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Decision
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Ottawa, 29 March 1985
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Decision CRTC 85-158
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Keith Campbell, representing a company to be incorporated Windsor, Ontario - 842183600 - 842184400
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Russwood Broadcasting Limited Windsor, Ontario - 840883300 - 840884100 - 843099300
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Following a Public Hearing in Windsor on 12 February 1985, the Commission approves the applications for authority to acquire the assets of CKLW and CKEZ-FM (formerly CFXX-FM) Windsor from Russwood Broadcasting Limited (Russwood), and for broadcasting licences to continue the operation of these radio stations.
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The Commission will issue licences to Keith Campbell, representing a company to be incorporated, upon expiry of the current licences on 31 March 1985. The Commission will issue an experimental F.M. licence for CKEZ-FM, as prescribed in section 3 of the Radio (F.M.) Broadcasting Regulations, as recently amended (SOR/85-220, Canada Gazette Part II, 20 March 1985).
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The A.M. licence for CKLW and the experimental F.M. licence for CKEZ-FM will expire 31 March 1990 and will be subject to the conditions specified in the appendix to this decision and in the licences to be issued.
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This authority will only take effect at such time as the Commission receives documentation establishing that the company has been incorporated in accordance with the applications in all material respects.
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Background
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On 4 July 1984, the Commission held a public hearing in Windsor, during which it discussed with the broadcasting licensees serving the Windsor market, and with other interested parties, the circumstances and problems affecting the Windsor radio undertakings, in particular the overall decline in audiences and revenues, as a consequence of their close proximity to the large and competitive Detroit market.
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Consideration of applications for the renewal of the licences for CKLW, CKEZ-FM and CJOM-FM, which were scheduled to the 4 July 1984 hearing, was deferred in order to allow the Commission first to assess the testimony of participants at the hearing concerning the Windsor broadcasting environment.
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Subsequently, in a document entitled "Windsor Radio Review" (Public Notice CRTC 1984-233 dated 25 September 1984), the Commission acknowledged that there were a number of special characteristics which set Windsor apart from other Canadian markets, and which warrant an exceptionally flexible approach, particularly with respect to the application of the FM regulations. As noted by the Commission:
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A distance of less than 1,000 meters separates the downtown areas of Windsor of Detroit. Metropolitan Windsor has about 250,000 inhabitants; Detroit is the centre of an urban area with over 4 million residents. Many Windsorites work in Michigan; many more regularly attend cultural and sporting events in Detroit. Windsor-originated television programming addressing local issues and concerns from a truly Canadian perspective is available only on the CBC English and French-language stations but most particularly through CBET; seven Detroit television stations are available to Windsorites. Other than the CBC and student radio stations, Windsor has four local commercial radio outlets while Detroit has more than twenty-five. The Detroit broadcasters have available to them all of the expertise and financial resources usually required to compete in major U.S. markets.
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Windsor residents cheer for Detroit sporting teams, shop and work in Detroit, attend concerts, plays and dances in Detroit and increasingly listen to Detroit radio stations. The weather, much of the news and various community events reported by these stations are of interest to many Windsorites. This is reflected by national advertisers who, wishing to reach Windsor listeners, purchase time on Detroit rather than Windsor stations.
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In light of the unique characteristics of the Windsor market, the Commission stated that it would be prepared to make such changes to its Radio (F.M.) Broadcasting Regulations as would be necessary to give it the regulatory flexibility to deal with special situations, such as Windsor, on an experimental basis. An amendment to its FM regulations prescribing a new class of F.M. licence, namely an experimental F.M. licence, was subsequently enacted on 29 March 1985. The amendment exempts the holder of an experimental F.M. licence from having to adhere to the requirements set out in sections 8, 15, 16 and 19 of the Radio (F.M.) Broadcasting Regulations regarding advertising, simultaneous broadcasting and foreground format programming.
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More recently, in Public Notice CRTC 1985-55 dated 18 March 1985, the Commission proposed a further amendment to its Radio (F.M.) Broadcasting Regulations which would enable the Commission to exclude holders of experimental F.M. licences from the application of section 17 of the said regulations. Section 17 restricts the use of pre-recorded matter by FM stations.
