ARCHIVED -  Transcript - Toronto, ON - 2000/02/11

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Triumph Howard Johnson Triumph Howard Johnson

Plaza-Hotel Plaza-Hotel

MacDonald-Cartier Salle de bal

Ballroom MacDonald-Cartier

2737 Keele Street 2737, rue Keele

Toronto, Ontario Toronto (Ontario)

February 11, 2000 Le 11 février 2000





Volume 10






In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

bilingual as to their covers, the listing of the CRTC members

and staff attending the public hearings, and the Table of


However, the aforementioned publication is the recorded

verbatim transcript and, as such, is taped and transcribed in

either of the official languages, depending on the language

spoken by the participant at the public hearing.





Afin de rencontrer les exigences de la Loi sur les langues

officielles, les procès-verbaux pour le Conseil seront

bilingues en ce qui a trait à la page couverture, la liste des

membres et du personnel du CRTC participant à l'audience

publique ainsi que la table des matières.

Toutefois, la publication susmentionnée est un compte rendu

textuel des délibérations et, en tant que tel, est enregistrée

et transcrite dans l'une ou l'autre des deux langues

officielles, compte tenu de la langue utilisée par le

participant à l'audience publique.

Canadian Radio-television and

Telecommunications Commission

Conseil de la radiodiffusion et des

télécommunications canadiennes

Transcript / Transcription

Public Hearing / Audience publique

Broadcasting Applications and Licences/

Demandes et licences en radiodiffusion





A. Wylie Chairperson/Présidente

M. Wilson Commissioner/Conseillère

J. Pennefather Commissioner/Conseillère

A. Cardozo Commissioner/Conseiller

R. Williams Commissioner/Conseiller

C. Grauer Commissioner/Conseillère

A. Noël Commissioner/Conseillère




P. Cussons Hearing Manager and Secretary / Gérant de l'audience et Secrétaire

D. Rhéaume Legal Counsel /

Conseiller juridique





Triumph Howard Johnson Triumph Howard Johnson

Plaza-Hotel Plaza-Hotel

MacDonald-Cartier Salle de bal

Ballroom MacDonald-Cartier

2737 Keele Street 2737, rue Keele

Toronto, Ontario Toronto (Ontario)


February 11, 2000 Le 11 février 2000


Volume 10




Dufferin Communications Inc. 1933



Rogers Broadcasting Limited, Corus Radio Company

and WIC Radio 2015

Mr. William J. Genereux 2058

Orangeville Community Radio 2066

Popular Records Inc. 2072

The Corporation of the Town of Orangeville 2082



Dufferin Communications Inc. 2089

Toronto, Ontario/ Toronto (Ontario)

--- Upon commencing on Friday, February 11, 2000

at 0905 / L'audience débute le vendredi

11 février 2000 à 0905

9312 THE CHAIRPERSON: Welcome back to our hearing for this last item on the agenda.

9313 Mr. Secretary, please.

9314 MR. CUSSONS: Thank you, Madam Chairperson. Good morning, everyone.

9315 We will now hear an application by Dufferin Communications Inc. to amend the broadcasting license of the radio programming undertaking CIDC-FM Orangeville by relocating the transmitter site presently located six kilometres west of the Town Hall to a site located eleven kilometres east of the same Town Hall and by decreasing the effective radiated power from 50,000 to 30,700 watts.

9316 The applicant has confirmed its continued Orangeville programming orientation. We have Mr. Evanov and his team.

9317 Mr. Evanov.

9318 THE CHAIRPERSON: Good morning.


9319 MR. EVANOV: Bonjour.

9320 Madam Chairman, Members of the Commission, my name is Bill Evanov, President of CIDC-FM. To my left is Carmela Laurignano, Vice President and Station Manager. To her left is Debra McLaughlin, our research analyst and expert. At the second table at the far left, your right, is Ken Stowar, Program and Music Director; Barry Horne, News Director; Fedele Naccarato, Sales Manager and Nadia Cerelli, Promotions Manager.

9321 We are back before you again seeking permission to move our tower. Things are different since we last applied.

9322 One important reason for a transmitter relocation is that our transmitter is hanging on a tower that is unreliable and sometimes impossible to service.

9323 Number one, the old tower, which is the current tower we are using, we will refer to it as the old tower, is located in the middle of a farm and the lease from the farmer expires in 2001, a year from now.

9324 Access to the old tower, is Concession 2, which is a gravel secondary side

road running 2 kilometres to Highway 9. During major snow storms, we have been off the air up to six hours because our engineers were stuck in three feet of snow and had to wait for snowploughs to clear the roads.

9325 Snow is one problem; another is unreliable hydro, which results in down time. The farm is only serviced by Ontario Hydro "Rural" Service. The old tower is a light duty structure, the cheapest available that just passed old minimum standards when erected by the previous owners. A natural disaster, or an ice storm similar to CJAD in Montreal would immediately collapse the old tower, causing great hardship to an independent broadcaster.

9326 Purchasing and erecting a stronger, higher tower in a more accessible location was an option we explored, but it was cost prohibitive and good available sites are almost impossible to find.

9327 MR. STOWAR: Then a miracle happened. We learned that Peel Region was building an "essential service" tower only seven miles east of Orangeville with Communication facilities for Peel Regional Police, Public Works, Mississauga, Brampton and Caledon Fire, Emergency Services, the RCMP and the Ministry of Health. We have attached pictures of the tower site in your package.

9328 The benefits of being on this new tower are numerous to this Independent Broadcaster:

9329 One, the road to the new tower is paved, not gravel. It is a "Class 1 Road" and due to the essential service status receives number one priority for snow ploughing and Hydro service. Before anything else in the County, it will be serviced first.

9330 Two, unlike the old tower, the new tower, due to its strength, might withstand a natural disaster. And if not, its "essential service status" would ensure reconstruction at great speed. The engineers, from Max tower tell us that the new tower which would have withstood the Montreal Ice Storm, is rated 360 pascals with 25 millimetres of ice thickness, more than double the old tower, which would have collapsed under the Montreal Ice Storm.

9331 Three, new tower significantly reduces operating costs and it would also allow us to use an STL system from the studio to the tower instead of expensive Bell land lines. This alone would save us 25,000 a year. In terms of hydro, immediate access and security, it would put us on an equal footing with most broadcasters in the CMA. Its operational benefits are similar to what Toronto radio stations enjoy at the CN Tower. It makes absolute sense from an operations and business perspective. I can think of no broadcaster who would not want this improvement for their radio station.

9332 MR. EVANOV: We need to have a strong, reliable signal into the Toronto CMA. Let's analyze why.

9333 I will ask Debra McLaughlin to explain the term CMA and how advertisers look to it as the crucial measurement in determining where the advertising dollars go.

9334 MS McLAUGHLIN: BBM Bureau of Measurement is the industry standard for ratings and audience measurement. The basis of all representative research is accurate population estimates and so it is imperative that BBM parameters are intrinsically tied to Statistics Canada definitions. For the majority of the markets in Canada these definitions more or less correspond to broadcast licenses and contours and for many stations represent their trading area.

9335 There are some notable exceptions, however, and a case in point is CIDC-FM.

9336 In 1986 when this Orangeville station was licensed, it had a distinct market measured separately by BBM and was recognized by Stats Can as existing outside the CMA. The results of the 1986 census however showed that a considerable portion of the population commuted to the Toronto CMA and this, along with other criteria, meant the town of Orangeville was redefined as part of the CMA.

9337 And I will just draw your attention to Exhibit 2. You can see that Orangeville isn't in isolation obviously. There are several markets contained on this map, like Newmarket, Brampton. They are all now part of the Toronto CMA. This wasn't alone the result of the 1986 census, but in fact is representative of what is happening to the markets surrounding Toronto. They are simply being swallowed up as people commute in.

9338 BBM notified both buyers and sellers of the inclusion of Orangeville in the definition and in the fall 1987 BBM survey new maps, new population and a new station, CIDC-FM, was incorporated into the survey. Because of trending purposes and to allow the station to continue to monitor the performance within their licensed area, BBM produced a separate Orangeville report. While this was useful to monitor programming, it no longer was useful in a marketing sense.

9339 National and regional accounts who had once Orangeville on a market list now knew that when they bought Toronto they covered off this market. And as has been the fate of small markets and the stations servicing them across Canada, the town of Orangeville was gradually dropped from buying lists.

9340 The report on Orangeville was continued until CIDC-FM resigned membership in the early 1990s. It was discontinued for two reasons. First, there was no funding from a subscribing station, and two, most importantly there was no demand from buyers.

9341 As a cooperative, BBM is run by executive committees representing both buyers and sellers. A decision to drop a market from reporting is only made when there is consensus from both sides of the industry that there will be minimal impact. The fact that Orangeville was no longer needed is indicative of its non-status as a market.

9342 CIDC-FM could fund a separate report called a suburban market report that would, in fact, provide data for the buying community on the Town of Orangeville. But in a practical sense there would be no return on investment. Less than 50 per cent of the markets eligible in Canada for suburban reporting status use this option because they found that it makes no difference to their buys.

9343 Orangeville is part of the CMA. CIDC-FM is therefore a de facto CMA station. CIDC-FM's position in the marketplace has been imposed by Stats Can, BBM and a marketplace that increasingly does not spend money on small markets. In the case of Orangeville, there is no need to spend. BBM reports the performance of Toronto stations in this market. Stations which have been bought to reach the largest radio market in Canada coincidentally cover off a small non-essential market. Why would they look further? The only potential for CIDC-FM is to look to the portion of the Toronto CMA that they reach to recover some revenues.

9344 MR. EVANOV: To have a better understanding, I would like to draw your attention to Exhibit 3, which shows the same CMA Pond, but with the exact location of the intervening stations. We have in Toronto the three Rogers stations: CISS, which I refer to as "kiss"; CFTR and CHFI. They are licensed for Toronto.

9345 If we take ClSS-FM, 40 per cent of the audience comes from BBM ballots received from outside the City of Toronto in the balance of the CMA, and that includes Orangeville, Newmarket, Tottenham, Alliston. To the north is ClLQ-FM licensed for North York, which last year was incorporated into Toronto but was not in Toronto when licensed 20 years ago. Forty-seven (47) per cent of the CILQ-FM audience comes from BBM ballots collected outside the City of Toronto and the other parts of the CMA towns and villages.

9346 Further North is CHOG/AM640. It is licensed for the City of Richmond Hill, but considers itself a Toronto station. Fifty-two (52) per cent of its audience comes from ballots from the CMA outside of Toronto. The last two stations, although referred to as WIC stations, we consider them Shaw stations. But they were purchased by Shaw subject to CRTC approval and we are not sure where that is in the process.

9347 To the west/north of Toronto is CFNY-FM licensed for the City of Brampton, the same city our AM station is licensed for. It moved its transmitter from Brampton to the CN Tower in Toronto 15 years ago, not seven miles, but 26 miles. And 43 per cent of the CFNY audience comes from outside the City of Toronto from the other parts of the CMA.

9348 From Bramptom, a 20-minute drive north of Brampton is ClDC-FM. Both the Town of Orangeville and CIDC and its 3 mV/m are located within the CMA.

9349 To the far bottom of the map is the Shaw station CING-FM, licensed for Burlington and located in the Hamilton CMA. But 80 per cent of their audience, 80 per cent of their total Toronto and Hamilton audience comes from the Toronto CMA, not the Hamilton CMA.

9350 MR. NACCARATO: You could have a town which only listens to your station, filled with chain stores, for example, "McDonalds", "Wendy's", "Le Chateau", "The Bay" and yet not receive one dollar of advertising from those stores. This is because the advertising agencies buy the top rated stations in the CMA. Only whoever can deliver the largest audience gets the budget, with no regard to the listenership that a local station may have in its very own town. This is the reality we must all live with.

9351 MR. HORNE: Nothing will cause CIDC-FM to shift its focus away from Orangeville. It is devoted to serve that community.

9352 The financial recovery after the first seven years enabled CIDC to increase its Orangeville service in two key areas.

9353 One, CIDC-FM serves Orangeville with good programming, local news, traffic, weather and a strong presence in community activities.

9354 CIDC-FM provides an additional service which is vital to Orangeville's growth. To prosper, this town of 23,000 inhabitants must reach out to the overall CMA and beyond in order to attract a flow of commerce to the area. It must encourage the flow of new residents and home buyers into the Orangeville area, and it must target and attract people in the CMA to attend major Orangeville events such as the Dragon Boat Races, Founders Day, Oktoberfest, Band Bash, Lobsterfest, Fall Fair, et cetera.

9355 With almost 600,000 listeners, CIDC provided Orangeville with a vehicle to encourage and attract consumers, visitors, new home buyers and industry to the area.

9356 An Orangeville infomercial is aired daily on CIDC-FM. It is produced by the Applicant in cooperation with the Town of Orangeville, the Business Improvement Association, the Chamber of Commerce and Headwaters Tourism. CIDC-FM is a media vehicle to bring tourism and investment to Orangeville.

9357 MR. STOWAR: Approval of this application provides benefits to the broadcasting system.

9358 One, Orangeville will be served better than ever because we will be able to get more people throughout the Toronto CMA to hear the call from Orangeville for people to come to the place that is, as our slogan says, "a great place to work if you really want to live".

9359 Two, CIDC remains viable and retains much of its audience.

9360 Three, CIDC, as an independent, will continue to be an "alternative voice" to that provided by the multiple ownership stations in the CHR format. We are the only Dance CHR, whereas our competitors are CHR/POP and CHR/Mainstream Formats. We will continue to give an opportunity for new artists to receive airplay quickly. The programming department will continue to meet with independent record labels and new talent get them on the air and promote them.

9361 MS LAURIGNANO: We ask that you allow us to move our transmitter to a good site so that we can hold our own against the bigger signals in the CMA.

9362 To us, the Commission has a basic choice to make with regard to radio stations like ours being located at the edge of a huge CMA. One, either let a small market station try to survive in the huge CMA; or two, support a CMA station that can survive to serve a particular small market.

9363 We think there is only one choice for the Commission. The small market station cannot make a living in a large CMA setting. Advertisers will buy time on the big CMA stations and none will buy time on the small station. CIDC before we bought it in 1994 is a sad example of how this can happen.

9364 On the other hand, if you let a CMA station have enough access to the CMA it will continue to serve the small market it is licensed to serve. If you let us move our transmitter as we have proposed, we will have access to only 16 per cent of people within the total Toronto CMA. If we are successful, we believe that we can attract enough of those people to have a two share in that same central marketing area.

9365 MR. EVANOV: To conclude, we are not changing the principal marketing area of CIDC. We will not spend any new money to increase sales effort or to market the new areas of the CMA that we do not presently reach. Everything stays the same.

9366 We applied to you last time because, we felt threatened that a Toronto broadcaster with a strong signal from the CN Tower would flip to our format and impact our operation. The Commission at that time denied our request noting that the threat from a Toronto broadcaster was perhaps a perceived threat or a hypothetical situation.

9367 The perceived threat, as we anticipated is now very real. It happened with this format and it would happen again with any other format.

9368 The broadcast landscape around us has changed, but our needs for a good tower site remains the same.

9369 Thank you. And we would be pleased to answer any questions.

9370 THE CHAIRPERSON: Thank you, Mr. Evanov, and your team.

9371 Commissioner Wilson, please.

9372 COMMISSIONER WILSON: Good morning, Mr. Evanov, Ms Laurignano.

9373 Ms Laurignano, I believe you said earlier this week that you weren't really looking for an award for the most appearances at a single public hearing. But if we did have a record book, I am sure you would be in it. You have been quite busy the last couple of weeks.

9374 I have, I guess, three major areas that I want to go through with you this morning.

9375 The first area is really focused on the information that you filed with us in confidence with respect to your revenues and your sales history and the projections that you have done under both an approval scenario and a denial scenario.

9376 The second area has to do with broader market issues. The notion of incumbency in a market, sort of where do you belong as an Orangeville station. Audience and tuning, service to your local community and impact on other stations in the Toronto central market.

9377 And then I want to wrap up by just sort of focusing on what I consider to be two of the major issues, and I will just sort of hold off on giving you my opinion on that until we get a little further down the road and then we can get some feedback from you on those.

9378 If I can direct your attention to information that you filed in July 1999. It is stamped "Confidential." It is a table of confidential attachments and there are three of them, the CIDC sales history, the revenue lost to CISS and the financial operations being the denial and the approval scenarios. Do you have those attachments with you?

9379 MR. EVANOV: I am sorry. I will just get them organized. But which denial scenario? Denial of the tower, right?

9380 COMMISSIONER WILSON: Yes. You filed two projections. One for approval, the five-year period following approval of the application, and one for denial. You also filed with us a sales history for CIDC.

9381 MR. EVANOV: Is that the four-month -- no. The sales history, yes.

9382 COMMISSIONER WILSON: The sales history. The before CISS and after CISS numbers that you gave to us. Then you also provided an attachment where you laid out the revenue loss to CISS. Do you have those?

9383 MR. EVANOV: That would be the four month one, the last one you referred to.

9384 COMMISSIONER WILSON: Yes. So you have got those tables in front of you because I have some questions on those.

9385 Okay. So on attachment one, which is your sales history, and I recognize these are confidential so I won't be using any exact figures but I am just going to point you to some figures.

9386 MR. EVANOV: Okay.

9387 COMMISSIONER WILSON: On attachment one, under the column headed "Dollar Change," and the total line.

9388 MR. EVANOV: I am sorry for the delay. We have had so many scenarios here with all the various applications and the impacts.

9389 COMMISSIONER WILSON: These are part -- well, no they weren't. They are part of my file; not part of the public file because they are confidential.

9390 MR. EVANOV: Okay. I have them. They are stamped July 20th.

9391 COMMISSIONER WILSON: Okay. That is what it looks like.

9392 MR. EVANOV: Oh, that page. Okay. I know what you are referring.


9394 MR. EVANOV: Yes.

9395 COMMISSIONER WILSON: The CIDC-FM sales history.

9396 MR. EVANOV: Yes.

9397 COMMISSIONER WILSON: It is marked "Attachment One, Confidential." And it has got a date July 20th 1999.

9398 MR. EVANOV: I'm sorry for the delay. But now I know which page you are referring to. I was looking at the financial projections and the financial sheets. Yes, I think we have the same page.

9399 COMMISSIONER WILSON: Okay. It is a two-year comparison?

9400 MR. EVANOV: Yes.

9401 COMMISSIONER WILSON: And if you look at the bottom line, the total line --

9402 MR. EVANOV: Yes.

9403 COMMISSIONER WILSON:  -- under the column heading "Dollar Change".

9404 MR. EVANOV: Yes.

9405 COMMISSIONER WILSON: There is an amount there in brackets showing your loss --

9406 MR. EVANOV: Yes.

9407 COMMISSIONER WILSON:  -- since the change in format at CISS.

9408 MR. EVANOV: Okay. What happened is from September to January we were on a climb and our sales were exceeding our previous year by 10 and a half per cent.


