ARCHIVED -  Transcript - Calgary, AB - 2000/10/30

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Telus Convention Centre Telus Convention Centre
120 Ninth Avenue Southeast 120 - 9e avenue Sud-Est
Calgary, Alberta Calgary (Alberta)
October 30, 2000 le 30 octobre 2000


Volume 1


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

Application for new broadcasting licences for FM in Calgary/

Demande d'une licence de radiodiffusion visant l'exploitation

d'une entreprise de programmation de radio FM à Calgary


Ronald Williams Chairperson/Président
Barbara Cram Commissioner/Conseillère
Andrée Noël Commissioner/Conseillère
Stuart Langford Commissioner/Conseiller
David McKendry Commissioner/Conseiller
Michael Burnside Hearing Manager and Secretary / Gérant de l'audience et Secrétaire
Geoff Batstone Legal Counsel /
Conseiller juridique
Telus Convention Centre Telus Convention Centre
120 Ninth Avenue Southeast 120 - 9e avenue Sud-Est
Calgary, Alberta Calgary (Alberta)
October 30, 2000 le 30 octobre 2000


Volume 1


Telemedia Radio West Inc. 7
Newcap Inc. 94
Craig Broadcast Systems Inc. (OBCI/SDEC) 179


Calgary, Alberta / Calgary (Alberta)

--- Upon commencing on Monday, October 30, 2000

at 0902 / L'audience débute le lundi 30 octobre

2000 à 0902

1 THE CHAIRPERSON: Good morning, ladies and gentlemen.

2 Bonjour, mesdames et messieurs. Je vous souhaite la bienvenue à cette audience publique.

3 Welcome to this Canadian Radio-Television and Telecommunications public hearing. At this hearing, we will consider seven FM radio licence applications from Calgary and surrounding area.

4 We will also look at an application from Saskatchewan Telecommunications, better known as SaskTel. SaskTel has applied for a broadcasting licence for a cable distribution undertaking to serve a number of communities in Saskatchewan.

5 My name is Ron Williams. I am the CRTC Regional Commissioner for Alberta and the Northwest Territories. I will be chairing this hearing. Joining me on the panel are my colleagues from the Commission: Barbara Cram, Regional Commissioner for Saskatchewan and Manitoba; Andrée Noël, Regional Commissioner for Quebec; David McKendry, National Commissioner and Stuart Langford, also National Commissioner, both from Ottawa.

6 The staff who will be assisting at this hearing are our Hearing Manager and Secretary, Michael Burnside, and our Legal Counsel, Mr. Geoff Batstone. Ann Charlotte Pulleybank is in charge of the examination room up across the causeway on the South tower. John Traversy, CRTC Director, Regulatory Research in the back row and Joseph Aguiar, Senior Programming Analyst are also assisting in this hearing.

7 The applications for the Calgary FM radio licences are as follows. As I said earlier, over the course of this hearing we will examine seven competitive FM radio station applications in the Calgary area, five for the frequency 98.5, and two for frequency 88.1.

8 Here are the five applicants for 98.5 and a short description of what they propose.

9 CHUM Limited. CHUM has proposed a modern adult contemporary music format.

10 Craig Broadcast Systems Inc. would offer a hot adult contemporary music format.

11 Newcap Inc. Newcap has proposed an adult contemporary/modern rock music format.

12 Standard Radio Inc. has proposed an urban rhythm music format.

13 Telemedia Radio West Inc. Telemedia would offer a smooth jazz music format.

14 Also competing for an FM radio licence in the radio Calgary market, but on frequency 88.1, is an application from Gary Farmer on behalf of Aboriginal Voices Radio. Mr. Farmer proposes a native-language radio station.

15 The panel will also consider a competing application for an FM licence for High River, Alberta on the frequency 88.1. The applicant, Golden West Broadcasting, proposes a non-specialty eclectic music format. We note that although this application is for High River, the station's signal, if this application is approved, would cover all of the Calgary market.

16 The SaskTel application. SaskTel has requested a broadcasting licence for a cable distribution undertaking to serve the communities of Regina, Saskatoon, Moose Jaw, Prince Albert, Yorkton, Estevan, Weyburn, Swift Current, North Battleford, Battleford, White City and Pilot Butte, Saskatchewan.

17 Their basic service plan as proposed would offer the following channels to viewers in these areas.

18 One all of the priority stations for each locality: APTN, CPAC, TVA, several Canadian specialty services, the U.S. networks -- ABC, NBC, CBS, PBS and FOX -- as well as all local radio services and digital music channels.

19 Beyond the basic option, SaskTel would offer several Canadian pay-per-view specialty and pay television services as well as the U.S. specialty services.

20 We note that according to its application, SaskTel will not be offering a community channel at this time, and we note that 5 per cent of gross revenues derived from broadcasting activities will be directed to eligible Canadian funds.

21 Before I finish, I would just like to say that it's real pleasure for me to be here in Calgary, particularly since this is the first time I have chaired a panel for the CRTC and it's especially nice because in the region, I serve part of the region.

22 So we will work through. We have a combined Secretary/Manager as well in Mr. Burnside and I am sure we are going to have a wonderful hearing.

23 Today our plan is to complete the hearing and discussion of the applications of Telemedia, Newcap and Craig.

24 Merci de votre attention. Nous sommes prêts à commencer et à vous écouter.

25 Now, I will ask Michael Burnside, the Hearing Manager and Secretary, to go over the procedures we will follow.

26 Mr. Burnside.

27 MR. BURNSIDE: Thank you, Mr. Chairperson.

28 Competitive applications heard today will be heard in four phases. Phase I is a presentation by the applicant to the Commission. Twenty minutes maximum is allowed for this presentation. Questions from the Commission will follow each applicant's presentation.

29 In Phase II, the applicants reappear in the same order as they presented their application to intervene against competing applicants. Ten minutes maximum is allocated for each interventions. Questions from the Commission may follow each intervention.

30 Phase III is where the appearing interveners make their presentations to the Commission. Ten minutes maximum is allowed for each of these presentations. Again, there may be questions from the Commission.

31 Phase IV provides an opportunity for each applicant to make comments or rebut the interventions that have been filed with respect to their application. Applicants appear in reverse order than they did in Phase I. Again, questions may follow.

32 Non-competitive applications are heard in three phases with the second phase I have just described for competitive applications being eliminated.

33 When you are ready to present to the Commission, be sure to hit the button so that the red light comes on your microphone.

34 For your general information, the public files associated with items at this hearing are available for viewing in Glen Room 21 which is located on the second floor of the South wing of the Convention Centre. You go up the escalator, go across the walkway and it is the first door on your left.

35 CRTC staff in that room will be pleased to assist you, but please be aware that while an application is being heard, the public files associated with it will be in this room and not available for viewing.

36 There is a verbatim transcript of this hearing being taken by court reporters who are located at the table just to my left. If you have any questions about how to obtain all or parts of this transcript, please approach the court reporter during a break for information.

37 If you want to have messages taken, we will be happy to post them outside the public examination room. The phone number if our public examination room is 403-292-5421.

38 Finally, I would like to point out that there is one addition to the list of appearing interveners shown on page 6 of the hearing agenda. The University of Calgary will appear between Items 16 and 17 on that list.

39 Now with your leave, Mr. Chair, I will call the first applicant.

40 The first application is by Telemedia Radio West Inc. on behalf of a company to be incorporated for a broadcasting licence to carry on an English-language FM radio programming undertaking at Calgary on the frequency 98.5 with an effective radiated power of 77,100 watts.

41 The applicant is proposing a smooth jazz format with a minimum of 70 per cent from Category 34, jazz and blues.

42 Proceed when you are ready.


43 MR. BEAUDOIN: Mr. Chairman, Commissioners, CRTC staff. Good morning.

44 My name is Claude Beaudoin and I am the President and Chief Executive Officer of Telemedia Radio Inc. and Telemedia Radio West Inc. which groups our Western-based radio stations.

45 I would like first to introduce our panel. On my far right, Hugh McKinnon, Executive Vice-President of Telemedia Radio West. Hugh was formerly a major shareholder of Nornet Radio here in Alberta and then with the Okanagan-Skeena Radio Group.

46 Mr. Dave Calder, on my immediate right, is Senior Vice-President of Telemedia Radio West. Dave was formerly a senior executive of Okanagan-Skeena.

47 At the table behind me, starting from your right, Mr. Chris Lecomte, Telemedia Director of Finance; Mr. Mario Cecchini, Telemedia Vice-President, Sales, Research and Marketing; Mr. Chris Weafer, our legal advisor from Owen Bird, Vancouver; Ms Betty Selin, Group News Director for Telemedia Radio West.

48 At the third table behind, Mr. John Reid is Prairie Regional Director, Canadian Music Centre, which is located at the University of Calgary. Mr. Kris Rodts, Telemedia Radio West Director of Engineering.

49 And back to this table, on my immediate left, is Ms Nanon De Gaspé Beaubien, one of our company's shareholders. Nanon lives in Vancouver and plays an active shareholder's role in the company with, I would say, a special interest for our Western operations.

50 MS DE GASPÉ BEAUBIEN: Good day, Mr. Chairman, Commissioners and CRTC staff.

51 My father, Philippe de Gaspé Beaubien has passionately devoted 30 years of service to Canadian Broadcasting. He recently transferred equal ownership of Telemedia to my two brothers and me. We are the next generation of Telemedia and we have chosen radio as our principal area of focus.

52 I am here first as an active owner of Telemedia and secondly as a proud Westerner who has chosen to work and raise my children in this vital part of Canada.

53 We are delighted to present today a compelling application for Smooth Jazz 98.5 FM, specialty format, to serve Calgary.

54 Our vision, first and foremost, is to answer the needs of our audiences for quality local news, entertainment and enlightenment, while connecting them to regional and national issues and events.

55 We have chosen to grow and focus in radio. Some companies might choose to invest only in major markets, others are motivated by language or regions. Still others have significant multi-media interests. But Telemedia is different. Telemedia is in large and small markets. We are in English and French Canada.

56 Our concept of connecting our stations expands our listeners' horizons beyond their own community. Our emphasis, our passion, our commitment is radio. We believe in radio. It is what we do and our track record proves we do it well. Our significant investment in Western Canada through the acquisition of the Okanagan-Skeena Radio Group is a reflection of our commitment to radio.

57 Mr. Chairman and Commissioners, this licence in Calgary is a strategic component of this plan. Telemedia presents to you a unique application. We believe our proposal maximizes benefits to Calgary listeners, musicians and youth and contributes in a significant way to the achievement of the policy outlined in the Broadcasting Act.

58 MR. McKINNON: As the Commission may remember, my family founded Nornet Radio. I had heavy involvement with Nornet here in Alberta and more recently I became involved with the Okanagan-Skeena Radio Group. Our Western company had a clear focus on small and medium markets. By bringing together Telemedia and Okanagan, we are now able to build a true nation-wide federation of radio services. The calgary application today is very important to me as it completes my vision of Alberta by filling a strategic gap and allowing better service to all the communities we serve.

59 In Alberta, we are essentially in small markets with the exception of one FM station in Edmonton. We operate 14 AM radio stations all in small markets.

60 One could portray us as a "big" company, and I like to think that is true. We are "big" in Drumheller, "big" in Stettler, and "big in Hinton, Alberta. Our 14 small market radio stations are, individually, the voice of their own community. Provincially reaching over 3000,000 Albertans they help connect one community to the other.

61 Commissioners, what happens in Calgary is important to the rest of the province and what happens in the rest of Alberta is important to Calgary. We can make this connection with our news system throughout Alberta. Telemedia, with 15 stations in Alberta, is uniquely positioned to bring a new and different news voice to Calgary, and a Calgary station is a key link for the rest of Alberta.

62 MR. BEAUDOIN: Mr. Chairman and Commissioners, let's review more specifically our Calgary application.

63 You emphasized in recent decisions four factors which are key in the licensing of a new radio station. We would like to address each of them: How Telemedia's application meets the CRTC's criteria for quality; how a Telemedia licence will add to the diversity of news voices in Calgary; the market impact of a licence granted to Telemedia, and why our entry to the Calgary market will not cause competitive imbalance.

64 First, let's talk about our proposed format. Here is a specialty format that adds diversity to the Calgary market, answers market demands, and has strong community support. Let's review the highlights of our research.

65 MR. CECCHINI: Impact Research, a major Canadian research company, surveyed Calgarians, and probed interests and musical tastes. Calgarians clearly told us there is a demand for a smooth jazz radio format in Calgary.

66 Well over a third of the respondents to this survey said the smooth jazz radio format interested them. After hearing samples of the music Smooth Jazz 98.5 FM will play, 49 per cent said they would listen to the station. This market feedback translates into a commercially viable radio audience, with a realistic market share projection of between 4 and 5 per cent.

67 Our market research also indicated that smooth jazz listeners are well-educated and affluent. This audience profile is valuable to advertisers. We are confident the revenue projections in our application are realistic.

68 MR. CALDER: Calgary is a city with a thriving jazz community and a major annual Jazz Festival. We found strong community support for Smooth Jazz 98.5 FM. We are delighted that the Commission has several hundred letters of support for our application.

69 In his intervention, Alberta Senator Tommy Banks, a legend in Canada's jazz community, underlines the need for Smooth Jazz 98.5 FM:

"Calgary, in fact, needs a radio service that provides a level of sophistication which is presently absent in the Calgary radio spectrum".

70 This unserved jazz audience in Calgary deserves a radio station they can call their own so they can hear artists like Diana Krall, Moe Koffman, Oscar Peterson, Rob McConnell. Ironically, these artists receive regular airplay on smooth jazz stations in the U.S., but are not widely heard on air in Canada.

71 Smooth Jazz 98.5 FM will be the only radio station in Calgary dedicated to smooth and mainstream jazz, and the only applicant seeking a Category 3 specialty licence.

72 Why are we a specialty format? Because less than 70 per cent of the Smooth Jazz 98.5 music will be from subcategory 21, pop rock and dance. In fact, we expect to be under 30 per cent.

73 There are real benefits in having a specialty licence in Calgary. First, Smooth Jazz 98.5 FM is not duplicated or imitated by any other station or applicant. Calgary is already well-served by mainstream formats.

74 Second, we can offer a commitment that Smooth Jazz 98.5 will remain as we planned it. Any change in format requires a further application to the CRTC.

75 Commission regulations would require Smooth Jazz 98.5 to devote not less than 10 per cent of its Category 3 musical selections to Canadian music.

76 However, following our analysis of music supply, we concluded there is sufficient material available to sustain a weekly 35 per cent Canadian content level. We make this commitment to you today. The depth of Canadian talent in this genre is impressive.

77 We are confident that Calgary will embrace Smooth Jazz 98.5 FM because of the enthusiasm we found when we went into the community to ask what we should do to support local jazz musicians in Calgary. From the great ideas, we fashioned a unique, substantial and progressive Canadian talent development program.

78 Let's look at the elements of this innovative plan, built in seven parts.

79 One, the first element of Telemedia's Jazz Calgary Program is Jazz in Schools. Almost every week of the school year, professional Calgary jazz musicians will be in a Calgary high school working side by side with music educators. After a live performance, these musicians will work with teachers and students in a professional clinic. The total commitment to this phase is $378,000.

80 Two, Jazz in Schools will be part of the core curriculum and that's important. We will provide direct support to Calgary high schools to develop the needed learning materials. Thus Jazz in Schools becomes a long-term part of music education. Our commitment to this direct support is $182,000.

81 Three, each year Jazz in Schools builds to the grand finale -- the Telemedia Jazz Calgary Showcase. Calgary professional jazz musicians and our best students share the stage in a venue like the Jack Singer Concert Hall. Smooth Jazz 98.5 FM will promote the show extensively and will broadcast the event. Our commitment to the Jazz Calgary Showcase is $140,000.

82 Four, Telemedia's Jazz Calgary Program is directed to high school students who have developed an interest in jazz, perhaps through Jazz in Schools, and are ready for a deeper learning experience. Mount Royal College will offer hands-on jazz workshops each summer for Calgary music students 13 and over. Telemedia's commitment to Mount Royal College is $175,000.

83 Five, the University of Calgary is our next partner in Telemedia's Jazz Calgary Program. The U of C already attracts bright and talented student musicians. Our scholarships are designed for students with a specific interest in jazz. With a $175,000 commitment, we can help turn dreams of a music career into the reality of a U of C music degree.

84 Six, to nurture interest in jazz, Telemedia's Jazz Calgary Program will support musicians in the University Jazz Big Band. This band now performs on an ad hoc basis, but with Telemedia's support, they will perform regularly. Smooth Jazz 98.5 FM will broadcast at least five of their performances a year. Our commitment to the musicians in the University Jazz Big Band is $70,000.

85 Seven, our last initiative is to expose our best local jazz artists to the largest live audience of the year: The Jazz Festival Calgary. This is where those who love jazz mingle with those who merely like it, and bring their friends who have never heard jazz.

86 With the Telemedia Jazz Calgary Program support of $350,000, the Jazz Festival Calgary will be able to showcase local jazz artists along with well-known artists like Diana Krall. While many will come to hear the known artists, our funding will bring new names to the stage. Perhaps in a few years those names won't be considered "new" any more.

87 Telemedia's Jazz Calgary Program focuses $1,470,000 directly on developing Calgary musical talent. We know it works because the artists and professionals who work in jazz every day gave us the ideas. This is grassroots Canadian talent at its best.

88 Our Jazz Calgary Program fits well with Telemedia's philosophy of connecting communities, in this case the youth and the professionals, the jazz artists and the City -- the City that has yet to discover the joy of smooth jazz on radio.

89 Telemedia's support for Calgary contemporary jazz artists extends far beyond the formal Jazz Calgary Program. Saturday Night Live Concert Series is exactly that: 26 local live jazz concerts broadcast on Smooth Jazz 98.5 FM.

90 We wish to underline that this will be a Calgary station in every sense of the word. All news and virtually all programming will originate from Calgary studios.

91 We consider the format itself to be a significant benefit. The Commission recognized this in their 1999 decision to licence CIWV-FM in Hamilton. In that decision, you noted:

"The new station will provide exposure for a broad group of Canadian contemporary jazz artists who currently receive little, if any, airplay on Canadian commercial stations".

92 This will be as true in Calgary as it is in Hamilton.

93 MS SELIN: First, Mr. Chairman, first let me state the obvious. Telemedia is not now a licensee in Calgary. By approving our application for Smooth Jazz 98.5 FM, a new news voice is introduced to Calgary. In addition, the Commission would be creating a strong, new regional news service. At a time when other news voices are being consolidated, this is a significant benefit.

94 Our existing Alberta stations, with 20 journalists across this province, will provide a unique regional connection to Calgary. News stories relevant to Calgarians occur everywhere. Whether from Brooks or Cold Lake, only Telemedia can deliver grassroots news diversity in Calgary.

95 Let me give you a recent example: just three weeks ago, an unseasonable snowstorm paralysed central Alberta. Because we have reporters in Drumheller and Stettler, people in Edmonton and all across rural Alberta heard direct reports on the Telemedia stations. With a Telemedia Calgary station, Calgarians would have been there too.

96 Our Calgary journalists, unlike any other Calgary station, will have access to province-wide news gathering resources. This is what we mean when we talk about connecting communities and creating a strong regional news voice in Alberta.

97 MR. CECCHINI: Can Calgary support Smooth Jazz 98.5 FM? Our research conducted by PriceWaterhouseCoopers says yes. Radio airtime in Calgary will grow 5.2 per cent annually over the next few years, to a total of almost $70 million by 2006.

98 Smooth Jazz 98.5 FM's impact on existing stations will be minimal. Calgary station margins remain high.

99 MR. BEAUDOIN: Finally, let's look at the market competitive balance. Three companies now own the nine Calgary radio stations between them. Telemedia is seeking one licence. Is this competitive imbalance? It could be for the independent small radio operator. But Telemedia has the strength, the financial resources and the human resources to compete with a stand-alone station against the current Calgary stations.

100 We are successful in Edmonton today as a stand-alone FM and we expect the same in Calgary. Smooth Jazz 98.5 FM will be a viable radio station able to compete on its own distinct strengths.

101 In conclusion, Telemedia believes that this application merits approval for the following reasons:

102 First, diversity. Telemedia offers a new format, unduplicated by any other Calgary station or applicant at this hearing, thus adding diversity to the broadcast system. Smooth Jazz 98.5 FM introduces a new news voice to Calgary.

103 Two, the proposed format. There is a significant demand for smooth jazz FM. It is a specialty format, not only different from all other Calgary stations, but it will remain different under a specialty licence.

