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Broadcasting Decision CRTC 2023-300

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Reference: 2022-298

Ottawa, 29 August 2023

James Scott Clements, on behalf of a corporation to be incorporated
Lunenburg, Nova Scotia

Public record: 2021-0336-5
Public hearing in the National Capital Region
19 January 2023

English-language commercial FM radio station in Lunenburg

Summary

The Commission approves an application by James Scott Clements, on behalf of a corporation to be incorporated, for a broadcasting licence to operate an English-language commercial FM radio station in Lunenburg, Nova Scotia.

Application

  1. James Scott Clements, on behalf of a corporation to be incorporated (James Scott Clements [OBCI]), filed an application for a broadcasting licence to operate an English-language commercial FM radio station in Lunenburg, Nova Scotia.Footnote 1
  2. The corporation to be incorporated would be wholly owned and controlled by James Scott Clements, a Canadian citizen residing in Canada, who would serve as the sole director and President/Chief Executive Officer (CEO). The applicant is therefore in compliance with the Direction to the CRTC (Ineligibility of Non-Canadians)Footnote 2 and is eligible to hold a broadcasting licence in Canada.
  3. The station would operate at 107.9 MHz (channel 300B1) with an effective radiated power (ERP) of 6,500 watts (non-directional antenna with an effective height of antenna above average terrain [EHAAT] of 74.6 metres).Footnote 3
  4. The applicant proposed to broadcast 126 hours of local programming per broadcast week, of which five hours and 39 minutes would be devoted to spoken word programming and one hour and 20 minutes to pure news (newscasts). Of the pure news offering each broadcast week, 40 minutes would be devoted to local news, 20 minutes to national news and 20 minutes to international news.
  5. The applicant proposed a mainstream Canadian and international rock music format featuring musical selections spanning the 1970s to present time, with the majority of the airplay coming from 1990 and after. The applicant added that the station’s music programming would specifically target adults 25 to 54 years of age and skew slightly towards men (65% male; 35% female).
  6. The applicant confirmed that it would exceed the regulatory requirements relating to the broadcast of Canadian musical selections set out in the Radio Regulations, 1986 (the Regulations). Specifically, it committed to devote, by condition of service,Footnote 4 40% of its content category 2 (Popular Music) musical selections to Canadian selections over the broadcast week and from 6:00 a.m. to 6:00 p.m. Monday to Friday of the same broadcast week.
  7. Further, the applicant committed to devote, by condition of service, 3% of musical selections aired each broadcast week to selections by Canadian emerging artists. The applicant added that it would support emerging artists by naming an “Emerging Artist of the month”, which would provide the selected artist with no-cost commercial airtime to promote their music and/or live performances in the area, an invitation to be interviewed on-air, and their biography and interview being archived on the station’s website to allow the audience to access the information after their month is complete.
  8. Subsection 15(2) of the Regulations sets out the basic contributions to Canadian content development (CCD) that radio licensees must make. As part of applications for new licences, applicants may commit to making additional CCD contributions that are over and above those required by the Regulations. In regard to the present case, the applicant did not propose any over-and-above CCD contributions, but stated that it would strive to achieve the spirit of CCD contributions through emerging artist airplay, interview opportunities, no cost commercial airtime, and Web Portal exposure, along with its commitment to exceed the regulatory minimum of 35% Canadian content by playing a minimum of 40% Canadian content each broadcast week.
  9. The applicant submitted that the licensing of its proposed station would fill a void on the local FM dial by providing Lunenburg with its first commercial FM radio service and by attracting businesses attempting to reach Lunenburg residents. According to the applicant, the majority of the tuning in Lunenburg goes to Halifax-based commercial and public radio. It argued that for far too long, in order to hear rock-oriented music, the town’s residents have had to tune to radio stations in Halifax, which provide very little to no spoken word content that reflects the diversity of Lunenburg. The applicant added that, primarily for these reasons, it is looking forward to becoming a new independent player in the Canadian radio industry, strongly reflecting the objectives of the Broadcasting Act.
  10. The Commission received several interventions in support of this application, from individuals and businesses in Lunenburg, as well the from president of Huber Radio Ltd., a radio broadcaster in Saskatchewan.
  11. The Commission also received an intervention in opposition to this application from Acadia Broadcasting Corporation (Acadia), licensee of CKBW-FM Bridgewater and CJHK-FM Bridgewater, Nova Scotia,Footnote 5 to which the applicant replied.
  12. In its intervention, Acadia questioned the applicant’s claim regarding a void on the local FM dial, and submitted that in light of current economic circumstances, including significant year-over-year declines in radio sector revenues, the applicant’s business plan is unrealistic. In its reply, the applicant cited Broadcasting Decision 2022-225, in which the Commission stated that Lunenburg County, because of its proximity to Halifax, experiences significant out-of-market tuning, and that a new station could provide an opportunity to repatriate some of this out-of-market tuning. The applicant added that its business plan is based on its successful managing of operations in similar Maritime radio markets and that it is familiar with the fluctuations the radio business can face, whether it is local economic changes brought about by market-driven adjustments or environment changes.
  13. Acadia further submitted that approval of the present application would “put further pressure on commercial radio revenues and profitability, including Acadia’s stations in Lunenburg County and elsewhere.” In its reply, the applicant stated that “[i]f the gloom and doom of the Acadia intervention is to be believed, it is implied the Commission should not be granting any new licenses or […] approving acquisitions for non profitable stations, such as [Acadia’s] recent purchase of CKQV-FM from Golden West Broadcasting.”

