ARCHIVED -  Decision CRTC 97-292

Decision

Ottawa, 4 July 1997

Decision CRTC 97-292

Diffusion Laurentides inc.

Sainte-Adèle, Saint-Jérôme, Saint-Jovite, Mont-Tremblant and Val-Morin, Quebec - 199616546Saint-Jovite, Quebec - 199617023Sainte-Agathe-des-Monts and Saint-Donat, Quebec - 199617015

Approval of applications to amend the licence for CIME-FM Sainte-Adèle; denial of competing applications for authority to carry on two new French-language FM radio programming undertakings

1.  Following a Public Hearing in Montréal beginning on 24 February 1997, the Commission approves the application by Diffusion Laurentides inc. to amend the licence for the radio programming undertaking CIME-FM Sainte-Adèle as follows:

·  by changing the frequency from 99.5 MHz (channel 258B) to 103.9 MHz (channel 280A);

·  by decreasing the effective radiated power from 50,000 to 630 watts;

·  by relocating the studios from Sainte-Adèle to Saint-Jérôme;

·  by authorizing the licensee to add a transmitter at Mont-Tremblant, operating on frequency 101.3 MHz (channel 267B) with an effective radiated power of 800 watts.

2.  The Department of Industry has advised that the transmitter will have the above-noted technical parameters rather than those indicated in Notice of Public Hearing CRTC 1996-15 dated 17 December 1996.

3.  The authority with respect to the transmitter at Mont-Tremblant will only be effective and the licence will only be amended at such time as construction of the transmitter is completed and it is prepared to commence operation. If the construction is not completed within twelve months of the date of this decision or, where the applicant applies to the Commission within this period and satisfies the Commission that it cannot complete construction and commence operation before the expiry of this period, and that an extension of time is in the public interest, within such further periods of time as are approved in writing by the Commission, the licence will not be amended. The applicant is required to advise the Commission (before the expiry of the twelve-month period or any extension thereof) in writing, once it has completed construction and is prepared to commence operation.

4.  The Department of Industry has advised the Commission that this application is conditionally technically acceptable, and that a Broadcasting Certificate will only be issued once it has been determined that the proposed technical parameters will not create any unacceptable interference with aeronautical NAV/COM services.

5.  In accordance with subsection 22(1) of the Broadcasting Act, the Commission will only issue the licence amendment and the authority will only be granted at such time as written notification is received from the Department of Industry that its technical requirements have been met, and that a Broadcasting Certificate will be issued.

6.  The applications by Peter Hamé, on behalf of a company to be incorporated, are denied for the reasons set out later in this decision.

The applications

7.  Diffusion Laurentides inc. explained at the hearing that it has two motives for moving its studios from Sainte-Adèle to Saint-Jérôme. The first is to move closer to the community that constitutes its core audience and provides more than a third of the revenues it derives from the Laurentides market. The second is to reduce the cost of the telephone links between its studio and transmitter. At the hearing the licensee assured the Commission that the Sainte-Adèle area will continue to receive the same service.

8.  The licensee also indicated that it intends to correct signal reception problems in the Hautes-Laurentides, particularly in such mountainous areas as Sainte-Agathe-des-Monts and the northern region in the vicinity of Sainte-Adèle. Finally, the licensee stated that it wishes to honour the commitment made when it purchased the station (Decision CRTC 86-435, 9 May 1986), namely, to extend CIME-FM coverage to the Saint-Jovite area as soon as its financial situation permitted.

9.  The licensee stated at the hearing that its purpose in setting up a transmitter in the Saint-Jovite/Mont-Tremblant area is to improve its signal, not to develop a new market. Sonème inc., licensee for CFLO-FM Mont-Laurier, submitted a written intervention expressing concern that the addition of a transmitter at Mont Tremblant would cover part of the area known as the Vallée de la Rouge, which is currently served by the intervener. In responding to this intervention, Diffusion Laurentides inc. made a commitment at the hearing not to sell any advertising north of Saint-Jovite/Mont-Tremblant.