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In its "Windsor Radio Review", the Commission expressed the view that its objectives in Windsor "will be achieved by programming services that reflect a firm Canadian orientation in their approach to the provision of spoken word and music programming." It invited the licensees of Windsor's commercial F.M. stations to submit proposals to amend their Promises of Performance, taking into account the Commission's position. Specifically, the licensees were expected to outline clearly in their revised renewal applications, "how they will meet the particular needs and interests of the Windsor area, and remain a Canadian service", and to demonstrate "how each will contribute to diversity through the creation of a realistic business plan that is financially viable."
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In response to Public Notice CRTC 1984-233, the Commission received applications by Russwood for renewal and amendment of its licences for CKLW and CKEZ-FM. These applications, among other things, contained proposals for new music formats and a new business plan for the two stations, and requested relief from the requirements of the Commission's regulations regarding the amount of foreground programming broadcast on CKEZ-FM.
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The Commission also received the applications for the proposed transfer of the stations' assets which are the subject of this decision. In all but a few respects, the programming proposals set out in the Russwood applications are identical to those contained in the applications by the company to be incorporated.
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The Current Applications
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Ownership of the company to be incorporated will include participation by CUC Limited which, with 50% of the total vote, will hold negative control. CUC Limited has extensive broadcast holdings in Ontario, including ownership of the cable television undertaking serving Windsor. The remaining 50% of the applicant's voting shares will be owned by four other shareholders, including Keith Campbell (20%) and Robert O'Brien (19%), both of whom have considerable experience in broadcasting and marketing, and will participate in the day-to-day direction of the stations.
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At the February hearing in Windsor, the applicant described at length its business plan and programming proposals which are designed to bring an end to the serious financial losses incurred by the two stations in recent years by enabling them to repatriate their Canadian listenership and to increase their advertising revenues.
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An essential element of this overall plan is the applicant's proposal to make use of a taped music service on CKEZ-FM. The applicant emphasized that this proposal was critical to the success of its business plan in this strongly competitive market. As noted above, the Commission has proposed an amendment to its FM regulations earlier this month which would enable the Commission to permit the holder of an experimental F.M. licence to use pre-recorded matter, as proposed by the applicant.
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The applicant intends to alter the stations' formats to appeal to the needs of those growing segments of the population between the ages of 35 and 44 in the case of CKLW, and between the ages of 40 and 54 in the case of CKEZ-FM.
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It stated that its purpose is to present, on both stations, music formats which will be attractive to the same Windsor audiences which, in large numbers, currently listen to two of the most popular Detroit stations. It emphasized, however, that both formats will be distinctly different from the music formats broadcast by Windsor's other commercial radio stations.
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The applicant noted that there is a sizeable potential audience to be developed jointly by the stations from among these age groups, offering a strong potential for cross promotion and for selling the stations to advertisers on a combined basis.
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The applicant also proposed a reduction in the amount of category 6 (Traditional-Special interest) music broadcast on CKEZ-FM from 15 hours to 21/2 hours per week. In this regard, the Commission notes that, prior to 1982, the amount of category 6 music broadcast by this Windsor FM station was 2 hours per week which, given the context of the city's broadcasting environment, was then deemed to be sufficient to provide diversity in the area. Accordingly, the Commission approves the amount of category 6 music proposed by the applicant in its Promise of Performance.
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The Promise of Performance submitted by the applicant for CKEZ-FM indicates a commitment of 9% for programming in a foreground format. The Commission considers that the applicant's proposal is balanced, however, by its commitment to programming in a mosaic format of 73%, representing a combined foreground-mosaic commitment of 82% which is well in excess of the 50% required of joint FM licensees under the FM policy. The Commission therefore approves, as a condition of licence, the amount of foreground programming proposed (9%).
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The applicant confirmed at the hearing that CKEZ-FM would broadcast a level of hits which would be no greater than 10% of musical selections from category 5, rather than the 90% hits which had, in error, been indicated in its written application. The applicant also gave the firm commitment to respect fully the Canadian content requirements on both stations throughout the day.
