ARCHIVED - Decision CRTC 2000-360

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Decision CRTC 2000-360
Ottawa, 24 August 2000
Atlantic Stereo Ltd.
Moncton, New Brunswick – 199807319

Maritime Broadcasting System Limited
Moncton, New Brunswick – 199909652

Telemedia Radio Atlantic Inc.
Moncton, New Brunswick – 199908407

6 March 2000 Public Hearing
in Moncton
Two new English-language FM radio stations in Moncton
The Commission has approved applications for one new English-language FM station, and the conversion of an existing AM station to the FM band. A second application for a new FM station is denied. As a result of these approvals, the English-language commercial radio market in Moncton will be more in competitive balance, with the two existing licensees owning two FM stations each.


The Commission approves the applications by Atlantic Stereo Ltd. (Atlantic) and Maritime Broadcasting System Limited (Maritime) for broadcasting licences for English-language FM radio programming undertakings at Moncton. The application by Telemedia Radio Atlantic Inc. (Telemedia), which was technically mutually exclusive with that filed by Maritime, is denied.


Subject to the requirements of this decision, the Commission will issue licences to Maritime and Atlantic, each expiring 31 August 2005. Both licences will be subject to conditions related to levels of local programming, Canadian content, financial support for Canadian talent, and the use of hit material on the new stations. The conditions are either set out below or in the licences to be issued. As noted in PN CRTC 1999-137, standard conditions of licence are now set out only on the licence form.


The Commission has granted a licence term that is less than the maximum of seven years permitted by the Broadcasting Act. This will allow the renewal of this licence to be considered in accordance with the regional plan established by the Commission.
The applicants


Maritime is the licensee of approximately 20 radio stations in Nova Scotia, New Brunswick and Prince Edward Island, including CKCW and CFQM-FM in Moncton. CKCW is the AM station that will be converted to the FM band as a result of these approvals. Maritime is ultimately controlled by Robert L. Pace.


Atlantic, licensee of CJMO-FM Moncton, is owned by local investors (37.8%) and by NewCap Inc., licensee of various radio stations in Newfoundland, Prince Edward Island, Alberta and Ontario. NewCap, the parent company of Atlantic, will manage the day to day operation of the new Moncton FM station. Ultimate control of Atlantic rests with Harold R. Steele.


Telemedia Radio Atlantic Inc. is the licensee of eight radio stations in New Brunswick and Nova Scotia. It is a wholly owned subsidiary of Telemedia Radio Inc., licensee of radio stations and radio networks throughout Canada. Telemedia Radio Atlantic Inc. is ultimately controlled by Philippe de Gaspé Beaubien.
The applications


In a number of recent decisions, the Commission has discussed various factors relating to the implementation of its new Commercial Radio Policy 1998 (Public Notice CRTC 1998-41), and the assessment of competitive applications.


The Commission considers that, while their importance will vary depending on the specific circumstances of the market concerned, there are four main factors that are usually relevant to the evaluation of applications. These are
  • the impact on the market of a new entrant,
  • the competitive state of the market,
  • the diversity of news voices in the city, and
  • the quality of the applications.


The Commission discussed these factors with the three applicants at the public hearing.
The Commission's decision


The Commission has approved the applications by Atlantic and Maritime, based on findings that the Moncton market can support one more English-language FM, in addition to the conversion of CKCW. The Commission is satisfied that these approvals will create greater competitive balance in the market, and that both applications approved have strong business plans and offer significant commitments to Canadian talent development.


While the two applicants proposed similar musical formats as one component of their overall business plans, the Commission notes that musical formats are not directly regulated, and can be adjusted to suit market realities at any time. These factors are discussed further below.
Impact on the Moncton radio market


Three commercial English radio stations, two FM and one AM currently serve the Moncton market. One French-language community FM, one French-language community/campus FM, English CBC Radio One, and French-language La Première Chaîne and La Chaîne culturelle stations also serve Moncton.


In separate decisions released today, the Commission has licensed a new French-language commercial FM station to serve Moncton, and approved two applications for low-power, non-commercial FM radio stations to provide religious programming in Moncton.


Based on the average profitability margin before interest and taxes (PBIT margin) over the years 1995 to 1999, the Moncton radio market was more than twice as profitable as the national PBIT margin over the same period. Given this level of profitability, the Commission is satisfied that Moncton can support the addition of one English-language radio station and the conversion of another station from the AM to FM band. It is, however, also of the opinion that the Moncton radio market is not large enough to support the entry of more than one additional English-language commercial FM station at this time considering both the conversion and the licensing of a new commercial French-language station.
Competitive state of the market


As noted above, there are currently three English-language radio stations in Moncton, two owned by Maritime and one by Atlantic. The Commission is satisfied that the approval of the Maritime and Atlantic applications will create a greater competitive balance in the Moncton radio market, with the two local ownership groups controlling two FM stations each.
Diversity of news voices


The two applications approved herein were submitted by local licensees, and therefore do not represent any net gain in the diversity of news voices resulting from this decision. The Commission notes, however, that Moncton residents already have access to news from a large variety of sources, in both official languages.
The quality of the applications


In considering this factor, the Commission assessed each applicant's overall business plan, including the proposed format, Canadian content commitments, the reflection of the community and local programming proposals, as well as Canadian talent development proposals.
Business plan and musical format


Atlantic applied for an FM station that would operate in the Country music format, of interest primarily to those over 25. Maritime applied to convert its station CKCW to the FM band, to serve Moncton with a "New Country" musical format appealing to listeners over 18 years of age. Telemedia proposed to operate a new FM station in Moncton, in the Contemporary Hit Radio format, targeted to an audience aged 12-24.


