ARCHIVED -  Decision CRTC 99-98

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Decision CRTC 99-98

Ottawa, 7 May 1999

Craig Broadcast Systems Inc.
Selkirk, Manitoba – 199805165

26 March 1999 Public Hearing
National Capital Region

Acquisition of the assets of CFQX-FM

1. The Commission approves the application by Craig Broadcast Systems Inc. (Craig) for authority to acquire the assets of CFQX-FM Selkirk, from Forvest Broadcasting Corporation and Radio One Investments Inc., known as Western World Communications Limited Partnership (Western World), and for a broadcasting licence to continue the operation of this undertaking.

2. The Commission will issue a licence to Craig, expiring 31 August 2004 (the current expiry date), upon surrender of the current licence.

3. The total consideration of this transaction is $ 4 million. Based on the evidence filed with the application, the Commission has no concerns with respect to the availability or the adequacy of the required financing.

4. Craig currently owns CKMM-FM Selkirk and manages CFQX-FM on behalf of Western World. A local management agreement granted Craig the option to acquire the assets of CFQX-FM.

5. As a result of this transaction, Craig will own two FM radio stations in the Selkirk market. In Public Notice CRTC 1998-41 entitled Commercial Radio Policy 1998, the Commission announced its common ownership policy for commercial radio stations. According to this policy, in markets with eight or more commercial stations operating in a given language, a single licensee may own or control as many as two AM and two FM stations operating in that language.

6. Craig stated that, although CFQX-FM is Selkirk’s only commerical radio station, the nine commercial radio stations serving the Winnipeg market are all received in Selkirk. Given the proximity of the two markets, Craig argued that Winnipeg and Selkirk should be considered as one market for the purpose of the common ownership policy. Accordingly, Craig claimed it should be permitted to own two FM stations.

7. The Commission agrees that Winnipeg and Selkirk should be considered as one market, and finds that the present case falls within its common ownership policy announced in Public Notice 1998-41.

8. In evaluating applications that would result in common ownership, the Commission requires applicants to address the issue of diversity of voices in the market concerned. Craig stated that, in addition to Winnipeg’s nine commercial radio stations, Selkirk receives the two CBC Winnipeg stations. Further, the cable company serving Selkirk provides a community programming service and a wide array of television signals. Finally, local residents are also able to obtain programming services from direct-to-home satellite services. The Commission is satisfied that the licensee’s plans will not negatively affect the diversity of voices available to the Selkirk community.

9. Consistent with the requirements of the benefits test outlined in Public Notice 1998-41, the benefits offered represent the required minimum direct financial contribution to Canadian talent development of 6% of the total amount of the transaction. This includes:

· $120,000 (3.1%) to be allocated to the Canadian Music Marketing and Promotion Fund, which is to be created;

· $80,000 (2.1%) as a contribution to FACTOR; and

· $40,000 (1%) as scholarships to Canadian students enrolled in the University of Manitoba’s School of Music.

10. The 3.1% contribution which is to be allocated to the Canadian Music Marketing and Promotion Fund must be directed to the Canadian Association of Broadcasters (CAB) which will hold all contributions in trust pending the creation of this fund. These commitments are over and above CFQX-FM’s existing commitments and conditions of licence.

11. Of the $186,500 benefits package proposed as part of Western World’s purchase of CFQX-FM in 1995, there remained, as of 30 November 1997, a balance of $65,646 to be spent within the seven-year term expiring on 31 August 2002. The Commission expects Craig to fulfill the specific projects promised as part of the 1995 transaction: $45,500 on a talent search and $21,000 divided equally between independent provincial and national country music associations (see Decision CRTC 95-93).

Conditions of licence

12. The licence will be subject to the conditions specified in this decision and in the licence to be issued. As conditions of licence, the licensee must:

· Not operate this station within the Specialty format as defined in Public Notice CRTC 1995-60 or as amended from time to time by the Commission;

· make payments to third parties involved in Canadian talent development at the level identified for it in the CAB's 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, concurrently with 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 an undertaking;

· 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 approved 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; and

· 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.

Other matters

13. The Commission notes that this licensee is subject to the Employment Equity Act that came into effect on 24 October 1996 (1996 EEA), and therefore files 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.

Secretary General

This decision is to be appended to the licence. It is available in alternative format upon request, and may also be viewed at the following Internet site:

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