104 Third, the Alberta regional news system. Telemedia's 15 station news system connects large and small communities across the province, from Edmonton to Brooks, from Drumheller to Hinton. Adding Calgary makes it a true regional news service.

105 With the addition of Calgary, a new regional news voice is created at a time when consolidation has reduced the number of diverse voices.

106 Fourth, the Canadian content is at a much higher level than requires in a specialty format. The format itself is a significant benefit to Canadian jazz artists.

107 Fifth, Telemedia's Canadian talent development plan and commitment, a grassroots plan entirely directed to local Canadian musicians and youth, developing Calgary musical talent and supported by $1,470,000.

108 Finally, building the Canadian broadcasting system. Telemedia has the resources to ensure Smooth Jazz 98.5-FM attains the goals and respects the commitments set down in obligation. There will be no significant impact on existing Calgary stations. New Jazz 98.5 is complementary, not competitive, to the choices listeners have today. We bring a new station which will add diversity to the market and in several key ways contribute to the goals set out as policy in the Broadcasting Act.

109 Mr. Chairman, Commissioners, thank you for your attention. We are ready to answer any questions you may wish to ask. Thank you.

110 THE CHAIRPERSON: Thank you, Mr. Beaudoin and Mrs. De Gaspé Beaubien for your presentation this morning.

111 I will now lead you through a few areas of concern and issues that we want to gather more information on as they regard your application. The main issues I am going to work my way through are the clarification of certain Canadian talent development initiatives. You have given us much information in your opening remarks, but I may ask some questions in that area again to give you an additional opportunity to clarify certain aspects of them.

112 We will also need some clarification regarding the proposed NAC smooth jazz format. We want to talk a bit about the proposed conditional licence for blended weekly minimum content level. I note that your application did say 25 per cent Canadian content level, but in your opening remarks this morning you have indicated a 35 per cent content level.

113 Finally, and overall, we want to gain an understanding of how your application constitutes and makes the best use of the 98.5 frequency, in view of the fact that there are other competing applications.

114 To begin, in the area of Canadian talent development, as a participant in the CAB Canadian talent development plan, you were required to direct your annual $8,000 commitment to eligible third party or parties. To which third party or parties do you direct this funding?

115 MR. BEAUDOIN: Mr. Chairman, you are referring here to the CAB national plan and this commitment that of course we take will be directed to FACTOR.

116 THE CHAIRPERSON: Directed to FACTOR. Thank you.

117 Your annual $50,000 cash contribution to the Calgary Jazz Festival is significant. What measures have been taken or agreements made with the festival organizers to ensure this annual funding would directly benefit Canadian talent?

118 MR. BEAUDOIN: Mr. Chairman, I would like to ask that my colleague, Dave Calder, give you more details on this issue.

119 MR. CALDER: We have held meetings with a gentleman named Mark Vasey, who I believe has filed an intervention in support of our application. He currently is the head of both the Edmonton and Calgary jazz festivals, which is part of the Westcan Jazz Group.

120 Similar to the dialogue we have had on other fronts and components of our CTD, we have been quite specific with Mark that the shortfall, if you will, in terms of what takes place with the Calgary Jazz Festival is a stage, particularly a free venue for the public that showcases Calgary players.

121 What tends to happen with the Westcan group is that they will take major talent, whether it is a Diana Krall or a Brian Hughes or a Jeremy Hepner, someone like that, and they will route that talent through all four of the western jazz festivals. They will share the cost for that and those are paid venues.

122 It is the local Calgary artists' terrain, Pat Belliveau, Vivian Cardinal, people like that, who don't get the same degree of exposure in paid venues. So the proposition is the entire amount would be directed towards a free to the public local Canadian Calgary jazz showcase.

123 So all of the monies or virtually all of the monies will go to the artists who perform and virtually aside from the promotional and administrative components of that stage specifically, all of those monies will go to Calgary performers and performances.

124 THE CHAIRPERSON: Would you consider attaching a condition requiring that that be the case with these monies?

125 MR. CALDER: Yes. I believe I could also, just to clarify from Mark Vasey's perspective, that concept was driven back to us from him as well. So, I know in advance that the jazz festival people would not take issue with where those funds are being directed.

126 THE CHAIRPERSON: We require a couple of clarifications regarding your jazz in the schools initiative. As part of this initiative we note that an annual budget of $54,000 has been allocated to stage 36 clinics over the nine month academic year. We note that administration costs are included within this budget. What are these annual projected costs and what would they consist of and will this initiative be administered by a third party or a designated member of the station's staff?

127 MR. BEAUDOIN: Mr. Chairman, before I ask Dave to give you more details, I would like to just repeat that this plan has been, as you see, developed in partnership with the community and it is really working with them that we have been tailor making this plan.

128 Dave will maybe be more specific for each of these parts on how the money will be directed.

129 MR. CALDER: Just to piggyback on the point Claude was making, I think one of the things that has been our intent from day one as we have developed the CTD components is to have the receivers of the CTD articulate to us where the needs are, rather than us make assumptions about where those needs might be. That is why you will note that there are two components in the jazz in schools initiative that separate the $54,000, virtually all of which would go to the musicians, the clinicians themselves.

130 Speaking with professional musicians in the Calgary marketplace, if you use a figure of roughly $250 to $300 per musician, then you can take the $54,000 in total over that period of time, divide it by that amount and you can come up with, I think the number is 180 musicians, for example, who will be paid over the period of time to perform.

131 We picked the number of 36 clinics to give you some sense of the average in a given year that we think will take place for those school performances, but, of course, if it is a trio going into the school to do a clinic, you are looking at a cost of $900 for the performance. If it is a 15 piece big band going to two or three of the high schools to do the same thing, you are looking at a larger cost.

132 Interestingly, since we filed the application, as we spent more time with some of the instructors, one of whom I believe is an appearing intervenor later this week, they suggested that they would even like to see a single musician come in for the day and work with their stage bands, work with the kids on a one on one basis. So, that clinic cost is obviously lower than even the lowest average cost that we had anticipated.

133 A long-winded answer to your question, of the $54,000, little if any of that money is going to get siphoned off on the administrative side. We anticipated that that might be the case, but according to the music educators they don't see that there will be much of any need to apply against the administrative side because they already have an infrastructure in place to route that money.

134 What they did say and you have seen us divide this out, is curriculum is key. You can't just put the performers into the schools and hope that by osmosis the students are going to grow from the experience.

135 So to ensure that funding is provided for that component, we have earmarked the other component, the $26,000 annually towards curriculum materials, charts for example. If you want to put a chart in front of a stage band for 15 or 20 kids, you are looking at a cost of $100 for that chart. So rather than rely on the system to pay for the materials that the clinicians will need, we have earmarked the money towards those materials as well.

136 THE CHAIRPERSON: Could you tell me a bit more about how the annual concert showcase relates and maybe just talk a bit about the content of that, about the feature, for example, professional musicians, student performers or combinations. We would like a little clarification in that area.

137 MR. CALDER: I am really enjoying this this morning. As an ex-musician I wish this kind of thing had been available when I was a kid. If you visualize what is going to take place as part of this, you have got professional performers coming to the schools meeting the kids, hopefully energizing them to a much greater degree to want to be players, to want to be performers, perhaps consider pursuing this more aggressively.

138 One of the things that is always missing in this kind of clinician environment is an opportunity to play side by side with these players in a venue; in other words, to get the experience of playing live in front of an audience, friends, family, in a broader spectrum of people who can provide immediate feedback to what you do as a live player.

139 So what we see happening, what we initially saw happening, and what's portrayed in the showcase, is a major venue where we fund professional musicians to join with the kids, stage fans, trios, jazz choirs. The bigger the better the event as far as we are concerned. So you have pros and amateurs side by side putting the performance on.

140 We also like the idea of putting it on the air as part of our Saturday night series. We think that has significant value, in terms of boosting the awareness of the genre in the marketplace.

141 One of the items that's been raised again since we developed this, as we have spent more time with the instructors, is if you are going to go to that extent and present the showcase much like a daytime matinee in the theatre side, there's no reason why, if you are all set up to do the showcase on a night or two, you cannot do daytime performances and bring students from the high schools in during the day to see these same performances -- which is essentially a rehearsal for the evening showcase -- for free. So there is enough moneys deployed against the showcase to see that happen.

142 THE CHAIRPERSON: Thank you.

143 Can you tell me a bit more bout the Mount Royal College Conservatory of Jazz program.

144 You indicate that part of the annual $25,000 to them will be directed to underwrite its summer jazz workshop program.

145 What specific dollar amount would be directed to this program and how would the balance of the annual funding be directed?

146 MR. CALDER: The primary goal of the moneys deployed to the Mount Royal College area are to ensure that -- the instructors are already employed and paid to do these workshops. The workshops are not as extensive as they will be with the funding that we place against them.

147 Currently, if you are at the high school level and you want to pursue, in the summer, a deeper expanded workshop experience, the venue that you look at is in Banff, which is a long ways away compared to Mount Royal College. So the intent of these moneys is to make the workshops available to as many students as possible with as little cost as possible. Currently, for example, the Banff workshops are in the hundreds of dollars for a student to attend. I believe that there is an individual from Mount Royal who is also intervening and will probably speak to this further, but what we said to them is: the goal is to make these workshops available to any high school kid in order to attend these things in the summer and to fund professional players as well as the instructors to be there.

148 So while I cannot give you a specific number as to the number of students, what I can say is that virtually 100 per cent of the money earmarked for this CDT component is directed to those two areas: student tuition and additional professional musicians to work side by side with the instructors in the workshop environments.

149 THE CHAIRPERSON: Thank you.

150 I'm going to now move to a different area. I want to talk a bit about Canadian content.

151 In your presentation this morning you indicated a 35 per cent Canadian content commitment; whereas in your application you indicated a 25 per cent.

152 I would like some elaboration on the change and how it relates to your previous commitment and why the change and some background information on that, please.

153 MR. BEAUDOIN: Yes, Mr. Chairman.

154 You are right, in our current application we did file originally with 25 per cent Canadian content level. Following the filing, of course, we have been through a major in-depth market analysis and music supply analysis and we are pleased today to confirm that following this analysis we strongly believe that a smooth jazz format can sustain a 35 per cent Canadian content.

155 Why have we come to that conclusion?

156 I would like to ask John Reid to comment on the music supply in this country on that top music.

157 John...?

158 MR. REID: Thank you, Claude. Commissioners.

159 In engaging with the Telemedia group -- actually, I should first introduce myself. I am not a member of the Telemedia Corporation, I'm a member of the community. I have been a professional musician for 30 years. I have done a radio show either in jazz music or contemporary classical music every week for the past 20 years. I'm the founder of the Calgary International Jazz Festival and the artistic director of the Jazz Is Society of Calgary. I'm a writer and reviewer of jazz music, I'm an instructor of jazz history at the University of Calgary, I'm a Master of Arts candidate in jazz history and research at Rutgers University in the Newark, New Jersey, campus in addition to my full-time job as Canadian Music Centre Prairie Regional Director.

160 In doing the research with Dave and the group -- you can see I brought a few CDs along here today as examples of the Canadian music that's available and there are two points that I would like to make. First of all, it has to do with the quantity and quality and then, secondly, is the supply of smooth jazz.

161 First of all, the quantity. There is a large quantity of Canadian jazz music available in this genre.

162 Secondly, the quality is very high. If you look at releases of Rock and Roll music, quality very uneven. If you listen to perhaps 10 records the quality can be quite uneven. Whereas in jazz, just to get to the point to be able to make a jazz album, there is a high degree of sophistication necessary, technical skill on the instrument, and the ability to improvise is a technical skill that's very highly developed. So the people who have made these CDs have a uniform high level of quality.

163 As you can see, we have brought in quite a few CDs -- and this is just a small cross-section -- and we have all the way from people like Diana Krall and Brian Hughes, who have major label exposure internationally, all the way to people with independent releases who, for probably less than $10,000, released their own compact disc, still very high level of quality.

164 The second aspect is the smooth jazz aspect which is a more, shall we say, not avant garde stream of jazz, a more approachable stream of jazz, and the interesting thing is about nine out of 10 albums that I listened to in this process -- about nine out of 10 -- include at least one track that would qualify as smooth jazz; that is, music that is palatable, perhaps, as we say, a ballad, a slow song in jazz music that has a very soothing quality to it like "Misty" or "Georgia on my Mind" or "Body and Soul", something like that, or maybe a Pop Jazz selection. For instance, Skywalk out of Vancouver has released six projects and virtually every single title on each of those six projects, some 60 songs, would qualify as a smooth jazz selection for broadcast on air.

165 THE CHAIRPERSON: Thank you.

166 In your application, you talked about a blended weekly minimum Canadian content level of 25.

167 So are we to understand that your wish is to increase this to 35? And is this a specific Category 3 Canadian content commitment? Can you give us just a bit more information around that, please.

168 MR. BEAUDOIN: Yes. We are taking the commitment to have a weekly 35 per cent Canadian content under Category 3. This commitment will be also in line with current regulations, i.e., between Monday and Friday, six a.m. until six p.m. and six p.m. until midnight. So, essentially, Mr. Chairman -- also, this is a specialty format and, also under Category 3, the minimum requirement is 10 per cent. Following this analysis and investigation, we are taking this commitment of weekly 35 per cent Canadian content commitment, in line with current CRTC's regulation for Category 2 format.

169 THE CHAIRPERSON: In our analysis, I guess the most important element of a station of the type that you are proposing, in terms of on air time, would be Soft Contemporary Jazz. I guess we think it would be reasonable to expect a station to make the on air exposure of Canadian Soft Jazz performers -- the mission -- featuring their recordings at a higher percentage level. How do you feel about that?

170 MR. BEAUDOIN: I'm sorry. Could you maybe reformulate your question?

171 THE CHAIRPERSON: Sure. Being that it's probable that the on air exposure of Canadian Soft Jazz performers -- these are artists whose works are rarely heard on commercial radio -- would it be in Telemedia's goal to try and make this their mission: to feature these recordings at a higher level, perhaps the 20 per cent level, for example?

172 MR. BEAUDOIN: Yes. We have designed, in our programming plan, some actions to address this issue.

173 Dave, I would like you to comment on that.

174 MR. CALDER: I think it's safe to say that in this format the array of Contemporary Canadian artists that we have to draw from, vocal and instrumental, is incredible, and maybe I can give some comparisons to you.

175 If I pick vocals, if we are talking about soft jazz, smooth jazz vocalists, I don't have to look across the border in terms of finding artists that I'm going to put into high rotation because it's not just Diana Krall. You hear a lot about Diana Krall, and the reason you do is because Diana has already crossed over to airplaying a lot of musical genres. But you don't hear yet about a Tim Tamashiro, and a Tim Tamashiro is Canada's Harry Connick. So I don't need to increase airplay of Harry Connick, I have a Canadian vocalist in my own backyard, Calgary, who has a CD out that is terrific and can get high rotation airplay. It's important to note that this the structure we have put on this is more like a Contemporary radio station. So you have power rotations, songs that are going to receive considerable amount of what we would call skins in a week and, you know, as I look through the list, there are artists coming out all the time. Megan Fanning wasn't on our list. Two weeks ago, a new CD out of Vancouver artist, vocalist, high profile, as good as anything that I have heard internationally.

176 So the answer to your question is, yes, absolutely, it can be a mission of ours to showcase these artists.

177 We have done a week's worth of music where we have merged BP lists out of smooth jazz stations in the U.S. and taken our own Cancon universe that we have prepared and easily produced a seven-day music mix that gets us to a blended 35 per cent. It is not a problem.

178 If I might add one other point. We have also articulated some specific spoken word features. "Smooth Talk" is one of them. These are 90-second vignettes that are regularly scheduled -- we actually have one scheduled per hour in the clocks that we have developed -- which speak to exactly that, because, let's face it, this is a genre that we are going to have to introduce and do a lot of external showcasing of because it is totally unfamiliar to most folks in Calgary. So we want to talk about the artists, we want to talk about where they are, where they are playing. It is all part of showcasing that talent.

179 THE CHAIRPERSON: Thank you, Mr. Calder. I am going to come back to that in a question in a couple of minutes.

180 First, Mr. Beaudoin, your proposal for a blended calculation as a means of filling minimum regulatory Canadian content requirements may well be a first in Canadian radio. What are your reasons for this proposal? Why do you propose this?

181 MR. BEAUDOIN: Because, Mr. Chairman, we really came to the conclusion that there was sufficient music supply to support the 35 per cent.

182 I guess we started with the fact that in the CRTC's regulation for the specialty format the minimum requirement is 10 per cent. When we have done a first analysis we have already found that 10 per cent was low and that we could support 25 per cent. So in July, following some changes in the regulation that was published by the CRTC at the end of June, in July it would confirm that it would be a specialty format, and our first investigation and music supply analysis indicated at that time already that the 25 per cent commitment would be sustainable.

183 However, this last few months we have been pursuing our discussion with the milieu and the musicians and John Reid. Following that investigation we really came to the conclusion that we should take this commitment of going as high as 35 per cent based on the fact that we believe that in this country we can support 35 per cent Canadian content on a smooth jazz format.

184 So, essentially, following our analysis of the music supply, we came to that conclusion, and this is why today we are talking this commitment of weekly 35 per cent Cancon.

185 THE CHAIRPERSON: Thank you, Mr. Beaudoin.

186 Mr. Calder, if I can come back to the area that we were talking about earlier.

187 In your supplementary brief, specifically Schedule 13, under the header "Quality of Application, Section 3, Canadian Content", you state, and I quote:

"There are scores of outstanding musicians in the jazz/blues genre that did not now receive exposure in Canadian radio. The existing success of so many western-based artists is testimony to the vibrancy of the genre. Top quality Canadian talent, a generous proportion of which is from Calgary, will be the cornerstone of 98.5's Smooth Jazz playlist." (As read)

188 Under this conditional licence you would gain the flexibility to program far less than 35 per cent Canadian jazz music because there are, agreed, many well-known Canadian popular music performers suitable for the NAC element of your format. Your Canadian content in Category 2 music could be quite high to compensate for the Category 3 Canadian content that could be well below the 25 or 35 per cent.

189 Given your words in the supplementary brief, why do you feel it is necessary to ask for a blended Canadian content level?

190 MR. BEAUDOIN: Mr. Chairman, maybe I should be more precise here.

191 The commitment of 35 per cent would be by category. In our opening remarks you probably noticed that I specifically mention 35 per cent for Category 3, just for the record, to make it clear. Following this investigation, the 35 per cent would be by category, 35 per cent for Category 3, and of course the minimum 35 per cent for Category 2.

192 THE CHAIRPERSON: Based on the United States' model, the NAC smooth jazz format is characterized as a blend of two-thirds instrumental music and one-third vocal music. Is the jazz instrumental-to-vocal ratio of your proposed NAC smooth jazz format comparable to this U.S. model?

193 MR. CALDER: Yes. I think the week that we worked with it was closer to 60/40, but two-thirds/one-third, 63/35. That seems to me, on average, over the course of a year to be about right.

194 Much like other formats, you know, it is going to be dependent on new releases because, to a certain extent, we are a contemporary format. Right now, for example, I just mentioned Megan Fanning. She would be in our top rotation and all of a sudden your proportion of vocal and instrumental might adjust itself for a week or two, but if Terrain or Middlewood or Skywalk was mentioned as a new release, you might find that weighting of instrumental adjust itself somewhat.

195 But overall, two-thirds/one-third, that sounds about right based on the work that we have done.

196 THE CHAIRPERSON: So two-thirds/ one-third, 60/40, generally in that area?

197 MR. CALDER: Yes.

198 THE CHAIRPERSON: From a programming standpoint, how will your instrumental and vocal music be blended and day-parted on your proposed station?

199 MR. CALDER: We have taken a first pass at creating the clocks for this station and creating the music mix. The first word that came to mind in answer to your question was "equally".

200 I don't see that there is, based on what I am looking at in terms of the work that we have done, a focus on, say, more vocal and morning drive and more instrumental and evening or something like that. I just don't think that the format lends itself to doing that, nor do I think that it would be of particular appeal to the listeners.

201 I think there is an expectation from the listeners that -- this is really the format for those folks who are kind of board with other adult contemporary formats. It is that simple.

202 In fact, John Reid made the statement to me yesterday that one of the challenges he has is he drives around with his radio turned off. As a radio person, that is a problem for me. So if I take a look at what this format brings to the table, it is not vocal or instrumental, it is the overall sound of the radio station, which absolutely is a blend of instrumental, of vocal. It is the roots from which the music comes that is going to be of appeal to the listener rather than skewing the balance one way or the other.

