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ARCHIVED - Decision CRTC 2000-155

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Decision CRTC 2000-155
Ottawa, 11 May 2000
Anthony Zwig, on behalf of a company to be incorporated
Belleville, Ontario – 199905519
6 December 1999 Public Hearing
National Capital Region
New FM country music station in Belleville

1.

The Commission approves the application by Anthony Zwig, on behalf of a company to be incorporated (Zwig), for a broadcasting licence to carry on an English-language FM radio programming undertaking at Belleville.

2.

Subject to the requirements of this decision, the Commission will issue a licence expiring 31 August 2006. The licence will be subject to the conditions specified in this decision and in the licence to be issued.
The public process

3.

In 1999, Zwig submitted an application for a licence to operate a new FM radio station to serve Belleville/Trenton. The applicant proposed to serve the market on the 100.1 MHz frequency with a country music format. On 2 July 1999, the Commission issued Public Notice CRTC 1999-103 announcing receipt of the application, and calling for applications from other parties wishing to obtain such a licence. No other party submitted an application in response to the public notice. The Zwig application was considered at the 6 December 1999 public hearing in the National Capital Region.
The Belleville/Trenton radio market

4.

Four commercial radio stations, two AM and two FM, currently serve the Belleville/Trenton market.

5.

Quinte Broadcasting Company Limited (Quinte) operates three stations: CIGL-FM, CJBQ and CJTN. Quinte also holds a 50% interest in Cablevue (Quinte) Ltd., the cable system that serves Belleville.

6.

Zwig currently operates CJOJ-FM, the remaining commercial station.

7.

The market is also served by CJLX-FM, a not-for-profit campus station associated with Loyalist College.
The applicant’s rationale

8.

The applicant considered that it was necessary for its company to have a second Belleville station in order to establish a competitive balance in the market. Without a second station, Zwig considered it could not compete effectively with Quinte, which operates three stations and draws over 80% of the market’s radio revenues.

9.

Zwig also was of the view that approving the application would strengthen and ensure the continued presence of an independent news voice in the community.

10.

The applicant argued that the market could support an additional radio station. It projected that more than half of the proposed station’s first-year revenues would come from growth and stimulation of the market. Zwig also pointed to various data indicating the potential for further growth in the local economy.

11.

The applicant further considered that the new station’s proposed FM "hot" country music format would fill an important programming niche. Although CJBQ currently plays country music, the applicant considered that the station’s primary appeal is its news and information. In contrast, the proposed station would be very heavily oriented to music. Zwig noted that about 10% of tuning in the proposed station’s total coverage area was to out-of-market country FM stations. It therefore considered that the proposed station would repatriate considerable tuning to Belleville.
Quinte’s concerns

12.

Quinte submitted an intervention that strongly opposed the introduction of a new station into the Belleville/Trenton market.

13.

Quinte was of the view that the Belleville market could not support a new station. It pointed out that Nortel was closing its manufacturing division in Belleville, bringing job losses to the community. It considered that growth, both in the local radio market and in Belleville’s population, has been stagnant in recent years.

14.

Quinte also was of the view that the radio industry in Belleville, even as currently structured, is not healthy. It noted that the aggregate profit before interest and taxes for Belleville stations was negative, and that the Quinte stations, taken together, were in a money losing position.

15.

Quinte was also very concerned about the effect that introducing a country music FM station would have on its station CJBQ. It noted that much of the music played by the proposed station would be similar to that played by CJBQ. It considered that country music forms an important part of CJBQ’s programming, and argued that the Belleville market was too small to support two country stations. It further noted that only 3% of the tuning in the Belleville central area was to out-of-market country FM stations. It therefore believed that most of the audience obtained by the proposed new station would be at CJBQ’s expense.
The Commission’s determination

16.

The Commission's Commercial Radio Policy, 1998 places an increased emphasis on competition as a way of ensuring that programming choice is available to Canadians. It therefore considers it important that sustainable competition be present in radio markets, where possible.

17.

