ARCHIVED -  Decision CRTC 89-47

Decision

Ottawa, 15 February 1989

Decision CRTC 89-47

La Coopérative des Montagnes Limitée -Radio Communautaire

Edmundston, Grand Falls and Saint-Quentin, New Brunswick - 881213300 - 881214100 - 881215800

Following a Public Hearing in Halifax, Nova Scotia, on 6 December 1988, the Commission approves the applications for broadcasting licences to operate French-language FM community radio stations at Edmundston, Grand Falls and Saint-Quentin.

The licences will expire 31 August 1991 and will be subject to the conditions specified in this decision and in the licences to be issued. This term will enable the Commission to consider the renewal of these licences at the same time as that of other broadcasting undertakings in the area.

In accordance with the applicant's proposals and with Commission policy as established in "The Review of Community Radio" (Public Notice CRTC 1985-194 dated 26 August 1985), the Commission will issue special community FM radio licences for the above-mentioned undertakings consisting of a Type B licence for Edmundston and Type A licences for Grand Falls and Saint-Quentin. All three stations will operate in a Group IV music format.

The applicant is proposing to establish French-language community FM stations in the Madawaska, Haut-Victoria and Restigouche-Ouest areas of northwestern New Brunswick in which the population is predominantly Francophone. The applicant has estimated that there are approximately 65,000 French-speaking persons residing in several small rural communities. The only local French-language radio service is provided by the private AM station CJEM Edmundston and its rebroadcaster CKMV Grand Falls. The CBC's French-language AM radio service is also available through rebroadcasters of CBAF Moncton. In addition, the signals of some fifteen English-language radio stations, most of them originating from the northeastern United States, are receivable in the area, particularly on the FM band.

In considering these applications, the Commission has taken into account the dynamism and perseverance of the project promoters, the large number of supporting interventions, several of which were submitted by Acadian groups and associations, and the information filed with the applications, including the results of a market study conducted by CEGIR for the applicant and additional information provided in response to the Commission's concerns set out in Decision CRTC 87-596 dated 6 August 1987, notably with regard to funding sources.

At a public hearing in Bathurst, New Brunswick on 12 May 1987, the Commission considered similar applications by the same applicant. The Commission pointed out in Decision CRTC 87-596 that while it was convinced of the need for a local French-language FM radio service in northwestern New Brunswick, particularly in the areas of Grand Falls, Kedgwick and Saint-Quentin, where there is virtually no local service, it continued to have serious doubts as to whether the proposal as submitted could be realized.

The Commission was primarily concerned about the sources of financing, the commercial aspect of the proposal, the human resources, and the proposed level of spoken work programming. In denying the 1987 applications, the Commission nevertheless stated that it was prepared to consider any applications that addressed its concerns and invited the applicant to revise its proposal in consultation with all other interested parties.

In terms of financing, the present application calls for a maximum of $1 million in capital expenditures. In this regard, the Commission has received confirmation that the applicant is eligible for a contribution equal to 50% of such expenses from the Department of the Secretary of State's program of assistance for minority official-language community radio stations. The applicant also submitted documentation confirming that it would be granted $200,000 by the New Brunswick government, and a bank loan of $100,000 for such expenditures.

The Commission notes that a number of the communities to be served have pledged to contribute a sum of $28,582 for capital expenditures, as well as annual contributions over five years for the purpose of repaying the bank loan. The applicant also indicated that the remainder of the capital expenditures would be financed through fund-raising campaigns and volunteer activities in the communities to be served and that some $80,000 in cash and pledges had already been collected for this purpose. The Commission has also taken note of the fact that at the time of the public hearing, the applicant already had signed up some 600 members and that its goal was 1,000 members. In light of the foregoing, the Commission is satisfied that the applicant will have at its disposal the necessary funds and community support to implement its project.

With regard to operating revenue, the applicant's financial projections indicate $157,000 in local advertising revenue in the first year of operation, consisting of approximately $82,000 originating from Edmundston, $50,000 from Grand Falls, and $25,000 from the Restigouche-Ouest area. Other revenue would be generated by volunteer activities undertaken for the benefit of the community radio station and from government grants, which are expected to be reduced from 38% of its total revenue in the first year of operation to 10% by the fifth year. In view of the fact that the applicant intends to achieve complete financial self-sufficiency by the end of the fifth year of operation and that it forecasts that its advertising revenue will, at that time, represent close to 70% of its total revenue, the Commission encourages it to diversify its funding sources as much as possible over the licence term, in order to lessen the effect of advertising on its programming.