203 THE CHAIRPERSON: Thank you, Mr. Calder.

204 Is the New AC format referred to in your impact research study and smooth jazz essentially the same thing?

205 MR. BEAUDOIN: Yes. That is two ways of calling -- it's the same thing, Mr. Chairman. The "New AC" expression is largely used in the U.S., so you might hear about the NAC format. But, essentially, smooth jazz and NAC, we are referring to the same format.

206 THE CHAIRPERSON: Thank you, Mr. Beaudoin.

207 Given that your research seems to support a hot AC format, can you explain why you selected New AC as your format?

208 MR. BEAUDOIN: Before I ask Mr. Cecchini to comment on that, you are right in saying that there were some differences between the hot AC format that we found through our research and the smooth jazz format, but beyond the results that Mario will comment on, you know, we have also to recognize that the smooth jazz format is a growing format and the demand for there is sort of growing. We are also looking for the next few years, not what is the situation today. The American experience on that is fairly surprising where this format has been significantly growing.

209 I might come back, but, Mario, do you might want to add some comments on that?

210 MR. CECCHINI: Thank you, Claude.

211 To add to that also is that you will note that in the Calgary market, the general AC, hot AC is somewhat of a well-served market. We also looked at smooth jazz as bringing to the market a very affluent and upscale audience, therefore, offering a uniqueness that not necessarily exists at this point in this market from that point of view. It is a distinct sound.

212 MR. BEAUDOIN: Just to conclude on that, Mr. Chairman, because of course that leaves us, of course, from the audience projection, and you might wish to talk about it in a few minutes, it's the revenue projection. So what we are referring to is not only that there is the demand, X per cent of audience interested in that format, but also the profile and the characteristics of this audience is valued a lot for the advertisers.

213 Really when you look at these three factors -- one, the demand in the market of the format itself; two, the profile of the audience; and, three, the fact that it is a growing format -- in taking into consideration these three factors, we have come to the conclusion that we should propose this format to the Calgarians and being convinced that the market can support this format.

214 THE CHAIRPERSON: Thank you, Mr. Beaudoin.

215 Is smooth jazz currently on the playlist of any existing Calgary FM stations?


217 Dave, you might want to add something on the CBC.

218 MR. CALDER: There is a small amount of block programming. CBC carries a certain amount of block jazz programming. It is not branded or labelled as smooth jazz, but the fact is probably two-thirds of the music that is contained in that block programming would reflect similar Canadian artists to those that we would play, but it is limited block programming.

219 The university station, the same thing: There are a couple of shows that are specifically dedicated to jazz, and that's it.

220 MR. BEAUDOIN: If I may just add one comment, just to emphasize the fact that Monday to Sunday from 6:00 a.m. on, sign-of/sign-off, as we say, there is no station providing this kind of service to the market.

221 THE CHAIRPERSON: Would there be any overlap and, if so, how much between the playlist of selections on your proposed station and the CHFM Calgary station?

222 MR. CALDER: Almost none, based on the first pass that we have taken at what would end up being a mix of our Canadian universe and our U.S. universe.

223 I'm not sure whether the Commission would like us to file these music lists with you -- we have copies of them, we would be happy to do that -- that list the artists, both Canadian and U.S. that would form the initial part of our music universe and we would be happy to give those to you so staff could check for themselves, I guess, to see how much duplication there is.

224 I think where there may be some overlap is with some of the vocalists like a Diana Krall, who would be a signature artist for us and who obviously -- you know, she gains the level of attention that she has, particularly with some of her songs -- would cross over to a mainstream AC station. There tends to be some more overlap in the U.S. smooth jazz stations than I see happening here in Canada.

225 But from what we can see in the original music lists that we are working at there is very little duplication.

226 THE CHAIRPERSON: Thank you, Mr. Calder.

227 I don't think it is necessary to file that additional information at this time. Your answer on the record is sufficient for the purposes of that question.

228 Your research reveals that in the United States smooth jazz stations are garnering steady increases in audience reach and market share. Do you have more detailed information about how many markets are involved, how large they are and whether they are located in the east or the western part of the U.S.?

229 MR. BEAUDOIN: I would like to ask Mario Cecchini to provide you the answer on that.

230 Thank you.

231 MR. CECCHINI: (Off microphone).

232 I have a list in front of me, Mr. Commissioner, that would roughly go to about at least 35 stations that we based our numbers on or that we looked at when we looked at the American experience.

233 When we also looked from a financial point of view at the stations, Pacific western, we observed about 25 to 30 stations. Smooth jazz operations in the States, probably every region, but we focused our attention mostly on the western part of the United States. But between 25 and 30 stations is what we observed to base our projections on based on the south Pacific region -- southwest Pacific region, I'm sorry.

234 THE CHAIRPERSON: Southwest Pacific. The American southwest.

235 MR. CECCHINI: Yes, I'm sorry, U.S.

236 THE CHAIRPERSON: Currently it might be argued that Calgary is predominantly a country music and rock-and-roll kind of town and that a smooth jazz format may not be suited to Calgary. Have you researched CD sales in Calgary or used any other similar means to predict the popularity of the smooth jazz format?

237 The question may appear a bit provocative, but it does give you the opportunity to be equally emotional --

238 MR. BEAUDOIN: Sure. We are strongly convinced that the Calgary market can support and there is a demand for smooth jazz FM.

239 I would like to share the answer with some of my colleagues.

240 I would like to ask Mario Cecchini to briefly comment on how we did the research, through sampling the music and why, in our view, the research that we have done came to that clear conclusion that there is a strong demand.

241 I would like to ask John Reid, who lives here in Calgary, why he believes that there is a demand of that smooth jazz format.

242 So Mario first and maybe John after.

243 MR. CECCHINI: Thank you, Claude.

244 The research was conducted -- as you know, it is not a well-known or well-played format right now, so what we did that is a bit different than any other typical research with better known artists.

245 The main point of our research is that after asking the question of if you would listen to that type of music, we went a bit further and played a montage, which is much more -- it is very difficult to put in words sounds or names of artists, because even artists have varied styles of music sometimes to the non-specialist ear. So in that sense we played a montage and that is when we saw the immediate emotional reaction, I would say, to that type of sound and the blended sound that Dave was describing earlier in that sense.

246 That led, then, to the audience figures, which because based on that we derived all of our projection, therefore can establish today that it can support some jazz format.

247 MR. BEAUDOIN: May I add one comment to Mario's point. It was impressive to see that following the sample of music, you know, close to 50 per cent from a very emotional standpoint was reacting positively to this blend of music. So that was a clear, clear indication that that style of music is extremely -- is seducing for people.

248 But maybe John Reid, I'm sure who can talk about it with passion, can tell you why he believes that Calgary is interested in a smooth jazz radio station.

249 John.

250 MR. REID: Mr. Williams, I am so glad you asked that question.

251 THE CHAIRPERSON: Well, I understand you drive around without listening to the radio.

--- Laughter / Rires

252 THE CHAIRPERSON: I'm looking forward to your response.

253 MR. REID: As we were talking about this in the room the other day, I went "Cowtown", "Jazz", "Cowtown", "Jazz". Huh? I kind of expected this question to come.

254 The population of Calgary is growing, as you know, and it is a growing city, it is a vibrant city, not only is the population here used to a festival that has been in existence for 20 years, our jazz society started in 1974, so that has a 26 year history.

255 Not only have the students come through with a very high degree of sophistication -- for instance, I was at a CD release party, Mr. Chairman, the other day, for a boy who is 15 years old, Curtis MacDonald released his own compact disc. To do that in jazz -- I mean he can play. He wasn't fooling around. This wasn't a vanity -- okay, it's a vanity project and he is financing it himself. It is not a major label that is on it. The YTV came out and did a special on him.

256 We have it coming up from within Calgary and also there is a population that is moving to Calgary. The CPR head office, for instance, just moved here -- not just, a couple of years ago -- and there are people from the States, there are people from eastern Canada, from all over the world really, who are coming to Calgary. I think the Olympics helped. That was really the one thing I think that helped us emerge from this "Cowtown" image, 1988. Of course, that is 12 years ago.

257 As a colleague of mine said -- we had Dave come and meet some members of the community the other day and Pat Belliveau, a local jazz artist, I have his CD here, a very good jazz artist, he said "It is very much `You build it, they will come", type of city. And that is true.

258 We just formed a brand new jazz society, the Jazz Society of Alberta, of which I am the artistic director, and we didn't have two dimes to rub together to start this with. We did three projects, three public concerts in our first year.

259 Not only was each one an artistic success, Mr. Chairman, but we had an excess of revenue over expenses on each concert. We put the word out and people came. They were a big success. There was vibration in the room. We made a few dollars.

260 So now we are sitting just one year later, Mr. Chairman, and we -- well, we just got our provincial grant, it was $1,500. Now, I know that doesn't sound like a lot of money, but for us to have a $1,500 surplus and a $1,500 grant. Now we have $3,000 to launch our series in its second year which means we can put on a concert and if nobody comes, which won't happen, but we can cover those expenses.

261 That's just kind of a small level example but, you know, it's not so much that we are disfranchised, we are un-enfranchised. I am not even sure if that's a word, but I drive around with my radio off because I flip the channels and there are some things here and there.

262 I can listen in the morning maybe to some jazz on CJSW, the campus station, and that's a crap shoot. I mean, yes, you might get smooth jazz, but you might get some of the wildest stuff you ever heard. It's campus radio which is great, it has a very good place. But that's over at nine o'clock in the morning. It's finished. I mean, it's three hours: from 6 a.m. to 9 a.m., but then it's finished.

263 So during the day, really until Ross Porter comes on at 10 at night there is nothing for us to listen to and this is a community here which is very well-developed. I am not going to lie to you and say that it's 75 per cent of the community. If it was, we would already have a station of course. It's sort of a vital heart of this community that is unserved and I really liked what Senator Banks had to say. I really believe in what he said.

264 This will be a complementary service and for me this is a once in a lifetime opportunity, even more than that perhaps. I mean, to get our own jazz station will benefit the musicians and the audiences. They come, they are interested. If you let people know that something is going on, they will come and support it.

265 I think you can look at the festivals that we have. The WordFest that just got started a couple of years ago is now a big festival. The Africans, we have an African Festival in Calgary. Did you know that? An African Culture and Music Festival in Calgary and it's doing very, very well.

266 So I don't know, those are just some of the examples off the top of my head that I think of when I go -- I can understand the question. Cowtown, jazz? No, it's here and I really think that there is the support, as Mario said, yes, an affluent population but also people that are professionals. Maybe say like a teacher, you know, there is a convention of teachers next door. I mean, they are professional people, maybe not affluent, but there is a lot of teachers that are professionals and will listen to this type of music.

267 I really believe in my heart that there is a lot of support here for this genre.

268 THE CHAIRPERSON: Thank you, Mr. Reid.

269 I am now going to move into an area of your advertising revenue projections. Is there any particular reason that you did not provide a breakdown between local and national advertising revenues for the proposed station?

270 MR. BEAUDOIN: Maybe Mario, you want to comment, but of course we did provide the CRTC with a detailed revenue source, where the revenue would come, and when we disclosed that 78 per cent would come from local radio dollars we, of course, include that. The split between national dollars and local would probably be in line with the market according to our analysis which would be around 25 per cent national and 25 per cent local.

271 Mario, do you want to add a comment on that?

272 MR. CECCHINI: No, that is what we filed -- 75 and 25 and just the way that when we did the projections that directly derive on the share market. So therefore the same rationale would apply whether it's local or national dollars.

273 THE CHAIRPERSON: Your application states that year one is assumed to begin September 1, 2002. How long do you expect to take to implement a station from the decision date? If the decision was rendered in three months, for example, how long would you expect to it to take to implement your station so that it's up and running?

274 MR. BEAUDOIN: Assuming, Mr. Chairman, that yes, the decision would be rendered within the next three or four months, we could envision launching the station I guess in early September. We would need probably six to nine months to set it up.

275 THE CHAIRPERSON: Thank you, Mr. Beaudoin.

276 Your application indicates that 78 per cent of your advertising revenues will come from existing stations as compared to the 30-40 per cent range estimated by most of the other applicants.

277 Is this estimate based upon your experience in other markets?

278 MR. BEAUDOIN: Of course, we took here into consideration the uniqueness of the format and this is based again on an in-depth analysis, on the profile of the audience that we would attract, where would they come from, how many more hours could be generated by this radio station, how many hours can we take from the out of town stations? So looking at these various components.

279 Mario Cecchini could add additional comments on that.

280 MR. CECCHINI: Thank you, Claude.

281 Well, Mr. Commissioner, again when we based that number deriving directly from the audience projections that we did, using year three when we obtained what we call the cruising speed or what impact as defined as the 4.5 per cent market share that we would achieve, we take that revenue -- and I will try to make it as simple as I can -- and just apply some factor like each hour's tune would then be worth $4.00 basically. That is in our response, I think, that we filed back in July.

282 Like Claude said, out of the total hours, 478 hours tune, come from originating stations, therefore, 78 per cent of the revenue. Market growth -- we would then get our share of the market growth at that point which would be a three-million dollar growth in our third year of operations. Increased budgets and advertisers. Well, we stated also in the research that 42 per cent hours tuned are newly created too to the niche format. The same ratio applies in that sense, and of course, new advertisers. If we bring back we think listenings from out of market tuning, well then also we can assume that we can grow the total audience of radio, therefore, bringing a new profile of listeners that are new to Calgary or originating stations.

283 This is basically how we derived the revenue breakdown.

284 THE CHAIRPERSON: Can I get you to elaborate on that a little bit, given the unique nature of the smooth jazz format in the Calgary marketplace. Could you tell me a bit more about the potential to attract new advertisers to radio as opposed to working on the existing group?

285 MR. CECCHINI: As stated, Mr. Commissioner, in our opening remarks, I think we stated that it's a complementary service versus a competitive service to the other stations.

286 The very affluent and very upscale, high end of the economic scale, listener, that Impact Research has indicated will be most likely to tune in, is -- and excuse the term -- a rare commodity, a commodity that is hard to reach, that is not necessarily tuned in to a lot of media.

287 We have experiences in other parts of this country. We have a station in Toronto who is not at the top end of the ratings and who outperforms its shares, mostly do because they have a specialty male-oriented format, and we can track how we overachieve our share of tuning, if you will, relative to the share of dollars.

288 MR. BEAUDOIN: Pardon, Mr. Chairman. Just to add a couple of comments. As you saw in our research, there is an unserved audience in this market for this format and based on that information, there is a clear indication that close to 50,000 to 60,000 hours a week will be generated from these unserved listeners. So right there, this will be adding hours tuned for radio and this will allow us to attract new advertisers.

289 Again, let's keep in mind that beyond the share that we are projecting is the profile of the audience that we strongly believe -- and as Mario said it we have other experiences that confirm that -- will allow us to expect new advertisers because offering to these clients a unique, a very unique, audience profile. So it's by combining these two factors that we can come to that conclusion.

290 THE CHAIRPERSON: Thank you, Mr. Beaudoin.

291 I am going to talk a bit about the technical side of your application and then the concept of mutual exclusivity. As you are aware, your proposal is mutually exclusive with the five others proposing to use the 98.5 frequency in Calgary.

292 This being the case, in any event the Commission concludes that more than one proposal should be licensed. Have you or your engineering consultants looked at any other available, comparable frequencies that could satisfy your coverage objectives for Calgary, and if so, what were your findings?

293 MR. BEAUDOIN: Thank you, Mr. Chairman. I would like to ask Kris Rodts, our engineer, to answer this.

294 MR. RODTS: As our technical brief proposes, we proposed on sharing existing tower sites with CHKF-FM. To minimize any hardship to the CHKF-FM, we felt it was essential for us to duplicate their existing pattern by replacing the antenna with a broadband one.

295 In other words, if we would share a common tower situation, it would be feasible from that location. Should we decide to go to an alternative site, we would have to redo our technical brief and we would be prepared to do so.

296 THE CHAIRPERSON: Your proposed transmitter and antenna sites would be located approximately 10 kilometres southwest of the other applicants and when combined with your directional antenna it would result in a lower effective radiated power or smaller coverage area.

297 Do you view that as a disadvantage for a radio station competing in the Calgary marketplace?

298 MR. RODTS: I would say not because in the majority of the ark we are actually 100 kilowatts, but at the moment we would be simulating the existing pattern of CHKF-FM so that they don't have to submit a change of technical briefs.

299 THE CHAIRPERSON: Could you tell me a bit more about your willingness to revise your technical parameters by proposing the use of an alternative FM, an alternate FM frequency even if it means one of a lower class, and I guess as part of that answer, would you also be willing to use, or considering using an AM frequency for your proposed station?

300 So I guess we are talking about an alternate FM frequency or an AM frequency given the large numbers that are competing for the 98.5. If more than one were licensed, would you consider any of these other options.

301 MR. BEAUDOIN: Kris, would you like to comment on the AM? Before Kris answers that, the AM, Mr. Chairman, would be a significant issue. Since it remains of course a music base to format, I think the listeners would then get the full value of the service if it was on an AM frequency. I think the listeners here would be significantly penalized if they wouldn't have access to that service to run an FM frequency.

302 We would be concerned about considering an AM band or an AM frequency to provide such a music-based service.

303 On the alternative AM and FM, I would ask Chris to comment on that.

304 MR. RODTS: Yes, we would be ready to look at that possibility.

305 THE CHAIRPERSON: I just have one more question here. I guess it is an opportunity or you get the opportunity to hear the home run, so to speak. In a couple of minutes can you quickly summarize what makes the Telemedia application superior to the other applicants?

306 MR. BEAUDOIN: Mr. Chairman, before I really take the last turn and I am pleased that you give us the opportunity. There are a couple of points that I would like to reinforce.

307 What we are proposing for Calgarians is not only a jukebox here. We are proposing a true radio station that will be delivering high-quality service to Calgarians, but also which will be part of our radio group in Alberta.

308 Something I didn't talk about this morning and I would like to take the opportunity to say a few words about it is the news area. We operate 15 radio stations here in Alberta, out of which 14 are in small markets. I believe we have a very unique news system. I would like to ask that Betty take a few minutes, if we may, to talk about the benefits that we believe we are providing to the community with our news system. Betty, if you can take a couple of minutes.

309 MS SELIN: Thank you very much, Claude.

310 Our news systems is the key link in our plan to connect those communities. We are already doing that in Alberta. The 14 small market stations that we have are electronically linked and share information. I know some people might look at that as a network, but it really isn't a network in the sense of a broadcast news network where it is only one way.

311 What this is is a news information exchange system, so that a story that is maybe developed in Wainwright and is relevant in Brooks can be shared with the audience in Brooks. That is why we think Calgary is an important part of that.

312 We have a number of communities who already feel connected to Calgary, like Drumheller and Brooks and so we think Calgary is an important link in what we already have in place.

313 The other thing is that we are experts in local news. You will not hear our news people just reading wire copy that listeners in Calgary can already hear on a number of other radio stations. We want to get the local angle on the air. We approach news diversity in a unique and proactive way. Our reporters are on the phone all the time developing local angles. We want to get Calgarians on the air.

314 In the time I spent listening to local stations I heard some good news, but I didn't hear a lot Calgarians on the air. We really are experts in that.

315 We don't like to blow our own horn, but I guess this is my opportunity. Our western Canadian newsrooms have won 29 provincial and national awards since 1995, including a Jack Webster award, eight BC/AB awards, two CAB awards, 15 RTNDA provincial awards and three national RTNDA awards and that is all for doing what we do best which is local news.

316 We want to bring our dedication to local news to the people of Calgary.

317 THE CHAIRPERSON: Thank you.

318 MR. BEAUDOIN: May I add now my final remarks, Mr. Chairman, or would you prefer to ask other questions?

319 THE CHAIRPERSON: I will give you an idea of where we want to go with our time management in the next few minutes. We are going to give you an opportunity to sum up with quick final remarks. We are then going to take our morning break. It will be a 20-minute break approximately because our hearing room is in the next tower, across the street basically, so it takes us a little bit of time just to get there and get back of course.

320 My colleagues have indicated that they have a few questions, so we will give the opportunity for them to fine tune the questions over the break and when we come back the other Commissioners will have questions for your panel. Legal may have a question or two and then you are done and we will move on to the next one.

