ARCHIVED - Broadcasting Decision CRTC 2002-226

Broadcasting Decision CRTC 2002-226

Ottawa, 8 August 2002

HIS Broadcasting Inc.
Winnipeg, Manitoba

Application 2001-0228-6
Public Hearing at Winnipeg, Manitoba
4 February 2002

Application for a youth-oriented Christian FM station to serve Winnipeg

The Commission approves the application by HIS Broadcasting Inc. for an English-language specialty FM radio station in Winnipeg that will broadcast Christian music appealing to youth. This is one of five new Winnipeg radio stations approved in Decisions CRTC 2002-224 to Decisions 2002-228, issued today.

The Commission's overall approach to the applications for new Winnipeg radio stations considered at the 4 February 2002 Public Hearing is set out in Introductory statement to Decisions CRTC 2002-224 to 2002-228: Applications for New radio stations to serve Winnipeg, Public Notice CRTC 2002-41, 8 August 2002.

The application

1.

At the 4 February 2002 public hearing, the Commission considered an application by HIS Broadcasting Inc. (HIS) to carry on an English-language specialty FM radio station in Winnipeg. The applicant proposed that the station would operate at 107.1 MHz (channel 296A) with an effective radiated power of 918 watts. HIS indicated that the new station would feature a contemporary Christian music format targeted to Winnipeg and area youth aged 12 to 24.

Interventions

2.

The Commission notes the interventions submitted in support of the HIS application. The supporting interveners were of the view that a Christian music station designed for a younger audience would provide a valuable new radio service to listeners in Winnipeg. The Commission did not receive any interventions opposing the application.

The Commission's analysis and conclusions

3.

In its assessment of competing applications for new commercial radio stations, the Commission takes into account four main factors that it has identified as being relevant. While their relative importance will vary depending on the specific circumstances of the market concerned, the four factors are as follows:

. The diversity of news voices in the community
. The quality of the application
. The impact of a new entrant on existing stations
. The competitive state of the market¹

Diversity of news voices

4.

In Introductory statement to Decisions CRTC 2002-224 to 2002-228: Applications for new radio stations to serve Winnipeg, Public Notice CRTC 2002-41, 8 August 2002, the Commission listed the radio, television and daily newspapers serving Winnipeg. Not counting the radio stations licensed today, this list includes eleven commercial radio stations owned by six licensees, five not-for-profit radio stations owned by five licensees as well as four CBC radio stations. Winnipeg is further served by three private television stations owned by three licensees, as well as by two CBC television stations. A new private religious television station has been approved in Proposed religious station for Winnipeg, Decision CRTC 2002-229, 8 August 2002. Winnipeg is also served by two local daily newspapers owned by two different parties.

5.

In light of the above, the Commission considers that the Winnipeg market is served by a variety of editorial voices, and notes that HIS will provide an additional editorial voice to a market that is already well served in this respect.

Quality of the application

6.

The Commission applies four main criteria when assessing the quality of applications for new commercial radio stations. These criteria are:

. The applicant's local programming proposals and plans for providing reflection of the local community
. The quality of the applicant's business plan, including the proposed
format,
. Canadian content commitments
. Commitments in support of the development of Canadian talent²

Local programming plans

7.

HIS indicated that the Christian music broadcast by its proposed station would be complemented by spoken word programming, including newscasts in the morning drive period each weekday. Local stories would make up 75% of the newscasts. Spoken word programming would also include information on the arts, features and vignettes, artist interviews, as well as community updates and cultural information oriented to youth.

8.

The applicant indicated that its spoken word programming would not constitute religious programming as defined in Religious Broadcasting Policy, Public Notice CRTC 1993-78, 3 June 1993 (the Religious Broadcasting Policy). HIS stated that it would not attempt to discuss specific faith issues in its programming but would rather encourage its young audience to examine moral, faith and spiritual issues.

9.

The Commission considers that the applicant's proposal with respect to local programming is acceptable and would provide coverage of local news and events in a manner that reflects the interests of its target audience.

