ARCHIVED - Broadcasting Decision CRTC 2002-190

Broadcasting Decision CRTC 2002-190

Ottawa, 16 July 2002

Genex Communications inc.
Donnacona, Quebec

Application 2001-1069-3
Public Hearing held at Québec, Quebec
18 February 2002

Amendment of the licence for CKNU-FM

The Commission denies by majority vote the application by Genex Communications inc. to amend the licence of radio station CKNU-FM Donnacona by expanding the contour toward Québec, by deleting the condition of licence limiting the solicitation of advertising and by amending the condition relating to local programming.

The application

1.

In response to Call for applications for a broadcasting licence to carry on a radio programming undertaking to serve Québec, Quebec, Public Notice CRTC 2001-78, 11 July 2001, Genex Communications inc. (Genex) filed an application to amend the licence of CKNU-FM in order to access the Québec market on its current frequency of 100.9 MHz. The amendments proposed by Genex were as follows:

2.

As the Genex application was competitive with four other applications to carry on a new FM radio station to serve the Québec area, it was heard at the same hearing. Since the four other applicants proposed to use the final FM frequency available in Québec, namely 91.9 MHz, they were mutually exclusive on a technical basis. In New FM radio station in Québec, Broadcasting Decision CRTC 2002-191, 16 July 2002 (Decision 2002-191), the Commission today approved the application by Cogeco Radio-Télévision Inc. (Cogeco) and denied the other applications. Given the particular circumstances surrounding the Genex application, the Commission elected to deal with it in a separate decision.

Background

3.

In New radio programming undertaking, Decision CRTC 95-9, 13 January 1995, the Commission issued a licence to the Coopérative du Courrier de Portneuf to operate a new radio station, CKNU-FM Donnacona. Since the new station's mandate was to provide the first local radio service to Portneuf, the Commission imposed a condition of licence restricting the station's solicitation of advertising to the Portneuf area.

4.

In Acquisition of the assets of CKNU-FM and its transmitter CKNU-FM-1, Decision CRTC 98-502, 24 November 1998, the Commission authorized Genex to acquire the assets and continue the operation of the station. At the time of the transaction, CKNU-FM was not profitable. Accordingly, Genex proposed no tangible benefits, but made a commitment to serve the needs of the Portneuf area by broadcasting local news, public affairs and community service programming. The condition of licence restricting solicitation of advertising to the Portneuf area was reimposed.

5.

In Licence amendment for CKNU-FM, Decision CRTC 2000-415, 26 October 2000 (Decision 2000-415), the Commission denied an application to amend the licence of CKNU-FM in order to relocate the transmitter from Donnacona to Mont Bélair, and to decrease the station's effective radiated power. The Commission also denied Genex's request to delete CKNU-FM's condition of licence prohibiting it from soliciting advertising outside the Portneuf area. The Commission noted that the application had been filed just six months after Genex had acquired the station, and considered that the licensee had failed to take all measures available to it to make the station profitable, while providing a truly local service to the Portneuf area, in keeping with its commitment.

6.

Genex is also the licensee of CHOI-FM Québec, the licence renewal application for which was considered at the Québec public hearing beginning 18 February 2002. The Commission summoned Genex to the hearing to discuss the licensee's apparent failure to comply with the Radio Regulations, 1986 (the Radio Regulations) with regard to the percentage of French-language vocal music broadcast and the submission of logger tapes. In addition, and having received several complaints, the Commission also indicated that it wished to discuss with Genex the content of certain of CHOI-FM's spoken word programming, in light of the high standard objective set out in section 3(1)(g) of the Broadcasting Act (the Act), and in light of the Radio Regulations and its condition of licence concerning sex-role portrayal. The Commission stated that it expected Genex to show cause why a mandatory order requiring the licensee to comply with the provisions of the Radio Regulations and its conditions of licence should not be issued.

Genex's position

7.