321 MR. BEAUDOIN: So I am hearing from you, Mr. Chairman, that we will come back after the break.

322 THE CHAIRPERSON: We will come back after the break. Pardon me?

323 MR. BEAUDOIN: Telemedia.

324 THE CHAIRPERSON: Telemedia will be back for an additional seven or eight to ten questions after the break, but you are certainly welcome to finish answering this question now and then we will take the break when you are done.

325 MR. BEAUDOIN: I know Dave wanted to add a comment, so I will give an opportunity to Dave to have one comment.

326 MR. CALDER: I don't get this opportunity very often and I would like to take it on the issue of Canadian content.

327 In 1980 I was at a hearing as a BCIT student in Vancouver and I watched people like Bruce Allen, Bruce Fairburn, others that I knew quite well appear in front of the Commission and speak to this issue. Here we are today, 20 years later, looking at competitive applications and you ask about why we are unique, different.

328 I would say look at the music. I have got a list of 150 Canadian musicians that form part of our music universe, 150 of them, that's a larger music universe than we have in some of our CHR stations on a weekly basis. They are not, as we speak, worried about Canadian content. They are not getting played at all. It is not an issue for them from coast to coast as to how many stations are exposing their CDs. Pre the Hamilton station they are not getting exposed at all, not 1 per cent, not 2 per cent, no per cent.

329 This is a huge, huge step forward for those artists. As a broadcasters I am very, very proud to be a part of that.

330 MR. BEAUDOIN: Mr. Chairman, if I may propose that we have the break. I will give my final remarks after the break, after you go through some additional questions, if that is okay with you.

331 THE CHAIRPERSON: As long as you can fine tune them I guess because we have a couple of other applicants to hear today.

332 MR. BEAUDOIN: As you wish. If you ask me for my final remarks I can do it.

333 THE CHAIRPERSON: No, I am prepared to wait and then when we come back after the break I will hear your remarks.

334 MR. BEAUDOIN: I will just take the last two minutes.

335 THE CHAIRPERSON: I will then turn it over to the Commissioners for questions.

336 MR. BEAUDOIN: Thank you very much.

337 THE CHAIRPERSON: Mr. Secretary, we propose a 20-minute break.

338 MR. BURNSIDE: We will return here at 11 o'clock.

--- Upon recessing at 1040 / Suspension à 1040

--- Upon resuming at 1102 / Reprise à 1102

339 THE CHAIRPERSON: As some of you may have noticed, we have been doing a few adjustments to the microphones. We have had a bit of feedback, if you can pardon the unintentional pun, in that perhaps my microphone was a little too far away and there was some difficulty in hearing me at the back of the room.

340 Can you hear me clearly at the back of the room now? Okay.

341 Mr. Beaudoin, my microphone was too far away and some have said that yours was perhaps a little bit too close, so between the two of us, I'm sure we will keep them all happy.

342 If you could begin now with your brief summary prior to me turning questioning over to my fellow Commissioners. Thank you.

343 MR. BEAUDOIN: Thank you, Mr.Chairman.

344 We would like to bring some precisions on the technical front, Mr. Chairman, so I would like first to ask Mr. Rodts to make some comments.

345 MR. RODTS: Mr. Chairman, the majority of the other applicants have their own tower facilities. We do not. So, for us, it would be somewhat difficult to find the required tower space in Calgary. That is why we have proposed a partnership with CHKF-FM, to be able to duplicate their coverage pattern by going into a combined antenna and a combined combiner for both facilities.

346 The frequency of 98.5 also, of course, has its limitations and is fairly close to the CHKF frequency in order for us to allow us to combine both stations into one common antenna.

347 THE CHAIRPERSON: Thank you for that clarification.

348 Mr. Beaudoin...?

349 MR. BEAUDOIN: I guess there are really four key elements that we have been focusing on: diversity; a specialty format; a unique news system in Alberta; and our very innovative CTD.

350 On diversity, Mr. Chairman and Commissioners, no doubt it's an unduplicated format. Unique for this market. We are not competitive; we are complementary. I think this is a very significant benefit for Calgary. It is a specialty format. What the Calgarians will see at day one will remain unless we come back to you, CRTC, for approval. We are not a licensee in Telemedia. There's a clear new news voice. So, number one, diversity for us was key.

351 Number two: the format itself. The format itself, you know, please, it's a music-based format but it's a full radio station bringing full service to the population. But this format is a growing format. You were right in saying and reminding us very correctly that the hot AC format did well in our research but, Mr. Chairman and Commissioners, we believe that does not add diversity as significantly and we believe it is not a specialty format and we believe that the format we are proposing is a growing format for the future. So we strongly believe in that format, with a unique profile, and we believe, on the second front, that the format that we are proposing is a very significant benefit.

352 Very briefly, this new system, I know we don't talk about it a lot but envision this: being able to connect our Calgary station with the rest of Alberta. I think that's a very significant benefit also. And, Mr. Chairman and Commissioners, we do it now. We are not talking about a dream here. We are talking about today. Telemedia, in Alberta, is already connecting these communities through our new system with our 15 radio stations. All we are proposing is to add another station, but in such a key market that I think for this province, Alberta, the regional news system will be significantly reinforced.

353 Finally, our CTD plan. Mr. Chairman and Commissioners, we know we are not the ones putting the most amount of money on the table. We know that. But we believe that the money we put on the table goes directly to the local Canadian musicians and youth in this market. There are no wasted dollars here.

354 Our program is innovative. We capitalize on the youth working with the milieu to build a very effective program. We are quite proud of this program. It's been counter-mated with the people here in Calgary to fulfil their needs. Beyond the money, I think here's a grassroots initiative that works with the educators in this market that will bring, we believe, significant benefits to the system. Thank you.

355 THE CHAIRPERSON: Thank you, Mr. Beaudoin.

356 I will now turn the questioning over to -- some of the Commissioners have questions, and I will begin with Commissioner Cram, please.

357 COMMISSIONER CRAM: Thank you, Mr. Chairman.

358 Mr. Beaudoin, has Telemedia changed the format of any of their other radio stations to this smooth jazz?

359 MR. BEAUDOIN: No, Madam Cram.

360 COMMISSIONER CRAM: Either west or east?

361 MR. BEAUDOIN: None of Telemedia's stations, as of today, are programmed as smooth jazz.

362 COMMISSIONER CRAM: Can you tell me -- I think it's Ms Selin -- how many reporters does Telemedia have in Alberta right now?

363 MS SELIN: Right now we have 14 radio stations, and in those 14 stations we have 16 newspeople. We also have three in our Edmonton station and three at what we call ANN, which is our Alberta News Network, which operates in Edmonton as well. We would propose three for Calgary, as well, and all of the news in Calgary would originate from our Calgary studios with those three newspeople.

364 COMMISSIONER CRAM: And those are only reporters?

365 MS SELIN: No, one of them would be a news director who would most likely do the morning show as well, would be on air as well.

366 COMMISSIONER CRAM: So without administrative directors, et cetera, how many people do you actually have on the ground in Alberta now and how many will you have should you be licensed?

367 MS SELIN: We have 22 right now and we would have 25 should we be licensed.

368 COMMISSIONER CRAM: But those include directors. How many --

369 MS SELIN: Those people are on the air as well.

370 COMMISSIONER CRAM: No, I mean on the ground, out talking to people getting reports.

371 MS SELIN: All of our newspeople are good at multi-tasking. They do both. We think that to be good broadcasters you need to still be on the air. So even our people who dedicate some of their day to administration are still actively working the phones and still carrying air shifts.


373 I thank you for your document on the U.S. experience. I found it very helpful. I noticed, though, that on the U.S. experience the results were quite diverse, in terms of profitability and share.

374 Have you looked any further into it? Because I notice you have not -- it seems to me you have not really explored the day parting issue and the blending.

375 Does the success or lack of success of any smooth jazz station depend on its programming and when it programs instrumental or singing -- have you looked into that at all?

376 MR. BEAUDOIN: Yes, we did some monitoring of some U.S. radio stations but one of the findings was that we didn't find significant impact on the day parting. This is why we do not propose to have a different balance through the day parting of our schedule.

377 On the U.S. experience, as Mario mentioned to you, we had about 25 to 30 observations of specific market and radio stations tracking how they have been doing, the audience profiles, and it is based on these stations that we have been able to pursue our reflections in our projections for Calgary.

378 COMMISSIONER CRAM: But their profitability does not depend on how they day part or how they program?

379 MR. BEAUDOIN: We didn't find any information that would allow us to conclude on that. Of course, we didn't have access to their detailed financial statements but, no -- I don't know, Dave, if you want to add a comment.

380 MR. CALDER: The issue of day parting, I think, would be similar to this station as it would be to other radio stations we have programmed in that familiarity is going to be important in morning drive, for example, and if you are going to introduce music that sort of pushes the envelope a little bit, you may well do that in some of your French periods first and then, depending on the audience response to it -- because we have a significant budget as you will have noted, in terms of music testing and those kinds of things, and similar to any other contemporary format you would roll that music into your primary day parts once you found that it had tested well. But it isn't an issue, I think -- if I understand you correctly, it isn't an issue of vocal versus instrumental, in terms of the day parting; it would be the issue of familiarity versus not. I guess the other issue that I noticed pretty quickly, and was delighted to see, is that it seems that in the western half of the U.S. the stations tend to be growing at a faster pace, and based on where are today I think that's probably a good thing.

381 COMMISSIONER CRAM: It could be that they are new and so, therefore, they are growing, or it could be for many reasons.

382 MR. CALDER: I think so. It's demographics for sure. But there's no question, as I say, it's not so much an issue of vocal versus instrumental. So if there is day parting, it would be based on familiarity.

383 COMMISSIONER CRAM: I'm sorry, I didn't hear a precise answer to the concept of blending. I know that you are -- are you no longer proposing the concept of blending here?

384 MR. BEAUDOIN: Are you referring to the Canadian content --


386 MR. BEAUDOIN:  -- of 35 per cent?

387 If you mean blending between the Category 2 and Category 3, yes, you are correct. What we are proposing this morning as a commitment is that 35 per cent will be the minimum content by Category 3 and 2 sequentially.

388 COMMISSIONER CRAM: So there would be no blending?

389 MR. BEAUDOIN: Exactly.

390 COMMISSIONER CRAM: Now if we do not accept the amendment, can you please explain to me what you mean by "blending".

391 BEAUDOIN: What we meant, Madam Commissioner, was that, of course, as indicated in our proposal, you know, about 70 per cent actually will come from Category 3 and so about 30 per cent would come from Category 2. So of course because for Category 3 the minimum requirement by the CRTC is as low as 10 per cent, one could think, well, let's you know use Category 2 to push the Canadian content as a general area and so we can manage Category 3 as a specialty format closer to the 10 per cent. And by blending the two categories, of course, we are still respecting the 25 or 35 per cent, whichever is the commitment. What we are saying today -- and that's what we meant by "blending". So what we are --

392 COMMISSIONER CRAM: I just need to explore this because you have to recognize that there is some probability that we won't accept your amendment and so we need to know what you are proposing.

393 What we will be talking about is something that we have never done before, if I understand it. We would habitually say a COL of Category 2 this much Canadian and a COL of Category 3 this much Canada. And you are suggesting a blending of the two. Is that correct? For a total. Is that how that blending works?

394 MR. BEAUDOIN: This was in the original filing, yes, Madam Commissioner, this would have been the case, blending the two categories to 35.

395 If I might make a last comment, we also, by doing and proposing and amending our proposal today, recognize that is not the way the CRTC was normally working. So this is also why we are pleased to take this commitment of having a clear commitment of 35 per cent by category.

396 COMMISSIONER CRAM: I understand you also have the same proposal in at Vancouver, which is why I would like to have it clarified, even if we do accept your amendment here.

397 Tell me -- and I am worried about the change you have proposed -- how do we preserve what I would call the integrity of the process when we have amendments at the hearing? How do we preserve fairness to the other applicants, because I don't want this to end up being other people coming up and adding another promise and another promise?

398 This is a competitive application, and you are very well aware of that. How do we preserve the integrity of the competitive process with amendments at the table?

399 MR. BEAUDOIN: It is a relevant question, to say the least, Madam Commissioner.

400 Again, I guess here we are talking about -- you know, yes, it is a competitive hearing -- we are talking about a specialty format. We are talking about a new format.

401 My response, Madam Commissioner, is that I think we are all learning, in this country, about this format. This format essentially does not exist. Okay?

402 I would go as far as saying that if the CRTC today was even going to review its regulation, maybe even the CRTC would question the current 10 per cent. We are learning about this format. It is a new format. It is a new category. It is a new specialty licence.

403 We are here today to propose, in view of this market investigation in music supply which is new for everybody, that we came honestly to the conclusion that we could support this. But of course we do respect and appreciate that it is the CRTC's decision to accept our proposal or refuse. We obviously respect that entirely and we are sensitive to your comments on the process and the integrity of the process.

404 My only comment that I can add, I think what we are facing today, in this format, is a new genre, a new format. The objective is to make sure that we bring something to the community that will respect the spirit of the regulations, and we hope and we trust and we count on your wisdom to make a fair decision.

405 COMMISSIONER CRAM: Mr. Beaudoin, though, you wouldn't have any problem with any of the other competitors objecting to us taking that and accepting your amendment?

406 MR. BEAUDOIN: Madam Commissioner, we are respectful of the rule and the process, and it is up to the CRTC to decide how you want to proceed with that, but we will respect your way of --

407 COMMISSIONER CRAM: Just as you don't object to anybody else making an amendment in that spot.

408 MR. BEAUDOIN: Madam Commissioner, I am just going to refer to the fact that we are not tabling for a non-specialty format. In the non-specialty format, I think we have much more experience in this country how we deal with a non-specialty format. I am simply suggesting that here we are talking about a specialty format and we are learning about a specialty format called "smooth jazz".

409 COMMISSIONER CRAM: Your position, if I understand it correctly, is that if what you knew today about the quantity and quality of music in your genre you knew at the time you made your application your application would have been different. Is that correct?

410 MR. BEAUDOIN: It is correct.


412 Thank you very much.

413 THE CHAIRPERSON: Thank you, Commissioner Cram.

414 Commissioner Langford, do you have questions?

415 COMMISSIONER LANGFORD: They were fooling with this, so I make no guarantees. I seem to have it working. Now if we can just get a carpenter to remover the pillars we can --

--- Laughter / Rires

416 COMMISSIONER LANGFORD: We have everyone sitting on the bride's side of the aisle here. It reminds me of my wedding.

--- Laughter / Rires

417 COMMISSIONER LANGFORD: I have a question that may be somewhat off the wall and so if it is just don't answer it; it's as simple as that. I will give you your defence now to the question.

418 I noticed in your -- well, one couldn't help but notice, in your Canadian development proposals, that they are basically educational proposals. And that's fine. In this day and age when the schools are screaming for money, who can complain.

419 But I noticed that other candidates, applicants, as well are focusing on education. I will mention one without excluding others, but CHUM, the CHUM application -- you must have read it -- has a lot of emphasis on getting into the schools and working with the schools, and the same sort of thing, perhaps in a different format or a different genre than what you are working in, but still working in the schools.

420 Do you folks ever get together on these things? I mean, I know you like to take the glory for doing this, but it seems to me when you are working in something like education that it might be an opportunity to partner, so I would put a proposal to you.

421 Assume, for example, that following up on the Chairman's earlier questions about the technological feasibility of using another frequency we were to grant two licences, and let's assume, just for the sake of argument, that it was CHUM and you and you were both heavily involved in education, would you consider working together so that you get more bang for the buck, as a former American president once said?

422 MR. BEAUDOIN: CHUM is a great organization and I'm certain that we don't have any problem to see how we can maximize the impact that we could have serving the Calgary community.

423 I guess before the hearing, I mean up to this stage, I think, as Madam Cram reminded me a few minutes ago, it is a competitive hearing, so of course we can all appreciate that no, no, with all respect to CHUM, we did not talk to each other, and each of us I guess is trying to see what kind of program should be proposed with our vision of what we want to do, so up to that, no.

424 But to react to your comment, I guess I take note of it and it is something I guess that we can reflect in the event that you are suggesting that we could probably see, at the end of the day, how we can make sure that we are really maximizing the value of our program, so that is an idea that I will keep in mind.

425 COMMISSIONER LANGFORD: It just seems to me that timing is everything. What is collusion before the decision is made is community service afterwards, you know.

--- Laughter / Rires

426 COMMISSIONER LANGFORD: It's a little bit like your wedding day, you know. What happens before is viewed differently as to what happens afterwards, you know.

--- Laughter / Rires

427 COMMISSIONER LANGFORD: Anyway, it seems to me to be an interesting area to explore since everyone is so community-minded, but it would be interesting to see how that might play out.

428 Thanks very much.

429 THE CHAIRPERSON: Thank you, Commissioner Langford.

430 Commissioner Noël.

431 CONSEILLÈRE NOËL: Bonjour, Monsieur Beaudoin. Deux très courtes questions.

432 Quand on vous a demandé -- quand le Président vous a demandé si on vous accordait la licence, votre demande prévoit que ça serait en opération en septembre 2002.

433 Est-ce que vous vouliez dire septembre 2001?

434 M. BEAUDOIN: Madame Noël, je suis content que...

435 THE CHAIRPERSON: Excuse me just for a second.

436 I am sorry, Commissioner Noël. We didn't anticipate questions in French.

437 COMMISSIONER NOËL: There is no translation, so I will rephrase my question in English.

438 THE CHAIRPERSON: No, I don't have a problem with you asking your question in French, it's your right, but if you could also repeat the question in a similar manner in English for us unilinguals it would be helpful.

439 Thank you.

440 COMMISSIONER NOËL: I was just asking because the Chair referred to a start time if the application was granted, a start time or a start of operation of September 2002. That's in the application. From your previous answer to his question, I sort of understood that you meant 2001, so there would be an error in your application.

441 M. BEAUDOIN: Merci, Madame Noël, de me donner l'occasion d'apporter cette précision. Effectivement, je faisais référence à l'année 2001 en imaginant que le CRTC rende sa décision d'ici trois ou quatre mois.

442 So assuming that the CRTC's decision would be rendered within the next three to four months, I was obviously referring to 2001.

443 Merci.

444 COMMISSIONER NOËL: Mr. Beaudoin, the other question I have is concerning your format. I would like you to explain to me if this could be seen as a niche format, a little bit like the CJPX in Montreal, the co-alliés station, which is a classical music station.

445 Would you describe your proposition as a niche format rather than a general public format?

446 MR. BEAUDOIN: Yes, I think so, Madam Noël. I would call it a niche format on two or three folds. One, you know, referring to the market share that we are projecting. We are projecting a market share of 4.5, and the 4.5 becomes a plateau, contrary to what one would call the mainstream format that could go significantly above 4.5, so this format will tend to plateau at 4 or 5 per cent. This is also consistent with the U.S. experience that we have found.

447 So number one, I would say that in that sense it would be called a niche format.

448 Number two, the format itself and the music that we are going to play, let's face it, the jazz and smooth jazz type of music, is definitely what could be called a niche format, and the fact that the CRTC has recognized such a format as a specialty format in my view sort of confirms that it is a niche format.

449 My third comment would be on the profile of the audience, the type of advertisers that you would reach. This would be called, definitely, in my view, from a marketing standpoint a niche format.

450 COMMISSIONER NOËL: Just a final question.

451 Did you pick a specialty format as a means of committing yourself to the format or was there any other motivation?

452 MR. BEAUDOIN: First of all, we recently picked a specialty format, we have chosen smooth jazz, and I would like to make this comment first, okay.

453 Our research, when we did our research we researched smooth jazz regardless of the specialty/non-specialty. So first, our pick was on and is on smooth jazz. However, the CRTC regulations indicate that this is a specialty format. You know what, that is fine with us.

454 We are pleased to make this commitment, this commitment that not only is this format different, but the commitment that the format will remain different. Our research indicates that we can sustain this commitment. So we are pleased today that this format is a specialty format.

455 CONSEILLÈRE NOËL: Merci beaucoup, Monsieur Beaudoin.

456 M. BEAUDOIN: Merci, Madame.

457 THE CHAIRPERSON: Thank you, Commissioner Noël.

458 Just prior to turning you over to legal counsel, we want to thank you for your jazzy presentation, smooth answers and we recognize your desire to bring smooth jazz to "Ville de vaches", which is French for "Cowtown" for my fellow unilinguals. Commission Noël helped me with that a minute ago.

--- Laughter / Rires

459 THE CHAIRPERSON: Legal counsel.

460 MR. BATSTONE: Thank you, Mr. Chair.

461 I would just like to ask a few questions centred around the Canadian content commitments again.

462 If the Commission were to accept your 35 per cent commitment, I just would like to confirm from you whether you would accept that as a condition of license. This would be 35 per cent in content Category 3.

