ARCHIVED -  Decision CRTC 94-343

Decision

Ottawa, 29 June 1994

Decision CRTC 94-343

Durham Radio Inc.

Ajax, Ontario - 931179600 - 931180400

Acquisition of assets and conversion to FM

Following a Public Hearing in the National Capital Region beginning on 25 April 1994, the Commission approves the application by Durham Radio Inc. (Durham) for authority to acquire the assets of the AM radio programming undertaking CHOO Ajax from Golden West Media Consultants Ltd. (Golden) and for a broadcasting licence to continue the operation of this undertaking.

The Commission will issue an AM licence to Durham to continue the operation of CHOO subject to the conditions in effect in the current licence as well as to those conditions specified in this decision and in the licence to be issued, upon surrender of the licence currently held by Golden.

The purchase price relating to this transaction is $500,000. Based on the evidence filed with the application, the Commission has no concerns with respect to the availability or the adequacy of the required financing.

Because the Commission does not solicit competing applications for authority to transfer effective control of broadcasting undertakings, the onus is on the applicant to demonstrate to the Commission that the application filed is the best possible proposal under the circumstances, taking into account the Commission's general concerns with respect to transactions of this nature. As a first test, the applicant must demonstrate that the proposed transfer will yield significant and unequivocal benefits to the community served by the broadcasting undertaking and to the Canadian broadcasting system as a whole, and that it is in the public interest.

The Commission notes that, although the applicant did not propose any tangible benefits, CHOO has had pre-tax losses over the three years preceding filing of this application. Accordingly, the Commission is satisfied that the application meets the criteria set out in Public Notice CRTC 1993-68 entitled "Application of the Benefits Test at the Time of Transfers of Ownership or Control of Broadcasting Undertakings". The Commission notes the important intangible benefit associated with this transaction, that being the maintenance of CHOO as a viable, local radio service in Ajax. Accordingly, the Commission is of the view that approval of this application is in the public interest.

Conversion to FM

The Commission also approves the application for a broadcasting licence to operate an English-language (Group II - Country) FM radio programming undertaking at Ajax on the frequency 95.9 MHz, (channel 24OB), with an effective radiated power of 3440 watts.

The Commission will issue an FM licence expiring 31 August 1998, subject to the conditions specified in this decision and in the licence to be issued. This term will allow the Commission to re-evaluate, at the earliest opportunity, the applicant's direct commitments for the development of Canadian talent under a positive financial situation. The Commission notes that Durham projects a positive financial situation in its third year of operations.

Upon implementation of the FM station, the programming will be as described in the Promise of Performance. During the phasing-in period, CHOO will simulcast, for a period of six months, the programming of the FM station on frequency 1390 kHz. At the end of this period, as stated in Durham's application, the Commission requires Durham to surrender the licence issued for CHOO.

The applicant indicated that replacing the existing facilities with a new FM station is necessary in order to overcome technical problems which, in the past, have contributed to the erosion of its audience, thereby creating financial hardship. The greater range and improved quality of the FM signal and enhanced locally-oriented programming are expected to reverse current market erosion. Furthermore, Durham expects to expand the potential audience of the Ajax station through repatriation of listeners from out of market country music stations and from younger listeners moving from the AM to FM band.

The Commission reaffirms the particular importance it attaches to the development of Canadian talent. As part of its application, the applicant did not propose a commitment in direct expenditures to Canadian talent development. The Commission will expect the applicant to increase its on-air support of local and regional talent and to make direct cost contributions to the development of Canadian talent once the station achieves a positive operating income, the profit before interest and tax (PBIT) index being the primary profitability indicator.

In Public Notice CRTC 1992-59 the Commission announced implementation of its employment equity policy. It advised licensees that, at the time of licence renewal or upon considering applications for authority to transfer ownership or control, it would review with applicants their practices and plans to ensure equitable employment. In keeping with the Commission's policy, it encourages the applicant to consider employment equity issues in its hiring practices and in all other aspects of its management of human resources.

It is a condition of licence that the applicant adhere to the guidelines on gender portrayal set out in the Canadian Association of Broadcasters' (CAB) "Sex-Role Portrayal Code for Television and Radio Programming", as amended from time to time and approved by the Commission.

It is also a condition of licence that the applicant 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.

The Department of Communications (DOC) has advised the Commission that this application is condi- tionally technically acceptable, and that a Broadcasting Certificate will only be issued once it has been determined that the proposed technical parameters will not create any unacceptable interference with aeronautical NAV/COM services.

In accordance with subsection 22(1) 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 its technical requirements have been met, and that a Broadcasting Certificate will be issued.

It is a condition of licence that the authority granted herein be implemented within twelve months of the date of receipt of the DOC notification referred to in the preceding paragraph or, where the applicant applies to the Commission within this period 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.

The Commission has taken into account the 19 positive interventions submitted with respect to these applications. It has also noted the concerns submitted by Sims Mazar & Brady, on behalf of Ken and Joan Green as well as Durham's reply thereto.

Allan J. Darling
Secretary General