9410 MR. EVANOV: And then after the impact for the last seven months of the year, we went into a decline and our sales decreased 19.8 per cent, which is almost 20 per cent.

9411 COMMISSIONER WILSON: Okay. Then the bottom line is the bottom line, the loss, one year over the other.

9412 MR. EVANOV: Yes. Yes.

9413 COMMISSIONER WILSON: Okay. If you look at that number and then if you look at the other, attachment two, the next page of that attachment which is the revenue loss to CISS, a four month impact.

9414 MR. EVANOV: Yes.

9415 COMMISSIONER WILSON: The number that you have got at the bottom of the page --

9416 MR. EVANOV: Yes.

9417 COMMISSIONER WILSON:  -- that number is almost double the number on attachment one.

9418 MR. EVANOV: Right.

9419 COMMISSIONER WILSON: So can you explain that difference to me?

9420 MR. EVANOV: Okay. I believe -- okay, first of all, the -- I think the attached page was submitted on July 20th that we projected, and also the revenue loss to CISS was also at the same time submitted on July 20th before year end, which was August. It meant -- the numbers on the two-year comparison are actual billing numbers.

9421 COMMISSIONER WILSON: They are actual?

9422 MR. EVANOV: Billing or what we billed that month, not the total value of the contract. The total value of the contract may run from July to November, but only the portion in the current fiscal that we referred to would be reflected.

9423 COMMISSIONER WILSON: I am not sure I am following you because on the two-year comparison, you are showing your 1999 fiscal, which is August 1999 results.

9424 MR. EVANOV: Yes.

9425 COMMISSIONER WILSON: And then the four month impact is May to August 1999. So it is the same period. It falls within the same fiscal year. But the impact number is quite a bit higher than the number that you show in the two year comparison. So I am not sure that I -- maybe I am not understanding.

9426 MR. EVANOV: All right. Even though we may have put May to August, there were contracts running beyond that point. And these were the contracts that we -- or the clients that we specifically lost in dollar amounts.

9427 COMMISSIONER WILSON: Okay, so that --

9428 MR. EVANOV: No, no. Because one referred to a specific client that we lost to a particular radio station. The other one would reflect maybe a combination of clients that would run beyond that. But also if we picked up any new business and brought it in to maybe offset this slightly and that would be the difference for the variation. In other words --

9429 COMMISSIONER WILSON: It is quite a big difference?

9430 MR. EVANOV: Well, it is a difference, definitely a difference. I guess the pressure was on the sales force. We were losing these accounts, okay. They had lost these accounts and we had to go out and dig out additional money. So I can't break down for you exactly how much -- how many of the accounts may have run into the early September or November. I can't -- all I can say to you is that we are almost at 360 here and there is maybe a $240,000 difference.

9431 COMMISSIONER WILSON: Okay. So this number then doesn't actually reflect the impact in fiscal 1999. It actually runs into fiscal 2000 as well.

9432 MR. EVANOV: It runs into fiscal 2000. But it is more to illustrate the specific accounts, one by one, that were taken away from us.

9433 COMMISSIONER WILSON: Okay. And those accounts were taken away from you over a four-month period or --

9434 MR. EVANOV: Yes.

9435 COMMISSIONER WILSON:  -- the financial impact is over the four-month period?

9436 MR. EVANOV: Yes. Well, in that time of selling -- yes. Well -- if a contract came in on July the 20th, July 19th and let's say that particular contract we had lost a booking of a buy to Molson's or Labatt Ice for 25,000 for example. The schedule of that contract may not start until September 1st.

9437 COMMISSIONER WILSON: Okay. I understand that. So in fact the impact over the four-month period, the dollar impact in terms of revenue loss is probably closer to the number that you show on attachment one?

9438 MR. EVANOV: Yes.

9439 COMMISSIONER WILSON: The smaller number.

9440 MR. EVANOV: The smaller amount would be -- yes.

9441 MS LAURIGNANO: So it would a combination of loss and --

9442 COMMISSIONER WILSON: Okay. I just wanted to clarify that.

9443 If we look at your denial scenario, the financial projections that you filed under your denial scenario, you project that over a five-year period you are going to lose almost half your revenue base.

9444 But before I ask about that, I want to ask you about, and I am looking here at the information from your annual returns that is kept in our database. Between 1997 and 1998, which was before CISS changed its format, if I look at those financial results, your revenue drops by just over nine per cent between 1997 and 1998. I am not going to quote the numbers. I don't know if you have a copy of your financial return.

9445 So between 1997 and 1998 your revenues dropped more than nine per cent. What was the cause of that decline in revenues?

9446 MR. EVANOV: It was a number of factors. It could have been different buys that we were not getting for various reasons. At that point our combo situation with CING-FM was starting to wind down. We may have also, I think, at that time had a change of sales managers and I think we had a staff problem for a while. But there were internal reasons for that particular --

9447 COMMISSIONER WILSON: When did your combo arrangement with CING wind down?

9448 MR. EVANOV: Well, we had it until -- and I don't have the exact date -- a year ago, I believe. However, it was winding down in the last couple of years because there was no real great together type of effort. So there was a drop dead date for sure. But even prior to that, I think the enthusiasm for the combo died on both sides and it was used only when necessary and particularly in the cases of strictly national sales and not large agency sales necessarily for retailers.

9449 COMMISSIONER WILSON: Ms Laurignano, do you remember when that --

9450 MS LAURIGNANO: Yes. That particular arrangement formally ended January of 1999.

9451 COMMISSIONER WILSON: In January of 1999.

9452 MS LAURIGNANO: Right. And that agreement was in place prior to the Shaw acquisition of CIDC-FM, and it was something that obviously was honoured. But let's say the cooperation was not to the same degree between the two stations and the relationship was not such that the benefits of that agreement were maximized if I put it that way.

9453 COMMISSIONER WILSON: Okay. So let's look at the denial scenario then.

9454 Mr. Evanov, you have been in this business a long time and I think I have heard you over the course of the last couple of weeks talk about the quality of your staff. I am just wondering if you ran any sensitivities on your financial projections with respect to the following, and I have three things that came to my mind.

9455 One was that the decline in your revenues would plateau at a certain point. Did you look at that? Second, that your station would be a more appealing advertising buy for a certain strata of businesses that might not be able to afford to advertise on CISS versus yours, and a change in format. Did you look at any of those scenarios when you were going through your plans?

9456 MR. EVANOV: We looked at all of them.

9457 COMMISSIONER WILSON: You looked at all of them. Okay. So let me take you back to the first question.

9458 Did you foresee at any point that the decline in revenues due to lost advertising to CISS would stop?

9459 MR. EVANOV: There is a point where you will bottom out based on, not even share, but based on your relationship with various clients, based on your niche and based on your past experience and how you feel you will do. So even though maybe a station could have done five million at one time, it will never go totally broke. It will go down to a certain base. And we felt that our base is probably the figure reflected in the Year 2001 on the denial scenario.

9460 COMMISSIONER WILSON: You think that is the lowest you would ever go?

9461 MR. EVANOV: Well, I think it is probably about -- okay. Our analysis said that we would not probably go below the total of what shows there as the local figure. Without saying the figure out loud, that is the figure.

9462 COMMISSIONER WILSON: Okay. What about the second one. The notion that -- what are your ad rates, by the way?

9463 MR. EVANOV: I'm sorry. Which?

9464 MS LAURIGNANO: The advertising rates.

9465 MR. EVANOV: The advertising rates. In the retail business it is $80 a spot.

9466 COMMISSIONER WILSON: I'm sorry. I am having a bit of trouble hearing you.

9467 MR. EVANOV: Okay. I will ask my sales manager to answer that. I think he has got a good handle on it.


9469 MR. NACCARATO: Thank you, Bill.

9470 Currently our local retail rates out on the street are $80 per 30-second spot.

9471 COMMISSIONER WILSON: Eight dollars per 30-second spot.

9472 MR. NACCARATO: Per 30-second spot and that is to a local retailer, a Mom and Pop store out on the street.


9474 MR. NACCARATO: Now, unfortunately on the agency side we have had to discount our rate tremendously just to compete.

9475 COMMISSIONER WILSON: Okay. And what is CISS's rate?

9476 MR. NACCARATO: CISS's rate from what I understand on the street, I don't have what they are applying to agencies, but we have heard close to $200 a 30.


9478 MR. NACCARATO: Two hundred dollars a 30.

9479 COMMISSIONER WILSON: Two hundred dollars a 30.

9480 MR. NACCARATO: A 30-second spot.

9481 COMMISSIONER WILSON: Yours is eight and their's is 200.

9482 MR. NACCARATO: Eighty (80) and their's is 200.


9484 MR. NACCARATO: Eighty dollars ($80).


9486 MR. NACCARATO: Eight-zero. And if I could just reply to your strata question, looking at past advertisers on CIDC-FM, the majority of them were high level clients. Clients of national stature. Clients of multi-chain advertisers.


9488 MR. NACCARATO: And now currently they would still love to advertise on CIDC, the problem is we can't give them the numbers that they are looking for in the total CMA.

9489 COMMISSIONER WILSON: Okay. So they are gone. But what about, again, other businesses who might be interested in your demographic who wouldn't want to pay $200 for a 30-second spot?

9490 MR. NACCARATO: We have approached them all. And what is happening currently in the market is, is that local retailers have more media buying savvy than ever. They are educated. They understand the art of buying advertising.

9491 So they do look at BBM numbers. They do look at what the market is dictating, and therefore, what is happening is, is that they will consult with people and once they see that CIDC-FM is not an efficient buy, because based to numbers, then they don't look at us.

9492 The other thing, what I have had to do as well is to maintain my core in Orangeville, is I have had to reduce my rate. I have had to reduce my rate by 50 per cent of the rate card.

9493 COMMISSIONER WILSON: So you have said that you have approached them all. So you have approached every single business within your 3 mV/m or your 0.5?

9494 MR. NACCARATO: Believe me, we have approached everybody. Everybody in our community that we feel best resembles our audience. So to try to find an advertising match with our audience we have gone out, and I have a very dedicated staff and we have worked extremely hard in trying to recoup business and trying to get new business. But unfortunately with the landscape we can't compete and that is basically our problem today.

9495 COMMISSIONER WILSON: Okay. Thank you for that.

9496 MR. NACCARATO: You are welcome.

9497 COMMISSIONER WILSON: Mr. Evanov, what about a change in format?

9498 MR. EVANOV: I think I am going to let Carmela handle that. But we looked at format changes and we said there is no point. If we do another format and we do it well, someone else will flip to the same format. We are in an inferior position signal-wise. So no matter what we do, we could produce the best programs in the world because we think we do the best CHR program and dance program, but if you have a stronger signal, you always win or usually win.

9499 So even if we developed another format or another format and another format, there is no end to the changing it. And also, why would we disrupt the listeners that we have? Why would we disrupt Orangeville? There is no gain by changing formats.

9500 If we are totally wiped out and we are incapable of producing good programming, you change your format or you buy a service. But we have capable people. I have got a staff of 60 people that work at the radio station. I have some of the best music people in the City of Toronto, bar none, that produce excellent CHR programming. And we have given it a real good niche with the dance implemented into it.

9501 It is a radio station. We provide great services to various artists who get immediate on-air play, like immediate on-air play. And we play records before -- we give spins before any other station, before the corporate companies do. So it would be a shame to abandon that and everything we have built just to try another format. Because I will tell you right now, if I do it well, someone in Toronto is going to change and say, "Hey! If they can do it, just think what we can do with our signal and our resources."


9503 MS LAURIGNANO: If I could just add, and it would be senseless -- the other side of the coin is it would be senseless for us to try and duplicate a format, another format that is covered or carried on a larger signal. So in other words, it would be suicidal for us to take on the CKFM format or the CHUM-FM format. Because just on our signal alone, we would be losing. And based on what we said before, how the buys are made and how the CMA is comprised, it would be pretty silly of us to do that.

9504 But what is really important I think to note is that this format works for Orangeville. If you look at the BBM, Orangeville, it shows CIDC-FM as the number one station for 12 to 17, for 18 to 24, for 18 to 34.

9505 COMMISSIONER WILSON: In Orangeville.

9506 MS LAURIGNANO: In Orangeville.

9507 COMMISSIONER WILSON: Are there any other stations in Orangeville?

9508 MS LAURIGNANO: Oh, there is every other station.

9509 COMMISSIONER WILSON: No. I mean are there any other Orangeville stations?

9510 MS LAURIGNANO: No. We are the only Orangeville station. But we are ranked number two for 12 plus; the number one station for 12 plus is CKFM-FM. So if somebody is buying a large demo, that is in the mix as well that we talked about.

9511 MS McLAUGHLIN: Just to put that ranking in context, there is over 95 stations reported as being heard in Oakville -- or in Orangeville, and that is a lot of competition for a station of this size.

9512 MR. EVANOV: Also very important, just to show how close we really are. Out of the top ten stations in Orangeville, nine are CN Tower Toronto stations. Nine. Top ten. Okay. We are number two, 12 plus. But number one and the rest of them are all Toronto stations.

9513 So to survive, I have difficulties now. But to flip to a format of a CHUM or a CKFM or someone else, it makes absolutely no sense.

9514 COMMISSIONER WILSON: Okay. Could you tell me, you don't have to reveal any numbers, but how is CIDC doing so far this fiscal year since September 1999, for example? I am just wondering if your losses are as great as what you had projected in the forecast that you provided to us on a confidential basis?

9515 I see a heading nodding in the back row.

9516 MR. EVANOV: We projected our sales would go down a million dollars this year.

9517 COMMISSIONER WILSON: Sorry. Your sales would go down?

9518 MR. EVANOV: One million dollars. Okay. We would be impacted by a million dollars in this current year. And I am really happy to tell you, and that projection was made last -- early July, and I am pleased to tell you that hasn't happened.


9520 MR. EVANOV: No. And we are only down 800,000, which to us is a big loss. In other words, our first --

9521 COMMISSIONER WILSON: Your fiscal year is not over yet.

9522 MR. EVANOV:  -- we are trending down. No, no. But we are trending down. In other words, we have trended right through the year. If it continues the way it is, our losses will be 800,000 this year and our statements said they would be a million. I am just being truthful with you. I could stay here and say, "Oh, it is a million or more." And we will do everything we can to recoup those, but we will never return to anywhere near where we were. It is just impossible to get that much money out of the market.

9523 I want to go back for a second when you asked me before because I just want you to understand.

9524 We had a dip in sales in year end 1998. In year end 1999 that dip would have been corrected because we were on an upward trend of 10.5 per cent in the first four or five months. And our biggest season was yet to come, which was spring and summer. Those are the biggest months for a CHR radio station, particularly ours. Had we trended right through, we would have surpassed the 1988 figure by probably 400,000 or even 500,000. Okay.

9525 But midway through the year, in other words if you look at the year end 1998, and you asked me, there was a dip from 1997 to 1998 and there was a dip. But we would have made up for it in 1999 because we were on an upward trend. But midway through the year we got impacted badly.

9526 COMMISSIONER WILSON: Yes, I think you made that point quite clearly in your application.

9527 In your opening statement at page 3, the top of page 3, you said that the new tower would significantly reduce your operating costs. When I checked your approval and denial scenarios, I am assuming that those operating efficiencies would be reflected in your technical costs or is that an incorrect assumption? Because the technical costs in both scenarios, approval or denial, are exactly the same. So where are the efficiencies reflected?

9528 MR. EVANOV: They are not reflected in what we submitted. The efficiencies were basically calculated later on.


9530 MR. EVANOV: Afterwards as we were preparing the rest of the application. We did some costing and we did a number of other things in addition to and we kept looking for other sites and that type of thing.

9531 I can give you an idea of how we arrive at these. For example, an STL was something that we wanted to put in place but there is no line of sight to the current -- the old tower only because there were hills that blocked the way in. But there is a line of sight to the new tower, but that is not something that we put in the application and made allowance for. But our Bell line charges in that area are over $25,000 a year and there is a cost saving there. The purchase of your STL is 10,000 and that will be capitalized, but on the other hand, you do have a $25,000 expense, monthly -- yearly expense.

9532 The other big problem is we do everything on the site, and unfortunately we have two sites. We have one in Orangeville and other AM site is actually very close to the CBC site at Highway 401 and Trafalgar and right across the road. But on the FM site right now we do -- the AM site we own the land. At the FM site we rent the land. The tower was built. We have to service it totally.

9533 In other words, we do our own snow removal for about four or five hundred feet. We do grass cutting. We do fence maintenance. We do private road maintenance. When the potholes come in the spring, we bring in the gravel. We fill them. There is realty taxes we pay. There is Bell line charges. There is lost time in terms of organizing this and there is lost time in terms for the engineers in getting there when conditions are bad.

9534 We experienced at the hotel here, or at least I did where I was, power failures this morning and again last night, and right away the minute it happened to us we all said, "The radio station." And it happens to us on a regular basis. We did buy a generator last year. We spent $75,000 to do that. We hooked it up and then the first two times we were knocked off the air, the generator didn't work. It had a warrantee but that meant nothing for our listening area.

9535 COMMISSIONER WILSON: What is the total amount of the efficiency from the old tower to the new tower? I mean you mention $25,000 a year in terms of the STL system versus the land lines. But how much more than that?

9536 MR. EVANOV: Okay. The cost at the old tower at the present time with rent and all the maintenance and everything we do there is about $59,000.


9538 MR. EVANOV: My cost for the new tower is 21,600.

9539 COMMISSIONER WILSON: Twenty-one thousand six hundred (21,600)?

9540 MR. EVANOV: Twenty-one thousand six hundred (21,600). I think you have the lease on file with the application.

9541 COMMISSIONER WILSON: So it is about a third.

9542 MR. EVANOV: A third. Now, I have to add if I amortize the STL over five years, there is 2,000 there, but it is not quite the same thing.

9543 COMMISSIONER WILSON: So that does affect the results under your denial scenario?

9544 MR. EVANOV: Yes.

9545 COMMISSIONER WILSON: This is not the first time that you have applied to do this. You applied in 1998 to do this.

9546 MR. EVANOV: Yes.

9547 COMMISSIONER WILSON: At that time the Commission denied the application, and the decision said, and I will quote from the decision:

9548 "The Commission also notes the absence of any demonstrated current financial hardship or any technical impediment with respect to CIDC's ability to provide a reliable service to its currently authorized service area." (As read)

9549 So let me ask you this. If CISS hadn't flipped its format and your revenues were improving as you said up until the time that CISS flipped their format. If they hadn't flipped their format, would you have filed this application?

