ARCHIVED - Broadcasting Decision CRTC 2004-143
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Broadcasting Decision CRTC 2004-143 |
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| Ottawa, 13 April 2004 | |
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Norwesto Communications Ltd. Vermilion Bay, Dryden and Kenora, Ontario |
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Application 2003-0002-0 Public Hearing in the National Capital Region 20 October 2003 |
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English-language FM radio station in Vermilion Bay |
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| In this decision, the Commission approves the application by Norwesto Communications Ltd. to carry on an English-language FM radio station in Vermilion Bay, with rebroadcasting transmitters in Dryden and Kenora. | |
The application |
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1. |
The Commission received an application by Norwesto Communications Ltd. (Norwesto) for a broadcasting licence to operate a commercial English-language FM radio programming undertaking in Vermilion Bay at 103.3 MHz (channel 277A) with an effective radiated power (ERP) of 1,600 watts, with rebroadcasting transmitters in Dryden at 104.5 MHz (channel 283A) with an ERP of 1,800 watts, and in Kenora at 104.5 MHz (channel 283A) with an ERP of 1,700 watts. |
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2. |
The proposed station would offer a Hot adult contemporary music format featuring mostly dance and contemporary hit music. Approximately 90 hours per week of the programming would be station-produced and would target the three communities of Vermilion Bay, Dryden and Kenora using a regional community-of-interest programming model. The applicant stated that most of the content of its regional news and information programming would be pertinent to all three communities, given that they share many common interests. Nevertheless, it indicated that local and spoken word programming segments of specific relevance to each of the three communities would be incorporated into the service's programming schedule, including 280 minutes per week of station-produced regional and local news programming. Furthermore, the applicant stated that it would broadcast a two-to-four-minute spoken word feature, every hour, devoted to topics and local stories of common interest to all three communities. These features would be created by the station or picked up through syndication. The applicant stated that the addition of a new service in these markets "would be good for the listener, good for the advertiser, and indeed good for the market." |
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3. |
Under the plan developed by the Canadian Association of Broadcasters (CAB) for contributions by radio licensees to Canadian talent development, a radio licensee serving a community the size of Vermilion Bay would normally be expected to contribute a minimum of $400 in each broadcast year to eligible third parties for the development of Canadian musical and other artistic talent. The applicant confirmed that it would participate in the CAB's plan and expend a total of $2,000 in each broadcast year on initiatives that directly support Canadian talent development. The applicant would devote $400 per year to the Foundation to Assist Canadian Talent on Records (FACTOR) and $1,600 per year to high school music and arts scholarships. |
Interventions |
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4. |
The application by Norwesto was originally scheduled for consideration as a non-appearing item at the 14 July 2003 Public Hearing in the National Capital Region. However, in addition to ten interventions in support, the Commission received an intervention by Fawcett Broadcasting Limited (Fawcett) expressing strong opposition to the application. Fawcett is the licensee of AM radio stations CKDR Dryden and CJRL Kenora. |
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5. |
Given the concerns expressed by Fawcett, the Commission considered that a more complete discussion with the applicant was necessary. Accordingly, the Commission withdrew the application from the 14 July 2003 Public Hearing and asked the applicant to appear at the 20 October 2003 Public Hearing in the National Capital Region. The following discussion takes into account the concerns expressed in Fawcett's written intervention and appearance at the public hearing. |
Market impact |
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6. |
Fawcett is the licensee of AM radio stations in Dryden and Kenora. Fawcett noted that it has been the sole commercial radio broadcaster "in this area of northwestern Ontario for the past 65 years." Moreover, the signal of CKDR is currently receivable in Vermilion Bay and, in fact, is the only commercial radio signal currently receivable, off-air, in that community. The Commission has approved an application by Fawcett for a conversion of its AM station, CJRL, to the FM band in CJRL Kenora - Conversion to FM band, Broadcasting Decision CRTC 2004-142, also published today. Fawcett indicated that it plans to submit a similar application for CKDR in the near future. The intervener's concerns were addressed primarily to the market impact of the applicant's proposal on the existing radio stations. |
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In its intervention, Fawcett argued that Norwesto's business plan was unrealistic in its expectation that Dryden and Kenora could each support more than one commercial station. Fawcett expressed concern that Norwesto's proposed station would have a significant impact on Fawcett's Dryden and Kenora stations, which would result in a decline in Fawcett's local revenues. The intervener stated that the recent economic decline in these communities, as well as in Vermilion Bay, has already weakened advertising revenues, and that approval of the proposed station would "destroy CKDR's Vermilion Bay customer base." Fawcett added that Dryden plays a significant role within the Fawcett Broadcasting group, and that any considerable reduction in CKDR's revenues would damage the entire group. Fawcett contended, however, that denial of Norwesto's application would ensure the continued survival of live, local radio service in Dryden and Kenora, and would allow Fawcett to continue with its long-term plan to convert its AM stations to the FM band. |