Issues

  1. The Commission has the authority, pursuant to subsections 9(1) and 9.1(1) of the Broadcasting Act, to issue licences for the carrying on of broadcasting undertakings and to make orders imposing conditions on the carrying on of a broadcasting undertaking that it considers appropriate for the implementation of the broadcasting policy set out in subsection 3(1) of the Broadcasting Act.
  2. After examining the record for this application in light of applicable regulations and policies, the Commission considers that the issues it must address are the following:
    • whether the use of the frequency 107.9 MHz by the applicant for its proposed station represents an appropriate use of spectrum;
    • whether approval of the application would have an undue economic impact on incumbent stations in the market;
    • whether the applicant’s proposal would serve the local community and would contribute to local reflection; and
    • whether approval of the application would increase diversity in the market.

Appropriate use of spectrum

  1. The Department of Industry (also known as Innovation, Science and Economic Development Canada) has granted conditional technical acceptability of the proposed station. As such, the applicant’s proposal adheres to the rules governing FM spectrum coordination.
  2. Further, in regard to the applicant’s proposed use of frequency 107.9 MHz (channel 300B1), the Commission has identified multiple other frequencies that are capable of providing similar or greater coverage to that proposed by the applicant. As such, the frequency 107.9 MHz is not the last frequency available to serve Lunenburg.
  3. In light of the above, the Commission finds that the use of frequency 107.9 MHz by the applicant for its proposed station would represent an appropriate use of spectrum.

Economic impact on incumbent stations

  1. Lunenburg County is located 90 kilometres south-west of the city of Halifax. According to Statistics Canada, the population of Lunenburg County in 2021 was 48,599, and its largest population centres included Bridgewater, the town of Lunenburg and Mahone Bay. The population of Lunenburg County increased by 3.1% from 2016 to 2021, with the increase distributed almost equally on the territory and on the main population centres, with the exception of the town of Lunenburg, where growth was almost double.
  2. The proposed station would cover the town of Lunenburg as well as a significant portion of the town of Bridgewater and neighbouring towns. The proposed station’s primary contour would serve a population of 23,723 (based on 2021 Census data), and approximately 50% of the proposed station’s primary contour would overlap those of Acadia’s English-language commercial radio stations in Bridgewater (CJHK-FM and CKBW-FM).
  3. Lunenburg experiences significant out-of-market tuning. According to the applicant, a significant portion of listeners tuning in to out-of-market stations seem to do so to listen to the music format being proposed by the applicant.
  4. The applicant projected local advertising revenues of $313,000 in the first year of operation, to increase at an average annual rate of 3% through to year 7, with a projected profit starting in the first year of operation. In the Commission’s view, it is uncommon for a station to achieve profitability in its first years of operation. However, the applicant’s profile and past broadcasting experience, specifically over 21 years in management positions at various stations as well as a director of an English-language community radio station, could improve the chances of profitability of the new radio station, due to the knowledge and skills obtained in those positions.
  5. The applicant stated that it expects to generate only 20% of its revenues from existing radio services. The Commission recognizes that Acadia’s Bridgewater radio stations have not yet fully recovered from the loss of revenues triggered by the COVID-19 pandemic. Nonetheless, given the dominant position held by Acadia in the market, the out-of-market tuning, the projected local advertising revenues (compared to the market size) and the current profitability of the market, the Commission considers that while the proposed station would likely have an impact on incumbent stations, Acadia would be able to withstand the increased competition that would likely result from the launch of the proposed station. The Commission further considers that the proposed station could have a stimulating effect on the Lunenburg market.
  6. Finally, given the size of Acadia as a radio operator (in 2022, Acadia owned and operated 17 radio stations, mostly in medium-size markets in the Atlantic region and in Ontario), the Commission considers that the proposed station would have a limited impact on that licensee’s capacity to maintain its current stations nationwide.
  7. In light of the above, the Commission finds that approval of this application would likely have a financial impact on incumbent stations, but without compromising their viability, including the specific viability of Acadia as a radio station operator.