In its application, Genex submitted that access by CKNU-FM to the Québec market was critical to the station's long-term survival. Genex stated that, following Decision 2000-415, it had taken steps to increase the station's involvement in the community, including the hiring of three new employees assigned to programming. Genex added that the results of its efforts had been encouraging, with an increase in the station's audience share from 4% to 8% in the fall of 2001, and a 30% increase in advertising revenue. Genex stressed, however, that these positive results were not enough to make the station profitable, and that its operating deficit had in fact increased rather than decreased.

8.

During its presentation at the hearing regarding CKNU-FM, Genex recognized that its applications for renewal of the CHOI-FM licence and the amendment to the CKNU-FM licence placed it in a special, sensitive position. The applicant stated that it was nonetheless confident that its application concerning CKNU-FM would be judged on its own merits, and indicated that CKNU-FM was not the subject of any complaints and that it had fully complied with its current conditions of licence in the operation of the station.

ADISQ Intervention

9.

In its intervention, the Association québécoise de l'industrie du disque, du spectacle et de la vidéo (ADISQ) opposed the application to amend the CKNU-FM licence for two principal reasons. First, in referring to Genex as the licensee of CHOI-FM, ADISQ stated "[translation] that Genex failed to show its will and ability to act as a responsible broadcaster in the operation of its existing French-language radio station in the Quebec City market." (italics in the text) ADISQ's opposition was also based on the fact that the contributions to the development of Canadian talent proposed by Genex for CKNU-FM met neither the basic principles of the policy nor the minimum mandatory contribution to MusicAction, as set out in the plan of the Canadian Association of Broadcasters (CAB).

10.

In its reply to the ADISQ intervention, Genex stressed the efforts that it had made to increase its local involvement in Portneuf, and reiterated that CKNU-FM had not been the target of any complaints, and was being operated in accordance with the regulatory framework applicable to it. Genex added that the application to amend the licence of CKNU-FM should be considered on the basis of its own distinctive characteristics and judged on its own merits, in the spirit of the following Commission statement set out in the Commercial Radio Policy 1998, Public Notice CRTC 1998-41, 30 April 1998 (the Commercial Radio Policy):

The Commission, following its consideration of applications for new market entry, will be prepared to issue licences, depending on the individual merits of the applications, in particular the benefits their approval will bring to the communities concerned and the broadcasting system as a whole. (underlining appears in the Genex reply)

11.

With respect to the proposed contribution to the development of Canadian talent, Genex recognized that its contribution was less than most of the other competing applications and was explained by CKNU-FM's deficit and its limited means.

Commission's analysis and conclusion

12.

The Commission has examined Genex's application in light of the broadcasting policy for Canada set out in section 3 of the Act. As well, in accordance with the Commercial Radio Policy, the Commission has examined the application on the basis of its specific merits, namely the benefits that its approval would bring to the listeners in the Québec region, including those in the Portneuf area, to whom Genex made a commitment to provide a first local radio service, as well as the benefits to the broadcasting system in general. The Commission has also taken into account the interventions in favour of the approval of this application as well as the opposing intervention filed by ADISQ discussed above.

13.

The Commission notes that this application to amend the licence of CKNU-FM is very similar to the one it denied in Decision 2000-415. The Commission notes the efforts made by Genex to improve its local involvement and to make the station profitable. However, based primarily on the licensee's financial data, the Commission is not convinced that Genex has pursued all possible avenues for developing the station in its current situation, or that it has taken all measures possible to reach the break-even point.

14.

Furthermore, the Commission is concerned that Genex's request to replace the current condition of licence related to local programming with a condition that would reflect the greater regional coverage that it proposes for CKNU-FM would result in lower quality local radio service than listeners in the Portneuf area currently enjoy, and would be to the detriment of the communities that were of concern when the licence was issued.

15.

In terms of the target audience of the station, Genex proposed to serve an audience composed mainly of women. The Commission notes that this is similar to the audience targeted by the Cogeco application that was approved in Decision 2002-191. In the Commission's view, Cogeco will be better able to meet the needs and expectations of the targeted audience in the Québec region.