The Commission further notes that Radio Edmundston Ltée, licensee of CJEM Edmundston and CKMV Grand Falls, and the Syndicat des communications de la république du Madawaska, representing the employees of CJEM, intervened at the public hearing in opposition to the present applications. Their opposition was based primarily on the concern that the applicant's projected advertising revenue could jeopardize the survival of CJEM's AM service. In response, the applicant maintained that its goal in offering a new and complementary service on the FM band is to create a new market and a new audience for French-language radio in this part of New Brunswick, thereby recuperating a substantial portion of the audience and market currently held by English-language radio stations, particularly by American FM stations.

Upon being questioned on this matter by the Commission, the applicant estimated that about 50% of its projected advertising revenue in the Edmundston area, representing approximately $40,000 in the first year of operation, might be drawn from CJEM's market; in the Grand Falls area, its advertising revenue could represent between 10% and 15% of the $50,000 forecast to be derived from this market during the first year. The Commission notes that the applicant's estimate of that portion of its advertising revenue to be drawn from the CJEM/CKMV market in the first year of operation represents about 5% of Radio Edmunston Ltée's total local advertising revenue in the year ending 31 August 1988, according to the information provided in the written intervention submitted to the Commission.

In examining CJEM's situation, the Commission has also considered the fact that this station has been established in the community for more than 40 years and that, according to BBM data for the fall of 1988 provided by the intervener at the hearing, the station enjoys a dominant position in its market in terms of listenership, with better than 85% of the potential audience in Madawaska County. The station is also in a strong financial position, with above average before-tax profits and with operating profits only slightly below the average for the Canadian radio industry. In view of all of the foregoing, the Commission has concluded that implementation of this community radio proposal will not jeopardize the survival of CJEM and CKMV.

The Commission further notes that the proposed Edmundston station, as a Type B community station operating in a market served by an existing French-language radio station, must respect the restrictions imposed under the community radio policy in terms of the amount of advertising to be broadcast each day, while a commercial station such as CJEM is not subject to any such restriction. The licence of the Edmundston station will, therefore, be subject to the condition that the applicant broadcast an average of 4 minutes of advertising per hour, with a maximum of 6 minutes per hour, in accordance with community radio policy for Type B stations. The licences of the Type A stations at Grand Falls and Saint-Quentin/Kedgewick will be subject to the condition that the applicant not devote more than 20% of their total broadcasting time to advertising, with a maximum of 250 minutes per day up to a maximum of 1,500 minutes per week.

The Commission notes in this regard the system proposed by the applicant to control the amount of advertising carried by the three stations, inasmuch as each will contribute a certain amount of programming. Accordingly, when the stations are operating independently, each may broadcast the maximum amount of advertising authorized by its individual licence; whereas when the stations are operating as a network, the restrictions on the Edmundston station will apply.

The Commission also received a written intervention from Radio Dégelis Inc., licensee of CFVD Dégelis, Quebec, which opposed in particular the proposal for a station at Edmundston. The intervener expressed concern about the proposed technical parameters which indicate a substantial overlap in the service contours of the proposed Edmundston and Grand Falls stations and a coverage area extending well beyond the target markets and into CFVD's primary market in the Quebec county of Témiscouata. The intervener requested that the applicant be required to modify the proposed service coutour of the Edmundston station in order to safeguard its Témiscouata territory, and also asked that the applicant be prohibited from soliciting advertising in that market.

Having considered the applicant's statements at the hearing relating to advertising, the Commission requires the licensee by condition of licence not to solicit advertising in the province of Quebec. In imposing this condition of licence, the Commission has given consideration to the fact that CFVD is a small, marginally profitable station that is already subject to competition from other French-language radio stations in the area. The Commission has also taken into account the fact that the community radio service proposed by the applicant is intended specifically to serve the francophone population of northwestern New Brunswick.