Serving the local community and contributing to local reflection

  1. In Broadcasting Public Notice 2006-158, the Commission stated that radio station licensees, in their local programming, must incorporate spoken word material of direct and particular relevance to the community served, and that this material must include local news, weather, sports coverage, and the promotion of local events and activities. In Broadcasting Regulatory Policy 2022-332, the Commission maintained this view.
  2. The applicant proposed to devote, over the course of the broadcast week, approximately five hours and 39 minutes of the station’s programming to spoken word programming, of which one hour and 20 minutes would be pure news (newscasts). The remainder would consist of local surveillance and weather reports, scheduled sports information and local lifestyle and event information.
  3. The applicant stated that it would strive to serve the news and information needs of its audience, with an emphasis placed on local news that is important to that audience. This would be accomplished through news gathering and reporting by news staff, and through the presentation of 30 scheduled newscasts per week during the Monday to Friday morning show and 10 scheduled newscasts per week during the Monday to Friday afternoon show. Newscasts would be scheduled Monday through Friday and presented every half hour from 6:00 a.m. to 8:30 a.m., and again at 4:00 p.m. and 5:00 p.m. The applicant added that although it does not plan to provide weekend news at the time of the proposed station’s launch, it hopes to provide such scheduled news coverage after its first year of operation. It further added that it would, in urgent breaking news situations, have the ability to break format and broadcast any news, but that this would happen on an as-required basis.
  4. The applicant stated that it would keep its listeners informed with what is happening in its local communities, positioning itself as the place to go when listeners want information on local hockey, snowmobiling, lake activities, concerts, and fundraisers that contribute to the spirit of Lunenburg. It further stated that it plans to air a community calendar-style feature approximately 110 times over the broadcast week, and that since there is no licensed local station in the town of Lunenburg, public events that reflect the values and diversity of Lunenburg’s residents would take precedence.
  5. The applicant indicated that public affairs programming would include information from town council, with invitations extended to the seven members of town council to provide in their own words their viewpoints to residents about town matters. The applicant added that it plans to provide civic engagement messaging to its listeners by airing information on town council meetings and on how to be involved in person and/or online. Finally, a “speakers’ corner” concept would air the voices of the residents in their own words, with listeners recording their opinions for broadcast in the station’s spoken word content.
  6. In light of the above, the Commission finds that the programming proposed by the applicant is consistent with the Commission’s definition of local programming and that it would contribute to local reflection in the market.

Diversity in the market

  1. As set out in Broadcasting Public Notice 2008-4 (the Diversity of Voices Policy), the Canadian broadcasting system should ensure that audiences have access to a diversity of programming – especially national, regional and local content. Specifically, the Commission considered that the concept of “diversity” in the Canadian broadcasting system should be approached at three distinct levels: diversity of elements, plurality of editorial voices within the private element, and diversity of programming.
  2. According to the applicant, there would be a benefit to approving its application, since the addition of a new independent service to the Canadian broadcasting industry would increase programming diversity and would have no major impact on the financial state of affairs for the incumbents. The applicant stated that the proposed station, in addition to being the first commercial radio station in the town of Lunenburg, would represent a new and diverse voice in the market, by function of it being the first and only station belonging to a new licensee. In this regard, it noted that there are two licensed commercial FM radio stations in the town of Bridgewater that are both licensed to Acadia and that operate under formats different from that proposed for the new station: CKBW-FM, which currently operates under an Oldies/Classic Gold format, and CJHK-FM, which currently operates under a Country Music format. The applicant submitted that given the stark difference in formats and target audience, as well as the long-standing presence of Acadia in Bridgewater, the proposed station would not overly impact these two Bridgewater stations.
  3. In the Commission’s view, the introduction of a new commercial radio station focused on the town of Lunenburg would add a unique voice to the commercial radio offering for that town. Further, and consistent with the Diversity of Voices Policy, the addition of a new, independent voice in the radio sector through the proposed station would promote plurality of ownership within the Canadian broadcasting system. Accordingly, the Commission finds that approval of this application would increase diversity in the market.

