ARCHIVED -  Decision CRTC 98-92

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Decision

Ottawa, 27 March 1998

Decision CRTC 98-92

Radio Asia Canada Inc.

Toronto, Ontario - 199701991

Application for a new ethnic radio station - Denied

1.  Following a public hearing held in Toronto on 11 December 1997, the Commission denies the application by Radio Asia Canada Inc. (Radio Asia) for a broadcasting licence for an ethnic radio programming undertaking at Toronto on the frequency 1670 kHz, with a daytime transmitter power of 10,000 watts, and a night-time transmitter power of 1,000 watts.

2.  In assessing this application, the Commission has taken into account the supporting interventions and one comment which it received. The Commission has also considered the arguments set out in a number of opposing interventions including those submitted by several ethnic radio stations in the Toronto area, namely CIAO-FM (CKMW Radio Ltd.), CHIN and CHIN-FM (Radio 1540 Limited), CJMR (CJMR 1320 Radio Limited), CIRV-FM (CIRC Radio Inc.), and CHKT* (1146129 Ontario Inc., Fairchild Radio). An opposing intervention was also received from the Canadian Thamil Broadcasting Corporation, which currently makes use of the Subsidiary Communications Multiplex Operations (SCMO) facilities of CFMX-FM, to provide a 24-hour ethnic programming service to Toronto's Tamil community.
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* formerly CKYC

The Commission's ethnic policy

3.  The Commission's ethnic broadcasting policy generally requires each ethnic broadcaster to provide a broadly-based service to the ethnic groups within its station's coverage area, with a particular view to meeting the needs of underserved smaller ethnic communities (Public Notices CRTC 1985-139 and 1985-241).

4.  In its application as initially filed, Radio Asia proposed to broadcast a minimum of 105 hours of Type A and Type B programming each week and to offer programming directed to a minimum of five cultural groups, namely the Sri Lankan, Indian, Malaysian, Singaporean and Mauritian communities, in a minimum of four languages: Tamil (61% of all programming), Telugu, Kannada and Sinhala. In response to questions asked as part of the deficiency process, Radio Asia stated that it would make six hours of airtime available in each broadcast day of the week to any ethnic community in metropolitan Toronto that is not currently served by another ethnic broadcaster, or is unable to obtain airtime from another ethnic broadcaster. Radio Asia added that it would make up to two hours of commercial-free airtime available in each broadcast day Monday to Friday, for community announcements or non-profit charitable causes. While Radio Asia confirmed that the six-hour block of programming would be Type A or Type B, it did not specify the languages of the programming or the cultural groups to be served during these hours, nor during the two-hour commercial free airtime.

5.  In response to the Commission's questions concerning the applicant's course of action if other ethnic groups did not take advantage of this offer of airtime, Radio Asia stated "if we would be able to get a licence for a 24-hour period pure Tamil program on AM 1670 ... there's nothing else we would want." The applicant further explained that it had amended its application to make hours available each week to other ethnic groups so that the application would "reflect ... the ethnic broadcasting regulations of the Commission. That is the reason we had to actually make that change."

6.  The Commission notes that the applicant did offer to accept a condition of licence prohibiting it from broadcasting in any of the major languages of other ethnic broadcasters.

7.  Nevertheless, the Commission finds that Radio Asia did not adequately identify the additional cultural or language groups to be served by the proposed station. Moreover, the Commission is not satisfied that the applicant provided adequate evidence that it has made contacts with representatives of Toronto's ethnic communities, other than those it proposed to serve in its application as initially filed.

8.  Based on all of the above, the Commission considers that the applicant failed to demonstrate an understanding of the Commission's ethnic policy sufficient to ensure that its proposed ethnic station would be operated in accordance with that policy, particularly with regard to the number of cultural and linguistic groups to be served.

Radio Asia's business plan

Shareholders

9.  Prior to the hearing, Radio Asia changed its list of proposed shareholders a number of times, including changes made just a few days before the hearing commenced. The Commission notes that fully one half of the funding for the proposed station was to have been in the form of shareholder equity. In the Commission's view, the ongoing uncertainty surrounding the applicant's ownership structure, and ultimately its financing, is a significant shortcoming of the application.

Population and Reach

10.  Radio Asia estimated the population of Toronto's Tamil community to be 130,284, and that of the Teluga, Kannada and Sinhala language groups combined to be 13,478. According to Radio Asia's projections, the proposed station would reach 120,000 people each week in its full coverage area.

11.  Certain opposing interveners argued that Radio Asia's estimates of potential audience for the proposed station were inflated.

12.  When asked, at the hearing, to explain the methodology used to arrive at its population estimates, Radio Asia stated that it had used "a lot of estimates and educated guesses". Radio Asia further acknowledged that "there might not be sufficient evidence to support" its conclusion regarding the size of the Tamil population in the Toronto area.

13.  Based on the interveners' arguments and the applicant's responses, the Commission considers that Radio Asia overestimated both the size of the station's potential audience and its potential reach.

Advertising Revenues

14.  Radio Asia projected advertising revenues of $1,567,180 in the first year of operation rising to $2,264,573 in the fifth year. Several opposing interveners claimed that Radio Asia had overestimated the advertising revenues that the proposed station would generate. Some opposing interveners also expressed concern that, if Radio Asia was unable to obtain its projected advertising revenues, the applicant would likely change its programming to target larger and more lucrative ethnic audiences that are already served by existing ethnic broadcasters. Radio 1540 Limited stated that such a situation would "surely upset the delicate balance that exists between the six ethnic licensees in this market".

15.  The Commission noted earlier in this decision that Radio Asia failed to provide specific details concerning the cultural or language groups it proposed to serve during the additional eight hours of programming daily. The Commission agrees with the opposing interveners that Radio Asia would be unlikely to achieve its projected advertising revenues. In this regard, the Commission notes that Radio Asia's financial projections were based on its overestimated projections of a target population and potential reach.

16.  In the Commission's view, the lack of specific details concerning the additional eight hours of daily programming and the uncertainty surrounding financing for the proposed station, as well as Radio Asia's inflated estimates of the size of its target audience, the reach of the proposed station and its projected advertising revenues, all seriously undermine the credibility of the applicant's business plan.

17.  For all of the reasons outlined above, the Commission has determined that approval of Radio Asia's application would not be in the public interest and, accordingly, has denied the proposal.

Laura M. Talbot-Allan
Secretary General

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