463 MR. BEAUDOIN: Yes, legal counsel.

464 MR. BATSTONE: Thank you.

465 In terms of scheduling -- and again I am speaking of the content Category 3 selections -- can you confirm for me that the 35 per cent, if that is what the Commission accepts, would be scheduled in a reasonable manner throughout the broadcast day, and would you also accept -- I'm sorry, maybe you should answer that one first.

466 MR. BEAUDOIN: Yes.

467 MR. BATSTONE: Would you also accept that that would be 35 per cent of the Category 3 in the 6:00 a.m. to 6:00 p.m. period?

468 MR. BEAUDOIN: Yes, legal counsel.

469 MR. BATSTONE: Okay. Thanks very much.

470 My last question, then, is in respect of repeats of musical selections. Again I'm talking of the Category 3 selections.

471 With respect to those, the Canadian Category 3 music selections, can you tell me how often those selections would be repeated over the broadcast week?

472 MR. BEAUDOIN: Dave, do you want to answer this?

473 MR. CALDER: The repeat factors overall are significantly lower on smooth jazz than they are in pretty much any other contemporary format that I am aware of. Our first pass does divide up into what we would call a power rotation and those types of things, but I would say the highest repeat factor would be probably under 15 spins in a week. That would apply only to our power rotation and then the numbers would drop pretty rapidly from there.

474 I think I mentioned just before the break that the Canadian music universe that we have developed already, which is close to 150 artists -- that is 150 artists, not songs yet in terms of drawing from that, so presumably the universe is even larger -- will allow us to have the spin level lower, particularly in the recurrent and gold categories.

475 MR. BATSTONE: Would there be a higher level of repeats for the Canadian material than the non-Canadian?

476 MR. CALDER: No.

477 MR. BATSTONE: Okay. Thank you very much.

478 THE CHAIRPERSON: Thank you, Mr. Batstone.

479 Mr. Secretary, what I propose we do is we hear the opening remarks of the next applicant, Newcap, and then break.

480 We have a conference call with the other Commissioners on an issue that we have to deal with during the lunch hour, so we plan on returning at two o'clock -- I'm sorry, 1:30. We should be able to be back by 1:30.

481 So once we have heard the opening remarks of Newcap, we will then break for lunch until 1:30.

482 So thanks again for your presentation.

483 Mr. Secretary.

484 MR. BURNSIDE: I would like to call Newcap Inc. to present their application, which is for a broadcasting licence to carry on an English-language FM radio programming undertaking at Calgary on frequency 98.5.

485 The applicant is proposing an adult contemporary modern rock music format.

--- Pause / Pause

486 THE CHAIRPERSON: Mr. Secretary, while Newcap is getting settled in, I note that we do have the French translation here. Are there headsets available for people in the audience and ourselves?

487 Perhaps after lunch we will distribute them, in the event that they are needed during the questioning period.

488 Thank you.

--- Pause / Pause

489 MR. BURNSIDE: You may proceed when you are ready.


490 MR. TEMPLETON: Good morning, Mr. Chair, , CRTC staff. My name is Bob Templeton. I am the President of Newcap Broadcasting.

491 Just before we begin our presentation, I would like to introduce our panel.

492 Rob Steele. Rob is a member of the Board of Directors of Newfoundland Capital Corporation Limited and the son of our Chairman, Mr. Harry Steele. Rob is a successful Halifax area businessman who is taking an important role in the operations of Newcap's primary business, radio.

493 Liz Janik. Liz is a Toronto-based consultant and researcher. From her early days at CFNY to her status today as one of North America's foremost program consultants in modern rock and modern AC, Ms Janik has been a leader in alternative rock and pop formats for over 20 years.

494 Anna Zanetti. Anna is an important part of the management team of Q104, our Halifax rock station where she is the music director and midday host. She is well known in the industry for her passion and knowledge of rock and her sustained support for Canadian music.

495 Peter Doering. Peter has 30 years experience in the field of marketing and behaviour research. After 25 years with Goldfarb Consultants, including the position of president of the company, he left to open his own firm, providing market research services. He is a lead researcher for the Ford Motor Company and Four Seasons Hotels and Resorts worldwide. Mr. Doering conducted the market research from which we designed our business plan.

496 David Murray. Dave is Vice-President, Operations at Newcap Broadcasting. He helped to develop the business plan and, in particular, the financial projections for our proposed station.

497 Bob Kennedy. Bob is a British Columbia-based broadcaster and consultant. His experience and expertise includes news and information, as he was News Director for both CHUM and CJEZ-FM in Toronto. He has served as a consultant on community and aboriginal issues to various governments. He is a member of the Oneida Nation and the publisher of, one of the most visited news and information aboriginal Web sites in the world.

498 Jackie Rae-Greening is part of the management team of Canada's most successful AM country station, CFCW in Camrose, Alberta where she is the program director and morning host.

499 Jackie is very active in community events in central Alberta. She is here to answer any questions you might have about our plans for community involvement.

500 We would also like to point out the presence of others in the room who are important in the development of this application. In the front row is Mr. Harry Steele, the Chairman and CEO of Newfoundland Capital Corporation. Beside Mr. Steele, is his son John Steele, Vice-President of our radio operations in Newfoundland. Beside John, is John Matthews who prepared our engineering brief. Beside Mr. Matthews is Linda Emerson, our executive assistant. Beside Linda is Steve Jones, Program Director of our Edmonton FM radio stations.

501 Mr. Chair, we are now ready to start our presentation.

502 We are here today to request your approval to operate a new FM station to serve Calgary. The proposed modern rock/modern AC station will operate on the FM band at 98.5 with an effective radiated power of 100,000 watts.

503 MR. STEELE: Good morning, Mr. Chair and members of the Commission. It is a pleasure to appear before you here today for the first time in Calgary.

504 Newfoundland Capital Corporation is a publicly traded company with its headquarters in Atlantic Canada. My father launched Newfoundland Capital in 1978 in the transportation business, operating Eastern Provincial Airways. Subsequently, we moved into other fields of transportation, including trucking and rail forwarding both in Canada and the U.S.

505 In 1985, the company diversified into communications, particularly radio. NCC made strategic acquisitions in radio, acquiring stations in difficult markets where others had given up, including Newfoundland. More recently, the company decided to refocus itself as a media company, divesting all of its transportation assets. Our primary business focus is radio.

506 Currently, we hold radio licences in the four Atlantic provinces and in Thunder Bay, Ontario. Newcap is also the licensee of two stations in Edmonton, the most recent acquired in 1997, and an AM station in Camrose.

507 We have demonstrated that radio is our priority. In Newfoundland, Halifax, Moncton, Charlottetown, Thunder Bay, Edmonton and Camrose, our determination to devote the necessary resources and our managerial ability have turned around stations that many others had given up on. We have made successes of them all. In fact, in the markets we serve, we are pleased to report we are the market leaders or close to that status.

508 Our family is absolutely committed to radio. My brother John and I have taken an increasing role in the operations of the company. John manages and operates the Newfoundland network and I have dedicated myself to spearhead our national initiatives. Radio is our future and that is why both of us are here today.

509 Mr. Chair, we wish to grow beyond our base in Atlantic Canada to have a true national presence, developing a stronger radio company with the reach to compete with the Toronto and Montreal-based broadcasters who operate in many of our markets.

510 Our growth will bring additional diversity to the national radio market, as we are the only major broadcaster based in Atlantic Canada.

511 As you know, we have submitted applications in a number of markets across the country for new stations.

512 When looking at where we could grow, Calgary was an obvious choice for us. It has one of the fastest growing economies in Canada. The radio market is one of the most profitable in the country with margins much superior to the industry averages and with fewer stations per persons than many other major markets.

513 For example, in Edmonton, a market we currently serve, a smaller population is served with more FM stations than in Calgary, and a smaller radio revenue pie is shared between a greater number of stations. Furthermore, Calgary has a special interest to us, as a natural addition to our Alberta operations.

514 Having determined that Calgary was an underserved market that was of interest to our company, we decided to apply our unique approach to the market to develop a format. First, we conducted research on what the listeners in the market wanted, then we designed a station to meet those needs and applied for it. In fact, our application triggered the call for this market.

515 We turned to Mr. Doering to undertake that research.

516 MR. DOERING: Newcap asked us to determine how satisfied Calgary residents are with the current radio offerings available to them and to identify which music format Calgarians would most like to see on a new Calgary FM station. Newcap wanted its research study to be very thorough to give Calgary residents the opportunity to evaluate the appear and diversity of many different possible music types, not a preselected few.

517 We conducted 600 telephone interviews in the Calgary CMA with residents 18 to 54 years of age. Our study found that less than half of them, in fact only 45 per cent of all listeners, are very satisfied with the radio choices available to them in the market. Men in particular are the least satisfied, with only 30 per cent being very satisfied, whereas 60 per cent of women are very satisfied.

518 We then asked listeners to identify which type of music they would prefer on a new Calgary radio station. In all, we explored the interest in 19 different music types. Three types of music emerged as the most in demand among those least satisfied with current Calgary radio stations. Those three: modern rock, modern pop and '90s pop.

519 Next, we determined the interest of Calgary residents in 19 different radio formats. Two emerged as the highest interest formats among those looking for something different from what is currently being offered by existing stations: modern rock and modern AC. These formats have particular appeal to both men and women 18 to 44 years of age and especially with those least satisfied with current Calgary radio offerings, men aged 25 to 34.

520 We also asked listeners their perception of how hard or soft the music is on each of the existing Calgary stations and how old or new they perceive it to be. In addition, we asked their perceptions of each of 19 different music types that could be made available on a new radio service. The chart before you and appended to your copy of the remarks graphically illustrates the listeners' opinions. Clearly, a modern AC/modern rock format is perceived as quite different from what other stations in the market are providing. This difference also means that the format would have minimal impact on listening to other stations.

521 MS JANIK: Modern rock and modern AC are characterized by the diversity of the musical styles featured as well as a strong emphasis on new music. Modern rock listeners have an adventurous, eclectic appetite for new music. They are turned off by the formulaic approach of the mainstream rock and pop music formats.

522 The hybrid of modern rock and modern AC has emerged as the format that meets the needs of the widest available audience by clipping the hardest edge from the modern rock and eliminating the softer edge from the modern AC to provide a sound that ranges from Canadian modern rockers, Puddy, to tomorrow's next new Canadian modern AC superstar, Tara MacLean.

523 In order to verify the clear diversity of this format attested to by Calgary residents in Mr. Doering's research, we compared the actual music played on the existing radio stations in the market for the week after we submitted our list to the Commission. The existing stations' playlists from a full week of programming in July were obtained from Broadcast Data System or BDS. Their song lists were compared to our 18-hour playlist.

524 The results of that analysis are on the bar graph on the chart before you and have been appended to our remarks. There is almost no duplication of existing stations. In real terms, the overlap of songs with CKIS was only 4 per cent, with CHFM it was 13 per cent, with CJAY it was 12 per cent, with CKIK it was 16 per cent, for CKRY, the country FM station, it is less than 1 per cent. Clearly, 84 per cent of the music that our station will play will be distinct from any one other station in the market.

525 Moreover, we will provide the diversity in Canadian artists that CIRPA's intervention calls for. There are dozens of Canadian artists who will be featured on new rock 98.5 who never receive airplay in Calgary. A list of some of these artists, 75, is appended to these remarks.

526 MS ZANETTI: Once, we new what Calgary listeners wanted we designed a radio station that would meet their expectations. The alternative pop and rock music featured on new rock 98.5 will feature new, emerging and non-traditional artists and groups. A minimum of 50 per cent of the music we play will be selections released within the past 12 months.

527 Modern music fans are big supporters of Canadian music from both national and local talent. In fact, Canadian acts are important mainstays of the format in both Canada and the U.S.

528 When young Canadians get together to create music today, modern rock and pop is usually the result. In recognition of these facts, NEW ROCK 98.5 will feature a minimum of 40 per cent Canadian music, distributed equally in all day parts.

529 Modern rock and Modern AC listeners want new music and they want lots of it. They are passionate and knowledgeable about their music and they want announcers who can talk about the music with authority. We will meet their needs not only through the diversity and choice of music, but also through specialty new music shows, such as:

530 "Like It or Spike it", a nightly feature in which listeners will call or e-mail their opinion about new releases. This will be tied to the chat room on our Web site and help guide our selection of new music.

531 "Locals Only", once a week an hour-long program will feature Calgary and Alberta artists playing original music.

532 "7 at 7", every evening at 7:00 will feature the top seven modern rock and modern pop songs voted by our listeners through the Internet or by phone.

533 "Virtual Calgary", every Friday night we will broadcast live from a Calgary nightclub, featuring cutting edge Canadian modern rock artists.

534 Our emphasis on new music adds to the diversity and distinctiveness of our service and fills a need that local artists and musicians have for radio airplay. This format requires and attracts announcers who are passionate and informed about the music and who want to share their passions with their audience.

535 Of course, our audience is also very music active and their tastes and interests will have a great influence on our music choices. Our announcers will want to engage in a dialogue with the audience about the music, the musicians and the events in our community, both on air and through the Web site.

536 NEW ROCK 98.5 will undertake a number of additional initiatives in support of Canadian modern rock and pop talent.

537 $700,000 will be provided to FACTOR over the course of the licence to support the production of new music by Calgary and other Alberta modern rock NAC musicians.

538 A minimum of 21 free announcements per week will promote new releases by Canadian musicians in our format. We will also promote the appearances by Calgary and area musicians.

539 Our station will actively seek out local musicians and invite them to submit their new music for airplay. This will be promoted regularly on the station and on our Web site.

540 Our Web site will have a special section on Canadian music, outlining new releases, current charts, background on artists and a comprehensive guide to the upcoming appearances in our area. A special focus will be devoted to local artists.

541 MR. KENNEDY: Mr. Doering's research indicated that local and regional news is very important to Calgarians and that many of them are not satisfied with the information services now available to them. We will meet the strong listener demand for local news, traffic and weather with 71 information packages each week and by ensuring that a minimum of 50 per cent of the stories aired will focus on Calgary news, with an additional 25 per cent focusing on Alberta news.

542 Our local news department will be supported by our Edmonton station's coverage of the Legislature. This will ensure a new and different view of provincial affairs in the market, while freeing the local staff to focus even more on the Calgary news.

543 Our news reporting will be supplemented by 37 public affairs reports each week. Our backgrounders titled "Calgary Today" will be broadcast as part of all major newscasts, other than those in the morning drive.

544 This important initiative to reflect Calgary to itself will culminate in a weekly one-hour program called "Calgary This Week" which will cover the past week's major local stories in greater depth, and our Web site will provide more detail on both our newscasts and the stories that we are following on both "Calgary Today" and "Calgary This Week". This includes links to other Web sites with related information.

545 Our audience will be encouraged to provide us with feedback that we will incorporate into our spoken word features.

546 MS RAE-GREENING: Mr. Chair, I can't believe that if it is to become a national player, it must develop initiatives that reflect that status. With this in mind we have developed three initiatives that you will see reflected in all of our applications.

547 First, we believe in giving back to the markets we serve. So, for example, in Edmonton we established a trust fund to help children and youth. In Calgary we will establish a similar fund to help disadvantaged children in the area. We will raise funds through a variety of activities to support these initiatives.

548 In Edmonton this has resulted in significant funds being provided to support a variety of initiatives.

549 Secondly, we recognize that our industry and our company have a way to go to ensure that our workforce reflects the face of the communities we serve. Beginning on day one, we will maintain representation among the four designated groups, women, visible minorities, aboriginal people and persons with disabilities, equal to their proportion in the Calgary population.

550 Third, the Broadcasting Act recognizes the importance of service to aboriginal people. In fact, section 3(1)(o) states that "programming that reflects the aboriginal cultures of Canada should be provided within the Canadian broadcasting system as resources become available for the purpose." Furthermore, the Royal Commission on Aboriginal Peoples report identified the urgent need for accurate information and realistic portrayals of aboriginal people.

551 The Commission has made an important contribution to meeting this need through its licensing of TVNC to serve the north and APTN to provide television service to all Canadians. Your licensing of aboriginal community stations in the north and those based in First Nation communities has provided local service to many.

552 But radio service is underfunded and does not generally reach where most aboriginal people in Canada reside -- in our major cities. Moreover, no new funds are available from the federal government to extend service.

553 MR. TEMPLETON: Newcap has engaged in a joint effort with Aboriginal Voices Radio to fund the development of a national Aboriginal Voices Radio Network, providing high quality national news, information, music and cultural programming reflecting the experience of aboriginal people from all regions of the country. The licensing of Aboriginal Voices radio will continue the momentum to ensuring that aboriginal citizens are as well served by the broadcasting system as all Canadians.

554 As part of our commitments in this application, we will contribute over $2.3 million for the development of AVRN over the course of the licence.

555 As we have mentioned earlier, we invest heavily in the success of our stations by ensuring the necessary resources in programming. The financial projections that we submitted to you with our application project spending $10.4 million on news and programming over the course of the seven-year licence. This amount is 25 per cent higher than the second-highest applicant and more than double the lowest. We intend to spend these amounts to ensure a high-quality service that will reflect the local community and meet the needs of our audience.

556 Mr. Chair, we believe that there are at least five compelling reasons to award a new FM licence to Newcap in Calgary.

557 First, the quality of our application. Our application is based on a format developed from thorough research. We are confident that our format will provide the musical diversity that Calgarians say they are lacking. Based on our research, we have designed a station that will meet their music and spoken word needs.

558 Second, contribution to Canadian expression. Our minimum proposed Canadian content level of 40 per cent exceeds your requirements and will meet the expectations of our audience. New Canadian music will be front and centre in all of our activities.

559 Third, diversity of voices. In a market that once had a significant number of different owners, we will provide a new voice -- one with a unique perspective. You will also be facilitating the emergence of a strong new national radio player, contributing to diversity on a national scale.

560 Fourth, reflection of the local community. Our comprehensive news and other spoken word programming are designed to reflect the needs of Calgary residents. The local music community will be supported by the emphasis on local musicians. Our employment equity initiatives will ensure that our workforce reflects Calgary's demographic make-up.

561 And last but not least, meeting public policy objectives. $700,000 will flow to the support of Calgary and other Alberta Modern Rock and Modern AC talent. In addition, approval of our proposal will result in over $2.3 million to local and national aboriginal radio initiatives, thereby contributing to the objectives of the Broadcasting Act and other public policy objectives.

562 Newcap Broadcasting is willing to devote the resources necessary to make stations work. We stay the course. We stick with the formats that we have chosen because we base our approach on constant research into the markets we serve and the needs of our audiences. We also devote significant resources to programming, resulting in consistent quality of service. That approach is reflect in this application -- our format and programming are based on the expressed needs of the Calgary audience. Our programming spending projections are substantially higher than those of any other applicant at this hearing.

563 MR. STEELE: Newcap is proud of our heritage as an Atlantic Canada based broadcaster. In an increasingly consolidated radio environment, we have to grow to be competitive with the large radio entities that have emerged. Newcap needs to be a national broadcaster and is making the commitments necessary to merit that status. Your 1998 radio policy expressed the wish to balance the need for consolidation to ensure strong players with the need for diversity of voices. Strengthening a mid-sized radio company helps to meet both of these goals.

564 MR. TEMPLETON: That concludes our presentation, Mr. Chair.

565 THE CHAIRPERSON: Thank you, Mr. Templeton and panel members.

566 As mentioned at the beginning or just prior to your presentation, we will be taking a break. We are going to take a slightly longer break than originally said. We will return at 1:45 p.m. and begin with the questioning of your application.

567 MR. TEMPLETON: Thank you.

--- Upon recessing at 1158 / Suspension à 1158

--- Upon resuming at 1345 / Reprise à 1345

568 THE CHAIRPERSON: Good afternoon.

569 We will reconvene this hearing beginning with Newcap and Mr. Templeton's group and the questions for your presentation to be led by Commissioner McKendry.

570 COMMISSIONER McKENDRY: Thank you, Mr. Chair.

571 Good afternoon. I just wanted to start by asking a couple of questions that came to me out of your oral presentation this morning, in particular, the three appendices to it which are behind you.

572 The first question relates to format, particularly in relation to your target demographic, which I take to be males 18 to 34. Is that correct?

573 MR. TEMPLETON: Overall, it is 18 to 44, and there is a fairly even balance between male and female. But primarily it is 25 to 34 is the narrow demographic.


