate the revenues projected within the application, in competition with existing stations in the market.
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The applicant, in response to close questioning by the Commission on staffing levels, made the following statement:
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I am confident that we have the staff sufficient to meet our commitments and quite frankly if we find, in the final analysis, that we don't then we simply will have to make sure that we do. I will have to go out and hire someone else.
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The Commission notes this undertaking by the applicant, and will follow closely its performance in fulfilling all of its commitments.
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The Department of Communications (DOC) has advised the Commission that this proposal is technically acceptable, but that issuance of a Broadcasting Certificate is conditional on the resolution of any problems involving interference with aeronautical NAV/COM services. In accordance with paragraph 13(1)(b) of the Broadcasting Act, the Commission will only issue the licence, and the authority granted herein may only be implemented, at such time as written notification is received from the DOC that it will issue a Broadcasting Certificate.
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It is a condition of licence that the authority granted herein be implemented within 12 months of the date of receipt of written notification from the DOC that it will issue a Broadcasting Certificate or, where the applicant applies to the Commission and satisfies the Commission that it cannot implement its authority before the expiry of this period and that an extension is in the public interest, within such further period of time as is approved in writing by the Commission.
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It is a condition of licence that the applicant adhere to the Canadian Association of Broadcasters' (CAB) self-regulatory guidelines on sex-role stereotyping, as amended from time to time and approved by the Commission.
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It is also a condition of licence that the licensee adhere to the provisions of the CAB's Broadcast Code for Advertising to Children, as amended from time to time and approved by the Commission.
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The Commission authorizes the applicant to make use of the Subsidiary Communications Multiplex Operation. The Commission expects the applicant to adhere to the guidelines set out in Appendix A to Public Notice CRTC 1989-23 dated 23 March 1989 entitled Services Using the Vertical Blanking Interval (Television) or Subsidiary Communications Multiplex Operation (FM). This authority may only be implemented when the DOC gives the technical approval required by the Radiocommunication Act and regulations made thereunder.
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Fernand Bélisle
Secretary General
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