ARCHIVED -  Decision CRTC 98-56

Edmundston Radio Limited
Edmundston, New Brunswick
– 199702923

Following a Public Hearing in the National Capital Region beginning on 15 October 1997, the Commission approves the application for a broadcasting licence for a French-language FM radio programming undertaking at Edmundston, on the frequency 92.7 MHz, channel 224B, with an effective radiated power of 40,750 watts.

Edmundston Radio Limited (Edmundston Radio) currently operates the radio programming undertaking CJEM Edmundston and its transmitter CKMV Grand Falls. In operation since 1944, CJEM is the only private French-language radio station in this area of New Brunswick.

By condition of licence, the Commission authorizes Edmundston Radio to simulcast CJEM’s programming on the proposed FM station during a transition period of three months from the date of implementation. However, the Commission requires that, at the end of this period, the applicant surrender the licence currently issued to CJEM.

Programming on the new station will be similar to that currently broadcast on the AM band. The station will produce 126 hours of local programming each broadcast week, including one 30-minute English-language religious program.

At the hearing, the Commission discussed with the applicant certain concerns raised by this application, including the financial impact that the new station could have on the community station CFAI-FM Edmundston and those in the neighbouring markets; the necessity to continue operating the CKMV Grand Falls transmitter; and the applicant’s plan to reduce operating expenses after converting CJEM to FM. These matters are addressed further below.

The applicant submitted that the proposed FM conversion is intended to reverse the station’s declining audience and revenues in recent years. It explained at the hearing that it filed the application for technical and financial reasons.

The applicant claimed that by broadcasting on the FM band it will be able to provide a reliable, quality signal during the day and at night and therefore counteract the audience losses caused by technical problems. It also indicated that the economic climate in its market and the increased competition for the advertising dollars available in the area have added to the technical limitations of AM broadcasting and have led to significant reductions in revenue for the station since the early 1990s.

The Alliance des radios communautaires du Canada inc. (ARC), Coopérative des Montagnes ltée, Radio des Hauts Plateaux, and Radio Dégelis inc. filed interventions opposing Edmundston Radio’s application.

ARC argued in its intervention that approval of Edmundston Radio’s application could jeopardize Coopérative des Montagnes ltée’s ability to continue operating the community station CFAI-FM Edmundston and CFAI-FM-1 Grand Falls, which rebroadcasts some of CFAI-FM programming, and could cause undue harm to the community stations in neighbouring markets, including CFJU-FM Kedgwick/St-Quentin, Restigouche county.

In its intervention, Coopérative des Montagnes ltée argued that, because of CFAI-FM’s precarious financial condition and the weakness of the Edmundston market, any change in the market would mean closure of the station. It was also opposed to Edmundston Radio maintaining its repeater CKMV at Grand Falls because broadcasting simultaneously on AM and FM would give it a competitive advantage at Grand Falls.

In a written intervention, the employees of CFAI-FM also opposed the conversion of CJEM to FM because they feared it would lead to the closure of their station.

Radio des Hauts Plateaux, licensee of the community station CFJU-FM Kedgwick/St-Quentin, and Radio Dégelis inc., licensee of the commercial station CFVD-FM Dégelis, Quebec, also opposed this application. These interveners argued that the proposed coverage area encroaches on their markets, and that this would enable the applicant to compete against them for listenership and advertising revenues. They also claimed that their stations are in a precarious financial situation and cannot withstand any additional competition.

Finally, Radio-CJFP 1986 ltée filed a written intervention stating that it is not opposed to CJEM’s conversion to FM, but is opposed to the technical parameters proposed. The intervener alleged that the new signal’s coverage area would cover 90% of Témiscouata County and would weaken the station’s position in its already saturated market.

Replying to the interveners’ arguments and the Commission’s questions at the hearing, the applicant emphasized that the purpose of its application was only to arrest CJEM’s loss of audience and revenue. The applicant forecasted that its advertising revenues will increase by a maximum of only 3% annually, and that these revenues would come from sources other than those now drawn on by CFAI-FM. The applicant also submitted that CFAI-FM’s financial statements depict a financial situation that is far from severe.

The applicant claimed that the spillover of the new FM station’s signal into the Restigouche market would be limited to uninhabited areas, so CFJU-FM would not be affected by CJEM’s move to FM. Further, owing to the mountainous terrain in the area, the signal of the new radio station in Témiscouata County would be weak and incapable of attracting listeners. Consequently, CJFP-FM and CFVD-FM would not be affected. Finally, the applicant submitted that CJEM’s programming is of no interest to Témiscouata residents.

Replying to a question put by the Commission at the hearing regarding the need to continue operating the transmitter CKMV at Grand Falls, the applicant advised the Commission that this is a temporary measure and that it does not intend to pursue its AM operation at Grand Falls. The applicant plans to conduct tests to confirm that the new FM signal will adequately cover the Grand Falls market in Victoria County. If it does, CKMV will be closed. If the tests show that the signal is inadequate, the applicant will apply to the Commission to convert CKMV to FM. The applicant undertook to submit a report to the Commission on this matter within six months of the conversion.

The Commission expects the applicant to submit a report within six months of the conversion regarding the quality of the signal of the new station in the Grand Falls market, namely Victoria county. The Commission also expects the applicant to honour its undertaking to close its AM transmitter at Grand Falls or to apply to the Commission to convert it to FM after filing the report mentioned above.

With regard to the applicant’s plan to reduce operating expenses after converting CJEM to FM, the applicant indicated at the hearing that, while maintaining its current level of programming, it hopes to automate certain activities, which will yield considerable savings in some cost items, including labour. It added that its staff had agreed to wage rollbacks on the condition that the station convert to FM. In light of the explanations provided, the Commission considers that the applicant’s expense forecasts are reasonable.

Given the applicant’s financial situation, the fact that the new station will have a minimal impact on the stations in the area, and, as noted above, that the applicant undertook not to repeat its signal on the AM and FM bands in the Victoria County market, the Commission is of the view that approval of this application will ensure the survival of a key radio station which has served the area for over 50 years, and is in the public interest.

The licensee is required, by condition of 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.

It is a condition of licence that the licensee adhere to the guidelines on gender portrayal set out in the CAB’s 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.

It is also a condition of 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 accepted by the Commission.

In Public Notice CRTC 1992-59 dated 1 September 1992 and entitled Implementation of an Employment Equity Policy, the Commission announced that the employment equity practices of broadcasters would be subject to examination by the Commission. In this regard, 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.

This authority will only be effective and the licence will only be issued at such time as construction of the undertaking 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 issued. 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.

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.

In accordance with section 22(1) of the Broadcasting Act, the Commission will only issue the licence 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.

The Commission acknowledges the intervention filed in support of this application.