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Broadcasting Decision CRTC 2007-221
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Ottawa, 6 July 2007
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Newcap Inc.
Kentville, Nova Scotia
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Application 2006-1148-5, received 12 September 2006
Public Hearing in Membertou, Nova Scotia
16 April 2007
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English-language FM radio station in Kentville
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The Commission approves an application for a broadcasting licence to operate an English-language, FM commercial radio programming undertaking in Kentville, Nova Scotia.
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Introduction
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1.
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Newcap Inc. (Newcap) filed an application for a broadcasting licence to operate an English-language, FM commercial radio programming undertaking in Kentville, Nova Scotia at 89.3 MHz (channel 207C1) with an average effective radiated power of 9,900 watts.
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2.
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Newcap stated that the proposed station would offer a Classic Hits music format featuring hits of the 70s, 80s and 90s and targeted to adults between the ages of 24 and 54. All of the programming would be local. Approximately 98 hours of each broadcast week would consist of live-to-air programming while the remaining hours would be voice-tracked programming that fulfils the definition of local programming set out in Commercial Radio Policy 2006 (Broadcasting Public Notice 2006-158). In each broadcast week, the station would offer 16 hours of spoken word programming including 7 hours 30 minutes of news, of which 75% would be local content, and 8 hours 30 minutes of surveillance material such as local weather, traffic and the promotion of community events as well as other information of general interest.
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3.
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Newcap made a commitment that, in addition to the required basic annual contributions to Canadian content development (CCD), it would contribute $72,001 annually to CCD initiatives.
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4.
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The Commission received eight interventions in connection with this application: two in support, four in opposition and two comments.
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5.
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After reviewing the application and interventions, the Commission considers that the primary issue arising from this application is whether the Kentville radio market can sustain an additional radio station without an undue negative impact on that radio market.
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Commission's analysis and determination
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6.
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Currently, there is only one commercial licensee serving the Kentville radio market, namely Maritime Broadcasting System Limited (MBS), which operates two FM stations. CKWM-FM offers a Hot Adult Contemporary music format, which appeals primarily to females aged 18 to 44 years. CKEN-FM offers a Country music format, which usually captures listeners between the ages of 25 to 54.
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7.
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In opposing interventions, MBS and three other members of Kentville's business community expressed concern that introducing a new radio station would have an undue negative financial impact on the existing radio services in Kentville. MBS further contended that there is limited potential for economic growth in the Kentville radio market.
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8.
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The Commission notes that Kentville is one of the towns and small communities that make up Kings County in the Annapolis Valley of Nova Scotia. Retail sales estimates for Kings County for 2007 exceed $840 million, ranking third on a per household basis among all of Nova Scotia's counties. Commercial and residential construction in Kings County increased in 2006 compared to 2005 with similar annual growth forecast through 2012. Financial Post Markets (FP Markets) project continued economic growth in Kings County over the coming years.
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9.
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Statistics Canada's 2006 Census of Canada counts Kentville's population as 25,969, representing a 3.2% increase since the 2001 Census. The 2006 Census reports the population in the larger Kings County area as 60,035, a 2% increase over the 2001 Census. FP Markets forecasts an additional 2% population growth for the Kentville area over the next five years.
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10.
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According to the BBM bureau of measurement, the incumbent radio stations have accounted for more than 65% of total tuning in the Kentville radio market since Fall 2003. Total advertising revenues in the Kentville radio market have grown between 2002 and 2007. With an exception of a reported decline in profitability in 2006, the profit before interest and taxes (PBIT) margins recorded by the Kentville commercial radio stations from 2002 to 2005, inclusively, was higher than the average PBIT for all commercial radio stations in Canada during those years.
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11.
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Based upon projections for growth in Kentville and Kings County as well as the profitability of the Kentville radio market, the Commission is confident that the market could sustain, without an undue negative impact, the licensing of one new commercial radio station at this time. While recognizing that musical formats are not regulated and may be changed to respond to market realities, the Commission is of the view that the Classic Hits music format proposed by Newcap would increase the diversity of radio programming available to listeners in the Kentville radio market and provide service to a listening audience that appears to be underserved by the current radio offering in that market. The Commission is also satisfied that approval of Newcap's application would introduce a new editorial voice and foster greater competition in a radio market that has been served by only one commercial radio licensee for over 40 years.
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12.
