ARCHIVED - Broadcasting Decision CRTC 2002-195

Broadcasting Decision CRTC 2002-195

Ottawa, 17 July 2002

Houssen Broadcasting Ltd.
Moncton, New Brunswick

Application 2001-0755-9
Public Notice CRTC 2002-1

Application to broadcast commercial messages on CKOE-FM

The Commission approves the deletion of a condition of licence that prohibits the broadcast of commercial messages by CKOE-FM, a Christian music station in Moncton.

The application

1.

The Commission received an application by Houssen Broadcasting Ltd. (Houssen) to amend the licence for radio station CKOE-FM Moncton by deleting the condition of licence that prohibits the broadcast of commercial messages. CKOE-FM is a low-power station operating with an effective radiated power of 50 watts and broadcasts Christian music designed to appeal primarily to youth.

2.

In support of its application, Houssen submitted that CKOE-FM was currently staffed entirely by volunteers. Since the volunteers had other work commitments to fulfil, much of the station's programming had to be recorded. The applicant indicated that it would use advertising revenues to employ some of these individuals so that they could devote more time to the station, making it possible for CKOE-FM to broadcast additional live programming. Houssen further submitted that revenues from advertising would also be used to help promote local artists and increase coverage of local news and community events.

3.

Houssen projected that the sale of local advertising would generate revenues of $215,000 in 2002. It further estimated that annual local advertising revenues would grow to $350,000 by 2006. The applicant submitted that, since most of its advertising revenues would come from new advertisers and advertisers who are not currently buying time on existing Moncton radio stations, no more than 3% of its revenues would be derived from advertising dollars now going to other Moncton stations. The applicant was therefore of the view that its proposed sale of advertising would have little impact on existing stations in the market.

Interventions

4.

The Commission received 137 interventions in connection with the application. One hundred and thirty-six interveners supported the applicant's proposal, and one intervener opposed it.

Interventions in support

5.

Those supporting the application commended the contemporary Christian format offered by CKOE-FM and considered that the addition of advertising revenues would help sustain and expand the serve that CKOE-FM provided. CITA-FM, the other Christian radio station serving Moncton, was among the interveners supporting Houssen's proposal.

6.

Christian Hit Radio Inc. (Ottawa), licensee of CHRI-FM Ottawa, indicated that, in its experience, Christian music stations attract new advertisers to radio that do not advertise on other stations. It therefore considered that the broadcasting of advertising on Christian stations such as CKOE-FM would not have a negative effect on commercial stations of other formats.

Opposing intervention by Maritime Broadcasting

7.

Maritime Broadcasting Systems Limited (Maritime) opposed the Houssen application. Maritime is the licensee of CFQM-FM and CKCW-FM Moncton. It further holds a 49% interest in CHOY-FM, a French-language commercial station in Moncton.

8.

Maritime submitted that Houssen originally applied for a licence on the basis that the proposed station would broadcast no advertising but would be financed by contributions and donations. It was concerned that Houssen filed the current application just six months after CKOE-FM signed on the air.

9.

Maritime noted that, following a hearing in Moncton that began on 6 March 2000, the Commission granted new Moncton commercial radio licences for a French-language FM station and a country FM station and approved the conversion of an existing AM station to an FM station. It considered that the licensing of those services had had a "very sizeable impact on the available advertising dollars for radio." Maritime disagreed with Houssen's statement that a maximum of 3% of CKOE-FM's advertising revenue would come at the expense of existing Moncton stations. It submitted that, if Houssen achieved its projected advertising revenues over five years, this would have a very serious impact on the services that Maritime's stations provide.

Houssen's reply to the Maritime's intervention

10.

Houssen submitted that its annual projected revenues would constitute "a very small piece of the pie" in the Moncton market. The applicant reiterated that a significant portion of its advertising revenue would come from advertisers that do not currently advertise on local conventional radio stations.

11.

Houssen also noted that CKOE-FM was well accepted within the community and was meeting and exceeding the promises that it made to the Commission during the licensing proceeding.

The Commission's determination

12.

The Commission acknowledges Maritime's concern that the applicant filed its application early in its first licence term. The Commission notes, however, that CKOE-FM is a low-power radio station that operates with an effective radiated power of only 50 watts. CKOE-FM also must, by condition of licence, operate in the specialty format and therefore targets a niche audience. Audience surveys conducted in Fall 2001 indicated that the audience attracted by CKOE-FM was far smaller than those attracted by Moncton's commercial radio stations. The Commission considers these factors greatly limit CKOE-FM's ability to compete effectively with commercial stations, such as those operated by Maritime, that program mainstream musical formats.

13.

The Commission further notes that, while the combined revenues of Maritime's English-language stations CFQM-FM and CKCW-FM decreased from 2000 to 2001, both stations remained profitable at or above the national and provincial averages for commercial radio stations. The Commission also accepts Houssen's submission that, as is the case with other Christian music stations, a significant portion of advertising revenue received by CKOE-FM would come from new advertisers, thus reducing the potential effect on existing stations.

14.

In light of the above, the Commission approves the application by Houssen to amend the licence for radio station CKOE-FM Moncton by deleting the condition of licence that prohibits the broadcast of commercial messages.

Consistent with its approach to other conventional FM stations that broadcast advertising, the Commission requires the licensee to adhere to the following conditions of licence:

•  The licensee shall refrain from soliciting or accepting local advertising for broadcast during any broadcast week where less than one-third of the programming aired is local. The definition of local programming shall be as set out in Policies for local programming on commercial radio stations and advertising on campus stations, Public Notice CRTC 1993-38, 19 April 1993.

•  The licensee shall adhere to the provisions of the Canadian Association of Broadcasters' (CAB) Broadcast Code for Advertising to Children, as amended from time to time and approved by the Commission.

Secretary General

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