9550 MR. EVANOV: The honest answer is yes. From a technical -- then it would have been strictly a technical improvement, a technical clean-up or improvement application because we are just experiencing more and more difficulties with access to the old tower. And we found a tower that any broadcaster should be on if they are in the area.

9551 Before this, before we found that tower, we looked through that area. We drove -- as a matter of fact, we drove -- we put a ten-mile circle around Orangeville and we drove around it trying to find land. When we found this piece of land, it was a Godsend. It was only seven miles from the city, like from the town you are there in seven minutes.

9552 It is a great site. There is no maintenance for us to do. We rent our space from the tower. We don't have to worry about snow. And its location, as we have said in our presentation, it is on a -- our engineers can leave Toronto or wherever they live, drive to the tower totally on paved highway and paved roads right to the doorstep. I can't do that now.


9554 MR. EVANOV: And after last night's storm, I would have a little bit of difficulty getting in this morning to repair a problem that maybe we experienced or we didn't because of our generator. But they have -- because we do have a lot of icing up in that area. Not like Montreal had.

9555 COMMISSIONER WILSON: In fact, I was just looking back at the Table of Contents of your application. The whole tower argument, the old tower versus the new tower, that doesn't appear in your application. Because it occurred to me this morning when you were going through your opening remarks and making all of the arguments about the old tower and the new tower that that was something new to me. This was a new argument.

9556 MR. EVANOV: Well, you are hearing it perhaps new. It was always there. Even when we applied last time, we knew that --

9557 COMMISSIONER WILSON: You just didn't share it with us.

9558 MR. EVANOV: Well, I guess, maybe we didn't share it with you. But it is a real problem and it is an ongoing problem.

9559 When we bought the station, it was basically in shambles and needed a total overhaul. And we did first things first. I think first we did the programming. Our first investment was with announcers, with music and that area. Then you do your self sort of a hit list. And the tower was on there and we have refurbished part of it, but the extent of the problems become more apparent every year. We have been blessed this year because we haven't had that much snow. So that has been a real help. And we have been blessed because we haven't had a major ice storm.

9560 But I don't want to come back after what happened in Montreal, and I had these Max Tower people look at the tower and tell us, and we have got specs we can file with the Commission. The tower is not unsafe, but it will not withstand anything close to what happened in Montreal. And as a broadcaster, I am saying to myself, "Okay. I have got a lease expiring. Sure I can renew the lease."

9561 But do I really want to be there, when you consider the strength of the tower or lack of it, the snow, the hydro, the inaccessibility and I can save myself dollars by going seven miles down the road to the essential service tower, which is totally looked after. And because it is essential service, if hydro goes off, it's repaired.

9562 COMMISSIONER WILSON: Yes. And I think you go through that quite clearly in your opening remarks.

9563 I guess what I am trying to get at here is how realistic the financial projections are? Because if I look at this paragraph of the 1998 decision, and that is the decision on your previous application, it says that "there was an absence of any demonstrated current financial hardship or any technical impediment." If we use that decision as establishing the criteria by which you could move your tower, then -- and I don't mean to be glib in any way about this, because I mean obviously you are losing revenues and as a business person that is a difficult thing.

9564 But in fact, with the tower argument that you have now introduced this morning too, you meet both of those criteria. Because now there is demonstrated financial hardship and with the tower information, which was not filed as part of the original application, there is a technical impediment. So those two criteria would be met.

9565 MR. EVANOV: Yes, they would, and there is something very important here. We didn't look for a site to build the tower. Peel Region built the tower and we ran into it. It is not like we set out --

9566 COMMISSIONER WILSON: It was a miracle.

9567 MR. EVANOV: We didn't put a map. The only place we put a map is when we applied for 93.5 in Toronto, we superimposed a map on Toronto. In this particular case we didn't look at a map of contours. Either the mayor or someone in Orangeville mentioned that this tower was being built. We drove in our cars seven miles down the highway. We were there in seven and a half minutes and saw the building of the tower and immediately talked to Peel Region.

9568 COMMISSIONER WILSON: Okay. So the combination of the CISS format change and this new tower, in fact, sort of help you make the case for something that you wanted to do all along.

9569 MS LAURIGNANO: If I can just add to that. It is something that we had to do all along. As it has been explained, the position of where we have to live just by the mere geographic location, how the census measurement has changed, Stats Canada recognizes as advertisers. Do -- the audience is measured from there. We have to be realistic. We are a little town in a big CMA place and we cannot operate as a small town in any other way except in our programming orientation which is what we do.

9570 So regardless of who flipped what and good for CISS-FM that they did it because if it wasn't them, it would be somebody else. And if it was another format, here you are, you are a little station. Obviously if you are listening to the station, you know what kind of advertising revenues you are attracting. You know what kind of success you have with your promotions. You look at the BBM. Well, holy moly, if these guys can do it on one-tenth of being able to reach a population of that, imagine what we can do. And we probably would have done the same, you know, we would do the same if we were in that position.

9571 So definitely it is something that we needed to do all along because our position is always and would always be precarious. Because if we went out with a format or a niche, if we find that niche that nobody else has, this -- Orangeville does not exist in isolation. So there isn't a particular cultural interest or an identified cultural community that would be a niche that is geographically retained. It is part, it is a family -- it is part of the family of the CMA. So no matter what we did we had to come to this point.

9572 COMMISSIONER WILSON: Okay. You have actually provided the perfect segue for me because now I am going to move into the market issues which is essentially what you are talking about.

9573 So one of the arguments that you use to support your application is that Orangeville is a part of the Toronto central market, and you have also referred to the Stats Canada redefinition of the census metropolitan area. I think somewhere in all of these pages that I have gone through, you said that, in fact, Orangeville is no longer a geographic entity on its own. I am just wondering how the mayor feels about that. No, I am just kidding really.

9574 But you attached a map from BBM that shows Orangeville as part of the Toronto Central Market. Just out of curiosity is Orangeville -- I should probably know this -- but is Orangeville considered part of the new City of Toronto?

9575 MR. EVANOV: No.

9576 COMMISSIONER WILSON: It is not. Okay.

9577 MR. EVANOV: No. Not yet.

9578 COMMISSIONER WILSON: Not yet. Okay.

9579 MS LAURIGNANO: Actually the mayor -- the mayor was going to deliver the revised map to Madam Chair, but he was delayed. We had a little snowstorm and he goes into a crisis when that happens. So he is waiting for the army to come in.

9580 COMMISSIONER WILSON: Right. Well, I spent some time in Ottawa, so I know what it is like to deal with snow.

9581 So is it basically your contention with these maps that how BBM views you is how the Commission should view you? Is that your argument?

9582 MR. EVANOV: Well, it is the reality of the market. I mean this is how it is.

9583 There are no budgets for the City of Toronto here. Like none. There isn't a national advertising budget or a big agency budget for Toronto. They buy what they call Toronto Central, which is the entire CMA, and that is why so many ballots are necessary from every community that you see there. And I will let Debra speak to that.

9584 MS McLAUGHLIN: To understand the importance of the BBM definition, you have to understand the role that BBM plays in this market. BBM provides audience measurement and in so doing is the valuation tool by which all media is judged, at least in terms of broadcast. So when that definition is put out there and that audience is put out there, that is the tool that they use. They don't stop to try and sort out the markets per se. It is the Toronto CMA.

9585 The BBM has defined, as Stats Can has defined, that Orangeville is in fact part of the CMA. It isn't possible to separate it out and to take the impact of the Toronto stations out of Orangeville. It is part of it.

9586 COMMISSIONER WILSON: So I mean based on BBM's definition then, essentially you are saying that you are an incumbent radio station in the Toronto market?

9587 MR. EVANOV: In the Toronto CMA. We don't want to be a Toronto city radio station.

9588 COMMISSIONER WILSON: No, but the Toronto central market under BBM.

9589 MR. EVANOV: Yes.

9590 COMMISSIONER WILSON: The CMA is the census metropolitan area. That is Stats Canada, right?

9591 MR. EVANOV: Yes.

9592 COMMISSIONER WILSON: Now, I think there is some connection between the two.

9593 MR. EVANOV: They are identical, I believe.

9594 MS McLAUGHLIN: The BBM uses Stats Canada definitions almost rigidly.

9595 COMMISSIONER WILSON: Almost rigidly.

9596 MS McLAUGHLIN: There is a couple of minor exceptions, and I am sorry I can't pull them to mind at the moment. But because of having to weight the population and getting the data in a convenient and manageable fashion from Stats Can, they use the CMA definitions. Every time there is a census, BBM reviews the definitions by Stats Can and there is a realignment and really a reassigning of population, which has nothing to do with licenses, broadcast patterns, market realities, but it becomes the buying tool for the industry. So stations have to respond.

9597 COMMISSIONER WILSON: Okay. That is very useful information.

9598 Mr. Evanov, just speaking of incumbency and saying because of your location and BBM and the way BBM views you that you are an incumbent station in the Toronto market, the Toronto central market. At the December 6th CRTC hearing you intervened against all three applicants for the new Barrie station on the basis of format because two of them were proposing what you said were virtually identical formats and another one was doing something that was quite similar. Although we are interested in format, we don't require a format by condition of license.

9599 And when you intervened there, you described yourself as an incumbent station in the Barrie market. And you quoted your ratings. You said that you were number one in the 12 to 17 demo and the 18 to 24 demo and number four overall.

9600 So I guess what I am trying to get at is how you define incumbency. Because in this application you are saying that it is location. When you intervened against the Barrie applications, it was ratings. If it is ratings, then you would -- I have checked BBM, I have checked CIDC's ratings in various BBM markets, central markets. In the Guelph market you are number two, 12 to 17. In Kitchener you are number two, 12 to 17. In Dufferin you are number two, 12 plus and number one in 12 to 17, 12 to 24, 18 to 24. So you would be incumbent in all of those markets as well as a result of those ratings.

9601 MR. EVANOV: I think in Barrie, and I think Madam Wylie recognized, we were trying to make a case that we were getting sandwiched from the south, and to be impacted also from the north at the same time. And at the time it would have its toll on this radio station. But we also said that perhaps it should be discussed at the Toronto hearings, where we are now. And I think she led me to believe that because I have never met the Mayor of Barrie that the Commission would probably go ahead and license a radio station for Barrie and that we were not an applicant in that process. So in terms of --

9602 COMMISSIONER WILSON: I mean you could have applied.

9603 MR. EVANOV: We could have applied. I know.

9604 And then she asked also which format would do the least damage to us and our point is they are all going after a similar demo that we do, so there would be impact. So we know there is going to be impact in Barrie.

9605 COMMISSIONER WILSON: So you didn't --

9606 MR. EVANOV: So the incumbent just meant that we had a good standing at that point in time.

9607 COMMISSIONER WILSON: So you didn't really mean that you were an incumbent in that market?

9608 MR. EVANOV: Not incumbent is the wrong word probably. That we were there and we were a number one in one category, a number two in another category and that we know that that won't be available to us any more once Barrie is licensed. And that therefore all we have is the Toronto CMA. And even though we may be lucky enough because of our good programming to pick up a bit of shares here and there, whether it is Guelph or wherever, that won't make any money for us because the money is only made in the CMA, the ad agencies buy your audience in the CMA. You can have spill all over the place, but they are not going to do well there.

9609 Barrie was a bit of an exception, and that wasn't Barrie so much as it was the cottage country area around Barrie and Collingwood. Because a lot of our audience would travel north, ski, come back and they take the station with them to Wasaga Beach or to Blue Mountain or wherever. But we don't have to worry about the Barrie station because we have already been impacted up there by Rogers with their combo buy.

9610 A year ago or for a few years we have Blue Mountain budget. They took the whole budget. Horseshoe Valley they took the budget. Hockley Valley Ski Resort they took the budget. And these were places we had a very good budget before. So we have already lost -- yes.

9611 Even in Orangeville there is a ski resort called Hockley Valley and for the first time in years they did not buy us and Fedele can tell you why. Rogers came in with their tri-combo buy and took the entire budget and there is nothing left for the local radio station. And 90 per cent of the people that ski at the ski hill come from the greater Orangeville area.

9612 So we have been impacted at all the ski resorts this winter by Rogers and they have done a very good job. They have the clout, the muscle to do it and good for them. So we have already lost money in Barrie and we know a station will be probably licensed for that area. Our concern really is the policy you made, where we are measured and where we get buys from and to slightly improve our situation there.

9613 We are not asking to be number one. We will never be number one. We will never have an eight share with this proposed signal. If we are lucky to end up with a two share or a 2.4 share, as we once had, that would be stretching it and probably very, very lucky. But we think from that at least we can carve out a living, provide a great service to Orangeville, provide a great service to all the Canadian music people that can listen to us and who we give airplay to.

9614 COMMISSIONER WILSON: So your target audience is what?

9615 MR. EVANOV: Our predominant audience would be 18 to 34.

9616 COMMISSIONER WILSON: Your target audience is 18 to 34?

9617 MR. EVANOV: And teen.

9618 MS LAURIGNANO: With the spill.

9619 MR. EVANOV: With the spill.


9621 MR. EVANOV: With the spill going both ways, particularly teen.

9622 COMMISSIONER WILSON: Sorry. I missed that.

9623 MS LAURIGNANO: The core audience would be 18 to 34 because of the format, and the spill demos would be 12 to 17 and 25 to 34.

9624 COMMISSIONER WILSON: So your main one is 18 to 34?

9625 MS LAURIGNANO: That would be the core demo. The one that the service is serving, yes, the format.

9626 COMMISSIONER WILSON: Okay. What percent of your revenues come from the Toronto market, the Toronto central market? What percent of your overall revenues?

9627 MR. EVANOV: Come from the CMA?

9628 COMMISSIONER WILSON: It is the same thing.

9629 MR. EVANOV: Oh. Virtually all the revenues. There might be -- I haven't broken it down but it would be maybe a good 90 per cent would come from the CMA and Orangeville as well.


9631 MR. EVANOV: It is probably less than that since we lost all the ski resorts.

9632 COMMISSIONER WILSON: What per cent of your tuning comes from Toronto CMA?

9633 MS McLAUGHLIN: Sorry, Madam Commissioner. That is for me to answer but unfortunately my bags with all my briefs are circulating somewhere in the air. I was trapped in Calgary overnight. We got in about five but my bags didn't come.

9634 MS LAURIGNANO: What was the question?

9635 COMMISSIONER WILSON: What per cent of your tuning is from the Toronto CMA? Yes, in your application you show the Orangeville tuning.

9636 MS LAURIGNANO: Yes. I have just got to work it out because I know roughly.

9637 COMMISSIONER WILSON: I have some BBM fall 1999 numbers that break down your listening hours, and it looks like about 65 per cent of your tuning comes from Toronto.

9638 MS LAURIGNANO: Right. I will confirm that. I knew the numbers. I just didn't know the percentage. It is roughly 64 per cent.

9639 COMMISSIONER WILSON: Okay. I want to turn now to the whole issue of service to Orangeville. You said this morning that you have a strong presence in community activities. You also said in your application, actually you sort of acknowledged the fact that the format that you chose. It is actually page two of your supplementary brief, you say that your format is not obviously suited to all persons in a smaller community.

9640 When you changed your format, were you thinking about Orangeville or was it more a sort of positioning the station to be able to compete in the larger market?

9641 MR. EVANOV: I will start to answer that.

9642 When we took over Orangeville, this is a radio station that lost money for seven consecutive years. It was really in bad shape. When we took it over, we analyzed everything and we said, "Okay. What do we do?" That service was providing a certain service to an older demo. Our experience previously it was successful was that we knew the dance CHR format. We knew that there was a demand by young people in Orangeville for it or the younger demos, so we launched that format.

9643 We also knew that we had to market not just the town of Orangeville with its 19-20,000 people at that time, but we had to market the surrounding area. And we had to do basically do really what all the stations in the CMA do, you market wherever you have listenership if you can and you build audience and you try to support --

9644 COMMISSIONER WILSON: Where you can get the money.

9645 MR. EVANOV: Sorry.

9646 COMMISSIONER WILSON: Where you can get the money.

9647 MR. EVANOV: Wherever you can get the money. And if you can't get at that street, you will turn left on the next street. But you have to survive and you go in the direction where you can make something.

9648 In terms of service to Orangeville, I would like to ask our News Director just to add to that.

9649 MR. HORNE: Thanks, Bill. Our commit to Orangeville is extensive. I myself am in Orangeville twice a week on a regular basis. Our news staff daily is in touch with the newsmakers, the people who are operating the Town of Orangeville, its police department, its education departments, mapping out exactly what is going on in the town. We meet regularly with civic officials, the Chamber of Commerce, business leaders, the Business Improvement Association.

9650 And in addition to that, designed a program to civically meet the needs of Orangeville based on actually Orangeville discovering what we had already known, in order to survive in the CMA, you had to reach the CMA. And that we are in consultation with the Town of Orangeville researching, writing and producing a series of infomercials that we air every single day that promote Orangeville as a destination as a visitor, as a place to do business, a place to establish a business and a good place to buy a home and live.

9651 All of these factors really contribute to our services to Orangeville. In addition to our involvement with such other projects as Orangeville Community Cable Radio. We have worked extensively with the development of their programs and tracked their growth, offering them equipment, technical assistance and financial support as they evolve within the community.

9652 In addition to that, of course, the numerous activities in the town, much like their business presence, in order to have that happen, it is necessary to attract audiences and visitors from outside their own boundaries. And perhaps I could ask Nadia to expand on that.

9653 COMMISSIONER WILSON: Let me just ask you a couple of questions first.

9654 MR. HORNE: Sure.

9655 COMMISSIONER WILSON: I know you moved your studio recently. But do you actually have anybody based in Orangeville?

9656 MR. HORNE: Yes, we do. We have --

9657 COMMISSIONER WILSON: They live there and work there full time?

9658 MR. HORNE: Yes. Yes. Yes, we do. We have a marketing public relations and news stringer type situation combined.

9659 COMMISSIONER WILSON: You have like one person there?

9660 MR. HORNE: Yes. And we maintain office space in Orangeville as well.

9661 COMMISSIONER WILSON: And if this application were approved, would you also put a person in Toronto or would you just run that out of your current facility?

9662 MR. EVANOV: We would run it out of our facilities in Etobicoke.

9663 MS LAURIGNANO: By the way, the office -- we also had the public file there for all to see in addition to where our studio is located. So anything that is of relevance to the station, we make them aware that that is available, including, as I said, the public file for this. I have invited them to go -- residents in the area to view it.