Conclusion

  1. In light of all of the above, the Commission approves the application by James Scott Clements (OBCI) for a broadcasting licence to operate an English-language commercial radio programming undertaking in Lunenburg, Nova Scotia.
  2. In addition, the Commission directs James Scott Clements (OBCI) to file, by no later than 60 days from the date of this decision, an executed copy of the constituting documents of the corporation to be incorporated.

Conditions of service

  1. The Commission notes that there are standard conditions of service that apply to all undertakings of a particular class. In regard to the present case, the Commission considers it appropriate to require the licensee to adhere to the standard conditions of service for commercial radio stations.
  2. Accordingly, pursuant to subsection 9.1(1) of the Broadcasting Act, the Commission orders James Scott Clements (OBCI), by condition of service, to comply with the standard conditions of service set out in Broadcasting Regulatory Policy 2022-334, as well as with all applicable requirements set out in the Regulations that were made under paragraph 10(1)(a) or under paragraph 10(1)(i) of the old Broadcasting Act.Footnote 6
  3. In addition, consistent with the applicant’s proposal to exceed the standard requirements relating to the broadcast of Canadian content category 2 musical selections, the Commission orders James Scott Clements (OBCI), by condition of service and as an exception to subsections 2.2(8) and 2.2(9) of the Regulations,to devote a minimum of 40% of its musical selections from content category 2 to Canadian selections in each broadcast week and between 6:00 a.m. and 6:00 p.m. from Monday to Friday.
  4. Given that this application was filed and processed and the hearing held prior to the coming into force of the new Broadcasting Act, and that interested parties had an opportunity to comment on the issues as part of that process, the Commission considers this proceeding sufficient to achieve the purposes of the publication and consultation requirement set out in subsection 9.1(4) of the Broadcasting Act in this case.
  5. Pursuant to the authority specified in paragraph 14 of this decision, the Commission has imposed conditions of service for this licensee, which, along with the terms under which the licence has been granted, are set out in the appendix to this decision.
  6. Finally, the Commission notes that the formal broadcasting licence document issued to a licensee may set out additional requirements for the undertaking, relating to, for example, technical parameters or prohibitions on transfer. Pursuant to subsection 9(1) of the Broadcasting Act, the licensee shall therefore also adhere to any such requirements set out in the broadcasting licence for the undertaking.

Canadian content development

  1. As noted above, the applicant did not propose any over-and-above CCD contributions. However, the applicant must adhere to the requirements relating to contributions to CCD set out in section 15 of the Regulations, as amended from time to time.

Emerging Canadian artists

  1. As noted above, the applicant proposed to devote 3% of musical selections aired each broadcast week to Canadian emerging artists, along with other types of support for such artists. The Commission notes, however, that as set out in Broadcasting Regulatory Policy 2022-332, it expects commercial radio station licensees not already required by condition of service to broadcast music by emerging artists to devote, in each broadcast week, at least 5% of the station’s musical selections to selections from Canadian emerging artists broadcast in their entirety, and to report annually on how it has met this expectation. Although this application was submitted before the issuance of that regulatory policy, the Commission finds that it would be appropriate to apply this expectation to the proposed station. Accordingly, in the appendix to this decision, the Commission has set out an expectation relating to the broadcast of musical selections from Canadian emerging artists.

Reminders

  1. The licensee must comply at all times with the Regulations.

Local news

  1. Radio stations are an important daily source of local news and information for communities. Carrying on a broadcasting undertaking comes with conditions, regulatory obligations and responsibilities, which include contributing to the Canadian broadcasting system by ensuring that Canadians have access to local programming that reflects their needs and interests and informs them of important current issues.
  2. Although Broadcasting Regulatory Policy 2022-332 does not specify a minimum level of weekly news to be broadcast, it does specify the type of spoken word material that must be included as part of a station’s local programming. In accordance with that regulatory policy, the Commission reminds the licensee that its stations, in their local programming, must incorporate spoken word material of direct and particular relevance to the communities served, and that this programming must include local news, weather, sports coverage, and the promotion of local events and activities. In addition, the Commission encourages the licensee to ensure that a reasonable amount of daily local news and information is made available to those communities.