10.

The Commission notes the applicant's confirmation that it has no plans to offer religious programming as defined in the Religious Broadcasting Policy. The Commission, nevertheless, reminds the applicant that, if it does offer religious programming, it must abide by the requirements set out in the Religious Broadcasting Policy with respect to balance and other matters involving the broadcasting of religious programming as well as the policy regarding solicitation of funds.

Business plan

11.

The applicant indicated that it viewed its proposal as a relaunch of CFEQ-FM, a new FM station that the Commission licensed in New Christian music FM radio station, Decision CRTC 99-467, 18 October 1999. The licence was subsequently revoked, at the request of Christian Solutions Group, which was the licensee at the time, in Revocation, Decision CRTC 2001-35, 1 February 2001.Mr. Tom Hiebert, who is the principal of HIS, was the manager of CFEQ-FM, but was unsuccessful in his attempts to purchase CFEQ-FM from Christian Solutions Group.

12.

HIS indicated that the proposed station would target an audience between 12 and 24, an audience that would be younger than that of CHVN-FM, Winnipeg's existing Christian music station. CHVN-FM broadcasts programming designed primarily for listeners aged 25 to 49. The applicant indicated that the proposed station would operate in the Specialty format, and at least 95% of the music played each broadcast week would be drawn from subcategory 35-non-classic religious. It further indicated that it would broadcast no more than 35% hit material in any broadcast week.³

13.

The applicant projected a 2% share of tuning in the first year of operations. It further projected advertising revenues that would amount to $395,500 during the first year of operations rising to $675,500 in year 7. Tom Hiebert, who controls HIS, indicated that, if necessary, he and his wife would cover any financial shortfalls in the station's operations.

14.

The Commission considers that the station proposed by HIS would fill a programming niche that is currently underserved in the Winnipeg market and is satisfied that HIS has the resources to launch the station and to cover any operating shortfalls that may occur in the station's initial years of operation. The Commission considers it appropriate to impose the licensee's commitments to operate the proposed station in the specialty format, ensure that at least 95% of the musical selections played each broadcast week are drawn from subcategory 35-non-classic religious, and to broadcast no more than 35% hit material in any broadcast week as conditions of licence. These conditions are set out in the Appendix to this decision.

Canadian content commitments

15.

As noted previously, 95% of the music played by the station would be drawn from category 3 - special interest music, and more specifically from subcategory 35 - non-classic religious. HIS further indicated that it would ensure that, in each broadcast week, at least 15% of the Category 3 musical selections that it broadcasts would be Canadian.

16.

The Radio Regulations, 1986 (the Radio Regulations) set out minimum levels of Canadian music that radio stations must broadcast. The Radio Regulations specify that, in each broadcast week, at least 10% of musical selections in category 3 and at least 35% of musical selections in category 2 must be Canadian.

17.

The Commission notes that HIS' commitment with respect to the broadcast of Canadian selections in category 3 exceeds the minimum requirements of the Radio Regulations and is similar to the commitment of other Canadian radio stations that offer formats based on contemporary Christian music. The Commission considers that it is appropriate to impose, as a condition of licence, HIS' commitment that a minimum of 15% of musical selections from category 3 that it broadcasts each broadcast week will be Canadian. The condition of licence is set out in the Appendix to this decision.

Canadian talent development

18.

HIS indicated that it would allocate $10,000 per year, or a total of $70,000 over a seven-year licence term, in direct expenditures for Canadian talent development. Annual expenditures would be allocated as follows:

. $2,000 to underwrite local Christian music concerts
. $6,000 for CD demo packages to be awarded to five recipients
. $2,000 for music scholarships.

19.

The Commission considers that the applicant's Canadian talent development proposal is appropriate for a small station that will target a niche audience. It is satisfied that the proposal will provide assistance to Christian music artists in the Winnipeg area. The Commission considers that it is appropriate to impose the licensee's commitments with respect to Canadian talent development as conditions of licence, and to require the applicant to file a report on the implementation of these commitments concurrent with its annual returns. These conditions are set out in the Appendix to this decision.

