ARCHIVED -  Decision CRTC 99-158

Decision

Ottawa, 2 July 1999

Decision CRTC 99-158

Rogers Broadcasting Limited

Ottawa, Ontario - 199807492 - 199807500

Applications processed by
Public Notice CRTC 1999-48
dated 19 March 1999

Summary

The Commission approves the applications by Rogers Broadcasting Limited (Rogers Broadcasting) for authority to acquire all of the issued and outstanding shares of CHEZ-FM Inc., licensee of CHEZ-FM Ottawa as well as CFMO-FM and CJET Smiths Falls. As a result of this transaction, Rogers Broadcasting will own three commercial radio stations in Ottawa, including two FM stations.

The Commission is satisfied that approval of these applications is in accordance with the common ownership policy established in Public Notice CRTC 1998-41 and will not significantly affect the choice and diversity of news voices available in Ottawa. Furthermore, Rogers Broadcasting has demonstrated that it has the financial resources required to enhance local services and to better serve the communities in the Ottawa and Smiths Falls markets.

Discussion

1. The vendor, CHEZ-FM Inc., is the licensee of three radio stations in eastern Ontario: CHEZ-FM Ottawa and CFMO-FM and CJET Smiths Falls.

2. The purchaser, Rogers Broadcasting, is part of Rogers Communications Inc., the largest broadcasting company in Canada. It is involved in several sectors of Canada's broadcasting industry: radio, television and distribution. Rogers Broadcasting owns and operates a number of radio stations in markets across Canada and is also the licensee of the multilingual and multicultural television station, CFMT-TV Toronto. In Ottawa, Rogers Broadcasting owns and operates commercial radio stations CKBY-FM and CIWW as well as a television rebroadcasting transmitter of CFMT-TV Toronto. Moreover, Rogers Cablesystems Ltd., a company that is affiliated with Rogers Broadcasting, provides cable distribution services to Ottawa.

3. The purchase price related to this transaction is $19 million, subject to adjustments for working capital. Based on the documentary evidence filed with the applications, the Commission has no concerns with respect to the availability or adequacy of the required financing.

4. As a result of this transaction, Rogers Broadcasting will own three commercial radio stations in Ottawa, including two FM stations. The Commission notes that this application falls within the scope of the policy on the common ownership of radio stations established in Public Notice CRTC 1998-41 entitled Commercial Radio Policy, 1998. According to this policy, in markets with eight commercial stations or more operating in a given language, a licensee may be permitted to own or control as many as two AM and two FM stations in that language.

5. In Public Notice CRTC 1998-41, the Commission stated that, in evaluating applications that would result in common ownership, it would take into consideration the impact on competition and the diversity of news voices in a market whenever the proposed purchaser has media cross-ownership and multiple local radio stations in the market.

6. Ottawa is served by a variety of media providing multiple news sources to the community. Six commercial radio stations and four CBC radio stations as well as two commercial television stations and two CBC television stations are available in Ottawa. The city also receives three rebroadcasting services of television stations and the many programming services offered on cable. In the area of print media, Ottawa is served by various local newspapers. The Commission is satisfied that approval of Rogers Broadcasting's application to gain control of a second FM station in the Ottawa market will not significantly affect the choice and diversity of news voices in the market.

7. With respect to the Smiths Falls market, CFMO-FM and CJET are the only local stations in the market and serve the Ottawa Valley including Perth, Carleton Place, Kemptville, Winchester and Almonte. Previous decisions by the Commission have highlighted these stations' longstanding local programming service to the Ottawa Valley and to the Smiths Falls region, in particular. Rogers Broadcasting made a commitment that it will invite a resident of the communities served by CFMO-FM and CJET to become a member of its existing local advisory board to keep station management informed on local issues, concerns and events. The Commission expects Rogers Broadcasting to adhere to this commitment.

8. The Commission notes that, although Rogers Broadcasting did not propose any tangible benefits for this transaction, the three stations, on a combined basis, have been unprofitable over the three years preceding filing of these applications. In accordance with its policy, first enunciated in Public Notice CRTC 1993-68 and most recently reiterated in Public Notice CRTC 1998-41, the Commission will forego benefits requirements for unprofitable undertakings.

9. The Commission notes the important intangible benefits associated with this transaction, including improvement of the three stations' financial performance which will enable them to continue providing high quality radio programming services.

Intervention

10. The Commission acknowledges the intervention submitted by the Canadian Independent Record Production Association (CIRPA) in support of these applications. While supporting these applications, CIRPA nevertheless argued that, given the substantial amount being paid by the purchaser, Rogers Broadcasting should be required to provide tangible benefits even though the stations have been unprofitable over the past three years. As previously indicated, Public Notice CRTC 1998-41 clearly states that the Commission will forego benefits requirements for unprofitable undertakings.

This decision is to be appended to each licence. It is available in alternative format upon request, and may also be viewed at the following Internet site:

www.crtc.gc.ca

Secretary General