9664 It is also used as a drop-off point if somebody has something of public service or ideas or sometimes, you know, children making postcards or that kind of thing. We have regular communication with that. There is a fax machine, a telephone that is available for them as well and mail, e-mail. So we are right there.

9665 COMMISSIONER WILSON: About the Orangeville infomercial that is aired daily on CIDC-FM, infomercials are usually commercial vehicles and the person who is promoting whatever they are promoting whatever they are promoting during the infomercial usually pays for that time. Does the City of Orangeville pay for that time?

9666 MR. HORNE: No, they do not.

9667 MR. EVANOV: No, not at all. We provide that --

9668 COMMISSIONER WILSON: Not at all. So you do that -- you provide that service to them as part of your local content.

9669 MR. EVANOV: We provide it as part of local content and it is our means of having Orangeville or giving Orangeville a voice in the CMA.

9670 COMMISSIONER WILSON: How long is that infomercial?

9671 MR. HORNE: Sorry.

9672 COMMISSIONER WILSON: How long? What is the duration?

9673 MR. HORNE: Of the infomercial. They are 60-second infomercial. They are aired twice daily.

9674 COMMISSIONER WILSON: They are 60-second infomercials aired twice a day. So that doesn't really make up too much of your 42 hours during each week.

9675 MR. EVANOV: I am sorry. That is not the 42 hours. No.

9676 COMMISSIONER WILSON: No, I know. But your requirement for local content is 42 hours a week.

9677 MS LAURIGNANO: Well, the requirement -- the minimum requirement is 42 hours but we do everything but one hour of local programming for Orangeville.

9678 COMMISSIONER WILSON: What do you mean everything but one hour?

9679 MS LAURIGNANO: That means that all the programming is for Orangeville. The studio by approval and with your permission is out of Etobicoke right now but it is local programming for Orangeville. Because our spoken word, our news content and these other initiatives reflect Oakville -- Orangeville, I keep saying Oakville, Orangeville in the same way.

9680 COMMISSIONER WILSON: Sorry. You say the music?

9681 MS LAURIGNANO: No, I say the spoken word. If I said music, I didn't mean that. But I am saying the spoken word and the news content. In other words, in the program, yes, the music originates from a local source. Where it is played from, that is what it means. It is produced locally. So the only thing that is not on here that is not produced locally is one hour a week, which is Sunday morning, two half hour programs.

9682 So by the Commission's definition of local programming, it is all local programming but one hour. It doesn't originate from Orangeville if that is what is confusing the issue in that there is no studio in Orangeville.

9683 COMMISSIONER WILSON: No. That is not my point. The point is more the reflection of the community.

9684 MR. EVANOV: The focus and orientation of the radio station are definitely Orangeville in spoken word, in news, in features such as the infomercial and in the fund raising that we do and the public service and the support for the various clubs. The music is very -- that can be very anywhere, the music that we play. And the information we provide are on local happenings, not just in Orangeville, but the CMA and even in Toronto in terms of a hockey game or in terms of the Blue Jays at the Dome. These are things that interest everybody in Orangeville.

9685 COMMISSIONER WILSON: How would that be affected by this change? If we were to approve the tower move, how would you strike the balance between serving Orangeville as your primary service area, the area that you are licensed to serve and serving the Toronto market, which is what would be most appealing to your advertisers?

9686 MR. EVANOV: Well, we are doing that now and nothing will change. In other words, the service we provide today will stay the same. There will be no change in service. We are basically a CHR music-driven format, which is predominately music. Whatever the content, the fund raising, the public service, whatever we have now, for Orangeville, the infomercial, that remains. That doesn't change at all. As a matter of fact, it is a plus to Orangeville to be able to reach into the CMA to bring in whatever it is that it is appealing to in the infomercial.

9687 COMMISSIONER WILSON: So if I tuned into CIDC, I am not sure how good the signal would be because I am right on the edge of your .5 contour, but I would hear a lot of Orangeville content in between music?

9688 MR. EVANOV: You would hear Orangeville -- I don't know what a lot means, but you would hear Orangeville content. If you woke up this morning, every newscast contained a feature or something happening in Orangeville in terms of news. If you heard the weather reports this morning, you got all the weather reports. Because remember, almost 50 per cent of Orangeville, or 45 per cent, travel out of Orangeville into the CMA to go to work every day.

9689 So we do traffic reports for Orangeville, and we are not talking downtown Orangeville. We are talking Highway 10 going into Orangeville. We are talking Highway 9 that goes -- shoots out and goes to Highway 400. Then we are talking about the 400, Highway 27, Airport Road. So we are talking the whole thing. Then we talk the 401. We talk, you know, 427, maybe a bit of Don Valley. We give the entire area in terms of traffic.

9690 If there is a school closing in Orangeville, you will hear it. You will wake up in the morning and you will hear about it. So there is no deletion of service of any kind to Orangeville with this expansion.


9692 MS LAURIGNANO: I should just add, it is to the degree that this type of format allows. Obviously, I don't want you to get the impression that in between every song we talk about Orangeville, because that is not the case. But in the spoken word, through the newscast, through the infomercial, through event calendars that we air daily, that is another feature there of things that are happening, through special promotions and events that we create, Orangeville becomes involved.

9693 And also we have to reflect Orangeville's position within the whole market. If the Raptors are playing, that is relevant to somebody who lives in Orangeville as much as it is to somebody who lives in Scarborough or anywhere else because that is the relationship that exists there. And if there is a concert happening at the Air Canada Centre, you know, if Alanis Morrissette is playing, that is relevant to the Orangeville listener as well. Because there is no Air Canada Centre in Orangeville.

9694 If you want to see a basketball game, you know -- but I think -- I would like to ask Nadia just to expand a little bit on how Orangeville is reflected in the special promotions that happen or the kind of events that happen throughout the year besides the ongoing things that I talked about which is the infomercial, the newscast, the event calendar and so on.

9695 COMMISSIONER WILSON: And just other than those things and the special events, and you do talk about the special events in your application and in your presentation this morning. But do you do any -- do you have any specific program that is just Orangeville, or a half an hour or a week or an hour a week when everybody from Orangeville knows they can tune in and they hear all about their own community? Or is it more event driven coverage, in addition to the news and weather and traffic and that kind of thing?

9696 MS LAURIGNANO: Oh, no, we couldn't do an hour a week because we are Orangeville all the time, as I said, through the spoken word.

9697 COMMISSIONER WILSON: You couldn't do an hour?

9698 MS LAURIGNANO: Oh, we --

9699 COMMISSIONER WILSON: Sorry. Is that what you said?

9700 MS LAURIGNANO: There is no need to do an hour. We are Orangeville all the time. We address it through -- we can't play Orangeville music because, you know, there isn't a record distributor there that has a CHR thing. But through the spoken word to the degree, as I said, that our CHR format will allow, we are Orangeville all the time.

9701 Above and beyond that, there are other things. There is initiatives that we have created that have tied into promotion. And one of the things that we do, for example, every Wednesday night we have a student hour where the students from high schools can come in and be interactive with the host and, you know, it is a chance to hype the school and talk about it.


9703 MS LAURIGNANO: And we have had the Orangeville high schools come in as guests and talk about that. So the access is definitely there as far as that is concerned.

9704 But it wouldn't make sense for us to dedicate an hour to Orangeville because we are Orangeville all the time.

9705 COMMISSIONER WILSON: Okay. Let me just ask you -- I want to talk now about the impact on other stations of approving your application. Because, you know, throughout your application and your comments this morning, you know, you make an effort to minimize the impact that you would have on incumbent Toronto stations. For example, on page 7 of your opening remarks this morning, you say:

9706 "If you let us move our transmitter as we have proposed, we will have access to only 16% of people within the Toronto CMA."

9707 Is that at the 3 mV/m?

9708 MR. EVANOV: Yes, that is the 3 mV/m.

9709 COMMISSIONER WILSON: How much does that increase if you go to the 0.5?

9710 MR. EVANOV: Well, if you go to the .5, we will give you a number in a minute.

9711 MS LAURIGNANO: Okay. In terms of actual numbers the 3 mV/m will increase by about 514,000 persons. This is like available universe, not listeners. We wish. And the 5 mV/m, the full thing, there is roughly one million additional people.

9712 COMMISSIONER WILSON: So a million in addition to what you have now?

9713 MS LAURIGNANO: Right. That is the total 5 mV/m, which includes the 3 mV/m. So in other words, five hundred within the 3 mV/m and roughly another five hundred for the total thing.

9714 COMMISSIONER WILSON: Okay. At page 14 of your supplementary brief you state that you will not have a stronger or better signal into downtown Toronto. Let me just turn to that page. And you are talking about the effect you might have. So at paragraph 6.01 of your Supplementary Brief, you said:

9715 "The signal will suffer the same deterioration it now experiences."

9716 But I want to explore this with you and I realize that there are some differences between how the signal gets to people in a highly urban area, a densely urban area versus out in the country. But Barrie, for example, if you look at your current contours, Barrie is right on the very edge of your .5 contour. And you are number one in the 12 to 17 demo there with a good enough signal to describe yourself as incumbent. So how good will your signal be at the proposed .5 mV/m contour?

9717 MR. EVANOV: It depends which way I am going. If I am going into open country, the signal will travel. If there is no obstacles, buildings, factories, highrises, bridges, it will travel extensively. I think all the engineers basically agree on this that your .5 is a unreliable signal in an urban built-up area due to highrises and everything else. So I guess with your question it would depend what area --

9718 COMMISSIONER WILSON: Did you do any tests about how far your signal will reach? Did you have an engineer look at --

9719 MR. EVANOV: Well, we have looked at it.

9720 COMMISSIONER WILSON:  -- the quality of the signal as it gets further out? Because I mean if you look at that .5, I mean you say only 16 per cent of the Toronto CMA. But if you look at the .5 on the propose contour, it covers the entire -- almost the entire Toronto CMA.

9721 MR. EVANOV: I thought it only covered 25 per cent of the population of the Toronto CMA and does not cover 75 per cent of the population of the Toronto CMA.

9722 COMMISSIONER WILSON: Okay. Because I have got this comparative map that you have filed. One of the maps that you put on file with us, and it takes in Burlington, Oakville, Missassauga, Toronto, Markham, Sutton, Barrie, Mount Albert. Barrie actually would get a better signal. I mean that is on the .5 mV/m periphery that I am talking about because that is what I wanted to explore.

9723 MS LAURIGNANO: Well, I think we are getting maybe a little confused because the .5 mV/m --

9724 COMMISSIONER WILSON: Point five (.5)?

9725 MS LAURIGNANO: The .5, it is an engineering question that we asked and we got the population which was sourced from Statistics Canada by the engineer. There is an additional one million within that whole contour. So then you are asking how many have fallen in the CMA. Is that the question?

9726 COMMISSIONER WILSON: Well, I am just -- I guess what I am trying to get at is that you are trying to minimize the notion of impact on other stations by saying only 16 per cent of people within the Toronto CMA are going to be affected by the move of your transmitter. But if you -- that is the 3 mV/m contour. So if you take it a little further out to the .5, what I am trying to get at is there could be a greater impact.

9727 MR. EVANOV: Could you tell me what area you may be referring to?

9728 COMMISSIONER WILSON: Well, I am referring to the map.

9729 MR. EVANOV: No, no, I know the map. But when you say impact, I have to know where --

9730 COMMISSIONER WILSON: Well, you said that it affects just a very small part, northwest part of the Toronto CMA.

9731 MS McLAUGHLIN: To address the issue of the impact so we don't get hung up on technical answers of reception that we don't have an engineer here present to answer, let's talk about the fact that it moves from a .5 that reaches 3.6 million to one that reaches 4.6.

9732 If you want to measure impact, you have to talk about tuning to the station. In the area where we compete now, which as you have already noted, is almost all of the CMA, we only have a 1.6 share, which if you are being generous would be moved up to a two. So it indicates that there is stiff competition, that where that competition exists we are clearly not the market leader. And the important thing to understand about the overall impact of the station is that it is an Orangeville focus.

9733 And as much as I may enjoy some of the music on this station, I don't really care about Highway 10 traffic and I don't care about what happens in the Orangeville City Council and that is the focus of their news. That is the focus of their spoken word. So by virtue of who they program to in terms of their core market, they never really will be able to impact the Toronto CMA.

9734 Yes, they have music but that music currently exists, as indicated by their .5 mV/m, and it is only achieving a 1.6 share. So in adding a million, you are not adding a million listeners, you are adding access to a million more homes. And if you simply take that share out, extend the current share out to that five, it is really not a major impact.

9735 COMMISSIONER WILSON: So this sort of brings me to the third area and I would really like to just get some comments from you just to sort of help us put the whole issue in some context here.

9736 You are originally licensed for a certain area, but you are actively competing in a number of other markets. Soliciting advertising and marketing your service and garnering some -- in some markets a fairly significant share, the smaller markets, maybe not in Toronto. And you are doing all of that without having gone through a competitive process for any of those markets.

9737 So Barrie, for example, you are not a Barrie station. You are an Orangeville station or you are a Toronto station, but you are getting -- you are drawing revenues out of that market. That is why you have intervened against the applicants there.

9738 At the same time, you are seeking protection from competition from those other markets as a small operator. Again, you intervened against the Commission licensing a station in Barrie because you felt it would affect you even though you are not licensed to serve it, you don't provide local content to that area.

9739 And I guess a related issue to that is as an urban area sprawls and smaller communities are drawn into that, how do we view you and what do we do with you and how do you continue to reflect your community and at the same time compete with the Toronto stations, some would say through the back door because you haven't -- you didn't apply for a Toronto station. You got an Orangeville station and through evolution of urban sprawl, you are now considered part of that market by BBM.

9740 MS LAURIGNANO: I will answer that.

9741 COMMISSIONER WILSON: I guess what I am trying to find out from you is that if you think there should be some criteria on some larger basis that we should look at to determine whether or not we should allow such things as transmitter moves.

9742 MS LAURIGNANO: Well, I think I will address the points as follows. The programming orientation, that is what we said about making sure that the community we are serving is reflected, that is done through the spoken word. If you have a music source, if you have a local artist, you can do that.

9743 But where you have to go for the money to make sure that that service is viable and that you can reinvest and invest money in better programming that will be better serving that community, should not be limited to just your own little area. Because there is businesses that are attracted to the station because you have a particular service that is unique and it may be located in one place or another. In our case it could be a dance club for example because of the type of demo that we serve.

9744 But the best way I can put it is this way. For us to be restricted to where we are, you, the Commission, would also have to restrict where everybody else is. Because it is like saying we don't have a license to market outside of our area, yet everybody else has a license and I will give you a really good example.

9745 We conducted a monitor, which we filed of what stations -- what other stations do, especially some who are competitive in the market with us in the same format. And we said, well, these are Toronto licensees or North York licensees, so you would suspect then that a lot of their advertising would be based in the City of Toronto. That is what you would think because that is the sort of impression that I am getting that we should be able to do or that we should be doing.

9746 And I know I am rambling on but I will get to the point. The point is that when you are looking at CFNY in Brampton and it is our file that I would be very happy to give the Commission. There was 151 spots aired over a period of time. Eighteen (18) of those spots were for clients in the City of Toronto. Thirty-eight (38) per cent were from the rest of the CMA. Ninety-five (95) spots were for Toronto central buys, what we discussed, which would be agencies, national clients, the ones who buy the BBL cell number. And the number of spots for Bramptom clients were zero.

9747 COMMISSIONER WILSON: Right. You have filed this as part of the previous item on this item.

9748 MS LAURIGNANO: Right. So the question is --

9749 COMMISSIONER WILSON: Well, I guess I am wondering if you see a contradiction in the fact that you are saying, "Don't restrict us, but restrict others." Because your intervention in Barrie, for example, was like, "Don't license there because that is going to affect me. But let me do what I want."

9750 I mean do you see a contradiction in that?

9751 MR. EVANOV: Okay. Neither the Barrie stations or the applicants for the Barrie stations or the Toronto stations of the CN Tower are having the impact that we now have. I am not here to cry in front of you. I am just saying I am being impacted and I have to do something. We came before you before because we knew -- we felt we were going to be impacted and maybe it was a little bit in advance. But we are here because we have been hurt. We are here because we have a tower that has a problem, a serious problem that I have to adjust and it is very close to Orangeville.

9752 In the Barrie situation we have already been impacted there before you even licensed anyone. We have lost half of our revenue to a Toronto station, which went after all the ski resorts and got the budgets for this winter. So I have already -- so Barrie no longer really is a concern. We have been impacted in Barrie and probably this summer we will be impacted again by a Toronto station when the budgets we get -- normally get for summer activities will happen. So that is part of the game and we expect that.

9753 But I think in the area that we live, the CMA, I think there, there has to be some kind of competitive balance. And somewhere along the line there has to be some, I don't want to say help for a small independent or a fringe player, but there has got to be some consideration. And my consideration is I need that tower. I need to be on it for a number of technical reasons, forgetting the whole signal thing, forgetting the CMA market. I have technical reasons why I believe I should be on that tower for the future of my radio station.

9754 So we are not saying don't do this with anybody else and don't do that with anybody else. I think at the Barrie hearing we conceded that yes, the station should be licensed and we would prefer one that didn't exactly duplicate our format even though it might duplicate our demo.

9755 We haven't intervened against any of the Toronto stations. And my only concern there about impact is there isn't, other than basically the Shaw group and the Rogers group, there are no intervenors from Toronto. The CHUM group did not intervene. They don't see any impact or threat from a station in Orangeville. Telemedia did not intervene. Standard Broadcasting did not intervene. No ethnic applicant intervened and none of the applicants for the new 93.5 intervened.

9756 So there are basically no interventions. Unfortunately the two interventions are from two that also have CHR stations in the market.

9757 COMMISSIONER WILSON: They were showing maybe a little more restraint than you were, Mr. Evanov.

9758 MR. EVANOV: Sorry?

9759 COMMISSIONER WILSON: I said, all of those people were showing maybe a bit more restraint than you have been.

9760 MR. EVANOV: Well, maybe. Just that we have -- okay. We have filed interventions here as part of the process of 93.5 and I think that is to be expected because of where we see impact, because right now we are vulnerable. If you add on 93.5 in Toronto in addition to CISS, in addition to Barrie, in addition to who knows who else, we are saying to ourselves, "Hey, we got to make a living."

9761 And so we are going to at least, if nothing else, let you know. You are not going to do it for us. But we are going to let you know where we stand. We are going to give you the financials of what we believe are -- or the road that we are going. And all I guess we are saying to the Commission is we are a small broadcaster. We are not asking for the world. Our 3 mV/m will only reach 16 per cent of the total population of the CMA and I think Debra explained that even with the .5, sure it will reach, on paper with numbers it is that extra million overall.