575 Looking first at the chart that shows Providing Diversity to Calgarian's Desire, which is the third last appendix in your presentation this morning, just help me a bit in understanding your format in relation to the format of the other stations that are on this chart, because it strikes me that although there is a fairly wide dispersion on the chart that in terms of the actual format there is not that much range in the difference between, for example, soft AC, modern AC, modern rock, classic rock and the contemporary hit radio CKIK. They would seem to be more closely grouped together than this chart would indicate.

576 I am just wondering if you could help me understand the difference between your format and the formats, in particular, of CKIK and CJAY.

577 MR. TEMPLETON: I would like to make a couple of opening remarks, Commissioner, and then I will call on Ms Janik and perhaps Mr. Doering to elaborate further.

578 As you can see from the chart before you, when we did our comparative analysis of duplication of music, the chart on the left, there was virtually no duplication. These are artists that are not featured on existing stations in the market. This is an alternative leading cutting edge format, very new -- 50 per cent of the music is new within the last year.

579 On that note, I think I will ask Ms Janik to explain the nuances of the difference between a modern rock/modern AC format versus the existing formats in the market.

580 Liz.

581 MS JANIK: If I understand your question correctly, you are curious about the particular graph on the right.

582 COMMISSIONER McKENDRY: In particular, it struck me that although the dispersion graphically displayed, there is a wide dispersion of a visual point of view there, the difference isn't as wide as perhaps the graphic would indicate. I would just like to understand better the difference between your proposed format and the format of the other stations, particularly CKIK and CJAY.

583 MS JANIK: This particular graph comes directly from the research and it is mathematically plotted based on the responses that the interviewed people gave to us. Since it comes directly from the research, I would like to refer that to Mr. Doering directly.

584 MR. DOERING: Commissioner, the graph in question has been developed based on the responses that Calgary residents gave in the research. We asked them to describe the music on each of the existing stations as well as the format that we are proposing. That is plotted graphically and the dispersion is mathematically correct there. So that is the dispersion that comes out based on the responses of people and how hard or soft they perceive the music and how new or old they perceive it to be.

585 So the dispersion is proportional to the responses that were given.

586 COMMISSIONER McKENDRY: If I was driving along in my car and I tuned into your proposed station to modern AC/modern rock and I then tune into CKIK with its contemporary hit radio, which I take to be top 40, from a listener's point of view, what would I hear as the difference?

587 MS JANIK: From a listener's point of view? The most outstanding feature that you would hear on the Newcap station is that the music sounds fresh and different. It doesn't sound like the formula soft AC sound. It doesn't have the traditional rock radio sound and it doesn't have the teen and rap factor that is available on the CHR.

588 So those ingredients that are fundamental to those three formats are missing from the modern AC/modern rock format.

589 What you will hear is a variety of music styles including pop and rock from artists that have fresh new sounds, and you will hear a higher level of new music from that type of artist than on any other station in the market.

590 The listeners themselves saw this station as being a newer and slightly more edgy station than what is available.

591 COMMISSIONER McKENDRY: Maybe we could just turn to the next graphic displayed, just to help me understand that a little better.

592 That indicates that there is very little overlap between the music you are proposing to play and the music that the other stations play.

593 What I am wondering is if each of those other stations has a distinct format, in order for us to properly appreciate the difference with respect to overlap, should we not accumulate the 4 per cent, the 13 per cent, the 12 per cent, the 16 per cent and the 1 per cent to understand how much overlap there would be with what is currently heard in the Calgary market?

594 MR. TEMPLETON: No, I don't believe you can do it that way. It was compared individually with each station in July versus the playlists that were supplied to us through BDS.

595 Liz, would you like to elaborate on how the analysis is done?

596 MS JANIK: You can't add across on those figures. It does show that there is an 84 per cent difference between us and each one of the individual stations. You can't add across mathematically.

597 How we got to this? The week after we filed our application we went to Broadcast Data Systems, and it is possible to get a week's worth of music printed out from this service. Based on all of the songs played on one week's worth of programming on each of their stations, we compared it to the list of songs that we submitted in our application. The overlap with songs reached that percentage value as we went across.

598 It is certainly possible that some songs are on more than one other station, but between each one of those stations that is the distinct song level.

599 COMMISSIONER McKENDRY: I appreciate that. I just wanted to make sure that if each one of those stations is playing different music, one would then have to add up those stations in order to understand how much duplication there was between your proposed list and the available music being played on the other stations as a group.

600 MS JANIK: It is more than just the individual songs that makes this station very different from the rest of them. I have outlined some of the things that the modern rock listener tries to avoid. Those particular stations offer a formula and a combination of talent and spoken word and imaging that is simply not what the modern rock listener likes.

601 So to fully understand the diversity is more than just individual songs. This is a format that takes the lead in breaking new artists and so typically what happens is a modern rock station will start playing -- historically, it was the first station to play, for example, The Police. After there is an established buzz around an up and coming artist that other people, other formats start to notice, then the other formats move to that song and start to play it. That's when it starts to show up on the charts.

602 So the significant difference between us and everybody else is we lead the charts. There is no one chart that we could go to to tell us what are the right songs to play in Calgary. The rest of the formats have charts that they could follow to give them some sort of guideline of what's about, and they wait to see songs on the chart before they add them. That is a critical difference in how we approach our programming, song by song, to the other formats.

603 COMMISSIONER McKENDRY: But that chart purports to just look at the songs, as I understand it.

604 MS JANIK: The only information I had available was in terms of -- on a weekly basis was the Broadcast Data Systems' information and it shows you the entire list of songs and the ranges between stations are probably between three and seven hundred distinct songs in each of those stations. So if you compared our list of 153 songs, assuming that is the right total, to each of those there was limited duplication of songs.

605 MR. TEMPLETON: Commissioner McKendry, perhaps I could just shed some light on this.

606 If there was no overlap between the stations you would be absolutely right, but there is overlap and there is a number of tunes played amongst all of the stations. This is showing how distinct ours is versus each individual station in the market, and the most significant is only 16 per cent, so 84 per cent distinct from any other service in the market to a low of 1 per cent.


608 Maybe we could just take a look for a moment at the last appendix you included: 75 Canadian Artists Not Currently Played on Other FMs in Calgary that Newcap FM Would Play.

609 Perhaps you could just tell me how you came up with that list. How did you develop that? When you say "Not Currently Played", what does that mean? Last week, last year?

610 MS JANIK: I used the same basis of information, one week's worth of music from each of those stations the week following our submission, and those are the artists that weren't on any of the lists.

611 I believe they are recently accurate. If you looked at today, I think there is one on that list that is currently getting some play in Calgary called Super Baby, but at the time it wasn't being played in the market.

612 COMMISSIONER McKENDRY: So this is a snapshot of one week. If one went back a month, 12 months, presumably the Cowboy Junkies has been played on one of these other stations in the last 12 months.

613 MS JANIK: I would assume that quite a few of the artists, at one time or another, have been played in this market. What counts today is that you can't hear any of those Canadian artists, at least based on one week's worth of music from the key stations. None of those stations played those artists.

614 COMMISSIONER McKENDRY: But if you had have gone back five weeks ago, for example, and taken the week then, you might have captured Holly Cole, for example.

615 MS JANIK: Perhaps. But, generally speaking, most radio stations have a library that is smaller than the number of song slots they have in a week, so their whole library turns over each song at least once during the week. So I think it is a fairly reasonable assumption that the one-week list has produced a fairly comprehensive overview of each station's library.

616 MR. TEMPLETON: Commissioner McKendry, again, some of our music will become mainstream music in six months or a year. But this is very leading edge, and that particular week that's what the snapshot showed.

617 Now we show a different snapshot but similar results. Music that's not being played or we would play might show up somewhere down the road on mainstream stations once it's charted and proven a success. We go much deeper than just what eventually will become hits; we go much deeper into the CDs to play a very leading-edge format.


619 I'm now going to ask you a bunch of questions that relate to your supplemental brief. I'm going to use that as the basis for my questioning, so you might want to have that in front of you because I'm going to refer to a number of pages in it.

620 Let me start with, actually, your covering letter that came with the revised supplemental brief on July the 10th. That's where you increased your Canadian content commitment to ensure that at least 40 per cent of the total number of music selections played in any given week are Canadian with respect to that revision to your proposed station that exceeds the regulated minimum by 5 per cent.

621 I would like to know if you are prepared to accept a second condition of licence requiring the 40 per cent of Canadian selections to be played between six a.m. and six p.m. Monday to Friday as we do with the 30 per cent.

622 MR. TEMPLETON: Yes, we would.


624 Just let me clarify the target demographic with you again. We touched on that earlier.

625 I'm under the impression, from the study that was done by Mr. Doering that it was a male audience between 18 and 34 that was the target demographic. Just explain to me again what in fact it is.

626 MR. TEMPLETON: I will make a comment and then pass it over to our expert.

627 In broad terms, it's 18-44. In very narrow terms it's 25-34. I think what you may be referring to, if I'm not mistaken, is the level of satisfaction with radio in the Calgary market where a 60 per cent of the female audience claims that they were very satisfied. The number for males was only 30 per cent. So there was much more demand from a male perspective as far as satisfaction with current radio. But the overall makeup of this format is very close to 50-50.

628 Peter, would you like to...?

629 MR. DOERING: Yes, that is correct, the overall market 18-to-54 males were significantly less satisfied than our females in the Calgary market and the group that's least satisfied is the 25-to-34-year-old male. In terms of the makeup of the audience, this particular format attracts interest from both men and women who are dissatisfied. So even though there's twice as many men as women who are dissatisfied, the format attracts both the dissatisfied male and female and the primary target, or the primary appeal of the station, is 18 to 44 with a good mix in that demographic spread.

630 COMMISSIONER McKENDRY: So, with that mix in that broader demographic, you would capture the 18 to 34 male, or the 25 to 34 age male that was least satisfied, they would be captured under that umbrella --

631 MR. DOERING: Yes, they are --

632 COMMISSIONER McKENDRY:  -- broader demographic --

633 MR. DOERING: Yes, that's correct, they are captured.

634 COMMISSIONER McKENDRY: You don't narrow your programming to them, you bring them in under this broader approach?

635 MR. DOERING: Yes, they come in naturally.


637 Let me just ask a question that flows from page 12 of your supplemental brief.

638 The 11 radio stations are owned -- you note that Calgary's 11 radio stations are owned and controlled by five broadcasters, and you set those out.

639 I'm wondering if you have any concerns about competing against radio operators in this market that are members of a group. What advantages do you see accruing to them that won't accrue to you and how are you proposing to deal with that?

640 MR. TEMPLETON: Perhaps I can respond this way: the Calgary radio market is probably the most robust under-served major market in Canada and with the huge revenue pie that's available in Calgary and given the fact that no new FM has been licensed since I think it was 1984 or 1985, yet the market has grown dramatically -- as an example, last year the radio market here alone grew over $4 million -- the ability to support a new FM station will be very easily accomplished, more so than any other market I'm aware of, any other research we have seen anywhere in Canada.

641 As far as competing with large groups, it is a very large market, a large revenue pie. We have competed, in the past, against some of the largest broadcasters in the country with good success. They are good broadcasters, and we like to think we are as well. In Edmonton, as an example, we operated for a number of years with a standalone FM station and were very successful both from a ratings standpoint and a bottom line standpoint and we have no concern whatsoever of being able to support ourselves and be an important part of the radio makeup here in Calgary on a standalone basis.


643 I would like to refer to page 16 and page 17 of your supplemental brief.

644 On page 16, the table there shows that the current share of "other", at the bottom of the table, will drop from 8 per cent to 5 per cent and at the top of the next page, you say that the 8 to 5 per cent reduction in tuning to station categories under "other" suggests that a considerable portion of tuning to the new station will originate in the out of market stations or stations other than local commercial stations. Our analysis indicates that the out of market tuning is limited to three stations, two country stations CKDQ and CHRB, and CKUA Edmonton, an educational station.

645 Could you just tell us what kind of programming is carried on CKUA and whether or not you propose to repatriate tuning to CKUA? Or is it the country stations that you see repatriating tuning to?

646 MR. TEMPLETON: Not country. You are correct, the out of town tuning is very limited. But I think Mr. Doering is better qualified to answer that question.

647 MR. DOERING: Yes, BBM, we have looked at the unsuppressed reach and the actual stations that are tuned to -- if you look at the unsuppressed reach -- totals about 5 per cent out of market tuning and it's a wide variety of stations even into the U.S. So a lot of people obviously are picking them up via the Internet. That would be the assumption.

648 Also, in BBM -- so there's 5 per cent of out of market tuning there but BBM does not show the per cent who don't tune at all and our study indicated that of the people who are likely to listen to this particular format 3 per cent do not have a current favourite station or are not tuning in at all. So we are expecting to bring some people to the radio who aren't currently listening on a regular basis as well as bring back some of the people who are tuning to other stations, and it's many more than three stations when you look at the unsuppressed reach report.

649 COMMISSIONER McKENDRY: You are going to have to help me a bit with this. The drop from 8 to 5 per cent you are saying isn't from CKUA or the two country stations, it's from -- finish the sentence for me.

650 MR. DOERING: All right. Of the 8 per cent, 3 per cent don't tune at all, 5 per cent tune to others. So we are saying approximately 1 or 1.5 per cent will come from tuning and 1.5 per cent will come from a wide variety of stations in many different areas.

651 MR. TEMPLETON: Commissioner, maybe this will clarify. We are talking about share points here versus percentage of populations share.

652 COMMISSIONER McKENDRY: Let me ask you a bit about your news and spoken word programming. Just tell me a little bit about how you would select your news stories and the kinds of things you would cover to appeal to the target demographic you have identified as your primary demographic.

653 MR. TEMPLETON: Again, I would like to make a couple of opening comments and then I will pass the mike to Mr. Kennedy, Bob Kennedy.

654 Fifty per cent of our news coverage we target will be local news coverage, Calgary news, 25 per cent will come from the region and 25 per cent -- Alberta, I should say, regional and Alberta -- and approximately 25 per cent national and international.

655 Bob, would you elaborate on that.

656 MR. KENNEDY: Yes.

657 Commissioner, it's a philosophy that I have, and I believe that Newcap has as well, that we are going to be targeting community- and consumer-based news in the local context. I favour local news myself and I believe there's probably more than enough to fill all the news times that are allowed in any radio station, but that's the focus we are going to have in terms of an inclusive community-based process to establish what needs to be covered better and we are told by the research that Peter has done that, in fact, the potential audience is great for someone who wants to have more local news.

658 MR. TEMPLETON: Could I answer that Commissioner?

659 One interesting thing about this format, considering it tends to be on the younger end of the traditional demographics, there is a disproportionate amount of desire for news in this format, which is unusual in this demographic. People who like this format do like a lot more news than the average radio listener and we are catering to that by offering over 70 newscasts per week and a number of foreground programs as well, 37 public affairs reports, et cetera.

660 Another thing I think that makes us somewhat unique is, we are promising employment equity from day one in all departments of our radio station, so the make-up of our staff I think will give a different perspective on local news and reflect it back to the community.

661 Those are a couple of the reasons we think we can support local news.

662 We also are planning a substantial news department to cover the Calgary local news scene.

663 COMMISSIONER McKENDRY: I take it from page 19 there would be no news in the evening. It seems to stop at 6:00 p.m. Why wouldn't there be any news in the evening?

664 MR. TEMPLETON: The demand for news in the later part of the evening, there is very little demand, number one.

665 Number two, also the tuning is very low at that period. Most people have their news and information by eight o'clock at night, as an example. So we concentrate our resources where the largest demand is, which is in prime time mornings and afternoon drive and, of course, throughout the midday as well.

666 If anything happens, though, we are equipped to respond to those needs. If there were emergencies or local conditions dictated, we certainly would respond and change our news content immediately.

667 COMMISSIONER McKENDRY: On page 21 you refer to your daily citizen Q opinion poll feature. Just tell us a little bit about that. Is it a call-in program? Will you be running it along with a Web site that is related to that? Perhaps you can just elaborate on the opinion poll feature.

668 MR. TEMPLETON: It is both. It is both a phone-in and through our Web page.

669 We have had tremendous success with this way of tracking listener opinions. I am going to defer now to Anna Zanetti who works with it day in and day out at our Q104 station in Halifax.

670 Anna.

671 MS ZANETTI: Thank you.

672 We run this twice a day. In the morning, every morning we put out a question, the topic of the day, and we get listeners to call in with their responses. We get that on voice mail and then we run these comments back at 12:20, the final days' results at five o'clock.

673 With respect to the on-air auction, you are proposing to raise some funds through that method, and I just wondered if you can give us an indication about how much money would be raised through those auctions and perhaps related to your experience with your other stations if you do a similar thing on your other stations?

674 MR. TEMPLETON: Again, I will make opening comments and then I will call on Jackie Rae-Greening, who, again, works with a children's trust fund on a regular basis.

675 This is an initiative we started a number of years ago in most of our markets, in the medium and larger markets, and it is a very simple concept. We get an advertiser to put up an item, usually in the $1,000 range, we promote it all week and we auction it off to the highest bidder. Every penny of that money goes into the children's trust fund.

676 There is no administration cost charged against it. Newcap corporately supports those costs. We have a small Board of Directors that -- no bureaucracy -- can answer and respond to local children's needs immediately. Many times we get requests at 10:00 in the morning and we have a cheque at one o'clock.

677 But I think Jackie Rae can speak more intimately about this and some of the examples of this wonderful fund that we are very proud of.

678 Jackie.

679 MS RAE-GREENING: Thanks, Bob.

680 To date we have raised about a quarter of a million dollars through those radio auctions on CFCW in Camrose and Edmonton's Mix 96. About 125 kids we have helped so far. We get the recommendations from capital health authorities and social workers when people, kids in north central Alberta are looking for help.

681 For example, a fellow was hurt in a hockey game, became a paraplegic. We were able to supply a van lift for their vehicle. Hearing aids we have been able to supply. Just a few weeks ago we did a specially built bike for a physically challenged young boy, so it is different things like that.

682 No bureaucracy at all. We react really quickly to everything. It is a wonderful program. I love it.

683 MR. TEMPLETON: We supply quite a bit of equipment to handicapped children. You would be surprised how little support there is from the government on some special needs that some special children require.

684 I can think of a reference where a welfare mother -- unfortunately she was on welfare and her son required delicate heart surgery in Boston and no funding at all to get the mother to Boston. We immediately responded with an airline ticket and hotel accommodations so that she could be there with her baby throughout the whole ordeal. Things of that nature. And it is very quick to react to local children's needs.

685 COMMISSIONER McKENDRY: And you find that sponsors are readily available to donate items to be auctioned?

686 MR. TEMPLETON: We never have any difficulty because it is win, win, win. Everyone wins with this. They get some good publicity. They associate themselves with a wonderful charity.

687 Frankly, sometimes we have the problem of what we can take and what we can't take. There is only one auction a week, so we have to decide which product we will go with and which we think will gross the largest amount of funding.

688 MS RAE-GREENING: We should also add to that probably that the awareness is there week-in/week-out, but we don't publicize it at all with the families we help. It is all very quiet and dealt with internally and it is nothing that we sit and blow our horn about and go "Yes, yes, yes". It is money we raise on-air and quietly help out the families that need help.


690 Let me just talk to you now about your proposed FACTOR contribution, which is talked about on page 22 of the supplemental brief and you are proposing to contribute $100,000 per annum or $700,000 over the seven-year term to support the production of new modern pop and rock music by local Calgary singers and musicians. You are going to direct the funds to FACTOR.

691 My question is: Have you received confirmation from FACTOR that FACTOR agrees to have your contribution directed to the Calgary area?

692 MR. TEMPLETON: Yes, we do, Commissioner. We have a letter -- I have it with me, I can supply it to the Commission if you would like a copy -- stating that every dollar of the $700,000 will be dedicated to the modern rock, modern AC format musical genre in Calgary and Alberta.

693 COMMISSIONER McKENDRY: So it's Alberta as well as Calgary?


695 COMMISSIONER McKENDRY: Okay. Thank you.

696 With respect to the Web site that you discuss also on page 22:

"Newcap's Web site will also be designed to enable local and Canadian participating artists and groups to sell their music directly to consumers." (As read)

697 Can you give me a little more information about how you propose to sell their music on the Internet?

698 MR. TEMPLETON: We will be promoting it over the station to go to our Web site for any of the artists we feature and any that have available -- a lot of them will be independent music that is not necessarily in record stores, but we will direct them to our Web site and they can make a purchase from our Web site.