Impact on other stations

20.

The applicant addressed the issue of the possible impact that licensing its proposed station would have on Winnipeg's existing Christian music station CHVN-FM. HIS noted that its proposed station would target a younger audience than that served by CHVN-FM. It further presented a letter from the president of CHVN-FM expressing support for the HIS proposal.

21.

The Commission considers that the station proposed by HIS, which would feature a format designed for a niche audience, would not have a negative impact on Winnipeg radio stations that program mainstream pop rock and dance music. The Commission further notes that the format proposed by HIS will target a younger audience than Winnipeg's existing Christian station CHVN-FM. In light of this fact, and the letter of support for the HIS application submitted by the president of CHVN-FM, the Commission is satisfied that the station proposed by HIS would not have a significant negative financial impact on CHVN-FM.

Competitive state of the market

22.

The competitive state of a market, as a factor in the Commission's consideration of applications proposing new commercial radio stations, is generally most relevant where the applicant is also the licensee of an existing station in that market. In such cases, the Commission's concern is that its licensing actions do not create an undue competitive imbalance in the market. The Commission notes that, in this case, the applicant would be a new player in the market and thus it would serve to increase competition.

Conclusion

23.

The Commission considers that the station proposed by HIS would expand the programming choice of listeners in Winnipeg by providing a Christian music service oriented to young people, complemented by spoken word programming that would include coverage of local news and community events. The Commission further notes that the HIS application has been supported by CHVN-FM, the licensee of Winnipeg's existing Christian music station, and is convinced that the proposed station would not have a significant negative effect on radio stations currently serving Winnipeg. The Commission further considers that HIS' commitment to exceed the minimum levels of Canadian content required under the Radio Regulations, along with its Canadian talent development initiatives, will provide important support for Canadian artists who record and perform Christian music.

24.

For these reasons, the Commission approves the application by HIS for a new English-language specialty FM station in Winnipeg on the frequency 107.1 MHz. While the applicant proposed to operate at an effective radiated power of 918 watts, the Department of Industry (the Department) has advised that the effective radiated power of the undertaking will be 920 watts rather than the 918 watts. The station will accordingly be licensed to operate at an effective radiated power of 920 watts.

Issuance of the licence

25.

The Commission will issue a licence to HIS Broadcasting Inc. with a licence term beginning on 1 September 2002 and expiring 31 August 2009, subject to paragraphs 26 to 28 below and the conditions of licence set out in the Appendix to this decision as well as those in New licence form for commercial radio stations, Public Notice CRTC 1999-137, 24 August 1999.

The Department has advised the Commission that, while this application is conditionally technically acceptable, it will only issue a broadcasting certificate when it has determined that the proposed technical parameters will not create any unacceptable interference with aeronautical NAV/COM services.

The Commission reminds the licensee that, pursuant to section 22(1) of the Broadcasting Act, no licence may be issued until the Department has notified the Commission that its technical requirements have been met, and that broadcasting certificates will be issued.

Furthermore, the licence for this undertaking will only be issued once the licensee has informed the Commission in writing that it is prepared to commence operations. The undertaking must be operational at the earliest possible date and in any event no later than 24 months of the date of this decision, unless a request for an extension of time is approved by the Commission before 8 August 2004. In order to ensure that such a request is processed in a timely manner, it should be submitted at least 60 days before this date.

Employment equity

29.

In accordance with Implementation of an employment equity policy, Public Notice CRTC 1992-59, 1 September 1992, 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.

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

Appendix to Broadcasting Decision CRTC 2002-226

Conditions of licence for the new FM station in Winnipeg licensed to HIS Broadcasting Inc.

The licence will be subject to the following conditions of licence, as well as the conditions set out in New licence form for commercial radio stations, Public Notice CRTC 1999-137, 24 August 1999.