9762 But I think I have assured you that in the expanded area of the .5 towards Toronto, that is not a reliable signal at all. We get blown out of the water right along Lake Ontario, the south part of Toronto from 103.3 in Buffalo called "the Edge." And the urban build-up in Toronto will make this signal -- it will make the CBC signal of 740 look wonderful in downtown Toronto. And we know that had certain holes -- if that had holes, this will have 30 holes for every hole that had in downtown. So the .5 is not a reliable signal.

9763 As a matter of fact, car tuning for some reason picks up radio signals better than anything else. And our car tuning in Toronto is probably one of the higher of the radio stations and the reason is people can't get it at home in Toronto, can't get it in buildings or highrises and maybe drive around with it in their cars wherever they can. And that is why high tuning, I think, car tuning is around 45 per cent.

9764 COMMISSIONER WILSON: Okay, thank you, Mr. Evanov.

9765 Those are my questions, Madam Chair.

9766 THE CHAIRPERSON: Thank you, Commissioner Wilson.

9767 I have a short question before we break and then hear the intervenors.

9768 On pages 4 and 5 of your presentation, Mr. Evanov, I thought I was following you and that the point that you were making here is that some Toronto stations that you name, CISS-FM for example, and CILQ from North York, which is now integrated into Toronto as I understand it, get a certain percentage according to BBM ballots from outside Toronto. But I got a bit confused when I got to CFNY Brampton where you say 43 per cent of the audience come from outside Toronto.

9769 Is that, if I understood the point you were making, isn't that exactly what should be happening? Then I thought, oh, oh, I'm missing something here. Isn't that the point that they should be taking their audience out of Toronto as you see it? Not should, but that you are making the point the Toronto stations get their audience outside of Toronto. So I have to be able to get mine into -- closer into Toronto. But I find that that line is kind of confusing.

9770 MS LAURIGNANO: Yes, it is.

9771 THE CHAIRPERSON: You agree with me that it is confusing.

9772 MS LAURIGNANO: I agree with you hundred per cent.

9773 MR. EVANOV: I have confused Carmela too.

9774 MS LAURIGNANO: We went down one road and then we threw a loop, but obviously you were paying attention. That should read by contrast 57 per cent --

9775 THE CHAIRPERSON: I just wanted to make sure that I had your principle straight. Thank you.

9776 We will now take a 15 minute break. So we will be back about five after eleven, no later, and we will hear the intervenors at that time.

9777 Thank you, Mr. Evanov.

--- Short recess at / Courte suspension à 1050

--- Upon resuming at / Reprise à 1105

9778 THE CHAIRPERSON: Order, please. Mr. Secretary, please.

9779 MR. CUSSONS: Thank you, Madam Chairperson.

9780 We will now hear an intervention, a combined intervention involving Rogers Broadcasting Limited, Corus Radio Company and WIC Radio expressing their concerns about the Dufferin application.

9781 THE CHAIRPERSON: Go ahead.


9782 MR. BLACKADAR: Madam Chair, members of the Commission, we are pleased to be here today to express our concerns about Dufferin Communications' proposal to amend the technical parameters of CIDC-FM in Orangeville.

9783 My name is Hal Blackadar the General Manager of CFNY-FM, a Corus Radio Company station. With me today to my left are Joe Zenobio the General Manager of Q107 Toronto, a station owned by WIC Radio Ltd.; and to my right, Gary Miles the Executive Vice President of Radio Operations at Rogers Media. Behind us, Tracey Pearce, Goodman Phillips & Vineberg, our legal counsel.

9784 We are here on behalf of Corus Radio Company as licensee of CFNY-FM; WIC Radio Ltd., as the licensee of CILQ and CFYI-AM; and Rogers Broadcasting Limited, as licensees of CHFI-FM, CISS-FM and CFTR-AM.

9785 Our opposition to the proposal by Dufferin is based on two key concerns.

9786 First, CIDC is attempting to become a de facto Metropolitan Toronto FM station by proposing a revision to "the technical parameters" of its licensed coverage area. We believe to maintain the integrity of the Commission's licensing process, Dufferin Communications should be required to apply to the Commission for a licence to serve the new market -- Toronto -- that it is really attempting to reach. And second, this application simply represents the latest in a series of attempts by Dufferin to fundamentally alter the nature of ClDC by transforming it from a local Orangeville station into a Metropolitan Toronto service.

9787 MR. ZENOBIO: This application is the third occasion on which Dufferin has sought to become a Toronto FM licensee by proposing amendments to its existing Orangeville licence. Dufferin applied in 1995 for amendments to its broadcasting licence reducing the required amount of local programming and deleting terms specifying the location of its transmitting antenna and studios.

9788 In response to a number of Orangeville intervenors, Dufferin offered assurances that local service would be maintained. One of these assurances was that no move was planned for the transmitter site.

9789 An important factor for the Commission in approving Dufferin's 1995 application was that the station had not applied for approval to change its licensed coverage area. The Commission concluded that the reduction in local programming, flexibility in the studio location, and deletion of the terms specifying the location of the transmitting antenna, would not change the local orientation of the station.

9790 However, Dufferin came before the Commission less than eighteen months later with a proposal to move its transmitter and alter its coverage area. The 1996 application was subsequently withdrawn. In 1997, Dufferin resurrected the same proposal which again sought authority for the identical transmitter site relocation.

9791 In denying the 1997 applications, the Commission agreed with the intervenors that approval would "result in a significant change in CIDC-FM's principle marketing area" and noted that the Commission has "traditionally considered CIDC-FM as external to the Toronto Central Market".

9792 Today, Dufferin is once again seeking to relocate its transmission facilities in order to provide it with coverage to the Toronto CMA. This application is no different than that proposed and withdrawn in 1996; re-filed in 1997 and denied by the Commission in 1998. Rather than applying for a Toronto FM licence, Dufferin has instead chosen to first secure a significant reduction in local programming, followed by three attempts to shift the coverage area to Toronto.

9793 MR. MILES: Dufferin attempts to distinguish the present application by pointing to projected revenue losses as evidence of financial hardship and a change in circumstances warranting the amendments sought. We disagree.

9794 In our view, the "increased competition" CIDC alleges it faces today is simply the ordinary operation of a dynamic radio market. The only real change Dufferin points to since its last attempt to achieve these amendments is the decision by Rogers to introduce a contemporary hit radio format on ClSS-FM or "KISS-FM."

9795 Quite simply, every broadcaster faces the reality that another radio station could alter its format to directly compete with its station or that a new license could enter the market. It is up to the station to determine whether it makes sense to continue with its existing format and directly compete with the new or newly re-positioned station, or to change its own format to another genre.

9796 In fact, we note that CIDC altered its own format to focus on dance music in 1995, despite the objections of a number of prominent Orangeville intervenors. Thus, the format change by CISS-FM simply reflects the realities of the competitive radio industry and should not form the basis for a fundamental alteration to the market served by CIDC.

9797 In our view, the appropriate response to the alleged impact of CIDC on the change in format on CISS-FM is best left to the market and the business acumen of Dufferin. It should not merit intervention by the Commission which would effectively provide Dufferin with a de facto Toronto licence.

9798 MR. BLACKADAR: As we stated in opposition to Dufferin's 1996 and 1997 applications, we believe Dufferin is pursuing an agenda which will see CIDC become nothing less than a Metropolitan Toronto station. In fact, if this application is approved, the population within the 3 mV/m signal contour of CIDC will increase by approximately 300 per cent and the population base within the .5 will increase by approximately one million. This is a significant expansion into the Toronto CMA.

9799 Throughout the present application, Dufferin states that CIDC already markets to and relies on the Toronto CMA thereby trying to minimize the impact of the proposed amendments. However, despite Dufferin's assertions to the contrary, CIDC is not currently licensed to serve the Toronto market. It is an Orangeville licensee. In this regard, CIDC is no different from stations licensed to serve Oakville, Ajax and Newmarket, all in Toronto but local radio stations, serving distinct local markets.

9800 In the oral presentation, the applicant this morning stated that the tower is unreliable, difficult to service and that a natural disaster could collapse the tower. These difficulties regarding the tower and the tower site were introduced, to our knowledge, for the first time today. There was nothing in the application, nothing in the technical brief, nothing in the reply.

9801 In our view, the introduction of these arguments at this stage for the first time raises real questions about why the applicant is here and the credibility of the application.

9802 In conclusion, we believe the application should be denied for the following reasons.

9803 The proposed shift in coverage will turn CIDC into a Metropolitan station, and as such, Dufferin should be seeking a Toronto licence, not a technical amendment.

9804 Two, we believe the Commission has previously considered and ruled upon this very application in 1998. In our view, the appropriate response to any impact a change in format of a Toronto station may have on CIDC is best left to the market itself.

9805 We thank you for the opportunity to present our comments and await your questions.

9806 THE CHAIRPERSON: Thank you, gentlemen.

9807 I do have a few questions for you. Of course, we have before us this morning, three very large broadcasting companies with multiple radio stations. So the Commission is, of course, interested in listening to every broadcaster. But when licensees of your size team up to make a point, I guess our ears should be perked and we should try to see whether you are establishing a principle of some sort that we should take into consideration in further licensing action.

9808 So for that reason I do have questions, perhaps more than otherwise, so we can understand what impact you would like your intervention to have in a broad generic sense as well as in the specific sense of the application before us.

9809 Do you dispute the numbers that I focused on this morning that are at pages 4 and 5 of the presentation whereby the applicant made the point that Toronto radio stations do gather a significant proportion of their audience and I would assume of their revenues from outside of Toronto where they are licensed?

9810 MR. BLACKADAR: Thank you, Commissioner. Just let me find pages 4 and 5 here. I believe that is in the supplementary. Is that correct? In their supplementary --

9811 THE CHAIRPERSON: In the presentation this morning, I don't know if you had a copy, but you probably heard. If not, I can briefly say, CISS-FM according to the applicant, if you look at the BBM ballots receives 40 per cent of its audience outside of the City of Toronto; CILQ-FM, 47 per cent outside of the City of Toronto; and CING, which is licensed for Hamilton, gets 80 per cent out of the Toronto CMA.

9812 And as I clarified, the point being made was that it is not the Toronto -- the greater Toronto area is no longer so easily compartmentalized and this is a reflection of why it's -- or that it's not. And I want to know whether you dispute these numbers?

9813 MR. BLACKADAR: Commissioner, let we try to start with this and perhaps Gary and Joe can follow up.

9814 I don't think that we would dispute the numbers. I think that if you take a look at the latest BBM surveys you will find that all of these stations, particularly Class C FMs in Toronto have a large coverage area. Principally, these stations garner most of their numbers within what is called the Toronto Central Metropolitan area, which is, you heard earlier today, is an area defined for and reported by BBM. And the balance of those numbers do fall outside the area. So we would -- I would not dispute those numbers.

9815 MR. GARY MILES: No, that is exactly correct. So it is either the central area or the full coverage area. And in fact, Orangeville would have a full coverage area as well as a central area. The only interesting thing that I think is maybe germane to this argument seeing as we were specifically referenced to in CISS, is that we are not on the CN Tower. CISS-FM is not on the CN Tower and in fact has very poor, if any coverage, into the Orangeville area.

9816 So as a result of the discussion of the impact of this format on the Orangeville market and the Orangeville station, technically is not as feasible as you may have thought thinking we were one of those top ten stations off the CN Tower.

9817 THE CHAIRPERSON: But would you agree with me that these numbers on pages 4 and 5 are a bit of a reflection of what is happening in the greater Toronto area. The way I understand it is there is a continuous population out of what was represented on those exhibits as Toronto per se in a continuous way in very large areas surrounding Toronto. And therefore, Toronto stations, I understand your comment about CISS, in general can cover the surrounding areas and some of these people are interested in Toronto stations.

9818 And thereby the argument that to level the playing field when you look at how Toronto has developed, perhaps it is simply a reflection of reality that one would want to ensure that they have a chance to counter the effect of the Toronto signals reaching them in a continuous way in the sense that, you can correct me if I am wrong, but between many of these localities there isn't like miles and miles of country in between. People move in and out of the greater Toronto area. In fact, Toronto is getting bigger and bigger and bigger. We have often wondered in Ottawa whether Mr. Lastman was aiming to reach us.

9819 MR. BLACKADAR: Not until next year.

9820 Commissioner, thank you. I think the two points in addressing your comment and your question are this.

9821 We have consistently made two points each time this application has come forward. We have said that this station, very similar to Oakville, very similar to Ajax, very similar to Newmarket, all serve a portion of this large metropolitan area. And earlier this morning, I think, Commissioner Wilson focused on what is the service area of CIDC.

9822 In these areas earlier in this hearing you had an applicant that came forward saying, "Look. We recognize that we are a station serving a portion of Toronto. But to be a Toronto radio station, we are going to file an application to be a Toronto station." That is one of our points.

9823 The second issue is that it is a bit of the thin edge of the wedge. If in fact serving these segments of the Metropolitan area is nothing more than to gravitate your transmitter site into Toronto, then those areas that fit into areas such as Ajax, New Market, Oakville will lose in fact that service that is currently there and we all come together as one large group of stations.

9824 This applicant has -- seeks to want to market and to grow its audience into the central area, moving its site away from Orangeville into Toronto. So the issue we have with that is that if, in fact, that is going to be the thin edge of the wedge, we will constantly see this gravitation and we have not seen that from other applicants in Toronto. Only with this applicant.

9825 THE CHAIRPERSON: So that leads me to indicate to you that my questions are aimed at trying to find out how much of your concern is actual harm to your stations. How much is the so-called integrity of the licensing process, which I guess you could leave to us. And how much is the fear or concern that these stations somehow are no longer going to be serving the community for which they were licensed to serve.

9826 So under those three rubrics, I am then wondering are you trying to establish principles here about how you try to extend your market or whether the Commission should be concerned on an ongoing basis. While there is a lot of turmoil, so to speak, in the radio area now in part as a result of our changes in our ownership policy, whether we should be looking more carefully at what you seem to call creeping into somebody else's market by the back door.

9827 And I suppose the licensee would call these last two pages clever incrementalism in response to a blast of Toronto signals into his market. And conversely, whether the Commission should also be concerned about the larger companies who have in some cases applied for re-transmitters to extend their markets outside of their main service area. And it does raise fundamental questions for us. I will try to look at each separately in light of your particular intervention in this case.

9828 Do I take it then that -- well, let me ask you, Ms Pearce. Did any of your clients intervene against us licensing 93.5 or Ajax or --

9829 MS PEARCE: In this proceeding, Madam Chair?


9831 MS PEARCE: No, they did not.

9832 THE CHAIRPERSON: So can I conclude from that that financial harm is not what concerns you?

9833 MR. MILES: Can I answer that.

9834 THE CHAIRPERSON: Oh, of course. Any of you, all of you. Not all at the same time.

9835 MR. MILES: That was the question I wanted to answer and you took away from me by asking Ms Pearce.

9836 No, the issue really is --

9837 THE CHAIRPERSON: She intervened on her behalf.

9838 MS MILES: Yes, that is right.

9839 THE CHAIRPERSON: I thought it was fair to ask her if she had also intervened against other applicants and whether I can conclude from that that you are not concerned about whether we license a dance station on 93.5 or whatever, on 740, that -- smack in the middle of Toronto where CISS will be affected and why that wasn't a concern to you since you are interested in the licensing process. There it was at the same hearing.

9840 So can I conclude from that that you are not concerned about harm, you are concerned about the principle?

9841 MR. MILES: There is no question we are concerned about the principle. In fact, one of the issues that we had to address before we came forward as three of the number of licensees in Toronto, and certainly we could speak for two others, which I think you identified as not appearing. They would have been Standard and Telemedia, all of who have a business interest in a national representative house with the current applicant which may or may -- may or may not explain that they are not here.

9842 But we did not intervene against any of the applicants, nor has it been the practice of our company, and I think I can speak for the other two, to intervene against new applicants in any market that we have been in anywhere across Canada. So it is not that process at all.

9843 But traditionally up until this time, the Commission has denied the removal of transmitter sites into more metropolitan areas because de facto that becomes a metropolitan radio station of whatever it is, whether it is Toronto or whether it is Edmonton or any other market. Certainly we have allowed -- the Commission has allowed the studio locations to be done for purposes under consolidation of better transmitting and things like that. But the transmitter site is an integral part of your coverage area and where it goes.

9844 So no, absolutely. Let this applicant and all others come back in and apply for a Toronto license and you won't see my pretty face.

9845 THE CHAIRPERSON: So, Mr. Miles, then if we follow this principle, if instead of an amendment, it had been a retransmitter or in the case of Ajax an actual new frequency, or if the Commission had chosen to say, this amendment is in fact competitive with the other requests to get new services into the Toronto market, you wouldn't have intervened against CIDC?

9846 MR. MILES: No.

9847 THE CHAIRPERSON: Simply because the procedure would have been what you consider a more -- would have respected the integrity of the license process. So in fact it is our fault. We should have gazetted it in competition with the other 15 applicants in which case you wouldn't be here this morning and we would use basically the same principles or criteria as best we can sort them out when we hear the applicant and the other intervenors, but not you, and decided whether this was a good idea or not.

9848 But you would have felt better because it would have been considered not creeping into Toronto. But despite the fact it was gazetted in the same -- at the same hearing, I have a bit of difficulty, Ms Pearce, with that legal concept.

9849 MR. MILES: Far be from me ever to say with the number of issues I have before the Commission, that anything would be your fault.

9850 Having said all that --

9851 THE CHAIRPERSON: That was a good answer.

9852 MR. MILES: It is not only the integrity of the process, but I believe when you are applying for a new license in an area that is stated in which there is a lot of other people competing, there are certain issues that you need to address as part of that being a new applicant as compared with I simply just want to move my transmitter site because I need to repair my old tower.

9853 It is to me, as being in this business for a long time, they are two distinct issues and they require different kinds of applications, and in fact, different kinds of reasons.

9854 THE CHAIRPERSON: If you are not concerned about harm and we had considered the amendment that CIDC applied for to be a competitive, creeping into Toronto, which is your point. If you are not worried about harm or taking away, I guess your point would have been, well, they are an Orangeville station even though you have acknowledged, you, the Commission have acknowledged that they are competitive. I just don't understand why you wouldn't have had -- I am trying to sort out here what is the problem.

9855 Is the problem a matter of principle or is the problem a matter of harm. Because, as I said earlier, we are interested. We have the opposite. We have, your company as far as I know -- or let me ask you. Have you not ever applied to put a transmitter somewhere completely outside of your market? Is it just because you applied for a transmitter rather than use a creeping cleverness that that was acceptable?