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In reply, Norwesto stated that the markets of Dryden and Kenora could support another commercial station. It pointed out that the Web sites of both cities forecast that the economy in the region will experience reasonably strong growth over the next few years. |
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According to Norwesto, although the proposed service would likely take some revenue away from CKDR, the impact that it would have on Fawcett's stations overall would be minimal. It noted in this regard that CKDR has six rebroadcasting transmitters in other communities and therefore reaches a much larger population than Norwesto's proposed transmitter in Dryden would reach. Norwesto contended that, given CKDR's greater reach, the proposed service would not have a significant impact on CKDR's ability to attract advertising revenues. Norwesto also stated that the format of the proposed service would attract new listeners to radio and serve a younger audience than that served by Fawcett. It noted that Fawcett has enjoyed a monopoly in the area for many years, and added that it was "confident that, with their experience and community involvement, Fawcett will continue to be successful regardless of some healthy FM competition." |
The Commission's determination |
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The Commission notes that, based on information from Canadian Demographics 2004, published by the Financial Post, total income and retail sales in Kenora are expected to continue to increase over the next five years. The Commission is further satisfied that Fawcett, as an established incumbent, is well positioned to adjust to the moderate impact that would result from the introduction of the commercial service proposed by Norwesto. Accordingly, the Commission determines that, while there would be a moderate impact on the Fawcett stations serving Vermilion Bay, Dryden and Kenora, the markets are sufficiently healthy to absorb the competitive impact that would result from the licensing of a new commercial FM station. |
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The Commission further notes that the proposed station would constitute a new voice in the markets of Vermilion Bay, Dryden and Kenora, and would provide service to the underserved group of those between 12 and 34 years of age. |
Local programming |
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Fawcett expressed the view that Norwesto's regional programming model would not provide adequate local news content specific to Dryden and Kenora. Furthermore, in Fawcett's opinion, Norwesto's commitments to local spoken word programming do not address the particular needs and interests of listeners from these communities. More importantly, Fawcett expressed concern that Norwesto's regional programming model and related local programming commitments would not be sufficient to allow it to operate in compliance with the Commission's standard local programming condition of licence as set out in New licence form for commercial radio stations, Public Notice CRTC 1999-137, 24 August 1999 (Public Notice 1999-137). This condition stipulates that: |
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Subject to paragraph 6, it is a condition of licence for commercial FM stations serving markets other than single-station markets (Public Notice CRTC 1993-121), that the licensee refrain from soliciting or accepting local advertising for broadcast during any broadcast week when less than one third of the programming aired is local. |
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In addition, in Policies for local programming on commercial radio stations and advertising on campus stations, Public Notice CRTC 1993-38, 19 April 1993, the Commission stated that "in their local programming, licensees must include spoken word material of direct and particular relevance to the community served, such as local news, weather and sports, and the promotion of local events and activities." |
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In response to Fawcett's intervention, Norwesto described its plans to meet the spoken word requirement outlined above. Specifically, Norwesto confirmed its intention to hire, during the first year of operation, one full-time newsperson and several stringers who would be located in Dryden and Kenora. Norwesto argued that this initial staffing level would be sufficient to fulfil its commitment to provide a minimum of 280 minutes per week of station-produced regional and local news programming, the latter devoted to stories of particular relevance to each of Dryden, Kenora and Vermilion Bay. Norwesto added that 15% of the total news content would consist of Dryden-specific stories, 15% would be Kenora-specific, and 10% would be Vermilion Bay-specific. Norwesto indicated that this regional and local news programming would be inserted at the end of hourly Broadcast News Service newscasts and broadcast every hour from 6:00 a.m. to midnight. In addition, Norwesto stated that it would broadcast live-to-air weekdays from 6:00 a.m. to midnight, and it would offer a combination of live-to-air and voice-tracked programming on weekends between 6:00 a.m. and midnight. |
The Commission's determination |