With regard to the technical aspects of the intervention by Radio Dégelis Inc., the Commission advised the applicant at the hearing of its concerns in this regard, particularly in view of the considerable overlap of the service countours of the Edmundston and Grand Falls stations that would occur if the proposed technical parameters were implemented. The use of two frequencies to provide the same service is counter to CRTC and Department of Communications (DOC) policies which are designed to ensure effective management and optimum use of the broadcast frequency spectrum. The applicant explained at the hearing that the proposed technical parameters were primarily designed to ensure adequate signal quality in the hilly area it will serve and to permit all three stations to be linked directly when they broadcast as a network. The applicant stated, nevertheless, that it was prepared to consider the possibility of modifying the contour of the Edmundston station in order to correct the anticipated overlap problem.

The Commission notes in this regard, that the applicant proposed to operate the Edmundston station on the 92.7 MHz frequency (channel 224B) with an effective radiated power of 4,100 watts. In view of the above-mentioned problems that could result and in line with the discussions on this subject at the public hearing, the applicant will be required, in consultation with CRTC and DOC staff, to submit a new technical proposal which would effectively bring the technical parameters of the class "B" frequency to be used at Edmundston in line with those of a class "A" frequency, while still enabling the station to achieve its planned coverage.

The Commission approves the proposal to operate the Grand Falls station on the 105.1 MHz frequency (channel 286A) with an effective radiated power of 2,900 watts.

With respect to the proposed station at Saint-Quentin/Kedgwick, the Commission has advised the applicant that its proposal to operate on the 95.3 MHz frequency (channel 237A) with an effective radiated power of 1,215 watts conflicts with another proposal received by the Commission to operate a new FM station on the same frequency. Inasmuch as the other proposal would utilize the frequency according to class "B" parameters, which would constitute a better utilization of the frequency spectrum, and because other class "A" frequencies could be used, the applicant will be required to select another frequency for the proposed station in consultation with CRTC and DOC staff.

In accordance with paragraph 13(1)(b) of the Broadcasting Act, the Commission will issue licences to the applicant for Edmundston and Saint-Quentin/Kedgwick upon receipt of written notification from the DOC within four months of the date of this decision that it will issue Technical Construction and Operating Certificates. No licences will be issued if the Commission does not receive this notification within said period or, where the applicant applies to the Commission and satisfies the Commission that it is unable to obtain said notification before the expiry of this four-month period and that an extension of this period is in the public interest, within such further period of time as is approved in writing by the Commission.

The Commission notes that these community radio stations will be owned and controlled by a non-profit organization whose structure provides for membership, management, operation and programming primarily by members of the community at large.

At the hearing the applicant emphasized the advantages of pooling the resources of the three areas in order to assure the viability of the project and as a means of offering better quality and more complete programming. While noting the interdependence of the three proposed stations, the applicant nevertheless indicated that in accordance with the terms of its charter each station would be required to be financially self-sufficient or be subject to closure after three consecutive years of losses.

The Commission points out that this provision could mean that the applicant might eventually serve only the Edmundston area which has the greatest resources at its disposal, and cease to serve the Grand Falls and Restigouche Ouest areas. The Commission is of the opinion that this would be inconsistent with the very purpose of the project since it is precisely these two areas that have the greatest need for local French-language radio service. It also considers that the granting of a licence to serve Edmundston can only be justified because the applicant has succeeded in demonstrating that the establishment of service in the Grand Falls and Saint-Quentin areas would not be possible without the contribution and support of the Edmundston area.

Accordingly, as a means of ensuring that the project herein authorized is implemented as proposed and continues to remain in operation throughout the licence term, the Commission requires, by a condition of licence of the Edmundston station that the licensee establish and operate simultaneously the three proposed community radio stations during the term of licence herein authorized.

The applicant proposed to broadcast a total of 122 hours per week on each station, including 16 hours to be devoted exclusively to each station's individual listenership. In addition, each station will contribute programming to the other two stations for a total weekly local production of 69 hours 20 minutes per week at Edmundston, 47 hours at Grand Falls, and 32 hours 40 minutes at Saint-Quentin. In addition, the three stations intend to co-produce a total of 5 hours of programs for children and youth. The Commission hereby notifies the applicant that should the number of hours of broadcasting lead to problems resulting in a situation of non-compliance and prevent it from honouring its programming commitments, it will be required to reduce its total broadcasting time to a level that will enable it to respect these commitments at all times. The Commission also reminds the applicant that the policy on community radio provides that, in order to respond to the needs of each community, a station may increase or decrease the number of hours of authorized weekly broadcast time by up to 20% without having to apply to the Commission to amend its licence.