9856 You know, there are situations where large companies have transmitters outside of their market, of their main market. Retransmitters. Not very popular with the incumbent small station. I also understand that one of your signals, I think it is Rogers' signal out of Vancouver is on Cancom and available for hours at a time in a number of small places via native broadcasters. Is that correct?

9857 MR. MILES: I'm sorry. I did not hear that. The which one?

9858 THE CHAIRPERSON: Oh, it is WIC, I believe. I'm sorry. I knew you would correct me. It wasn't you.

9859 But you see the principle I am talking about is are we now to say there has to be a very big fuss made when somebody is creeping into somebody else's market as huge as Toronto, let's say, out of principle. And then should we also look more carefully and be more severe about the other way around where there is a possibility of large companies' signals being in small markets for which they were not licensed. It is the flip side of this integrity. I mean what is it that you are trying to tell us here?

9860 MR. BLACKADAR: Chairperson Wylie, I think it is perhaps a little bit of both. It is perhaps a case-by-case basis. I think clearly our intervention here is that our companies are not concerned that this move by this applicant at this point is going to do grave financial harm to either Rogers, Corus or to WIC.

9861 We would believe that if, in fact, the process that was appropriate for this applicant were in place, it would, in fact, be a call for a market to be served or the applicant would, in fact, put forward an application to serve what amounts to a new market, which is in fact Toronto, not the Orangeville market. So it is the process.

9862 We are also saying in this intervention that if, in fact, this is now going to be a way that you can migrate your transmitter site without going through the formal process of a call so that all other applicants could apply for a similar coverage area, then I suspect you will find great interest by a lot of broadcasters wanting to move in from the periphery of these large areas into a metropolitan area.

9863 So our point here when we say about Ajax and Oakville and Newmarket and Orangeville that only one of those applicants are now asking to move the transmitter site. Oakville has applied for new frequency for Toronto for its new service. Ajax has likewise applied. And Newmarket as near as I know stands with this point.

9864 So that is the issue, I think, that we have tried to focus on here that it is an issue of principle and how you license that new service.

9865 THE CHAIRPERSON: You know, I made the point earlier, in this case would not that have been cured simply by the Commission saying this is getting into Toronto in response to the call and therefore we will append it as the 16th of the competing applications, rather than an amendment. Would that have satisfied you? Why a call, you know, if you are not asking for a new frequency.

9866 If it is the principle we have a problem with, then we would like to hear you. Should we in this case or would it have worked better for you for the integrity of the process, if we had in fact considered this amendment getting into Toronto the way Ajax did because they are applying for a new frequency? You know, are we standing on just how we gazette things or if you say there is no harm, what is it that we are supposed to use to say no? Because you were too clever by half to creep incrementally or because there is a substantive problem there.

9867 MR. BLACKADAR: Let me perhaps try to answer that by saying that if I understand the process, it is in fact the process that we are talking about here. And how you choose to deal with it, Commissioner, I think is clearly, obviously, the Commission's way of dealing with it. We are not suggesting for the moment that, as you said earlier, that you had erred or whatever through this process.

9868 The applicant came forward with an application and I am assuming that you chose to deal with it this way. I am simply saying yes if I think I understood your question, that making this part of the application as the total process for Toronto would in fact address the way we would see this, yes.

9869 THE CHAIRPERSON: So once we solve this process -- I understand you. Ajax applied for a frequency. It is considered competitive and there would be situations where maybe you would argue for a call. That is for another day. What we have before us is perhaps it would have worked better that way because there would have been really more of what you feel is what is happening is getting into Toronto.

9870 So then if we had -- if we consider it getting into Toronto along with the other 13 applicants, then we have to look at why should we say no. So I would like to hear you on that. You already told me you don't expect financial harm. You have a problem that this creeping would be done in the same fashion by others. Assume we are curing that in some way or other. Your third substantive problem about this outside of the procedure is a change in the focus of an Orangeville station. And I assume that is a principle too because you are not an Orangeville resident. And we don't have too many applicants -- intervenors who are against this. Even the Mayor of Orangeville is satisfied.

9871 So since you are worrying then about Orangeville residents or what is -- there is no financial harm then you do worry about them moving away from their Orangeville programming. So I would like to hear you more about what you understand to be in the current regulatory regime. The responsibility of the applicant vis-a-vis local programming. What do you understand?

9872 MR. BLACKADAR: Perhaps I will try and Gary and Joe can add to this.

9873 What I understand the orientation of the programming to be is a radio station that serves a market. That market is basically where it is intended to do most of its business.

9874 For example, there is a great deal in this application with respect to the national business, national revenue, national accounts and the amount of business that is lost. National revenue, per se, makes up on average about 21, 25 per cent of the average station's revenue during the course of the year. The balance of it is made up from local advertisers.

9875 And the challenge we have as broadcasters is that we are basically local, and that is the value of each license that we serve. When we give up that locality, this applicant said by general admission, that they weren't even sure -- or my interpretation is that the dance format or the format they are in really was broad enough to serve a small area such as Orangeville.

9876 It is, in fact, a reflection of that local community that gives you most of your revenue. At least in my experience. That the more you serve that local area, the more the ski hills will be there. The more the local advertisers will be there. The orientation is there. That too, at least the information available to us through the CAB, shows that basically stations live based on your local orientation, how well you serve your local market. That is probably going to cover about 75 per cent of your total revenue.

9877 The national revenue, per se, from agencies is what we call reactive revenue. Coca-Cola decides to buy a group of stations. It may be one in Toronto, it may be five, it may be ten depending on your demographic group. So they fall into the same sort of pot that everybody else does. And I would suggest that Oakville does, Ajax does, Newmarket does or we do at Energy Radio CING in Burlington. We live outside the Toronto CMA, on the cusp of the CMA as defined by that. But we direct our local business into that local territory and that is where we gain most of our revenue.

9878 So the programming we do for that is, in fact, measure how successful you are as an operator. If you are going to compete in a very broad sense, you are probably going to end up giving up some of that local revenue, some of that local orientation. And with it goes, perhaps a bottom line. So the local orientation of the radio station, and it is too long answering here, is, I think, the criteria that all of us need to address in our licenses. Serve your local market and you generally -- the local market responds.

9879 THE CHAIRPERSON: And what is the test in your view? Is it not the test is 42 hours of local programming. I was asking you what you felt was the responsibility of the local broadcaster who is getting some local revenue. You say that is a major portion of radio revenue. And to be able to garner local revenue, the Commission requires 42 per cent of local programming.

9880 Now, having ascertained that you are not worried about harm in the Toronto stations, I would conclude from that that you don't think that Orangeville has the wherewithal or CIDC-FM to become a Toronto station in the sense that you have just discussed of being meaningful to the community. And if not, would it not be a bit foolish to not serve the Orangeville population at least with its local programming and try to compete with CISS-FM in serving the Toronto area? Because that would be an admission that they are going to become a real threat, and you have said they are not.

9881 So why are you concerned that they are no longer going to be an Orangeville station in those 42 hours and they will be a Toronto station, which then they would be a competitor of some note? See I don't understand the basis for your concern that we don't have the tools at our disposal or that the market situation doesn't speak to continuing to serve Orangeville. You may be right, but I would like to hear more.

9882 I mean I have heard you say that radio stations must serve their local market. They get some revenues from local. Well, either Orangeville -- CIDC-FM is going to be able with this move to become capable of competing with you in serving Toronto or not. In which case, they will serve Orangeville I suspect. Why should we be concerned?

9883 MR. MILES: If I understand the question correctly, if this is a Toronto radio -- applying for a Toronto radio station they would appear before the Commission along with the other applicants to become a Toronto radio station. Once you declare yourself as a Toronto radio station, I guess two things happen. One is that you have to figure out how to compete against the rest of the signals in Toronto, or that also opens up the issue can somebody else apply for the Orangeville license. I don't know the answer to that. I guess there are other people who might consider that.

9884 We compete in a place called Whistler with three big Vancouver radio stations going into the marketplace. We compete --

9885 THE CHAIRPERSON: Nobody is friends today.

9886 MR. MILES: That is right. Absolutely. And in Canmore where the number one, number two and number three radio stations are not our Canmore radio station, at the end of the day it is how we service those two markets enables us to survive financially. And I think that the same implication is here.

9887 If you are going to become a Toronto radio station, you are going to have to compete against the Toronto signals. At the end of the day, their audience that they had, and this is just as an example, the ability to service the audience was the same before CISS signed off as it was after CISS signed on. CISS is a Toronto radio station. These people were Toronto listeners who were listening there because there wasn't a radio station serving that particular -- other wasn't a radio station serving that audience in Toronto.

9888 When a Toronto radio station came on, then those people in Toronto started to listen to that. So they are now going to expand by another -- what? -- million people in terms of the .05 mV/m. That is a substantial amount of people.

9889 If you don't become a Toronto radio station, particularly in that format, my experience has been that you won't attract a number of people. You have to service the area in which you reside or else the programming doesn't work. So there is the dichotomy. Look, there are probably far better programmers than I am and maybe they will have figured out how to do it. Just that my experience is that you can't do it as a matter of programming principle.

9890 THE CHAIRPERSON: Do you have any further comment to make about the situation where, for example, you mentioned Corus having a retransmitter in Whistler. So if I understand you correctly, then it is up to any local station in that case to keep its audience by keeping to its knitting.

9891 MR. MILES: And that is exactly how we are able to compete against them.

9892 THE CHAIRPERSON: And that Corus Vancouver keeps to its knitting and serves Vancouver. But that is not going to happen with CIDC just because it covers part of Toronto.

9893 MR. MILES: I don't know how they are going to service the two markets. We haven't been able to figure out how they will do it, but perhaps they know --

9894 THE CHAIRPERSON: Because the logic would mean well apply for a retransmitter. There are a lot of frequencies, and that is no problem. Then you remain Orangeville but you beam into Toronto.

9895 MR. MILES: Could be. But my experience has been you have to be a radio station in the market in which you serve in order to be successful because that is what people gravitate to.

9896 THE CHAIRPERSON: I would like to -- I have one more very specific question out of curiosity. But I would like to give you the opportunity, all three or either of you, if you want to put your best foot forward before we stop. Well, I will ask you my small question first and then you can -- well, it is not small, but it is specific.

9897 In the reply, we are trying to establish here, you know, what is going on in this very large market in Toronto and how do we handle it. Do we take your concerns as requiring us to have a closer look at how creeping should be done.

9898 In the reply at paragraph 8, Orangeville gives an example of how difficult it is to survive in the periphery of Toronto. And the example is that -- this is about the Orangeville ski resort. Do you remember that? Do you dispute this that the net result was that CIDC could not sell air time to advertise the Orangeville ski resort because the entire budget was taken by Toronto stations?

9899 MR. MILES: Thank you very much for the question. I would prefer a chance to -- I do appreciate the opportunity to answer that.

9900 This has less to do with markets being served by which radio station and has more to do with the marketing plan of the client. For instance, the local radio station owned by a company which shall go unnamed, Rogers Media that serves Whistler, just lost $45,000 worth of advertising this year. The money is being placed on Toronto radio stations because Interwest who know a bit or two about where there market is servicing, have decided that they didn't want the local people any more. They were going to get them. And in reality wanted people from Toronto.

9901 In fact, you hear the spots on the air saying for cheaper than I can actually fly out there myself and buy lift tickets, you can actually buy a package from somebody in Toronto to go out there seven days and ski for six and have the airfare included.

9902 So what we are talking about here is a change in direction, marketing direction by the company in which they look towards figuring out where their available audience is and where they can get it from.

9903 Just as another example of that, we actually do run on the Whistler radio station in the heart of Interwest which owns both mountains, advertising messages for ski resorts from the Okanagan Valley because that is the marketing direction of where those people go. So I think it has less to do because actually I do know the sales manager of this radio station and he is very good. And we wouldn't lose against him on that kind of a thing unless the marketing direction of the company and the client changed in terms of where they need to get their available audience.

9904 THE CHAIRPERSON: I understand the explanation and I am sure Mr. Evanov is listening carefully too, because isn't that exactly the point he is making is that the world is globalized and maybe you can't serve Orangeville unless you try to put your best foot forward in the best way possible. And yes, it is our responsibility to hear intervenors and to try to sort it out. But it is an explanation that reflects the regime and the way marketing and advertising is sold and audiences are garnered, et cetera.

9905 MR. MILES: For today it is. But I would suspect that that client will change his marketing efforts tomorrow or the next year, just as they all do. Some years Coca-Cola decides they are going to be in radio; some years they are not. Some years it is local; some years it is not.

9906 THE CHAIRPERSON: So it could happen tomorrow then to the Orangeville ski resort. Yes.

9907 MR. BLACKADAR: Commissioner, I was just going to say further to what Gary has said. That is true. I mean you have raised a specific account and it is very difficult to respond to it.

9908 THE CHAIRPERSON: Well, I didn't. It was raised in the reply.

9909 MR. BLACKADAR: Raised in the application here. But the fact of the matter is, with all radio stations, with all media there is a churn of accounts every year. In my own case we have what we call a churn, a turnover of accounts that don't return. It could be as high as 30 per cent. I think in radio it runs something near that.

9910 So one year you may have, as Gary said, a client that may be on for a number of years. They change their marketing strategy. They try something else for a while. They come back. It happens to radio. It happens to newspaper. It happens to television. Again, back to our premise here. The better job you do at serving those local clients, the quicker you are likely to get them back. But as for a case-by-case basis, it is very difficult. I think you have to look at it on a case-by-case basis.

9911 For example, Coca-Cola some years is into radio in a big way. Some years they are out. It hasn't anything to do with the signal coverage area at all. It has to do with the marketing strategy as Gary said. And when you come up against that it is not just restricted to CIDC. If you gathered a collection of all of the churn that all of these radio stations had in the run of a year, you would see a huge turnover of accounts.

9912 THE CHAIRPERSON: And of course with our new policy, some companies extend their ability to withstand the shift by having more stations in the same market. So that is why I was raising some questions at the beginning about, you know, should the Commission be looking at this issue in a more generic way because -- and I think we have ascertained that you have a problem in principle in this particular application. And therefore, that is why I pursued it.

9913 I do want to give you the opportunity though if you wish for a few minutes each if you have more to add about your position because I have directed how the discussion was going up to now.

9914 MR. MILES: Thank you. I only have two. One is this is not about us against them; big stations against small markets. This is a licensing principle.

9915 And secondly, I wonder if Mr. Blackadar could enter into the record the accounts that he is missing off the -- because I want to call on some of those. Is that possible?

9916 MR. BLACKADAR: No, Madam Chair, I have nothing else.

9917 THE CHAIRPERSON: Counsel has questions I believe.

9918 MR. RHEAUME: Thank you, Madam Chairperson. Very, very briefly, Mr. Evanov in his presentation earlier and also in his reply indicated that for the purpose of agency buys his station is already considered as part of the Toronto CMA. Is that fair? Do you have any comments on that?

9919 MR. BLACKADAR: I'm sorry, counsel. Do I -- I didn't quite hear that very well. Do I understand the question is that his station is already considered a Toronto CMA radio station?

9920 MR. RHEAUME: For the purpose of agency buys. He gave the example this morning, Wendy's and McDonalds and a few others, that he is considered for those buys as part of the Toronto CMA. Do you have a copy of the presentation?

9921 MR. BLACKADAR: Yes, I do.

9922 MR. RHEAUME: Go to page 5. Go to page 5.

9923 MR. BLACKADAR: Counsel, I'm sorry. Are you talking about his presentation this morning or are you talking about the application?

9924 MR. RHEAUME: Yes.

9925 MR. BLACKADAR: Thank you. I now have it.

9926 MR. RHEAUME: Where it is said that this is because the advertising agencies buy the top rated stations in the CMA. I am not quite sure how that works. So his station, if I understand what he is saying correctly, for that purpose, the purpose of the buys of agencies, is considered as part of the CMA?

9927 MR. BLACKADAR: I guess in terms of reporting it in the BBM books. If you -- let me give you sort of, I guess, quickly in my laymen's terms this and Gary and Joe can correct me easily when I am wrong.

9928 What happens is a buy is planned, such as a national buy and I will go back to my Coca-Cola scenario, and they want to buy Toronto CMA. They will, assuming then they are into the radio portion of that buy, they will then go down the list and find how many stations they need to reach generally what is considered to be 150 GRPs. And that really is 150 gross rating points, typical target group reached three times in a week and 50 per cent of the audience. And there are buys that are different than that, but that is basically how it works out. You then go through your list of stations to see how deep you have to go to accomplish that buy.

9929 In terms of whether CIDC qualifies or not depends on your standing, regardless of where your transmitter site happens to be. You could be in downtown Toronto and not qualify for the buy. You could be on the cusp of Toronto and still qualify.

9930 So to the extent that his station falls on the screen of a buy wherever it may stand in that grouping, yes, CIDC is part of that. Again because as you heard earlier this morning, Orangeville is enveloped in what is called a Toronto CMA. Is that --

9931 MR. RHEAUME: I think I understand it. If that is the case then, for some -- in some material aspects Mr. Evanov's station is considered as part of the Toronto CMA. Would it be unfair to say that he is merely expanding where he already operates?

9932 MR. BLACKADAR: It would be fair to say that if he wasn't proposing to move his transmitter site. Because just like Oakville falls within the Toronto CMA, they would also be on that list, as would Ajax, as would Newmarket. So those stations would in fact be on that list if they qualified anyway. You would be there serving that particular niche of this big metropolitan area.

9933 If I may, sir, he doesn't need to move the transmitter site to be on the CMA list.

9934 MR. RHEAUME: The last question. The way I understand the signal configuration, the proposed signal would stop roughly around here. Is that your assessment as well? It would not go to the downtown core but would stop roughly around the 401.

9935 MR. BLACKADAR: These gentleman can answer as well. I am not an engineer. I am just going by the map that is filed and I take it that what they have said is that they will add about an additional one million people that fall within the .5 mV/m contour.

9936 You heard the applicant this morning accurately explain in laymen's language as near as I know that buildings do have an impact on the strength of that signal. But if, you know, there are days when I can drive into Toronto, depending on the weather, from my place in Oakville and I can pick up CIDC coming in. There are other days you can't.

9937 This map which you have here is simply, as they all are, hypothetical situations that meet a certain criteria. I think that we would argue that he in essence, as we say, is creeping into Toronto and envelopes now a much larger portion of Toronto than what he is really licensed to serve.

9938 MR. RHEAUME: This is my final question. What do you make of the argument that Mr. Evanov says he does not want to be a City of Toronto station.