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With respect to news programming, the applicant proposed a total of 41/2 hours per week on CKEZ-FM and 5 hours per week on CKLW, prepared by a staff of 8 full-time and 2 part-time employees. This staff would also be responsible for preparing the bulk of the enrichment material contained in CKEZ-FM's mosaic and foreground programming. The applicant gave the commitment that, on both the AM and FM stations, a minimum of 45% of the news items covered, and a significant portion of the other spoken word segments broadcast by the two stations, would have a Canadian orientation.
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The Commission considers the Canadian orientation of the news programming provided by CKLW and CKEZ-FM to be an essential means of achieving the overall Canadian character in the services offered by these stations. Accordingly, and as specified in the appendix to this decision, it shall be a condition of both licences that 45% of the news items, to be measured on a weekly basis, have a Canadian orientation in that they must relate to events taking place in Canada or to a distinct Canadian involvement in international events.
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The Commission has examined closely the applicant's business plan and proposed programming in the light of the exceptional circumstances presented by Windsor's broadcasting environment, and considers that the applicant's proposals comprise reasonable and workable means to restore the financial viability of CKLW and CKEZ-FM. Moreover, the Commission is satisfied that its more flexible regulatory approach, coupled with the fulfillment by the applicant of its commitments with respect to Canadian content in its music, news and other spoken word programming, will enable the stations to re-establish themselves as attractive and strongly Canadian programming services in the Windsor area, responding first and foremost to the needs of Canadian residents.
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The Commission intends to review the effectiveness of its regulatory approach and the results obtained by the licensee from implementation of the proposed changes at the time of next licence renewal. In the meantime the Commission requires the applicant to submit a report, two years from the date of this decision and on an annual basis thereafter for the remainder of the licence term, on its progress in implementing its business plan and on the success of its programming proposals.
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The Commission notes that approval of the applications by the company to be incorporated renders further action on the Russwood applications unnecessary (840883300, 840884100, 843099300).
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Fernand Bélisle Secretary General
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Appendix to Decision CRTC 83-158
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A. Condition of licence for CKLW and CKEZ-FM:
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The licensee shall, between 6 a.m. and midnight in any broadcast week, ensure that a minimum of 45% of the news items broadcast on CKLW and CKEZ-FM have a Canadian orientation in that they must relate to events taking place in Canada or to a distinct Canadian involvement in international events.
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B. Conditions of licence for CKEZ-FM:
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1. The licensee shall not, between six o'clock in the forenoon and twelve o'clock midnight in any broadcast week, devote to time segments presented in a foreground format, less than 9% of the broadcast time of the station.
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2. The licensee shall not, between six o'clock in the forenoon and twelve o'clock midnight of any day, broadcast simultaneously on CKEZ-FM the same matter that is being broadcast on CKLW, unless the simultaneous broadcasts
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(a) are specifically authorized by the Executive Committee on the ground that the matter is of compelling importance to the community served;
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(b) are necessitated by public emergency; or
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(c) consist of a special live program that may include a commentary on the program if the commentary is an integral part of the program and that relates to
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(i) any royal or vice-royal address, including a speech
from the throne,
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(ii) an address by the Prime Minister of Canada or the prime minister of a province,
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(iii) the results of a federal, provincial or municipal election or referendum and is broadcast after the close of the poll, or
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(iv) a federal provincial or municipal budget.
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3. The licensee shall, at least once during each day, between seven and nine o'clock in the forenoon, or between six and nine o'clock in the afternoon, local time, broadcast a brief statement on its F.M. station indicating the nature of the relationship between CKEZ-FM and CKLW and the interest of the licensee in CKLW.
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4. (1) Between the hours of six o'clock in the forenoon and twelve o'clock midnight of any day, the licensee shall not broadcast commercial messages the aggregate time of which exceeds 150 minutes.
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(2) The licensee shall not, during any clock hour between six o'clock in the forenoon and twelve o'clock midnight of any day, broadcast more than 10 minutes of commercial messages.
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