However, in order to ensure that each station offers adequate local service, particularly in the communities of Grand Falls and Saint-Quentin, the three licences will be subject to the condition that the level of local production on each station will not decrease by greater than 20% of the amount of local programming proposed by the applicant, namely 69 hours 20 minutes at Edmundston, 47 hours at Grand Falls, and 32 hours 40 minutes at Saint-Quentin.

In response to one of the concerns expressed in Decision CRTC 87-596, the applicant promised that the amount of spoken word programming to be broadcast at Edmundston would be at least 35%, with 16.4% foreground programming, and 66.2% combined foreground/mosaic programming. With regard to each of the other two stations, the commitments are 30.1% for spoken word, 13.9% foreground, and 62.3% combined foreground/mosaic programming.

The applicant indicated at the hearing that it would have a staff of 14, with 8 persons at Edmundston, 4 at Grand Falls and 2 at Saint-Quentin. Volunteers would produce some 59 hours of programming per week for the three stations, which appears to be a more realistic figure than that contained in the previous application. The Commission also notes the applicant's plans to co-operate and exchange programs with other community and student radio stations, particularly its plan, in collaboration with Radio Peninsule Inc., to exchange a public affairs program to be broadcast on weekends.

The applicant intends to operate in a Group IV musical format, using selections from all of the popular music subcategories (Category 5), and to broadcast 9 hours 34 minutes per week of Category 6 music (Traditional and Special-Interest). At the hearing, the Commission stressed to the applicant that it is important to ensure that its musical programming is distinctive in terms of both its content and its presentation. The Commission notes in this regard that the applicant indicated a willingness to amend its proposal to commit to a maximum repeat factor of 10 for popular music selections, rather than 14 as initially proposed. The applicant emphasized that it intended to play 25% to 30% instrumental selections in order to achieve a distinctive style in its music programming. In this regard, the Commission reiterates that in its policy statement on community radio dated 26 August 1985 it stressed that community radio stations must offer a diversified and balanced selection of music and pointed out that such stations ought to make use of most, if not all, of the popular music subcategories and offer a broad range of traditional and special interest music.

In the same context, the Commission also discussed at the hearing the applicant's proposal to commence with 55% French-language vocal music and to progressively increase this amount to 65% during the fourth year of operation. The Commission has considered the applicant's arguments for this request, namely that in this way it would be able to faciliate the establishment of community radio and to modify listening habits gradually. The Commission is of the view, however, that this community radio station should offer from the outset a distinctive alternative to other radio stations in the area, most of which broadcast in English. It has taken into account the applicant's statement at the hearing that it would not have any difficulty in obtaining French-language recordings since it will be receiving substantial gifts of records from the governments of Quebec and of France. Accordingly, the licences are subject to the condition that the licensee broadcast a minimum of 65% French-language vocal music on the three stations as of the moment they commence operation.

In accordance with the provisions of its community radio policy, the Commission further expects this community radio undertaking to develop innovative forms of community-oriented programming. It also expects community radio stations to offer distinctive programs that deal with issues of concern to particular segments of the communities they serve, including the individual towns and villages served as well as various interest groups. In this regard, the Commission notes with interest the applicant's plan to originate its broadcasts for one day each year from each of the seventeen municipalities that have made a commitment to support the project financially. This will be achieved within the context of special events characteristic of each of these communities.

In its policy statement on community radio, the Commission also encouraged community stations to continue to emphasize all forms of artistic expression at the local and regional levels. It notes in this regard that the applicant has committed to allocate a total of $5,000 annually to ensure, among other things, the broadcasting of musical performances originating at various regional festivals as well as a weekly 30-minute program featuring local talent.

It is a condition of licence that the applicant adhere to the Canadian Association of Broadcasters's self-regulatory guidelines on sex-role stereotyping, as amended from time to time and approved by the Commission.

The licences are also subject to the condition that construction of the undertakings be completed and that they be in operation within twelve months of the date of receipt of written notification from the DOC that it will issue Technical Construction and Operating Certificates, or, where the applicant applies to the Commission within this twelve-month period and satisfies the Commission that it cannot begin the operation of the stations before the expiry of this twelve-month period and that an extension is in the public interest, within such further period as is approved in writing by the Commission.

Fernand Bélisle
Secretary General