9939 MR. MILES: He isn't already.

9940 MR. RHEAUME: I beg your pardon?

9941 MR. MILES: He is not already a City of Toronto radio station. He had the same audience, the same ability to cover Toronto or not Toronto or that portion of Toronto he wanted before CISS signed on and he didn't. At the end of the day the reason that his audience is down is that CISS is a Toronto radio station, CIDC is an Orangeville radio station. People in Toronto listen to Toronto stations and people in Orangeville listen to Orangeville radio stations. I haven't figured out how to do it any differently.

9942 MR. RHEAUME: When does one become, according to you, a City of Toronto station other than the licensing process?

9943 MR. MILES: When your transmitter is moved so that it encompasses more people in Toronto then.

9944 MR. RHEAUME: I am sorry. I can hardly hear you.

9945 MR. MILES: I'm sorry. When your transmitter is moved so that you are able to cover more people in Toronto and your focus is on the Toronto area.

9946 MR. RHEAUME: I guess that is what confuses me a little bit. Covers more deeply the City of Toronto. I guess that is the sense of my question. At what point do you become a City of Toronto station? Is there a mark on a map that we can point to starting here? Does it work that way?

9947 MR. BLACKADAR: Counsel, I think the way we have attempted to address this issue is not try to tell you what is or what is not a Toronto station based on a particular intersection. Our contention here is just two issues. That this fundamentally changes this licensee by taking his 3 mV/m contour, moving it 17 kilometres to the east/southeast, migrating into Toronto and fundamentally changes the representation that he has for which he is currently licensed. And the extension of that is, when you do that, you are in fact in our view applying for a Toronto license to cover the metropolitan area. And I don't think we would probably want to define for you what is a "Toronto station."

9948 MR. RHEAUME: I think I understand. We are back to the principle of it all. Thank you. Thank you, Madam Chairperson.

9949 THE CHAIRPERSON: Before we leave you gentlemen, do all three of you and your counsel feel that the process that we have followed have given you and any other of the 13 applicants for the Toronto frequencies that are available, a full opportunity to make your case about the appropriateness of this application, both procedurally and in substance?

9950 MR. MILES: Is that a trick question? No.

9951 THE CHAIRPERSON: I'm not clever enough for that.

9952 MR. MILES: No, and neither am I. We did not intervene against the Toronto applicants because they were Toronto applicants.

9953 THE CHAIRPERSON: That is not what I am asking you. I am asking you if you feel that this particular hearing and the process we are going through this morning and the Notice of Public Hearing, et cetera, has given you as good an opportunity and anyone else to come forward and make your case about the inappropriateness of approving this application?

9954 MR. BLACKADAR: Madam Chairperson, I am going to ask our legal counsel to respond.

9955 MS PEARCE: Madam Chair, I think in this particular circumstance with these particular intervenors, given that this is essentially the third time they have had an opportunity to look at this application, we certainly aren't suggesting that we haven't had the opportunity to fully consider it and to put before you what our concerns are.

9956 But to return to the "matter of principle," I think what we are also saying is that if you are going to serve a different market, it is a preferable way to proceed to apply for a license for that market. And that in principle that provides people, the public, broadcasters and the Commission a better opportunity to consider that in principle. But we are not suggesting that in this particular circumstances that these intervenors -- we have fully presented to you our arguments and we feel we have had a fair opportunity to do that in these circumstances.

9957 THE CHAIRPERSON: And my last question would be, I understand that in this case, it was the same hearing but I suppose you would say if it happens in between when there is no hearing, there should be a larger process.

9958 Would it be your view then that when large companies do go into smaller markets via the implementation of retransmitters, that there should be a similar process? A call and a full scale process as though they are going into a different market, rather than the fairly easy way of doing this at the moment. Should the flip side of this also be considered by the Commission that in all fairness if you go from Vancouver to Whistler, as an example, there should be a process that recognizes that now that station is going to also be a Whistler station and there should be a process? Because they are getting a frequency to now transmit in that market.

9959 MS PEARCE: I think, Madam Chair, that our position is that it remains to be -- that they should be considered on a case-by-case basis and that there may well be circumstances in which that would be appropriate and there may well be circumstances in which a more administrative process would be appropriate.

9960 THE CHAIRPERSON: Thank you, Ms Pearce, and thank you, gentlemen for your appearance today.

9961 Mr. Secretary, please.

9962 MR. CUSSONS: Thank you, Madam Chairperson.

9963 I now invite Mr. William J. Genereux to present his intervention, please.

9964 THE CHAIRPERSON: We are just waiting for the translator to get your text. It is so much easier for them if they do. Monsieur Genereux.

9965 MR. GENEREUX: Yes, thank you, Madam Chair.

9966 THE CHAIRPERSON: Yes. Go ahead when you are ready. And sorry for the delay. We are just trying to get our ducks in a row first.

9967 MR. GENEREUX: Just let me know when you are ready.

9968 THE CHAIRPERSON: Yes, we are now.


9969 MR. GENEREUX: Okay.

9970 Thank you for hearing me this morning. I rushed over here so I am not sure what stage of the proceedings we are at. So I apologize if I am appearing out of order here.

9971 THE CHAIRPERSON: No, you are exactly in order. You found Keele and the 401 just in time.

9972 We are hearing interventions. We have heard the application and we have heard Corus, WIC and Rogers in intervention and we are hearing you now in exactly the order planned.

9973 MR. GENEREUX: Thank you very much. And I understand I have 10 minutes. Is that correct, Madam Chair? Thank you.

9974 My intervention is made on behalf of what I would call content providers and people who are in the business of producing and writing music. My background is -- I am an entertainment lawyer, practising in the City of Toronto. I have been practising law for about 15 years. And over that period of time I have had the occasion to come in contact with a lot of people in the music industry, in particular people in the music industry in the CHR format. By that I would loosely define that as being dance music, pop music, R&B/Soul and Rap.

9975 And some of these people are clients and other people are people that I come in contact, you know, just watching their careers. One of the things that I have noticed is that it is very difficult to break a new song. It is something that is a very delicate process that needs to be fostered in this country. I think nobody would disagree that we need to support Canadian talent in this country, and indeed there are criteria established by the Commission for that purpose.

9976 But the other practical problem is from a programming point of view where I have seen many, many times people have a very good song and they have put a lot of effort into it, but it is very difficult for them to get it played on the radio. And part of that reason in my experience is that there is a Catch 22 situation that exists, especially with CHR radio since it is hits oriented, and that is that the song has to be a hit before it is played. But you can't have the song become a hit unless it gets played. So hence what I would call the Catch 22.

9977 Now, over the course of the years, especially in the last five years or so since CIDC-FM has embraced what I would call the dance/pop format, it has provided a very vitalizing influence on the music community in the Toronto area in that it has provided another alternative for Canadian artists to have their music broken. And it becomes all the more important when you consider that the Toronto CMA is very influential in determining what songs will be played for the rest of the country.

9978 So the theory goes, if you can break the song in Toronto, you stand a much better chance of having it played in the other provinces. So I feel that what I am here today to say is that we should be whenever possible embracing the concept of diversity and making sure that extra voices can be heard in the broadcasting community.

9979 Now, I am not here to knock the other CHR stations. In fact, that would be very foolish on my part because many of my clients want their songs to be played on those radio stations as well. But what I am saying is that I think, at least in terms of looking at it from the perspective of the recording industry, it is vitally important for their to be alternatives.

9980 Now, specifically dealing with CIDC-FM, they have a reputation of being very receptive to listen to new music and to play it on its merits. I understand them to be an independent radio station. So they are not clogged with bureaucracy. They are not -- some programmers, I understand, pay more attention to the U.S. charts, for example. In my experience, at least, CIDC is very open to having people come in, literally walk through the door and put their song on. And again, I am not knocking the other stations because I know that at least CING-FM has also got that reputation. But again, diversity is very important here.

9981 The other thing I would like to mention about CIDC-FM is that they have also been very proactive in providing a forum for young, upcoming artists to appear. It is the nature of CHR artists that often times they have only got a couple of songs to play. Literally they could be teenaged kids. They have got a great song, but really that is about it. They are at the beginning of a career. So they are not going to be able to fill an arena. They are not even going to be able to do a 45-minute set.

9982 Also, they are probably not -- sometimes not 19 years old and they are not going to be -- it is not going to be conducive for them to appear in a bar. Additionally they are not going to be able to tour. So these sorts of outdoor programs and other kinds of live initiatives are very important in the process of breaking the record.

9983 The other thing I would like to mention is that CIDC-FM has been instrumental in having a syndicated dance music radio station, syndicated across the country and I was a part of that right from the very beginning. It is called GROOVE (ph) station now, but it used to have another name. And I believe after having witnessed the process, it would not have been possible to convince the other affiliates to take this syndicated radio station on if CIDC had not been a part of the core of radio stations that initially agreed to take it on.

9984 So again, what I am talking about is very, very important spin-off effects that are benefitting the Canadian recording industry at this very moment here in Toronto because of the efforts that CIDC is doing.

9985 I recognize that they are an Orangeville station. I am not here to debate those particular merits. I just know that it is a reality that their signal does at least come into a portion of this city. It is a very large city and to the extent that the signal does come in, it is providing a huge benefit for the people in the recording industry.

9986 So those are my comments and if you have any questions, I would be very happy to respond.

9987 THE CHAIRPERSON: Thank you, Mr. Genereux.

9988 Commissioner Noël.

9989 COMMISSIONER NOEL: I may have maybe one question.

9990 In your written intervention you mention that the station's position in the Toronto CMA is more than half a million listeners. I gather you take it from the 5 mV/m contour of the station and not the actual 3 mV/m listeners?

9991 MR. GENEREUX: To be completely frank with you I am basing that on what I am told. So I don't --

9992 COMMISSIONER NOEL: So you didn't verify those figures?

9993 MR. GENEREUX: It seemed right. It seemed accurate to me. Yes. But I can't swear on the Bible that that is the correct number but it seems accurate. Yes.

9994 COMMISSIONER NOEL: There is not too much I can ask you about your intervention. My only concern is that it is all very nice, but what do you think of the principle that was raised by the other intervenors in the application? I mean, should we allow the process to go that way by changing a transmitter rather than by applying for a frequency in the market?

9995 MR. GENEREUX: Well, that question is a little out of my bailiwick, but I will try and answer your question.

9996 I think that the type of application that they are making is not going to fundamentally change anything. I think that they are going to be still operating within the CMA that they are already operating in. And really this is more of an administrative matter where, as I understand it, the tower facility that they have right now is on its last legs. It has to be either replaced or they have to move. They are presented with a great opportunity to put this transmitter on to a transmitter that has got other emergency, I think, facilities on there right now.

9997 So I look at this more from the point of view of ensuring that the licensee retains its ability to continue doing the good things that it has been doing. Does that answer your question?

9998 COMMISSIONER NOEL: Well, yes, I guess so.

9999 Just on a humoristic note. I find funny that we describe what we had yesterday as a storm, coming from Montreal.

10000 MR. GENEREUX: Well, we haven't called in the soldiers yet.

10001 COMMISSIONER NOEL: I don't have any other questions.

10002 MR. GENEREUX: Thank you.

10003 THE CHAIRPERSON: Thank you, Commissioner Noël. I understand counsel has no questions. No.

10004 You don't seem to be too familiar with our process. So I will indicate to you that your comments are transcribed and added to your written intervention and the text is going to be placed in the record. As well, we appreciate your coming despite the storm.

10005 MR. GENEREUX: Thank you. Thank you very much.

10006 THE CHAIRPERSON: Thank you. Mr. Secretary, please.

10007 MR. CUSSONS: Thank you, Madam Chairperson.

10008 I am now inviting Orangeville Community Radio to present its intervention.

10009 THE CHAIRPERSON: Is it Mr. Milton?

10010 MR. MILTON: Yes, that is correct. Are we ready to go?


10011 MR. MILTON: Madam Chairperson and Commissioners, my name is Jim Milton. I am the station manager at Orangeville Community Radio and I will explain a little bit more about our situation in just a second.

10012 CIDC-FM and Orangeville Community Radio are partners in the development of community radio in our area. Orangeville Community Radio provides a unique ground level service to the people of the Town of Orangeville, providing a voice for every community group in the town to promote its interests and events. And, of course, as you know, the mandate of Community Radio is to allow access to radio frequency in the area.

10013 Orangeville Community Radio is a cable service. We are not yet broadcasting on air, but we are hoping to make an application under the new community policy that has just been approved recently.

10014 CIDC-FM has been involved with the development of the community radio service from the start in 1996. The plan was to establish a very new local radio service that would compliment the service provided by commercial radio.

10015 Through this partnership, the events such as founders day, the Dragon Boat Festival receive coverage through the entire Toronto CMA through CIDC-FM bringing new visitors and new dollars to the town and its merchants, while the smaller neighbourhood events receive support through Orangeville Community Radio. CIDC makes this service possible.

10016 In the last year CIDC-FM has contributed technical equipment valued at over $16,000 to the operation of Orangeville Community Radio. CIDC has further contributed funding in excess of $2,000 to the operation of Orangeville Community Radio annually.

10017 In addition to that, CIDC-FM has contributed technical expertise to Orangeville Community Radio and provides this today as needed. The planned expansion of the services of Orangeville Community Radio as a low power community service radio station includes further involvement of CIDC-FM in the provision of expertise and facilities.

10018 In this partnership, Orangeville Community Radio regularly forwards news items and community notices of events and activities and information it receives to the news department of CIDC-FM for inclusion in it's broadcast activities.

10019 At Orangeville Community Radio we provide space in our facility for the use of CIDC marketing representatives and news staff when they are in Orangeville. Also use of the facilities such as the fax machine, computer, e-mail and things of that nature. Without the financial and technical support of CIDC-FM, the operation of this very local community service would be very difficult and perhaps maybe even impossible.

10020 That is all I have to say.

10021 THE CHAIRPERSON: Thank you very much, Mr. Milton.

10022 Commissioner Penefather.

10023 COMMISSIONER PENEFATHER: Good morning and welcome. Thank you for expanding on your relationship with CIDC. I was interested to know a little bit more. From your letter you described a relationship, which supported your enterprise and I think you have expanded on that well this morning.

10024 I would like to ask you just a couple of questions with a little different focus. And having understood well the support that CIDC gives to you in your enterprise, I wondered if you could help us with your understanding of how CIDC really supports local programming.

10025 What is it in your mind that identifies this local programming? You are clear on the support that it gives to the community radio. But I would like to know what you think really comprises the local programming that the station offers to Orangeville.

10026 MR. MILTON: Yes. The station provides the local programming in the fact that things that are happening in Orangeville, the events that are happening in Orangeville are broadcast throughout the entire CMA on CIDC-FM. Also local happenings on the traffic end of it as well.

10027 I can certainly turn my radio on and know what is happening going down Highway 10, if I choose to choose that route, or along Highway 9. That kind of stuff I don't hear on the Toronto radio stations because a lot of people that are in Toronto usually live just in around the Toronto area. But at least 45 per cent of the population of Orangeville travel usually outside Orangeville and more than likely towards Toronto and that is the kind of report they are looking for, along with weather in the Orangeville area and right through to the Toronto CMA.

10028 COMMISSIONER PENEFATHER: So what you hear on air largely are the traffic, news. That is what you describe as the local programming in connection with Orangeville on the air?

10029 MR. MILTON: Yes, that is correct. And also any local events that are happening. Some of the events, perhaps a special event a merchant is putting on, that kind of thing is also broadcast on CIDC-FM and I hear that quite often as well.

10030 COMMISSIONER PENEFATHER: I think you have been here all morning and you are certainly aware of the request, the application before us to move the transmitter location. And I think you are well aware of the discussion around the rational behind that which certainly is one that includes access to a greater number of listeners, greater revenues in the Toronto CMA. Have you any concerns about that having an effect on local programming, reducing the local programming? Do you see a contradiction in terms of the mandate to serve local programming and the obvious drive to increase revenues in the Toronto CMA?

10031 MR. MILTON: I don't see any effect on the local programming at all or any change in that. Certainly the close ties that we have with CIDC-FM will certainly make sure that Orangeville is well represented, not only on community radio, but as we send the information to CIDC-FM, they will also broadcast it on their local station as well.

10032 COMMISSIONER PENEFATHER: So are you saying that your relationship with CIDC-FM is one of the reasons they will stay locally oriented?

10033 MR. MILTON: No, we do provide space for their own representatives to be in town as well. So they will be here, but certainly we are there all the time and live there and are more in touch with the community on the local business or more community basis. So we would have access to greater information that we can send to CIDC-FM so that they can put it on their local broadcasts as well.

10034 COMMISSIONER PENEFATHER: So you are comfortable that this change of location and what it implies in terms of the increased coverage in the Toronto CMA is not a threat to the local programming as you see it now? It won't change the focus of CIDC-FM?

10035 MR. MILTON: No, I don't see it changing the focus at all. The transmitter is already located outside of town, on the west of side of town. Now, it would be located on the east side of town. The fact they are reaching a larger market just allows them to be able to have a greater budget to operate the radio station, which will in effect allow them to highlight Orangeville and the things that are happening in the Orangeville town and perhaps bring more people and more dollars into the Orangeville area.

10036 COMMISSIONER PENEFATHER: Thank you very much. Those are my questions. Thank you, Madam Chair.

10037 THE CHAIRPERSON: Thank you, Commissioner Penefather. Thank you, Mr. Milton, for your appearance. We appreciate that you took the time to come and speak to us.

10038 MR. MILTON: Thank you for allowing me the opportunity to speak here this morning.

10039 THE CHAIRPERSON: Mr. Secretary, please.

10040 MR. CUSSONS: We will now hear the intervention by Popular Records Inc. represented by its President, Mr. Bernie Wilcock.


10041 MR. WILCOCK: Madam Chair and Members of the Commission, I appear before you today as President of Popular Records, an independent record label distributed nationally, with a roster that contains several new and developing Canadian recording artists, including Annick Gagnon, 2 Rude, Jully Black, 7 N 7, Elissa, and others. My comments today will reflect on the importance of a strong CIDC-FM in the Toronto CMA to Canadian artists, new artists, and the Canadian music industry.

10042 My personal background as a senior executive in the recording industry in Canada covers more than 20 years. So I have participated as the industry evolved and developed into what we have today, a vibrant industry that has been recognized internationally for the stature of its artists. It is my opinion that this accomplishment is threatened by developments in both the music industry and now radio broadcasting.

10043 Two years ago the music industry was well served by a good mix of independent companies developing new talent and feeding the major companies who operated in a very competitive, but profitable, environment. Canada had six major record companies, each with several major labels under their corporate umbrellas, and also functioning as the distribution and marketing partners for a number of independent record companies. All these operations were heavily engaged in the search for new artists.

10044 In today's environment, the quest for increased profits has seen the number of companies shrink to four, and if the negotiations between two of the remaining multi-nationals are successful, the number will be three. As competition shrinks, the opportunities for new artists also become fewer. As these companies reduce the risks, they will take in funding new talent by reducing the number of acts they sign.