10.  For his part, Mr. Peter Hamé, acting on behalf of a company to be incorporated (the applicant, Peter Hamé), explained that his aim was to establish two FM radio stations to serve that portion of the Hautes-Laurentides bounded by Sainte-Agathe-des-Monts, Saint-Donat-de-Montcalm and Saint-Jovite. On a weekly basis, the applicant proposed to broadcast, 120 hours of local programming on the Sainte-Agathe-des-Monts station, and an additional 6 hours originating from the Saint-Jovite station; on the Saint-Jovite station, the applicant proposed 36 hours per week of local programming and 90 hours originating from the Sainte-Agathe station. On the whole, programming on both stations was to focus on local and regional news and tourist information, and would have included substantial musical content. The applicant indicated to the Commission that its two applications were not severable. Specifically, it claimed that, given the recent broadcasting environment, and the resultant station closures that have occurred in the area, the operation of a single station would not be viable.

The Laurentides market

11.  In Public Notice CRTC 1991-74 dated 23 July 1991 and entitled Radio Market Policy, the Commission set out the procedures and criteria that it generally uses in the processing of applications for new conventional commercial AM and FM stations. Further, the Commission established as the basic criterion that the introduction of an additional commercial station must not unduly affect the ability of existing commercial stations to discharge their programming responsibilities.

12.  For many years, the Laurentides market was served by CIME-FM Sainte-Adèle, as well as by CJER Saint-Jérôme and its transmitters CKSJ Saint-Jovite and CJSA Sainte-Agathe-des-Monts. In 1994, CJER closed for economic reasons due to the weakness of the advertising market in the area. CIME-FM has enjoyed a slim profit margin, but only during the past two years. At the hearing, Diffusion Laurentides inc. strongly opposed the plan to establish two new stations in the area it serves. It argued that the Laurentides area is already heavily solicited by Montréal radio stations, and that the establishment of any new stations in the area could thus have an undue impact on its operations.

13.  Peter Hamé submitted that the advertising market in the area bounded by Sainte-Agathe-des-Monts, Saint-Donat and Saint-Jovite/Mont-Tremblant is at least $1 million. This forecast was based on the [TRANSLATION] "overall economic activity generated" in the area, which was estimated by the applicant as being approximately $500 million. Diffusion Laurentides inc. and Sonème inc. questioned the validity of the applicant's assessment of the market's advertising potential.

14.  Using a method based on retail sales, the Commission has estimated the value of the advertising potential in the areas concerned at $617,000. While it is widely acknowledged that retail sales have a significant impact on the advertising potential of a market, the Commission notes that this variable is not always the only relevant factor. This is particularly true of the Laurentides market, where most Montréal radio stations are receivable over the air. According to BBM results, non-local services garner 88% of the listening time in the Laurentides market. In light of this, it is the Commission's view that Peter Hamé's projections have overestimated the potential revenues. The Commission's staff considers that, with a possible listenership share of 15% to 20%, the potential revenues of the radio industry in the triangle bounded by Sainte-Agathe-des-Monts, Saint-Donat and Saint-Jovite/Mont-Tremblant could range from $100,000 to $170,000; in the Commission's view, an advertising market of that size cannot, by itself, support more than one local commercial station.

15.  Having weighed the foregoing, the Commission has determined that the proposals, as filed by Peter Hamé, would unquestionably have had an adverse impact on the financial situation of CIME-FM, thereby significantly diminishing its ability to discharge its programming responsibilities.

16.  In addition, in view of the limited number of employees that the applicant planned to hire for each station, 1.5 at Saint-Jovite and 3.5 at Sainte-Agathe-des-Monts, the Commission has serious concerns regarding the capacity of the two proposed stations to meet the applicant's commitments with respect to the broadcast of local programming.

17.  Further, the Commission notes that the programming broadcast by the applicant would have been largely of a regional nature, and therefore would not have differed substantially from the service currently broadcast by CIME-FM. In the circumstances, the Commission has determined that the proposals submitted by Peter Hamé would not yield sufficient benefits to offset their possible negative impact on the existing local and regional radio service of CIME-FM.

18.  In view of the applicant's statement at the Public Hearing that the applications for Saint-Jovite, Sainte-Agathe-des-Monts and Saint-Donat are not severable, the Commission has denied both applications.

19.  The Commission acknowledges the interventions filed with respect to these applications.

This decision is to be appended to the licence.

Laura M. Talbot-Allan
Secretary General

This document is available in alternative format upon request.

DEC97-292_0