ARCHIVED - Decision CRTC 2000-362
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Decision CRTC 2000-362 |
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Ottawa, 24 August 2000 |
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New Brunswick Broadcasting Co., Limited Saint John, New Brunswick – 199907044 |
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6 March 2000 Public Hearing in Moncton |
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| New adult contemporary music FM station at Saint John | |
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The Commission approves the application by New Brunswick Broadcasting Co., Limited (NBB) for a broadcasting licence to carry on a new English-language FM radio programming undertaking at Saint John. |
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Subject to the requirements set out in this decision, the Commission will issue a licence expiring 31 August 2005. The Commission has granted a licence term that is less than the maximum of seven years permitted by the Broadcasting Act in order to schedule the renewal of this licence in accordance with the regional plan established by the Commission. |
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The licence will be subject to various conditions, including those related to levels of local programming, Canadian content, financial support for Canadian talent, and the use of hit material on the new station. These conditions are either presented below or will be specified in the licence to be issued. As noted in Public Notice CRTC 1999-137, standard conditions of licence are now set out only on the licence form. |
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The new Saint John station will offer a local service featuring music in the adult contemporary format. According to NBB, the service will be targeted principally to an audience of those between the ages of 35 to 44 resident in the Kennebecasis Valley communities of Rothesay, Quispamis and Grand Bay-Westfield. |
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The applicant is licensee of CHSJ-FM, an existing FM station serving Saint John. In Decision CRTC 2000-363 of today's date, the Commission has approved another application by NBB considered at the Moncton hearing, that being for authority to establish another new FM station to serve St. Stephen, approximately 107 km west of Saint John. |
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NBB competes in the Saint John market with three other commercial stations, namely CFBC, CIOK-FM and CJYC-FM. All of these other stations are owned by Maritime Broadcasting System Limited (see Decision CRTC 98-469). At the hearing, NBB stated that its application for a new FM station at Saint John was motivated by its concerns for the long-term viability of CHSJ-FM in the face of strong competition from the other commercial stations in the market, all in the hands of a single owner. It also confirmed that its plans for establishing the St. Stephen station were conditional upon receiving Commission approval in respect of the Saint John application. |
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NBB's applications were opposed in an intervention by Maritime Broadcasting, whose concerns are discussed below. |
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Maritime Broadcasting intervention |
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According to Maritime Broadcasting, the Saint John market cannot support another station without creating an adverse impact on existing operations, in particular on those of the intervener's AM station CFBC. It also argued that the adult contemporary format chosen by NBB for its proposed FM station would essentially duplicate the musical format offered by CIOK-FM. |
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Maritime Broadcasting suggested that the distinct country music format of CHSJ-FM leaves NBB well positioned to continue as a vigorous competitor in Saint John without the need for a second FM station. According to the intervener, any difficulties the applicant faces are not due to actions taken by Maritime Broadcasting, but to its own business decisions. The intervener added that it was inappropriate of NBB to make its commitments for establishing a new station at St. Stephen conditional upon receiving approval of its Saint John application. |
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NBB's position |
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Audience survey data from the Fall of 1999 indicate that the three Saint John stations owned by Maritime Broadcasting account for the bulk of all radio tuning in the market. This compares with CHSJ-FM's share, which is less than one-third the total share captured by the three Maritime Broadcasting stations. Most of the remaining listening is to the non-commercial local CBC station CBD-FM. According to NBB, Maritime Broadcasting's domination of the market allows it to set advertising rates at unrealistically low levels. This, in turn, obliges NBB to increase its commercial minutes at a devalued rate. The applicant claimed that, without the revenue stream to be generated by its proposed Saint John station, the company would incur operating losses and would find it very difficult to continue to compete. |
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As for Maritime Broadcasting's argument that the proposed station format would duplicate that provided by CIOK-FM, NBB claimed that the intervener's station was broadly targeted to persons between the ages of 18 to 54, which is a much wider demographic grouping than the audience of those 35 to 44 years of age that it seeks to attract. |
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Commission's determination |
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The audience share statistics noted above are one indication of a possible competitive imbalance between the applicant and the intervener in the Saint John radio market. A comparison of the advertising revenues and profits (before income tax and interest expenses) earned by CHSJ-FM, relative to those earned by Maritime Broadcasting's three stations, provides further evidence of an imbalance, one that, in the Commission's view, can be corrected by approval of NBB's application. |
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With respect to the intervener's claim that the format of the new station would overlap that of CIOK-FM, the Commission is satisfied that NBB's proposal will offer a musical mix that will contribute to diversity in the Saint John market, and will provide an attractive service to the applicant's target audience resident in the various growing communities of the Kennebecasis Valley. |
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As for the intervener's comment that the applicant should not have made implementation of its St. Stephen proposal conditional upon receipt of approval for its Saint John application, the Commission wishes to emphasize that its decision to approve the latter is based on the merits of the application. |
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Other matters |
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NBB indicated in its application that it did not intend to participate in the plan developed by the Canadian Association of Broadcasters for contributions by radio licensees to Canadian talent development. Under this plan, based on the size of the Saint John market, NBB would normally have been expected to contribute a minimum of $3,000 per year to eligible third parties (such as FACTOR, MusicAction, national and provincial music organizations, performing arts groups, schools and scholarship recipients) for the development of Canadian musical and other artistic talent. |
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Instead, the applicant committed to make direct expenditures on Canadian talent development totalling $28,000 over the course of the station's first seven years of operation, or $4,000 per year. Of this annual amount, $500 will be awarded as a bursary to a senior student enrolled in a local music program, while $500 will be contributed to the newly-formed provincial music industry association known as Music/Musique New Brunswick. A further $3,000 will be allocated each year to a direct grant program to assist aspiring performers and artists in all genres throughout Greater Saint John. As discussed with NBB at the hearing, it is a condition of licence that the licensee make yearly direct contributions of $4,000 to initiatives in support of Canadian talent development, as described in the application. |
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The Commission notes NBB's commitment to establish a news bureau at the provincial legislature in Fredericton to provide locally relevant provincial news programming to its existing and proposed stations. |
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As agreed to by NBB, and consistent with the commitment contained in its application, it is a condition of licence that the licensee, in any broadcast week, broadcast no more than 10% hit material as defined in Public Notice CRTC 1997-42 as amended from time to time. |
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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. |
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As proposed by NBB, the new station will operate on frequency 97.3 MHz (channel 247C) with an effective radiated power of 55,000 watts. |
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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. |
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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. |
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In accordance with section 22(1) of the 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. |
| Secretary General | |
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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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