10045 For independent labels, this means fewer places to shop for agreements, translating into fewer opportunities for artists. The independent company now must try to pick up some of the slack in this area, but faces the problem of limited funding, much like the independent broadcaster.

10046 What has happened to radio is similar. From the music industry's point of view, the concentration of ownership has meant a reduction in the number of choices of available to an independent record company attempting to build the career of a new Canadian artist.

10047 Traditionally, independent radio stations have been more willing to take a chance on a new artist based on the sound of the song. The corporate stance, with its layers of local and corporate programmers and consultants, will adopt the "safe" position, waiting for someone else to take that chance, and researching the results before adding the artist or adding the song to their playlists. By then the artist could be bankrupt and the company as well and many hit songs and successful careers are hampered by this stance.

10048 From a business standpoint, I am not saying this is wrong. These people have shareholders to answer to. But it does little for the opportunities available to new Canadian artists.

10049 Independent operators tend to move much more quickly on songs they feel are right for their stations and audiences as they tend to operate more on the ground level of an office tower. From my experience, they are more directly in touch with their audiences. The result of this approach recently benefitted my independent record label, and a new artist.

10050 Popular Records became aware of an act known as Eiffel 65 and a song called "Blue." We felt the song was great and released it. Initially, we got little response from corporately-owned radio stations, but CIDC-FM listened to the song, liked it, and started to play the song, to the immediate response from the audiences, who began requesting it in significant numbers. Based on this exposure, the calls were coming in to the station that had initially rejected the song, and they eventually responded by playing it as well.

10051 At the same time, stations across the country, seeing that a radio station in the Toronto CMA with more than 500,000 listeners was playing Blue,

jumped on the song as well. It became the number one song in Canada, as a matter of fact it was for seven to eight weeks, a rare occurrence for an unknown artist released by an independent label.

10052 But the success story doesn't stop here. Following the release of the song in the U.S., American broadcasters noted how well the song was doing in Toronto and other markets, and began to play it. Again, their phones lit up, and the song soared up the charts, launching an enormous sales response.

10053 Somebody had to start the process, and that was CIDC-FM. As I said in my letter to the Commission, it's a real success story for a new artist on an independent label with the support of an influential independent radio station. I'm not saying that the multi-media owned stations wouldn't have eventually played the song, but they didn't. And this is not an isolated case. CIDC-FM, from my experience, has had a history of supporting new and emerging acts before the others, and my record company and new Canadian artists have benefitted from this.

10054 Quite simply stated, as a result, Eiffel has made more money to devote to the development of their career, and my company is in a stronger financial position and more able to fulfil the role of an independent in developing new talent and taking it to the market.

10055 The point of this presentation is none of this would have happened the way it did if CIDC was a smaller market or if the station did not hold audiences of 500,000 people. The other stations simply would not have noticed.

10056 Both the multi-media giants and the independents have a role to play in supporting the music industry. The independent operator can only play his role if he can compete on a fair and equitable basis. I'm not here to suggest to the Commission that independent radio operators should receive any special treatment, but I suggest that the Commission considers this story, and many others like it, before it allows the large operators to crush the independents.

10057 I am sure Mr. Evanov is not the only operator in the country to decide to continue to operate his radio station rather than sell to one of the national operators. The Commission can decide whether these operators who are important to the music industry can coexist with the multi-media owners.

10058 Thank you for your consideration. I hope you will allow this request from CIDC to level the playing field, and I am prepared to answer any questions you may have.

10059 THE CHAIRPERSON: Thank you, Mr. Wilcock. Commissioner Grauer, please.

10060 COMMISSIONER GRAUER: Thank you. Thank you, Madam Chair.

10061 Thank you very much for your presentation and for being with us here today. And we have talked this morning a fair amount about principles. Perhaps I could just make sure I understand it. You are suggesting that in principle or as a rule that smaller labels and newer artists have a much better opportunity with smaller independent stations than with the large national station groups, if I could put it that way. Is that correct?

10062 MR. WILCOCK: Totally correct.

10063 COMMISSIONER GRAUER: Why do you think that is?

10064 MR. WILCOCK: Well, they take a chance. They don't have a corporate structure -- they don't have to drink the corporate juice if you want to call it. They will listen to people. And you can talk to them directly and explain exactly what you are trying to -- what you are trying to attain with a specific artist and how you are approaching the specific product, the people it relates to.

10065 It is very significant for a small record company to have these kinds of opportunities. Because I mean you can't play a song in your backyard. You have to have other people listen to it. And having that opportunity with a small station, you know -- and you hate to, you know, many small stations I think can also do the same kind of thing but I think you are looking at a market like Toronto.

10066 And the other thing is that signal should be a clear signal too to the people that they are sending the message to. I can drive out of my -- I live in Markham, yet I can't listen to the station till I get in my car and hear it once in a while here, once in a while there. If you think if you are doing a job, you should be able to do it well within your marketplace and I think that is important to us. Because if you are having Canadian artists being played on that station, I would like them to be heard in that market that they are effectively playing their music in.

10067 COMMISSIONER GRAUER: It is interesting. As you know, we have a great interest in the development of Canadian talent and, of course, there has to be opportunities for new talent to get air play to build their careers. And it is a bit of an aside, but I know that I am based in British Columbia and one of the frustrations I have heard from radio stations outside the large cities is that they have a terrible time getting the music. And so it is interesting to hear from your perspective. You have trouble getting airplay and some smaller stations in smaller markets have a tough time getting music. So I don't know what the answer is but --

10068 MR. WILCOCK: I don't think it is the same case with a small independent company. We send our music everywhere. And I think the biggest problem is when you are dealing with multi-national they will go after the big fish. I mean why would you not go after the big market. And that is where you concentrate on I mean -- and that is not wrong. But that is a fact of life. We have to go after the -- we probably know every small station in Canada, but that is what we have to do because we are a small independent company and we focus our attention on that basis. And when we have a station that we can really concentrate on and make a big impact, we certainly do that. We might do the same thing with a London station or any other station or CHI in the Maritimes but with a different impact.

10069 COMMISSIONER GRAUER: So because you are small, you have to spend a lot of time going to all these stations, small and large, and you have more success with smaller stations is what you are saying.

10070 MR. WILCOCK: They will listen to us. Major stations -- I mean this is not a secret. I mean major companies have to please major record companies. They have got the big bucks, they spend all the money. And that is exactly what we are always told. So being the small independent we have to go where we can be heard more, where people will listen more.

10071 COMMISSIONER GRAUER: Thank you very much. We appreciate you coming today.

10072 THE CHAIRPERSON: Thank you, Commissioner Grauer. Thank you, Mr. Wilcock, for your appearance before us. I hoped you weren't intimidated that you could have come closer. Although I love to intimidate people.

10073 Mr. Secretary, please.

10074 MR. CUSSONS: Madam Chairperson, we have one more appearing intervenor with us today. The Corporation of the Town of Orangeville.

10075 THE CHAIRPERSON: And I believe it is Ms Huether. Thank you. Just proceed when you are ready.


10076 MS HUETHER: Thank you.

10077 Thank you, Madam Chair and Commissioners. My name is Nancy Huether and I am the Marketing and Project Manager for the Town of Orangeville. I am appearing before you today on behalf of the Mayor of Orangeville, Rob Adams, who was unable to attend. I am here in support of the application of Dufferin Communications Inc.

10078 The first thing I would like to do is set the context of Orangeville within the Toronto CMA. Our location, population, growth patterns and employment base, commuting patterns and economic development initiatives all illustrate how Orangeville does not exist in isolation of the Toronto CMA.

10079 Orangeville lies 80 kilometres northeast of Toronto, approximately one hour's drive. Our population is 24,000 and we are the eighth fastest growing community in Ontario. This massive growth pressure we are experiencing in Orangeville is a result, in large part, of being part of the CMA and the corresponding sprawl.

10080 Orangeville shares the same major industries that drive the Toronto CMA. Autoparts and plastics manufacturing, trade, health services and tourism. In regards to commuting patterns, approximately 45 per cent of the people who work in Orangeville commute into town from elsewhere and approximately 45 per cent of the resident labour force out-commute to elsewhere in the Toronto CMA.

10081 With respect to economic development for Orangeville, proximity to Canada's largest market is a pivotal feature for Orangeville. Businesses rely on the Toronto CMA as a key market. This idea situation is a key business development feature for the Town of Orangeville. In order to grow and prosper, Orangeville needs the ability to promote itself as a place to live, work, visit and do business. Orangeville needs a vehicle to attract from the GTA, commerce to the Orangeville area.

10082 In terms of the benefits of CIDC-FM to the Town of Orangeville there are many. CIDC-FM is a key marketing channel for the town. CIDC Hits 103.5 is the "Voice of Orangeville" in the Toronto CMA. The infomercials that CIDC-FM produces and airs daily give Orangeville the opportunity to communicate its comparative advantages as a place to live, work, visit and do business to the rest of the Toronto CMA. I personally have had prospects identify the infomercials as a source of their market interest in Orangeville.

10083 The station also markets special events occurring in the community, including our Dragon Boat Races, Founder's Day Fair, Busker Festival and Santa Claus Parade.

10084 Besides its role as an essential marketing channel, the station provides basic local service. The station airs news, weather conditions, emergency service and school closures in Orangeville. I would like to give you an example.

10085 In December 1999, a tragic apartment fire occurred in downtown Orangeville, which killed a young infant. CIDC-FM partnered with the Town of Orangeville, the Salvation Army and the community and was instrumental in raising funds for the infant's family through promotion.

10086 CIDC-FM also provides traffic reports illustrating conditions between Orangeville and all major Toronto CMA highways. The conditions on Highway 9 and Highway 10, important to this large number of people commuting in and out of Orangeville, are for the most part ignored by Toronto stations.

10087 CIDC-FM is also a community resource. It's a communication tool for the community-based groups and organizations in Orangeville, including our Business Improvement Area, Headwaters Tours and Organization, Chamber of Commerce and others.

10088 Due to population and media competition changes within the Toronto CMA, we recognize that it has become vital for CIDC-FM to have as strong a signal as possible to maintain its financial viability and programming commitments. Like CIDC-FM, the Town of Orangeville is part of the defined CMA, with the marketing efforts of the town going beyond the borders to attract business and tourism.

10089 The service of CIDC Hits 103.5 in promoting Orangeville has contributed to economic development in the area in terms of tourism and business investment. The many, and I imagine there is at least 20, signals from the Toronto stations that blanket the Orangeville area will not provide any services to Orangeville, radio services in Orangeville or services on behalf of Orangeville in the GTA.

10090 It is in Orangeville's best interest that CIDC retain its listenership throughout the Toronto CMA. CIDC is a partner in community and economic development in Orangeville. The Town of Orangeville supports the efforts of CIDC Hits 103.5 and the necessity to improve its signal within the Toronto CMA.

10091 Thank you for your time.

10092 THE CHAIRPERSON: Thank you, Ms Huether. Commissioner Cardozo.

10093 COMMISSIONER CARDOZO: Thank you, Madam Chair. Welcome, Ms Huether. I just have a couple of questions for you. You have been quite clear in what you have said today, as has the Mayor in the letter that he sent earlier.

10094 I hear your message quite clearly. I just wanted to test the counter-argument on a couple of points with you.

10095 One of the things the Commission has been concerned about for some time is what we call local programming, programming for the local areas. And it is something that we have developed as a priority because we have been told this repeatedly, especially from people in smaller towns. So I look at this and I wonder about what could happen. I want to ask you about it.

10096 If CIDC-FM covers more of Toronto and wants to look for more advertising from Toronto and therefore has to do more to reflect Toronto, do you have any concern that the focus of the station could turn more to Toronto and then by default less to Orangeville?

10097 MS HUETHER: Thank you. I do not have concerns in that regard. I don't think it is fundamentally going to change our relationship in any capacity. I just think that will allow Orangeville to reach a larger market and for us to highlight Orangeville in a greater capacity in the Toronto CMA.

10098 COMMISSIONER CARDOZO: I hear what you said about basic local service and the example you gave us of the fire in the apartment building in 1999. You said today, as did Mr. Adams in his letter, that CIDC-FM is the voice of Orangeville throughout the Toronto CMA.

10099 I am wondering if you feel anything could change in that or even currently is Orangeville enough of a voice in Orangeville as opposed to being the Orangeville voice to the CMA, is it being enough of Orangeville to the people of Orangeville? Do people get enough information? Is it just sort of traffic information and fire or is there enough about City Council, events in the local area, community events, business concerns that people may have, business views, things that are happening within the area?

10100 MS HUETHER: Council has never brought forward any concerns in this regard. If they had, I guess I would be able to bring that forward. But there has never been any concerns that that has been a problem.

10101 COMMISSIONER CARDOZO: Okay. And you are satisfied with the degree that the station reflects Orangeville to the people of Orangeville and that people living there can hear enough of what is happening in their own community as opposed to it being a PR to the rest of the Toronto CMA?

10102 MS HUETHER: They certainly do a good job of promoting all local events, local news stories, and happenings in the community. And in that capacity, yes, thanks.

10103 COMMISSIONER CARDOZO: Great. Thank you very much. Thank you, Madam Chair.

10104 THE CHAIRPERSON: Thank you, Commissioner Cardozo.

10105 Thank you, Ms Huether, for the -- is it the one hour drive?

10106 MS HUETHER: A little longer today.

10107 THE CHAIRPERSON: Yes. Too bad you couldn't be transmitted because apparently that happens very fast. Thank you very much.

10108 Mr. Secretary, please.

10109 MR. CUSSONS: Madam Chairperson, I now would like to invite Dufferin Communications to return and present its rebuttal to all interventions, please.

10110 THE CHAIRPERSON: Mr. Evanov, for sure you are familiar with the process by now.


10111 MR. EVANOV: We will try not to be too long because it has been a long time since Ottawa.

10112 THE CHAIRPERSON: Take the time you are allowed.

10113 MR. EVANOV: We would like to respond to a few of the items mentioned in the interventions.

10114 First I would like to say that in terms of this hearing process we believe this has been a full and thorough hearing. It has pretty well dealt with every issue and I think we now understand why the Commission chose to put us on this particular hearing. The process has allowed for interventions and response from all the Toronto broadcasters, like all the Toronto broadcasters, all the applicants for 93.5 and the residents of Orangeville. We are satisfied with the process. I just wanted to make that comment before we went on.

10115 Number one, in rebuttal to what our intervenors said, we are not trying to be a City of Toronto radio station. We serve Orangeville in the Toronto CMA. If CIDC wanted to move to be a Toronto radio station, then they would have to move virtually to the CN Tower and its 3 mV/m signal pretty well must encompass the City of Toronto and that is not the case. We are in Orangeville. We are staying in Orangeville. All we are asking for is to move our transmitter site seven miles, and by consequence, that pushes out our signal a little bit into a portion of the CMA, and definitely not into the City of Toronto.

10116 As a Toronto issue, we have applied separately for a Toronto station because that is something else that we wanted. And we provided for an application for that and we went through that process.

10117 Mr. Miles said that the CISS-FM signal does not go into Orangeville. This is not true. I just simply want to point out that it booms in and all we have to do is look to the full 98 BBM where CISS-FM was number three in the Orangeville market. Either it is a cable reception or its a very good reception, but they were number three in the market.

10118 The highway from the CN Tower to Orangeville is not the same highway as from Orangeville to the CN Tower, and this is really a critical thing to understand. When you are on the CN Tower and you put out a signal that goes over a city and then it travels and travels over the open country. When you are a station in Orangeville, or anywhere else for that matter, and you put out a signal and perhaps it may go towards, whether it is Newmarket, Aurora or Toronto, once you enter urban build-up your signal is distorted. It is definitely not the same highway.

10119 The other comment we would like to make, Mr. Blackburn kept saying, be local, be local, be local, because we are 20 per cent national and 80 per cent retail or local. That is not true. Because most of the advertising bought today for the CMA for most of the stations might be 20 or 25 per cent national. But there is another 25, maybe 30 per cent or even 40 per cent that comes from advertising agencies who buy for their clients whether it is McDonalds or any of the Bay or any of those clients. Although there is a distinction between national Labatts and large retail, nevertheless it is the same buying process at the advertising agencies in terms of buying for both areas.

10120 And both his stations, CING-FM and CFNY, do not rely on local sales. Eighty-eight (88) per cent of their business virtually comes from the advertising agencies based on the measurement of the Toronto CMA. Carmela.

10121 MS LAURIGNANO: I will quickly wrap-up because I am hungry; I want lunch.

10122 The intervenors were correct in saying that this is not our first attempt. We have known all along that we have to deal with the realities of the marketplace because of the CMA and because of where we live in that CMA. The previous operators of CIDC operated this station as a small market station. It provided excellent programming. It was an excellent programming service for Oakville, but you all must be aware of its financial situation prior to our involvement.

10123 When we took over, knowing what we know about the marketplace, we knew that we had to do something that would raise the station from the ashes. What we did is we identified a niche format, which was a dance CHR format and we marketed that service where we could be heard. As a result, we were very successful in terms of attracting both audience and revenue.

10124 All along we also knew that it was a matter of time before another broadcaster would duplicate our format, and then what? We could develop something else, another format. And quite frankly we haven't been able to come up with one for that frequency, otherwise it would be on. But we also feel some loyalty to the format that we serve.

10125 So we could try and develop something else. But what guarantee was there that again somebody else could not do the same thing on a bigger and stronger signal. I think you would agree that it would be foolish for us to duplicate another format such as the one that CILQ and CFNY is currently doing. And that is the simple process by which we got here.

10126 However you choose to deal with this, we can't be a small market in Canada's most competitive market. But this market, which is the most competitive market in Canada, is the only means by which we have to serve our Orangeville market, and we will serve that as we said in a number of ways through our local programming orientation. Our programming orientation is excellent. We are committed to it. We ask you to reaffirm our programming orientation because we want it. Thank you.

10127 THE CHAIRPERSON: Thank you, Mr. Evanov and Ms Laurignano. I believe, Mr. Secretary, that that concludes our hearing.

10128 MR. CUSSONS: Madam Chairperson, it does.

10129 THE CHAIRPERSON: Well, my colleagues and I thank all participants, applicants and intervenors for their cooperation in the past two weeks and more importantly for their input. We also are grateful to our staff for their invaluable support and we thank the court reporter, the translation service, and the technicians for being here on time and on the job for two weeks and all that with a smile. And I, of course, am particularly grateful to my fellow Commissioners for their support.

10130 Thank you very much and we hope you have a nice weekend.

--- Whereupon the hearing adjourned at 1300 /

L'audience est ajournée à 1300

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