16.

Finally, the Act mandates the Commission to regulate and supervise all aspects of the Canadian broadcasting system with a view to implementing the broadcasting policy set out in section 3(1) of the Act. The broadcasting policy for Canada states that frequencies are public property [section 3(1)(b)], that programming originated by broadcasting undertakings should be of high standard [section 3(1)(g)], that all persons who are licensed to carry on broadcasting undertakings have a responsibility for the programs they broadcast [section 3(1)(h)] and that the Canadian broadcasting system constitutes a single system [section 3(2).]

17.

A broadcasting licence is a privilege granted to a person under the Act to carry on a broadcasting undertaking. In considering the specific merits of an application, the Commission cannot fail to take into account the person who files the application, and particularly the person's record and behaviour as a licensee.

18.

In Short-term renewal of the CHOI-FM licence, Broadcasting Decision CRTC 2002-189, 16 July 2002, the Commission has today concluded that Genex did in fact contravene the provisions of the Radio Regulations and the condition of licence regarding sex-role portrayal. The Commission also noted Genex's flagrant failures to meet the objective of high standard programming set out in the Act. CHOI-FM's licence was renewed for a period of 24 months, with conditions of licence including one requiring adherence to a code of ethics. In its decision, the Commission added that it intends to monitor closely Genex's performance and placed the licensee on notice that if the Commission determines that the licensee has again failed to comply with the Radio Regulations or any of its conditions of licence, it may take any enforcement measures available to it under the Broadcasting Act, including the issuance of orders and the suspension or revocation of its licence.

19.

In the current application, Genex proposed to amend the licence of CKNU-FM in order to be granted the privilege of effectively operating a second radio station in the greater Québec market, in addition to CHOI-FM. In view of Genex's behaviour noted in Decision CRTC 2002-189, the Commission is of the view that it would not be appropriate to grant Genex such a privilege at this time.

20.

For all the above reasons, the Commission is not convinced that it would be appropriate to approve the application to amend the licence of CKNU-FM. Consequently the Commission, by majority vote, denies the application.

Secretary General

Minority opinion of Commissioner Andrée Noël

In its decision released today under number CRTC 2002-189 concerning the licence renewal of CHOI-FM Québec, a station owned by Genex Communications Inc. (Genex), the Commission granted the licensee a short-term (two-year) renewal subject to strict conditions of licence to take into account and penalize serious and repeated failures by the licensee to comply with its condition of licence and its general obligation to produce quality programming.

I do not intend to reiterate in this minority opinion the nature of the failures and the remedies the Commission felt were appropriate to impose on the licensee in order to rectify the situation. I would add that I fully support the Commission's decision in the matter of CHOI-FM (2002-189)and endorse its findings.

However, I believe that in the case of CKNU-FM Donnaconna, Genex displayed exemplary conduct. It was not found to have any failure to comply with its conditions of licence. In fact, Genex followed to the letter the directives the Commission set out in Decision CRTC 2000-415. In that decision, the Commission denied the licence amendment requested by CKNU-FM at the time on the grounds that the request was premature and CKNU-FM did not show that the station's financial situation could be improved by investing in station development.

Two years later, CKNU-FM came before the Commission once again, and on that occasion, it showed - beyond a shadow of a doubt to my mind - that unless it was authorized to move its transmitter to Mont-Bélair, solicit advertising in the Québec market and become, subject to certain conditions, a regional station serving both the Portneuf market and the Québec market, two adjacent markets, one being a suburb of the other, its financial viability would be irrevocably compromised.

Because the two applications were heard at the same time, that is, the licence renewal application for CHOI-FM and the licence amendment application for CKNU-FM, I am concerned that the overwhelming evidence in the case of CHOI-FM may have influenced my colleagues in considering the application for an amendment to CKNU-FM's conditions of licence.