699 The technology to do that is unfolding, as you probably know. A number of stations across Canada are now offering to sell music through their Web site as a direct result of their promotion from the radio station.

700 Does that give you enough detail of --

701 COMMISSIONER McKENDRY: You will be taking orders for CDs on the Web site or you will be allowing people to download music directly from the site in return for payment? How are you proposing to do this?

702 MR. TEMPLETON: Initially we will be linking to other Web sites, independent record producers, that sort of thing, but as the technology evolves and we become more and more familiar with it we believe we eventually will be selling directly, at no benefit to us, but just to support the local artists.

703 COMMISSIONER McKENDRY: So to start off with at least it will be linked to other Web sites where the purchase can take place. Is that correct?

704 MR. TEMPLETON: Initially, but we intend to move forward on the other technology.

705 Liz, did you have something you wanted to add to that?

706 MS JANIK: Yes. Over the last 20 years I have had a lot of opportunity to work with independent artists, and as exciting and wonderful as their music might be it is extraordinary difficult for them to get distribution.

707 This Web site allows us to provide contact information for the bands initially and also to post their activities. If they are playing in a club somewhere, then a fan has the opportunity to go and see them and often they sell their records live from the stage.

708 What we are trying to do is bring together the audience with the artist in an environment which really doesn't provide a lot of support to independent artists. So we are hoping that we can close the gap between the audience and that artist using the Web page for information about tours, contact the band to have them play for you or where you can go buy the record, if they have links set up that we can add in that feature. As we develop we can actually become a retail opportunity for them too.

709 MR. McKENDRY: Just a as matter of interest, are your stations -- or will this station be available on the Internet? Will it be streamed on the Internet?

710 MR. TEMPLETON: In all likelihood. We have not decided on that as yet, but in all likelihood we will.

711 More and more the major market stations have to have a streaming on the Internet to stay competitive. There is a growing number of younger people that are more and more moving over to the Internet. It is a good marketing tool and certainly a market the size of Calgary would support that kind of promotional initiative.

712 COMMISSIONER McKENDRY: I suppose in this vein, on page 23 of your supplemental brief, near the top -- I think you touched this on your oral  presentation this morning -- you say:

"We want to ensure that at least one-half of the Canadian music played each week will be new music released within the past 12 months". (As read)

713 I guess I would just like you to help me understand the importance of that commitment because it seems to me that would cover a fair bit of territory, you know, songs by Sloan or Tragically Hip or Wide Mouth Mason. It would seem to me to be a lot of music released within the last 12 months that is quite popular.

714 So I just want to understand what that commitment means and why you said it.

715 MR. TEMPLETON: I think you are absolutely correct, it would include some of those artists, but more importantly it would include a lot of artists that are not getting exposure and usually those artists that you named, within the last year -- right now they have a lot of hit material that are on the charts. We are talking for the most part new emerging talent.

716 MS ZANETTI: Sure, there are 75 Canadian artists that currently are not being played in this market right now and that's local and regional bands and there is 40 acts, Canadian acts, that are not being played as well, bands like the Carson Downey Band, Weeping Tile. They are not getting exposure in this market so this would allow us to play bands that aren't fresh and new and aren't getting that exposure.

717 COMMISSIONER McKENDRY: So when you make that statement it's directed towards that initiative as opposed to the more popular bands that are widely played in any event.

718 MR. TEMPLETON: Primarily, but it's 50 per cent of all of our music will be within the last year and 50 per cent of the Canadian music will be within the last year.

719 COMMISSIONER McKENDRY: Let me ask you know about the Aboriginal Voices radio network. There are a couple of areas in here I would like to explore with you. As you know, in the Moncton decision we excluded these contributions to the network from the amount projected for Canadian talent development, but included as the contribution that was required as a condition of licence.

720 I just want to make sure I understand whether or not you would accept this approach if you were successful applicants here in Calgary.

721 MR. TEMPLETON: Do I understand your question correctly? Would we accept as a condition of licence committing those funds outside of the traditional criteria as a benefit? Is that the question?

722 COMMISSIONER McKENDRY: Right. Similar to what took place in Moncton.

723 MR. TEMPLETON: Absolutely.

724 COMMISSIONER McKENDRY: You have told us that the commitment to the Aboriginal People's radio network would enhance the programming of the Toronto stations. Would you agree to a condition of licence that the funds be directed to the Toronto station regardless of whether the network is implemented or would you agree to the same condition as the licence in Moncton? I am sure you will recall there, we said that in each year until such a network is implemented it would be a condition of licence that Newcap redirect the funds to rent studio time to facilitate the production of Canadian aboriginal music.

725 MR. TEMPLETON: Yes, we would, Commissioner, but I did want to point out -- and you have an application before you coming up in the next day or so for a local application of an FM station here -- and what we had done in our proposal was we had earmarked the establishment of a local station, the capital cost of getting that station up and running, the ongoing maintenance of that station over the next seven years, plus a local news bureau, and all of that combined equalled about $1.2 million.

726 It was our intention, if that was approved by the Commission, we would earmark that amount to there and the rest to the network. But we would accept whatever condition by the Commission.

727 COMMISSIONER McKENDRY: I understand that, and I suppose my questions are more directed towards what would happen if those applications weren't approved and I wanted to know what you --

728 MR. TEMPLETON: We would accept that as a condition of licence, yes.


730 I want to now ask you a question about a matter you raised with us earlier in reply to one of my questions and that is the equal employment opportunities. You have pointed out in your application that you are quite committed to ensuring that there is balance and fair representation in the people you employ here, and you say that members of designated groups -- that's on page 29 -- will be represented on and off air at all levels and in all departments.

731 I am just wondering to what extent the company has set aside a budget to provide the appropriate training in order to meet that target, or do you foresee that there will be training required in order to achieve it?

732 MR. TEMPLETON: There will be some training and we do have funds in our administrative budget to meet that end. As you know, based on our application, we are promising employment equity, representing equal representation of the four designated groups from day one, and we have a number of local and national initiatives that we can employ to ensure that that takes place on day one. I could elaborate if you would like.

733 COMMISSIONER McKENDRY: And the budget for that has been included in your administrative forecast?

734 MR. TEMPLETON: Yes. It's not a large item because for the most part we take the initiative and we go out and recruit. Just saying not enough from a certain group apply is not a good enough answer. We go outside of our stations. In Calgary, we intend quite frankly to probably retain the services of professional equity -- what the term I am looking for? -- placement firms that specialize in employment equity issues, number one.

735 The community colleges are graduating a number of students from all of the designated groups and whenever we go out to speak -- I am speaking at Ryerson in a few weeks' time -- I always make a point of telling the young students that our goal is to get employment equity right throughout the company and in any licence we are promising from day one.

736 So we need you, we want you, apply to us, we have openings and we have had pretty good success. We are not right up to scratch at this moment, but I think our record could stack up against anyone in the country.

737 We are very proud of the progress we have made over the last few years heading towards employment equity.


739 I want to ask you about a statement you made in a May 4th letter to the Commission where you responded to written questions from the staff and you refer to that in your initial response to the expanding budgets of existing advertisers and you were asked to explain what you meant by that and you said, and I quote:

"Expanded budgets of existing advertisers refer us to the situation where existing advertisers will increase their radio advertising spending because radio will be more effective with the new station in the market compared to other media". (As read)

740 I want to understand why you say that. You say that an additional station in the market here will increase the effectiveness of radio as a medium. Why would that be the case? Why would the effectiveness not be reduced due to audience fragmentation?

741 MR. TEMPLETON: If I understand your question correctly, the increase in existing budgets, is that where you are heading with this? Why that would go up?

742 COMMISSIONER McKENDRY: You wrote us on May the 4th when we asked you to explain what you mean by expanded budgets of advertisers, of existing advertisers, where you had broken out sources of revenue.


744 COMMISSIONER McKENDRY: And you said that that referred to a more effective -- the radio market here would be more effective with the addition of a new station.

745 My question is: a new station creates audience fragmentation. Why is it more effective if the audience fragments from an advertiser's point of view?

746 MR. TEMPLETON: Okay, I understand now. Commissioner, you are absolutely right. It does fragment more, but it also allows you to target more effectively, more efficiently with your advertising. This is a demographic that has been difficult to reach in this market. I based that on my experience. Fortunately, I have had a varied experience in the industry.

747 I used to run a national rep shop and it has been my experience when a new service with a totally new and distinct format is introduced in the market that existing budgets increase because certain advertisers where they didn't use radio before can now target through radio effectively, or where they placed less emphasis on that demographic and covered it off with another medium, will now focus more and more.

748 In other words, if you were after a certain type of listener between we will say 18 and 34, and you were selling a product that appealed to them, you could focus right in on a market like this more effectively and more efficiently on a cost per thousand basis than before. So budgets tend to grow and increase and radio becomes overall more effective and when radio becomes more effective, more and more national advertisers can use it.


750 Let me ask you now about your administration expenses. We touched on that earlier with the training. I want to ask you about the overall level of administration expenses. Based on an analysis that our staff has done, your level of proposed administrative expenses seems to be significantly lower than other stations in Calgary, other stations in Alberta, other stations in Canada. If you would like, I can give you the numbers, but I see nodding so perhaps you are aware of that.

751 I guess we would like to understand why your administrative expenses, particularly the stand-alone stations in this market, are so much lower, not that that is a bad thing. We just want to know what the explanation is.

752 MR. TEMPLETON: I am glad you asked that, Commissioner.

753 A couple of things. One, we do have a very efficient head office resource for some administrative functions that we share with all of our stations, number one. More importantly, though, we dedicate compared to other broadcasters on a general rule of thumb a disproportionate amount of funding into programming and news and that is why the percentage looks a little out of whack.

754 This approach to broadcasting we think is one of the critical success factors of our company. We are very fortunate that we have been able to turn around a lot of very sick radio stations and get them in the black and get their ratings up to either be market leaders or competitive and one of the key fundamentals is the large amount of money and resources we direct towards programming and news. When you do that the market responds with larger audience levels and larger advertising revenues.

755 So it may look low in comparison on a percentage basis, but it is relatively normal for our company. We have had this type of question before.

756 Perhaps Dave Murray, who put together the financials with me, could elaborate on that. Dave.

757 MR. MURRAY: Sure, Bob. Thanks.

758 Commissioner, I certainly agree with what Bob said. I think it is very difficult for us to know exactly what is in the administrative expenses of the other station, where radio broadcasters do not share that sort of information.

759 Perhaps our overheads are spread a little bit differently into sales and programming and technical, but generally speaking we have very small staffs on administration and we concentrate most of our human resources on programming and news functions.

760 COMMISSIONER McKENDRY: Thank you. I do note in the analysis that was done that your program expenses are significantly higher than Calgary as a group and Alberta as a group and Canada as a group.

761 Let me ask you a question that I take from Schedule 18 of your application. You said that "We believe the revenue market in Calgary is approximately $43 million today and should grow by approximately 5 per cent per year." I am wondering if you can tell us how the 5 per cent was derived.

762 MR. TEMPLETON: Commissioner, Calgary if you look at the Tram Reports over the last number of years, the radio revenue market has grown at the fastest rate in Canada. Every economic indicator we have looked at, every economic study we have looked at would indicate that Calgary is on a roll and will continue to expand and continue to grow. It is a very robust economy. The tripling of oil prices has certainly helped Alberta.

763 The market currently, the $43 million you referred to I believe is the FM revenue for the marketplace and that is the world we would be competing in. Last year, as an example, I think I commented the market grew by over $4 million. Our first year revenue projection is $1.7 million.

764 By the time we get to air we anticipate the market will be up another $2 million to $3 million. That is based on the last five years and that would be conservative based on the history.


766 This is a question we asked the previous applicant and I would like to get your view as well on it. Your proposal is mutually exclusive with the four others proposing to use the frequency, 98.5 mHz.

767 In the event the Commission concludes that more than one proposal should be licensed, the panel would like to know, one, whether your engineering consultants looked at any other available comparable frequencies that could satisfy coverage objectives for Calgary and, if so, what were your findings?

768 MR. TEMPLETON: Again, I will defer this to John Matthews, but an opening comment that I would like to make, that we applied for 98.5. If you will recall, we came into the market with our market studies and part of our overall business research was technical, so we had one of the leading broadcast engineering firms conduct that portion for us. They assured us that 98.5 was the best utilization of our format because it has such wide reach.

769 There are a number of other frequencies, as you know, some close to the same stature and others far inferior. We would accept any frequency the Commission granted us, but I would like to remind you we did initiate this call. We did put forth the 98.5 because it was the best way to reach a larger cross-section of audience that will require this service.

770 John, could you elaborate on the frequency search in Calgary.

771 MR. MATTHEWS: Certainly. Thank you, Bob.

772 There are a number of unused allotments available in Calgary. We brought forward one that best suits this proposal, but in the event that it is unavailable because you are licensing some other service on it, then we would be prepared to look at the alternatives.


774 Would you be willing to use an AM frequency?

775 MR. TEMPLETON: It is very difficult to say no to anything at the CRTC, but there is one that I would have a hard time accepting. This format is young skewing, 18-44, but really the primary core of the target is 25-34 and these people grew up in an FM world.

776 AM radio, you may as well say shortwave to them. They just don't relate to it. That's what their parents listened to. It's what I grew up with, so it's not just demographics.

777 AM radio just is not the way to showcase music. It works well in some older targeting music formats, oldies, traditional country, news talk of course, but music driven, especially with the younger demo it just would not work. We would take the business plan and chuck it. I think it would be impossible to survive on AM.

778 Respectfully, I would have to say, no, we would not accept an AM.


780 This is my last question for you and it is an opportunity we give all the applicants to take a moment or two to bring anything else to our attention that you would like to or anything in your application you would like to emphasize to us.

781 MR. TEMPLETON: I appreciate the opportunity. What I will do is make a couple of comments and then I am going to turn the microphone over to Rob Steele to conclude this session.

782 We think there are four reasons why the Commission should approve our application. We have a solid business plan. It is very thorough. We have been through it every way you can possibly look at the business plan and we think it is bullet proof.

783 It has all been based on the interests of the local community, not just to win the licence, but that's just a good way of operating a radio business. Give people what they want. Don't try and sell what you make. Make what you can sell. In other words, give people what they want. Fill needs. So it is a very thorough business plan and we stand on that.

784 It's a fresh, new and distinctly different musical format than anything else before you. It has 40 per cent Canadian content, a comprehensive schedule of news and public affairs and spoken word programming, a diverse staff. I am referring to our employment equity initiative that we are very proud of. It dedicates $700,000 in support to local music talent in that genre. That's the overall business plan.

785 Second, it's a new voice in the Calgary radio market. There is no risk regarding market impact or competitive status in the market or concentration of ownership obviously.

786 Third, this will help facilitate an aboriginal radio network across Canada and we are very proud of our association with ABRN. This is a project that is starting to gain momentum and we are very proud to be associated with. It certainly supports that in a huge way with the dedication of over $2 million, $2.3 million in benefits.

787 Fourth, it enables a medium-sized broadcaster from Atlantic Canada to grow beyond its base in Atlantic Canada. Rob.

788 MR. STEELE: You know, people come in front of you all the time talking about convergence and the need to grow or die and that comes from the big guys. It applies even more to us, a small company from Atlantic Canada.

789 Calgary is a vibrant, exciting market, that can support at least one, possibly two new licences. We are confident that we have the right format and the appropriate public benefits. We respectfully ask you to give us this licence. Thank you very much.


791 Thank you, Mr. Chair, those are the questions I had.

792 THE CHAIRPERSON: Thank you, Commissioner McKendry.

793 I have one question before I turn it over to my fellow Commissioners for questions. Is the Aboriginal Voices Radio funding conditional upon Newcap receiving a licence?

794 MR. TEMPLETON: The $2.3 million?

795 THE CHAIRPERSON: That's right.

796 MR. TEMPLETON: Yes, it is.

797 THE CHAIRPERSON: Thank you.

798 Commissioner Cram.

799 COMMISSIONER CRAM: At page 16 of your original presentation, and it is just a curiosity more for me, you talked about the fact in the first paragraph:

"...but radio service is underfunded and does not generally reach where most Aboriginal people in Canada reside -- in our major cities." (As read)

800 How do you get that data that most aboriginal people reside in major cities?

801 MR. TEMPLETON: This is data we received from a number of sources, but through our close association with Aboriginal Voices they supplied us with a number of data that there is a large population in the 12 major markets, aboriginal population. That is why part of their plan is to roll out, with the CRTC's blessing, the 12 largest centres in the country. There is a perception that aboriginal populations concentrate in far northern small villages.

802 According to the statistical data we have looked at, the reality is not that. The vast majority -- well, the majority reside in and around the major markets of Canada.

803 COMMISSIONER CRAM: My question again is where you got the data because if I understand it right, StatsCan does not have data on Indian reservations. So where do you get the data about the aboriginals that live outside the major cities?

804 MR. TEMPLETON: Yes, that's a good question. You are right, it has been very difficult, so we are led to believe, collecting data. For various reasons it has been very, very difficult to get information from reservations and from other pockets of the population.

805 COMMISSIONER CRAM: I think Mr. Kennedy may have something to add.

806 MR. TEMPLETON: Bob, could you jump in please.

807 COMMISSIONER CRAM: I am sorry, I didn't mean to interrupt you.

808 MR. TEMPLETON: That's fine.

809 COMMISSIONER CRAM: He may in fact be able to --

810 MR. TEMPLETON: He is more qualified than I.

811 MR. KENNEDY: I hope, Commissioner, that I understand your question. Where do we get the idea and the numbers that the majority of aboriginal people in this country live in the urban setting as opposed to elsewhere.

812 COMMISSIONER CRAM: Well, where do you get the statistical basis for your assertion, yes.

813 MR. KENNEDY: From government at all levels. We have to look at two factors here. One, when we deal with the Department of Indian Affairs of course we are only dealing with Indians in the context of status Indians and that relates to First Nation communities, the most of which are not urban, although there are some urban First Nations.

814 But the majority of aboriginal people includes, as the Constitution defines them, Métis and Inuit as well as Indians. But in addition to that, of course, is the large number of non-status Indians, people that are in the category outside of carrying a status card. The other is the under-counting that goes on, especially of the Métis and non-status. Governments are very much aware of this today, at both the federal, provincial and local level, that the numbers fall far short of the actuals.

815 But, anyway, to answer your question more briefly, the Department of Indian Affairs numbers would give us the standard numbers about Indians but then other federal departments as well as provincial and local numbers and our own numbers in our community development process.

816 COMMISSIONER CRAM: Okay. And non-status exclude C-31s too. Is that correct?

817 MR. KENNEDY: C-31s is a label, of course, that's been given to some of our people. In fact, what it is is a status Indian. Because it's a category within Indian Affairs numbers.

818 COMMISSIONER CRAM: Next we were talking about, if I can call it Appendix A, providing the diversity Calgarians desire.

819 If I understand what you were saying, Mr. Doering, you talked to people about their perception.

820 MR. DOERING: That is correct.

821 COMMISSIONER CRAM: Now, how did you obtain the perception of the Newcap stations? Did you give them a montage of music? Or how did you get their perception?

822 MR. DOERING: We basically evaluated a number of formats by giving them example artists of those formats. So that's how we got their perception of that.

823 COMMISSIONER CRAM: And the respondents actually knew who you were talking about?

824 MR. DOERING: Yes. We basically --

--- Laughter / Rires

825 COMMISSIONER CRAM: Actually, for somebody who's a classical musician to understand that, I mean -- you know.

826 MR. DOERING: Yes. Not everybody, naturally, knew each of the artists. That's why you get varying interest in different formats. But basically we attempt to give a list of artists for each of the formats that help to define the type of music format we are discussing.

827 COMMISSIONER CRAM: My next question, Ms Janik, is in relation to what I will call Appendix 2, proportion of Newcap music played on existing stations.

828 Have I got it right that you filed -- your play list you filed with us with your application is what you compared?

829 MS JANIK: That's correct, the 18-hour play list in our --

830 COMMISSIONER CRAM: And that was 153 songs?

831 MS JANIK: I believe that's the correct number.

832 COMMISSIONER CRAM: Then you compared it to the 300 to 700 songs that CKIK, CHFM, CJAY, CKIK and CKRY played within the last week, each of them?

833 MS JANIK: Correct.

834 COMMISSIONER CRAM: Okay. Is that a valid way to do it? Because, clearly, you would have more than 153 songs that you would play in any week, wouldn't you?

835 MS JANIK: We would certainly have more than 153 songs. I would estimate this library to be around 300 to 400, probably. Working with the information that we provided and with the information that's available from the market seems to be the only formal way to compare the two.