Emergency alert system

  1. The Commission has implemented obligations in respect of the broadcast of emergency alerts. For reference, see section 16 of the Regulations as well as Broadcasting Regulatory Policy 2014-444. Compliance involves implementing the public alerting system for each of the licensee’s transmitters, and ensuring that any alert broadcast decoders (e.g., ENDEC) used for the purposes of broadcasting emergency alert messages be installed and programmed to properly account for the applicable contour (as set out in paragraph 16(2)(b) of the Regulations) of the station as well as that of any rebroadcasting transmitter that may appear on the licence for that station.

Secretary General

Related documents

This decision is to be appended to the licence.

Appendix to Broadcasting Decision CRTC 2023-300

Terms, conditions of service, expectations and encouragement for the English-language FM radio programming undertaking in Lunenburg, Nova Scotia

Terms

The licence will expire 31 August 2029.

The station will operate at 107.9 MHz (channel 300B1) with an average effective radiated power (ERP) of 6,500 watts (non-directional antenna with an effective height of antenna above average terrain [EHAAT] of 74.6 metres).

Pursuant to subsection 22(1) of the Broadcasting Act, no licence may be issued until the Department of Industry (also known as Innovation, Science and Economic Development Canada) notifies the Commission that its technical requirements have been met and that a broadcasting certificate will be issued.

Furthermore, the Commission will only issue a licence for this undertaking once the applicant has:

The undertaking must be in operation by no later than 29 August 2025. To request an extension, the applicant must submit a written request to the Commission at least 60 days before that date, using the form available on the Commission’s website.

Conditions of service

  1. The licensee shall adhere to the conditions of service set out in Revised conditions of licence for commercial AM and FM radio stations, Broadcasting Regulatory Policy CRTC 2022-334, 7 December 2022. Further, the licensee shall adhere to the requirements set out in the broadcasting licence for the undertaking.
  2. The licensee shall adhere to all applicable requirements set out in the Radio Regulations, 1986, that were made under paragraph 10(1)(a) or under paragraph 10(1)(i) of the old Broadcasting Act.Footnote 7
  3. The licensee shall, as an exception to the percentage of Canadian musical selections set out in subsections 2.2(8) and 2.2(9) of the Radio Regulations, 1986 (the Regulations):
    • devote, in each broadcast week, a minimum of 40% of its musical selections from content category 2 (Popular Music) to Canadian selections broadcast in their entirety; and
    • devote, between 6:00 a.m. and 6:00 p.m., in any period beginning on Monday of a week and ending on Friday of the same week, a minimum of 40% of its musical selections from content category 2 to Canadian selections broadcast in their entirety.

    For the purposes of this condition of service, the terms “broadcast week,” “Canadian selection,” “content category” and “musical selection” shall have the same meanings as those set out in the Regulations.

Expectations

Cultural diversity

The Commission expects the licensee to reflect the cultural diversity of Canada in its programming and employment practices.

Canadian emerging artists

Consistent with the Commission’s determination set out in Revised Commercial Radio Policy, Broadcasting Regulatory Policy CRTC 2022-332, 7 December 2022 (Broadcasting Regulatory Policy 2022-332), the Commission expects the licensee to devote, in each broadcast week, at least 5% of the station’s musical selections to selections from Canadian emerging artists broadcast in their entirety. The licensee should report annually on how it has met this expectation, including the percentage of selections from Canadian emerging artists out of the total number of musical selections that were aired, and the number of distinct artists whose music has been aired. The licensee should also be able to provide, upon request, information such as a list of all titles, artists, and International Standard Recording Code (ISRC) numbers.

For the purposes of the above paragraph, the definition of “Canadian emerging artist” is the same as that set out in paragraph 346 of Broadcasting Regulatory Policy 2022-332.

Indigenous musical selections

Consistent with the Commission’s determination set out in Revised Commercial Radio Policy, Broadcasting Regulatory Policy CRTC 2022-332, 7 December 2022 (Broadcasting Regulatory Policy 2022-332), the Commission expects the licensee to include Indigenous musical selections on the station’s playlist. The licensee should report annually on the amount of Indigenous content aired on the station throughout the broadcast year (i.e., from 1 September to 31 August), including the percentage of Indigenous musical selections out of the total number of musical selections that were aired, and the number of distinct artists whose music has been aired. The licensee should also be able to provide, upon request, information such as a list of all titles, artists, and International Standard Recording Code (ISRC) numbers.

For the purposes of the above paragraph, the licensee may use the provisional definition of “Indigenous-Canadian musical selection” set out in paragraph 441 of Broadcasting Regulatory Policy 2022-332 to determine whether a musical selection can be considered an Indigenous musical selection.

Encouragement

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 in its hiring practices and in all other aspects of its management of human resources.

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