I firmly believe that each application must be considered on its own merits and that it is inappropriate to consider the evidence produced in one case to determine the outcome of a second application that is unrelated. The only intervention opposing the application from CKNU-FM was filed by ADISQ and was a direct result of the failures to comply noted in the matter of CHOI-FM. ADISQ was also the applicant in a civil action against the licensee of CHOI-FM. All the other interventions in the case supported CKNU-FM's application.

Paragraph 20 of the majority decision states:

In the current application, Genex proposed to amend the licence of CKNU-FM in order to be granted the privilege of effectively operating a second radio station in the Greater Québec market in addition to CHOI-FM. In view of Genex's behaviour noted in Decision 2002-189, the Commission is of the view that it would not be appropriate to grant Genex such a privilege at this time.[emphasis added]

In my view, this is the ratio decidendi of the decision, and I think that a dangerous precedent is set in importing evidence from one matter to another.

Historically, the Commission has always judged applications on their own merit. I honestly believe that if the two applications had not been heard at the same time, the Commission's decision in CKNU-FM might have been different.

It is true that in the past the Commission has generally refused to allow licence amendments where the licensee has failed to comply with the conditions of licence. That very principle was demolished in the joint application from Shaw Communications Inc., Canadian Satellite Communications Inc. (Cancom) and Star Choice Television Network Incorporated, Decision CRTC 2002-84, in which the majority agreed to amend the conditions of licence of the applicant companies even though they had failed to comply with those conditions.

The Commission's own precedents state that applications must be considered on their own merit without introducing any failure to comply by the licensee that may be an issue in other matters. Interestingly, Radiomutuel, a seasoned broadcaster whose Chicoutimi station, CKRS, has obtained only short-term renewals since 1984, largely because of comments made on air by its star host, Louis Champagne¹,obtained two new specialty television licences for Canal Vie, Decision CRTC 98-90, 20 March 1998, and Canal Z, Decision CRTC 99-109, 21 May 1999. Moreover, at the same time the Chicoutimi licence was renewed for only a short term, the Commission allowed all of Radiomutuel's radio and television stations to be transferred to Groupe Astral.

In December 1998, the Commission heard an application for renewal from CKVL, a station owned by Groupe Métromédia CMR. Because of the problem behaviour of its star host, André Arthur, the licensee was granted only a 36-month renewal (Decision CRTC 99-93). However, the Commission granted two new licences to Groupe Métromédia CMR to operate English- and French-language all-news stations on the old AM frequencies of the CBC and Société Radio-Canada, with the agreement of the Crown corporation. The matter was heard in February 1999, that is, two months after the December 1998 hearing, and the decisions were released on 29 April 1999 for CKVL and 21 June, Decision CRTC 99-151, for 940 News and Info Radio 690. Finally, on 30 September 1999, the Commission, in Decision CRTC 99-449, allowed Métromédia CMR to acquire the assets of CIEL-FM.

In 1998, when Howard Stern was raising the ire of listeners with his iconoclastic remarks, the Commission granted CHUM Limited an amendment to the conditions of licence of its specialty television station BRAVO!, Decision CRTC 98-213. Paragraph 5 of that decision reads:

The Commission is satisfied that approval of this application is consistent with its approach toward industry self-regulation. Further, the Commission is satisfied that the status of Bravo with respect to these industry codes should not be linked to any complaints about a program broadcast by a radio station which, although also licensed to CHUM Limited, is recognized by the CBSC as having a separate membership status. [emphasis added]

I believe that it is inappropriate both for the Commission and for the broadcasting system in general to mix evidence from different matters. This is a precedent fraught with consequences that in my opinion unfairly puts the applicant at a dual disadvantage.

In view of the economic evidence on file and the public interest of in having the applicant viably serve the residents of Portneuf, I would allow the application from CKNU-FM and make it subject to the conditions of licence discussed at the hearing and accepted by the applicant.