In making its decisions, the Commission considered that the stations currently operating in the Moncton market are providing adequate service to the 12-24 demographic targeted by the Telemedia application. The Commission is of the view that, if licensed, Telemedia would have been required to broaden its target audience.


As part of the overall business plans, the Commission considered the proposed musical formats of the two applications approved, but notes that formats are not directly regulated by the Commission and most stations have the flexibility to move to a different format without Commission approval.


The Commission is therefore aware that, with Atlantic and Maritime proposing the use of similar musical formats, it is possible that one of the two new stations may switch to a format other than country.
Canadian content


With respect to plans for the exposure of Canadian music, all three of the applicants proposed to broadcast 35% Canadian content. This level is consistent with the percentage of Canadian musical compositions required to be broadcast each week, under section 2.2(8) of the Radio Regulations, 1986.
Reflection of local community / local programming


Each of the applicants presented detailed plans for coverage of local events and issues, including local news and sports, weather and marine conditions, airtime to promote charitable events, and local entertainment features.
Canadian talent development


All three applicants offered substantial financial commitments to foster the development of Canadian talent in various ways. The specific commitments contained in the two applications that have been approved, and which are therefore the subject of conditions of licence, are set out below.


As part of its application, Maritime made a commitment to participate in the Canadian talent development funding plan created by the Canadian Association of Broadcasters (CAB), which prescribes a yearly contribution of $3,000 for stations in markets such as Moncton. Adherence to that commitment shall be by condition of licence, as set out in the licence to be issued.


In addition to the amount prescribed by the CAB plan, the Commission notes Maritime's commitment to contribute an additional $28,000 annually to Canadian talent development, to be made up of a yearly contribution of $10,000 to FACTOR and $18,000 each year for a song-writing competition.


Consistent with that commitment, it is a condition of licence that, in addition to the contributions to the CAB plan noted above, Maritime make annual contributions of the type described above, of $28,000.


Atlantic also made a commitment to participate in the CAB's CTD funding plan, at the same level of contribution as Maritime, noted above. Adherence to that commitment shall be by condition of licence, as set out in the licence to be issued.


In addition to the amount prescribed by the CAB plan, Atlantic also committed to devote an additional $23,000 contribution to Canadian talent development, with $15,000 per year to FACTOR and $8,000 in yearly funding for a weekly program to be called "Atlantic Canada Country Music Special".


Consistent with that commitment, it is a condition of licence that, in addition to the contributions to the CAB plan noted above, Atlantic make annual contributions of the type described above, of $23,000.


As a further part of its commitments to CTD, Atlantic proposed to devote a minimum of $37,000 per year to the development of a national Aboriginal Peoples Radio Network (APRN). APRN is not yet a licensed undertaking, and Atlantic stated that should APRN not be licensed by the Commission, the financial aid would be redirected to other initiatives of benefit to the development of Canadian Aboriginal musical talent.


The Commission has assessed the APRN initiative and has concluded that it does not directly develop Canadian talent, in that the funds will be dedicated to the establishment of a radio network. Nonetheless, this initiative would contribute to the fulfilment of paragraph 3(1)(o) of the Broadcasting Act, and as such the Commission considers that it is beneficial to the broadcasting system as a whole.


It is therefore a condition of licence that Atlantic expend, at a minimum, $37,000 per year to support the development of a national Aboriginal Peoples Radio Network, should one be licensed by the Commission. In each year until such a network is implemented, it is a condition of licence that the licensee redirect the funds to rent studio time to facilitate the production of new Canadian Aboriginal music, and provide scholarships and grants for Aboriginal youths.
Technical matters


In the case of both Maritime and Atlantic, the licence will only be issued and effective when each new station is ready to begin operation. When each licensee has completed construction and is prepared to commence operation, it must advise the Commission in writing. If either station is not constructed and ready to operate within 12 months of today’s date, extensions to this time frame may be granted provided that the licensee applies in writing to the Commission before the 12-month period or any extension of that period expires.


As proposed, the Atlantic station will operate on the frequency 96.9 MHz, (channel 245C1), with an effective radiated power of 100,000 watts. As proposed, the Maritime station will operate on the frequency 94.5 MHz, (channel 233B), with an effective radiated power of 19,000 watts.


The Department of Industry has advised the Commission that both applications are conditionally technically acceptable. For each station, the Department will only issue a broadcasting certificate once it has 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, for each station, the Commission will only issue the licence and grant the authority to operate when it receives notification from the Department of Industry that its technical requirements have been met, and that a broadcasting certificate will be issued.
Employment equity


The Commission notes that both Maritime and Atlantic are subject to the Employment Equity Act that came into effect on 24 October 1996 and therefore file reports concerning employment equity with Human Resources Development Canada.


The Commission also notes Maritime's initiative in collaboration with the Atlantic Media Institute, a Halifax broadcasting school serving students throughout the Atlantic provinces. Maritime plans to continue to offer internships at Maritime stations, to members of designated groups. These internships are designed to provide students with hands-on radio experience.


The Commission acknowledges and has considered all of the interventions submitted with respect to each of these applications.
Related CRTC documents

• Public Notice 1999-137New licence form for commercial radio stations

• Public Notice 1998-41Commercial radio policy 1998

Secretary General


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