The Commission notes Quinte’s comment that the commercial radio stations serving Belleville, taken as a whole, are unprofitable. However, the majority of the losses at the level of profit before interest and taxes is accounted for by the applicant’s station CJOJ-FM. This tends to support Zwig’s contention that its competitive position must be improved if it is to continue to provide an alternative radio voice to residents of the Belleville area.
        18. In addition, the Commission notes that Zwig has made a commitment to expand its news staff, thus strengthening its position as an alternative news source for listeners in the Belleville/Trenton area.
        19. The Commission considers, on balance, that it is in the public interest to approve the application.
The new station
        20. The new station will provide a format based on new country music. Programming will be targeted to those between 18 and 54 years of age, with the core audience being between 35 and 54.

21.

The station will also provide coverage of local news and events. In order to facilitate news coverage, the licensee will add an extra journalist to its news staff, and also expand its network of stringers.

22.

The licensee will participate in the Canadian talent development (CTD) plan created by the Canadian Association of Broadcasters (CAB). Under this plan, the new station in Belleville must contribute $400 annually to third parties associated with CTD.

23.

As well, the applicant will spend $2,000 each year to support an annual talent search, including the production of a professional quality demo tape. The Commission considers that these commitments are adequate, given the size of the market and the financial situation of the licensee.

24.

It is therefore a condition of licence that, in addition to its commitments under the CAB plan for CTD, the licensee make additional yearly direct contributions for CTD of at least $2,000. The Commission notes that the applicant will ensure that all funds expended will meet the Commission's criteria for generally accepted direct CTD expenditures as set out in Appendix I of Public Notice CRTC 1990-111 An FM Policy for the Nineties.

25.

The Commission also notes the licensee’s estimate that its indirect final contributions associated with CTD will amount to $3,000 per year.

26.

The licensee is further expected to implement its commitment to increase the CTD commitment for its other station, CJOJ-FM Belleville, from $400 to $2,000 annually.

27.

In addition to the conditions of licence with respect to CTD, the licence will also be subject to conditions related to local programming and the use of hit material. As noted in Public Notice CRTC 1999-137, standard conditions of licence are now set out only on the licence form.
Technical matters

28.

The licence will only be issued and effective when the new station is ready to begin operation. When the licensee has completed construction and is prepared to commence operation, it must advise the Commission in writing. If the station is not constructed and ready to operate within 12 months of today’s date, extensions to this time frame may be granted provided that the licensee applies in writing to the Commission before the 12-month period or any extension of that period expires.

29.

As proposed, the new FM station will operate on the frequency 100.1 MHz (channel 261B) with an effective radiated power of 40,000 watts.

30.

The Department of Industry has advised the Commission that this application is conditionally technically acceptable. The Department will only issue a broadcasting certificate once it has determined that the proposed technical parameters will not create any unacceptable interference with aeronautical NAV/COM services.

31.

In accordance with section 22(1) of the Broadcasting Act, the Commission will only issue the licence and grant the authority to operate when it receives notification from the Department of Industry that its technical requirements have been met, and that a broadcasting certificate will be issued.
Other matters

32.

This authority will only be effective and the Commission will only issue the licence at such time as it receives documentation establishing that an eligible Canadian corporation has been incorporated in accordance with the application in all material respects and that this corporation may be issued a licence.

33.

In Public Notice CRTC 1992-59 dated 1 September 1992 and entitled Implementation of an Employment Equity Policy, the Commission announced that the employment equity practices of broadcasters would be subject to examination by the Commission. In this regard, the Commission encourages the licensee to consider employment equity issues in its hiring practices and in all other aspects of its management of human resources.

34.

The Commission acknowledges the interventions submitted concerning this application and has considered all of them in reaching its decision.
Related CRTC documents
  • Public Notice 1999-137 – New licence form for commercial radio stations
  • Public Notice 1998-41 – Commercial Radio Policy, 1998
Secretary General
This decision is to be appended to the licence.  It is available in alternative format upon request, and may also be examined at the following Internet site: www.crtc.gc.ca
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