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The Commission notes Fawcett's statement at the hearing that its AM stations in Dryden and Kenora "carry a lot of the same community programs . because they work in both markets." It went on to characterize the markets as being "very, very similar." In the Commission's view, these statements by the intervener are difficult to reconcile with Fawcett's criticism of the applicant's plans to serve the needs and interests of residents in these communities through the provision of regional news and information programming. In fact, in the Commission's view, the community-of-interest approach proposed by Norwesto is not dissimilar to the approach used by Fawcett. |
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The Commission notes in this regard the applicant's plan to broadcast the same programming (including advertising) on all three of its transmitters. The Commission is of the view that implementation of the applicant's plan, as presented, would have no undue impact on Fawcett. Nevertheless, the Commission would share the intervener's concerns if Norwesto had instead proposed to split feed its programming. Accordingly, the Commission is imposing a condition of licence requiring the applicant to adhere to its commitment to ensure that all programming broadcast on the applicant's Dryden and Kenora rebroadcasting transmitters is identical to the programming that originates from its Vermilion Bay studio and is broadcast on its Vermilion Bay transmitter. Should Norwesto wish to split feed programming to Dryden or Kenora in the future, it would need to apply for a licence to operate the transmitter at each of these communities as a station in its own right. |
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The Commission has assessed the applicant's commitments described above with respect to regional and local programming and, given the particular circumstances in this case, considers that the applicant's regional community-of-interest programming model will provide levels of spoken word programming of direct and particular relevance to the communities of Vermilion Bay, Dryden and Kenora sufficient to satisfy the requirements of the Commission's local programming policy and to meet the needs of listeners in each of those communities. |
Music format |
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In its intervention, Fawcett expressed concern that the music format of Norwesto's proposed service would duplicate that of Fawcett's CKDR and CJRL, and would therefore not add to the diversity of music programming available to listeners in Vermilion Bay, Dryden and Kenora. |
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In response, Norwesto stated that, although the format of the proposed station would include the music of some mainstream adult contemporary artists, current and recent dance and contemporary hit music would predominate and would target a younger adult audience than Fawcett's more mainstream adult contemporary format. |
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The Commission's determination |
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The Commission notes Fawcett's confirmation that CKDR and CJRL offer basically the same music programming, which is focused on a more mainstream adult contemporary sound. Although the Commission does not regulate the musical formats of commercial FM stations other than those operating in the specialty format, it notes that the musical format of Norwesto's proposed station would differ from that of both CKDR and CJRL. Accordingly, the Commission is satisfied that the music format proposed by Norwesto would add to the diversity of choice available to listeners in the communities of Vermilion Bay, Dryden and Kenora and, in particular, to youth and young adults. |
The Commission's determination |
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In light of the above, the Commission approves the application by Norwesto Communications Ltd. for a broadcasting licence to operate a commercial English-language FM radio programming undertaking in Vermilion Bay at 103.3 MHz (channel 277A) with an ERP of 1,600 watts, with rebroadcasting transmitters in Dryden at 104.5 MHz (channel 283A) with an ERP of 1,800 watts, and in Kenora at 104.5 MHz (channel 283A) with an ERP of 1,700 watts. |
Issuance of the licence |
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22. |
The licence will expire 31 August 2010 and will be subject to the conditions set outin Public Notice 1999-137. The licence will also be subject to the following conditions: |
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23. |
The Department of Industry (the Department) has advised the Commission that, while this application is conditionally technically acceptable, it will only issue a broadcasting certificate when it has determined that the proposed technical parameters will not create any unacceptable interference with aeronautical NAV/COM services. |
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The Commission reminds the applicant that, pursuant to section 22(1) of the Broadcasting Act, no licence may be issued until the Department notifies the Commission that its technical requirements have been met, and that a broadcasting certificate will be issued. |
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25. |
Furthermore, the licence for this undertaking will be issued once the applicant has informed the Commission in writing that it is prepared to commence operations. The undertaking must be operational at the earliest possible date and in any event no later than 24 months from the date of this decision, unless a request for an extension of time is approved by the Commission before 13 April 2006. In order to ensure that such a request is processed in a timely manner, it should be submitted at least 60 days before this date. |
Employment equity |
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In accordance with Implementation of an employment equity policy, Public Notice CRTC 1992-59, 1 September 1992, 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. |
| 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 |
Date Modified: 2004-04-13
- Date modified: