ARCHIVED -  Decision CRTC 97-639

Decision

Ottawa, 18 November 1997

Decision CRTC 97-639

Maritime Broadcasting System Limited

Sydney, Nova Scotia and Saint John, New Brunswick - 199704276 - 199704284 - 199704416 - 199704424

Newcap Inc.
Saint John, New Brunswick - 199704341 - 199704367

Acquisition of assets

1. Following a Public Hearing in the National Capital Region held on 22 September 1997, the Commission approves the applications by Maritime Broadcasting System Limited (Maritime Broadcasting) for authority to acquire the assets of the radio programming undertakings CJCB and CKPE-FM Sydney from Celtic Broadcasting Limited, and for broadcasting licences to continue the operation of these undertakings.

2. The Commission also approves Maritime Broadcasting's applications to acquire the assets of the radio programming undertakings CFBC and CJYC-FM Saint John from Fundy Cable Ltd./Ltée, on behalf of Newcap Inc., as well as Newcap Inc.'s applications to acquire the assets of these undertakings, pursuant to an assignment agreement entered into with Maritime Broadcasting, and for broadcasting licences to continue the operation of these undertakings.

3. Upon surrender of the current licences for CJCB and CKPE-FM Sydney, the Commission will issue licences to Maritime Broadcasting expiring 31 August 2004. The licences will be subject to the same conditions as those in effect under the current licences, as well as to any other condition specified in this decision and in the licences to be issued.

4. Upon surrender of the current licences for CFBC and CJYC-FM Saint John, the Commission will issue licences to Newcap Inc. expiring 31 August 2004. With the exception of the licence amendment for CJYC-FM approved below, the licences will be subject to the same conditions as those in effect under the current licences, as well as to any other condition specified in this decision and in the licences to be issued.

5. The purchase price relating to these transactions is approximately $1.3 million for the Sydney stations and approximately $2 million for the Saint John stations. Based on the evidence filed with the applications, the Commission has no concerns with respect to the availability or the adequacy of the required financing.

6. Because the Commission does not solicit competing applications for authority to transfer effective control of broadcasting undertakings, the onus is on the applicant to demonstrate to the Commission that the application filed is the best possible proposal under the circumstances, taking into account the Commission's general concerns with respect to transactions of this nature. As a first test, the applicant must demonstrate that the proposed transfer will yield significant and unequivocal benefits to the community served by the broadcasting undertaking and to the Canadian broadcasting system as a whole, and that it is in the public interest.

7. In particular, the Commission must be satisfied that the benefits, both those that can be quantified in monetary terms and others that may not easily be measured in terms of dollar value, are commensurate with the size of the transaction and take into account the responsibilities to be assumed, the characteristics and viability of the broadcasting undertakings in question, and the scale of the programming, management, financial and technical resources available to the purchaser.

The Sydney Stations

8. With respect to the purchase of the Sydney stations, the Commission has assessed the benefits package identified by Maritime Broadcasting as flowing from these transactions which amounts to $155,000 in tangible benefits over five years and, in general, is satisfied that it is significant and unequivocal, and that approval of the transactions is in the public interest.

9. In addition, the Commission notes that in Decision CRTC 90-913 dated 19 September 1990, it approved applications to transfer effective control of Celtic Investments Limited, then licensee of CJCB and CKPE-FM Sydney, to Fundy Cable Ltd./Ltée. A benefits package totalling $595,640 was then proposed as part of the applications, a portion of which remains outstanding. The Commission notes Maritime Broadcasting's commitment to assume the outstanding obligation, amounting to $78,190, to be completed within three years of the date of today's decision.

The Saint John stations

10. The Commission notes that, although Newcap Inc. did not propose any tangible benefits as part of its transactions, CFBC and CJYC-FM Saint John have been unprofitable over the three years preceding filing of the applications. Accordingly, the Commission is satisfied that the applications meet the criteria set out in Public Notice CRTC 1993-68 entitled Application of the Benefits Test at the Time of Transfers of Ownership or Control of Broadcasting Undertakings. The Commission notes the important benefit associated with these transactions, that being the maintenance of the Saint John stations as viable, local radio services to that community. Accordingly, the Commission is of the view that approval of these applications is in the public interest.

Interventions

11. The Commission notes that opposing interventions were submitted by Double 007 Consultants. The intervener suggested that approval of these applications would result in a monopoly situation in the Cape Breton market, in view of Maritime Broadcasting's control of 40% of the interests in CHER Sydney, and that the applications do not represent the best proposal in the circumstances.

12. In its reply, Maritime Broadcasting indicated that while it does currently maintain a 40% interest in CHER, it does not control the station which remains an independent and distinct presence in the community. The Commission is satisfied with Maritime Broadcasting's reply to the interventions.

13. The Commission also acknowledges the concerns expressed in interventions submitted by New Brunswick Broadcasting Co. Ltd., licensee of CHSJ Saint John, and it is satisfied with the applicants' replies thereto.

Licence amendment for CJYC-FM

14. The Commission approves the application to amend the broadcasting licence for CJYC-FM by decreasing the effective radiated power from 50,000 watts to 8,200 watts.

15. The Commission hereby authorizes the licensee to operate the undertaking on the basis of the contours and particulars resulting from the above-mentioned change.

16. The Commission notes that Newcap Inc. also proposes to relocate the transmitter from a site owned by Fundy Cable Ltd./Ltée at Sandy Point, New Brunswick, to a tower owned by Maritime Broadcasting at Mount Champlain for which no approval is required. Newcap Inc. indicated that this change would result in an improved coverage of Saint John and the surrounding area.

17. Radio Atlantic (CIBX) Ltd., licensee of CIBX-FM Fredericton, and Radio One Ltd., licensee of CIHI and CKHJ-FM Fredericton, submitted interventions in opposition to this amendment. The interveners expressed concern that the proposed amendment would fragment the Fredericton/Oromocto market, and jeopardize the financial ability of the existing stations to continue to operate.

18. The Commission notes that Newcap Inc. has made a commitment not to solicit advertising in the Fredericton market. After consideration of the application, and in view of Newcap Inc.'s commitment, the Commission is satisfied that the proposed amendment should not have any undue negative impact on existing local broadcasting services, and that approval of this application is in the public interest.

Conditions of licence

19. It is a condition of each licence that the licensee adhere to the guidelines on gender portrayal set out in the Canadian Association of Broadcasters' (CAB) Sex-Role Portrayal Code for Television and Radio Programming, as amended from time to time and accepted by the Commission. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the Canadian Broadcast Standards Council.

20. It is also a condition of each licence that the licensee adhere to the provisions of the CAB's Broadcast Code for Advertising to Children, as amended from time to time and approved by the Commission.

21. The licensees are required, by condition of each licence, to make payments to third parties involved in Canadian talent development at the level identified for it in the Canadian Association of Broadcasters' (CAB) Distribution Guidelines For Canadian Talent Development, as set out in Public Notice CRTC 1995-196 or as amended from time to time and approved by the Commission, and to report the names of the third parties associated with Canadian talent development, together with the amounts paid to each, on its annual return. The payments required under this condition of licence are over and above any outstanding commitments to Canadian talent development offered as benefits in an application to acquire ownership or control of the undertaking.

22. With respect to CKPE-FM Sydney, it is a condition of licence that the station not be operated within the Specialty format as defined in Public Notice CRTC 1995-60, or as amended from time to time by the Commission.

23. With respect to CJYC-FM Saint John, it is a condition of licence that the station not be operated within the Specialty format as defined in Public Notice CRTC 1995-60, or as amended from time to time by the Commission.

Emploment equity

24. The Commission notes that these licensees are subject to the Employment Equity Act that came into effect on 24 October 1996 (1996 EEA), and therefore file reports concerning employment equity with Human Resources Development Canada. As a result of a consequential amendment to the Broadcasting Act, the Commission no longer has the authority to apply its employment equity policy to any undertaking that is subject to the 1996 EEA.

25. In view of the approvals granted to Newcap Inc., it would appear that no further action is required on the applications submitted by Fundy Cable Ltd./Ltée for the renewal of the licences for CFBC Saint John (199704573) and for CJYC-FM Saint John (199704581).

This decision is to be appended to each licence.

Laura M. Talbot-Allan
Secretary General

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