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In light of the above, the Commission approves the application by Newcap Inc. for a broadcasting licence to operate an English-language, commercial FM radio programming undertaking in Kentville. The terms and conditions of licence are set out in the appendix to this decision.
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Changes flowing from the Commercial Radio Policy 2006
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13.
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In Broadcasting Public Notice 2006-158, the Commission set out a new approach to the development and promotion of Canadian artists. In order to reflect a new emphasis on development initiatives that lead to the creation of audio content for broadcasting Canadian resources, the Commission replaced the expression "Canadian talent development" (CTD) with "Canadian content development" (CCD). Under the new policy, each radio station holding a commercial radio licence is required to make a basic annual CCD contribution based on its total broadcast revenues in the previous broadcast year. This requirement will be reflected in the Radio Regulations, 1986 (the Regulations). Until such time, it will be implemented by a transitional condition of licence that will expire upon the coming into force of the amendments to the Regulations.
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14.
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Newcap made a commitment that, in addition to the required basic annual contributions, it would, by condition of licence, contribute $72,001 to CCD in each of the first seven years of operation. Newcap committed to direct $14,572 per year of this over and above contribution to FACTOR. The remainder, $57,429, would be directed to eligible initiatives as follows: Canada Music Week ($15,000), the Annapolis Valley School Board ($36,000) and Acadia University's Music Department ($6,429). The Commission is imposing a condition of licence, as set out in the appendix to this decision, reflecting these commitments.
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15.
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The Commission reminds Newcap that any development initiatives that have not been allocated to specific parties by condition of licence must be allocated to the support, promotion, training and development of Canadian musical and spoken word talent, including journalists. Parties and initiatives eligible for CCD funding are identified in paragraph 108 of Public Notice 2006-158.
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Employment equity
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16.
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Because this licensee is subject to the Employment Equity Act and files reports concerning employment equity with theDepartment of Human Resources and Skills Development, its employment equity practices are not examined by the Commission.
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Secretary General
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Related document
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Commercial Radio Policy 2006,Broadcasting Public Notice CRTC 2006-158, 15 December 2006
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This decision is to be appended to the licence. It is available in alternative format upon request and may also be examined in PDF format or in HTML at the following Internet site: www.crtc.gc.ca
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Appendix to Broadcasting Decision CRTC 2007-221
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Terms and conditions of licence
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Issuance of the broadcasting licence to operate an English-language, commercial FM radio programming undertaking in Kentville, Nova Scotia
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Terms
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The licence will expire 31 August 2013.
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The station will operate at 89.3 MHz (channel 207C1) with an average effective radiated power of 9,900 watts.
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The Department of Industry (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.
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The Commission reminds the applicant that, pursuant to section 22(1) of the Broadcasting Act, no licence may be issued until the Department notifies the Commission that its technical requirements have been met, and that a broadcasting certificate will be issued.
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Furthermore, the licence for this undertaking will be issued once the applicant 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 from the date of this decision, unless a request for an extension of time is approved by the Commission before 6 July 2009. 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.
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Conditions of licence
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1. The licence shall be subject to the conditions set outin New licence form for commercial radio stations, Public Notice CRTC 1999-137, 24 August 1999, with the exception of condition of licence no. 5.
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2. The licensee shall, upon commencement of operations, make a basic annual contribution to Canadian content development (CCD). The amount of the contribution shall be determined in accordance with the policy set out in Commercial Radio Policy 2006, Broadcasting Public Notice CRTC 2006-158, 15 December 2006 (Public Notice 2006-158), as amended from time to time.
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The licensee shall allocate 60% of this basic annual CCD contribution to FACTOR or MUSICACTION.
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The remainder of the annual basic contribution to CCD shall be allocated to parties and initiatives fulfilling the definition of eligible initiatives in Public Notice 2006-158.
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This condition of licence shall expire upon the coming into force of the amendments to the Radio Regulations, 1986 relating to CCD.
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3. In addition to the basic annual contribution, the licensee shall upon commencement of operations contribute $72,001 annually to the promotion and development of Canadian content. This amount is over and above the licensee's required basic annual CCD contribution. Of this amount, $14,572 per year shall be devoted to FACTOR. The remainder, $57,429 per year, shall be allocated to parties and initiatives fulfilling the definition of eligible initiatives in Public Notice 2006-158.
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Date Modified: 2007-07-06
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