836 COMMISSIONER CRAM: And you understand -- and this is my last question. A couple of hearings ago, there was a term in television used " morphing", and I see the scenario that you have the new leading edge and so you have a brand new singer, wonderful person, but once that singer and that song is picked up by, say, CKIK, then it appears to me that you then have to almost drop it, otherwise you become another CKIK -- and it makes sense because CKIK is very successful -- and so you then end up morphing into what CKIK is. That's the moving target concept that I was finding very difficult to deal with in your format -- and I know we are not supposed to be worried about format, but I mean how do we deal with the morphing concept that --

837 MS JANIK: How do you know that we won't become another format down the road? Is that your question?

838 COMMISSIONER CRAM: And we can't stop you anyway.

839 MS JANIK: We wouldn't want you to stop us because the largest available unsatisfied audience, both male and female, when asked what did they really want to hear, they told us they really wanted to hear Alanis Morissette, Natalie Imbruglia, Pearl Jam, Sarah McLaughlin, Green Day and Smashing Pumpkins. That's what they really want to hear. It seems to me to be in our best business interest to fulfil the needs of a very active, very volatile, experimental audience with this brand new music and the morphing that will happen is that as we play music and it becomes established, they will gradually pick it up. That doesn't mean we are going to abandon it, but it will be part of our gold library as opposed to our current library. There are certain songs which are totally appropriate for CKIK that we would never play. Ever. The same could be said for CHFM and CJAY. There are just songs that our audience have no affection for and, in fact, would like to avoid.

840 I suppose I would be a classic candidate, in terms of age and demo, for a Soft AC but, personally, I find it almost intolerable. For me, I like up tempo, I like today's music, I like a little bit of pop, a little bit of dance, a little rock; that variety of those styles, together with the freshest new sounds, is what makes me happy even though, technically, I'm out of this demo.

841 MR. TEMPLETON: Commissioner, perhaps I could add something, too.

842 Remember the days when a hit did not hit? It was a big factor in our industry. This was a traditional non-hit format. If you recall, some of those stations just never worried about hits and non-hits because they were always leading edge and playing non-hit music. It's really the evolution of that format in today's terminology with the listeners. There is some duplication. There are some artists that would be duplicated, as you have seen here, but we tend to go a lot deeper, a lot more CD cuts -- we used to call them album cuts -- going much deeper whereas the CHRs just play whatever's on the chart over and over and over again. This is not even close to that kind of format. The duplication is very limited. And, also, 50 per cent of our music is current and 50 per cent of the Canadian is current, so it's very leading edge, very fresh all the time. Six months down the road, some of the stations might pick up on some of the music we played six months ago -- some -- but certainly not the majority. They pick up the odd one. By then we have moved on to more leading-edge music. We are not a gold-based radio station as most of these are except the CHR.

843 COMMISSIONER CRAM: Thank you very much.

844 Thank you, Mr. Chairman.

845 THE CHAIRPERSON: Thank you, Commissioner Cram.

846 Mr. McKendry, do you have any additional questions?

847 COMMISSIONER McKENDRY: Just an additional question.

848 I'm sorry to go back to this but I want to make sure that I understand it, and this is the target audience.

849 When I was asking the questions initially about 18 to 34, you pointed out, really, that males 18 to 34 really wasn't your target audience. I was rolling it around in the back of my mind where did I get that from and I couldn't find it at the time. So I just want to make sure we are clear on this.

850 If you could turn to page 2 of your supplemental brief. It's the executive summary. In the third paragraph, it says, and I'm going to quote -- and this is after you refer to the Peter Doering Consultants findings. I'm going to quote:

"In accordance with these findings, Newcap FM will target 18 to 34 men with a Modern AC/Modern Rock format."  (As read)


851 So from what I understand from what you have told me that this is wrong?

852 MR. TEMPLETON: Let me clarify that, because the statement is correct. I could also say we are targeting 35-44-year-old-men, I could say we are targeting 18-24-year-old-men, because we are targeting all of those groups. This has broad appeal. It's 18-44 generally. But it tends to -- or the wheelhouse of the format tends to be 25-34. So, yes, we are targeting 18-34 and we are targeting 25-34 and 25-44 but the core of this audience is 25-34, the very narrow core, and it's fairly evenly balanced male to female.

853 COMMISSIONER McKENDRY: So this isn't wrong; it's just that this is one of several targets?

854 MR. TEMPLETON: Well, it is a target, 18-34 men, but we appeal to 18-44 men and women.

855 I hope I have answered your question.

856 They are all targets, but then you have the main targets. If we had to narrow it down from 18-44, the next would be 18-34. But the reality is 25-34 should be where the dominant portion of the listeners are, and that's fairly equally represented between male and female.

857 Have I clarified that?


--- Laughter / Rires

859 COMMISSIONER McKENDRY: I will read the record afterwards to make sure that I understand that because when I read this it indicates to me that the target is 18 to 34. It's not to say you can't change that target --

860 MR. TEMPLETON: No, that's correct, but there are other targets as well I guess is what I'm saying.


862 THE CHAIRPERSON: Thank you, Commissioner McKendry.

863 Mr. Templeton, just before I turn you over to legal counsel for a question, I must say I am very impressed with the daring of Ms Janik to be promoting Smashing Pumpkins this close to Halloween.

--- Laughter / Rires

864 THE CHAIRPERSON: Legal counsel.

865 MR. BATSTONE: How do you follow that?

--- Laughter / Rires

866 MR. BATSTONE: I only have one question and it relates to your audience share projections and your advertising revenue projections. I would just note that they appear to be among the highest of all the competing applicants and I would just like you to comment on why that is the case.

867 MR. TEMPLETON: What is the highest, the share of audience or the revenue?

868 MR. BATSTONE: I believe perhaps both, but maybe you could correct me if I'm wrong.

869 MR. TEMPLETON: I will comment and I will turn it over to Peter Doering.

870 But as far as the share, that is something Mr. Doering has statistically worked out and we have taken the low end of the range. We think 10 is the low end and it could be more than that: 12 or 13.

871 The thorough research that we did from 18 to 54, we believe we are the only applicant who thoroughly researched the entire market between 18 and 54. So we were very confident in that projection.

872 If you look at the revenue projection, it is very much lower than the share we are projecting to get. Year one we are projecting a five share, and I believe year two it jumps to eight, is our expectation, and year three, 10.

873 If you do the map on the available radio revenue market, even if you narrow it down to FM revenue, it is much less than what that share would normally dictate. Part of that is because it takes time to get that up to speed and become one of the larger players in the marketplace.

874 But we are very confident that our revenue numbers, we believe, are conservative. We have put together a number of these over the years and each time they have come out and at the end, a couple of years down the road they were conservative.

875 I think Mr. Doering, though, can more eloquently describe how we came about the 10 share that we are projecting.

876 MR. DOERING: Yes. Thank you.

877 Basically, we served up to the residents of Calgary a complete menu of possible formats and let them tell us which format they would like. This is the most popular formats of a full menu, so we are confident that if this is what they want and we are going to give it to them we will get a nice share.

878 I think I can answer Commissioner McKendry's question on the target: yes, we will target 18 to 34 men. But that doesn't mean some other people are going to not come along for the ride. By targeting the 18 to 34 men, we also attract a lot of 18 to 34 women, and also some 34 to 44.

879 So you can have as your target -- and a lot of marketers know this, you put out a target and you think this is who you are going to get and sometimes you are surprised at how many other people are attracted to the target.

880 MR. TEMPLETON: Peter, you mentioned to me as well that the response is much greater than the 10 per cent but your experience, when people are asked and prompted what they would do that their response rate, is somewhat less.

881 MR. DOERING: Yes. Basically, we take a look at just the very likeliest who say they are interested in a format. We had about 28 per cent were very likely to listen to this format.

882 But our experience, not only in predicting market share in the radio marketplace, but also in a number of other categories, including automobiles, cat food and men's socks, tells us that you can divide that top box by about a third to get an actual -- because not everybody is going to do what they say they are going to do, that assumes full awareness, that assumes they are all going to follow through, and things don't always go that way.

883 So experience has told us if you take about a third of your estimate from that very likely, you will come out -- and it has been very predictive in other markets and in other product categories.

884 MR. BATSTONE: Thank you very much. Those are all my questions.

885 THE CHAIRPERSON: Thank you, Mr. Batstone.

886 Commissioner Langford, you have additional questions?

887 COMMISSIONER LANGFORD: Yes. I wasn't going to ask anything, but as I listened to this I was reminded of a story that Mark Twain used to like to tell about going to a church and hearing a preacher he had never heard before, and after he listened to him for five minutes he was so impressed he decided to give him all his money. After five more minutes he thought maybe he would just give him half his money. Another five minutes and he wasn't sure. By the time they passed around the collection plate he took out $2.00.

--- Laughter / Rires

888 COMMISSIONER LANGFORD: When I first listened to you explain the male or maybe not male audience focus to Commissioner McKendry I was kind of heartened and I decided I wasn't going to ask the question. But as I have listened to you explain it in greater detail, I am becoming a bit disillusioned, and so here is my question. It refers to page 20 of your supplemental brief, the section that starts on 19 called "News and Spoken-Word Programming".

889 On the second paragraph, first line of page 20, you say, quote:

"News journalists will be carefully instructed and strongly encouraged to select stories that appeal to our male target audience and explain how these stories affect them." (As read)

890 I just wonder how that is done.

891 MR. TEMPLETON: I am going to ask Mr. Kennedy to elaborate, but there is a method of doing that and he will explain it.

892 But, again, at the risk of sounding like I am repeating myself, there are a number of targets you have and then there are narrower targets. One of the targets is 18 to 34-year old mean, but it does have broad appeal, 18 to 44, equally male and female. We believe 25 to 34 will be the strongest sub-demo.

893 So I just didn't want us getting, you know, pigeonholed into an 18 to 34 male-oriented radio station. There will definitely be -- one of the most dissatisfied groups is -- well, the most dissatisfied is young men. So it will have obviously an impact and they will appreciate this format.

894 Bob Kennedy, I think, can articulate how we -- if your question is how do we ask news journalists to have a male orientation to the news focus, I think he can elaborate further.

895 MR. KENNEDY: It's my understanding of the paragraph that you have targeted that it is clear in the context that if your audience is this you certainly go after the stories and the information and the materials that are of interest to them first and foremost, not the least of which would be certainly female news, news about whatever it is that that age group looks at. So I think it is fairly technically clear that you would target your news coverage to your audience. In this case it is a male audience.

896 COMMISSIONER LANGFORD: Let's say that there was a story in town about a problem with date rape on a campus and your studies told you that 18-year old men just didn't want to hear about that, you wouldn't cover the story?

897 Or let's say we were having a federal election and most 18 to 30-year old men just couldn't give a damn, would you cover that story?

898 MR. KENNEDY: I can't speak to the suppositions or the hypotheticals, but I am following, I believe, the train of your thought and your questions. Of course any newsroom or news staff or any radio station or any responsible broadcast organization has a breadth of news coverage. This is a target. This is something you have to be aware of and you have to certainly specialize in your news coverage. But when it comes to journalism, I think both you and I appreciate the same factors that the breadth includes the examples you are talking about.

899 Does that answer your question?

900 COMMISSIONER LANGFORD: Well, it comforts me, but I must say that I still don't quite understand the sentence. I don't want to beat it death with a stick. I assume you are running very good news operations in the parts of your country you are in now and you know how to do the job. But it is a strange sentence, I have to tell you that. In my opinion it is a strange sentence.

901 I know that some years ago in Alberta a fellow named Aberhart(ph) tried to select news stories and it didn't go over very big. He ended up in the Supreme Court of Canada and he was told he couldn't. So I will just let the Supreme Court of Canada talk for all of us. It did give me a little concern.

902 MR. TEMPLETON: Commissioner, could I add something?

903 Stations who have a heavier skew of female tend to concentrate more on lifestyle issues and issues that are of greater importance to women, and a lot of data is available, a lot of research to show where those levels of interest are. So news departments know who they are targeting and tend to slant in certain areas as far as levels of interest.

904 In the case here, with a slightly heavier emphasis on men, not to sound facetious, but if beer went up a buck a case, it would be a lead news story. That would be a big item on the news scene.

905 But I think that there is a misunderstanding of this whole targeting of the radio station, and I just want to make sure it is perfectly clear. If you will indulge me, I just wanted to read something to you that really summarizes exactly what it is we are proposing with this format:

"As indicated earlier, men are less satisfied with existing radio service than women in this market. Men are least satisfied with radio, more so than women. Women are 60 per cent. Men 30 per cent..." (As read)

906 Are satisfied: 60 per cent women are satisfied.

"Overall satisfaction levels for men and women combined, because it is a 50/50 population, is 45 per cent, but the satisfaction level is lowest among men, 30 per cent, particularly those 25 to 34." (As read)

907 This is all statistical data from the research.

"While the station will target men 18-34, it will enjoy a healthy representation of listeners 18-44, including women." (As read)

908 So I hope that clarifies the whole targeting issue.

909 MR. KENNEDY: If I may, just before it goes, if I may be so bold as to say this, I like what the Commissioner was saying and I didn't want to leave it there because it is a very important question you asked. I think it is in language we are caught up in here. I think this is radio programming language versus principal journalism language.

910 If I could try to use an example?

911 COMMISSIONER LANGFORD: Absolutely. Fire away.

912 MR. KENNEDY: One thing I heard you say is that you were comforted by what you heard me say, and obviously I haven't done my job because news is not supposed to necessarily comfort you, it is supposed to inform you. But, in fact, there are ways of comforting your audience and that is to provide subject matter that they are familiar with and that they want to hear about. But that is not to say that you don't provide the full reality of the society around yourself and the audience.

913 COMMISSIONER LANGFORD: It wasn't the news you were bringing so I wasn't comforted by the news, it was your philosophy as explained that was comforting me over and above this statement which I found could be read in a way that could be troublesome and I am glad to have it explained.

914 Thank you.

915 THE CHAIRPERSON: Well, on that comforting note, thank you very much for a good presentation, Mr. Templeton and the Newcap team.

916 It is only just after 3:00 so what I suggest we do, Mr. Secretary, is we hear the Craig group's opening presentation prior to our break.

917 Thank you very much.

918 MR. TEMPLETON: Thank you.

919 MR. BURNSIDE: The next application is the application by Craig Broadcast Systems Inc. on behalf of a company to be incorporated for a broadcasting licence to carry on an English-language FM radio programming undertaking at Calgary on the frequency 98.5.

920 The application is proposing a hot adult contemporary music format.

--- Pause / Pause

921 MR. BURNSIDE: You may proceed when you are ready.

922 Please proceed.


923 MR. COWIE: Chairman Williams, Commissioners, ladies and gentlemen, good afternoon. My name is Bruce Cowie and I am here representing Harvard Developments who is the co-applicant in this proceeding along with Craig Music and Entertainment.

924 Before beginning our presentation, I would like to introduce the other members of our panel.

925 On my right is Jennifer Stain, Vice-President, Corporate and Regulatory Affairs for Craig Broadcast Systems.

926 To Jennifer's right is Russ Tyson, Vice-President of Programming for Craig Music and Entertainment.

927 To my left is Alan Cruise, President and CEO of Craig Music and Entertainment.

928 Behind me, from your right to left, is Debra McLaughlin, Vice-President, Director of Operations and Research, Craig Airtime Sales; John Huschi, General Manager, Harvard Broadcasting; Clayton Bzdel, Vice-President, Investments for Harvard Developments. Beside Clayton is Michael Olstrom, Operations Manager for Regina Radio.

929 In the back row, from your right to left, we have Drew Craig, President and CEO of Craig Broadcast Systems. Beside Drew, Paul Hill, President and CEO of Harvard Developments.

930 We are delighted to be here today to talk about our application for a new FM station offering hot adult contemporary music with the best music from the '80s and '90s. The theme of this presentation is why our proposal represents the best use of the 98.5 frequency. We believe there are six key reasons:

931 First, Craig and Harvard between them have over 75 years of broadcasting success in radio, television and distribution in western Canada. This speaks to the soundness of our business plan and to both our ability and commitment to make this new station a success.

932 Second, while we are experienced operators, we also bring new ownership and a distinct new voice to the market. In Calgary there is a clear concentration of voices and perspectives. Three owners account for over 80 per cent of all hours tuned to radio. Our proposal will increase the diversity of voices.

933 Third, we know this market, and we think that in the case of an intimate and intensely local medium like radio, the ability to connect with the community is fundamentally important.

934 While Harvard's current operations are limited to Saskatchewan, Paul Hill plays a very active role in Calgary and Harvard Developments is an established and respected member of the local business community. These relationships are reflected in the numerous letters of support we received for this application from high profile business and community leaders.

935 And Craig, of course, is well-established here, having successfully launched A-Channel three years ago. The community emphasis that defines the A-Channel brand is precisely what builds a successful radio station.

936 The Mix will very quickly connect with the Calgary population and will offer a service that both understands and serves its listeners. We are unique among the other applicants in that our head offices are in western Canada. Decisions will be made here. Our station will reflect that regional perspective.

937 Fourth, there are synergies that can be realized between the new radio station and A-Channel should we be licensed. Those are in the areas of community support and Canadian talent development.

938 Fifth, the hot AC format, combined with the best music from the 1980s and 1990s and strong local programming, is a format that is particularly well-suited to the Calgary market. Our independent research demonstrates strong consumer interest in this format.

939 And sixth, we are extremely proud to offer a significant commitment to Canadian talent development and to the Calgary arts and education community: a $5 million fund with $3.75 million reserved for Calgary organizations directly involved in developing and promoting Canadian and local talent.

940 Mr. Chairman, with that as an overview we would like to now turn to the details.

941 MS McLAUGHLIN: The strength of the market and its ability to absorb a new player is evidenced not only in the independent market assessment we filed and in the material of the other applicants, but is also evidenced by the fact that none of the incumbents are arguing that the market can't absorb a new player.

942 Calgary is a very profitable radio market. In 1999, PBIT margins for Alberta radio stations were 33 per cent compared to 19 per cent for the rest of the country. Radio advertising revenues increased approximately 15 per cent each year, from 1997 to 1999. They are forecast to continue to grow steadily over the next four years in response to the ongoing strength of the local economy.

943 Advertising rates increased on average by 33 per cent in 2000 following two years of growth. The high demand for radio advertising time in Calgary means that it has replaced Vancouver as the market that is bought first and that rates are unlikely to decline with the addition of a new station.

944 Given the ownership concentration in the market, we respectfully suggest that the Commission should seize the opportunity to license a new voice, one with a proven track record.

945 MR. COWIE: This application is important for both Harvard and Craig because it offers us the rare opportunity to expand our radio businesses at a time when increasing consolidation is making acquisition of new stations in major markets very difficult. Expansion into larger markets in western Canada is critical to maintaining the viability of the stations we operate in Regina, Winnipeg and Brandon.

946 Harvard and Craig share a compatible business philosophy and strategy for expansion. A Calgary station is a natural fit for both of our companies.

--- Video presentation / Présentation vidéo

947 MR. TYSON: The hot AC format is one of the most popular formats in radio today. In markets where this type of station exists it consistently ranks within the top five stations in both share and reach.

948 This distinct format crosses several traditional programming lines and appeals to an audience whose listening interest span several musical genres. The reality is that no single traditional format appears to satisfy the full range of music interest of our core audience. Hot AC sits in the middle of the adult contemporary and the contemporary hits chart drawing selections from both of these charts and others.

949 When we embarked on the process of choosing a format for this station, it seemed obvious to us that Calgary should have a hot AC station. As indicated in the attachments to this oral presentation, the hot AC format exists in markets across the country, including Edmonton where the hot AC station ranks number two in adults 25-49, and in Winnipeg where it is number one in adults 25-49. The hot AC format is noticeably absent in Calgary.

950 Our playlist will build on this convergence of traditional format lines and the broadening of the range of musical interests by developing it into a cohesive music mix. An important element of our program strategy will be to mix current hits with selections that charted in the 80s and 90s.

951 This format is ideally suited to Calgary because the core audience, adults 25 to 44, matches precisely the concentration in the population, as demonstrated by the independent research filed with this application.

952 So what does our proposed format sound like? Simply put, it is the best of the best. Artists like Santana and Eric Clapton who have charted in both the AC and CHR formats in all three decades will be played. Relative newcomers like Sister Hazel from the adult alternative chart will mix with Everclear from the rock chart and Lone Star and Faith Hill from the country chart. This innovative programming reflects consumer demand for adult hit music.

953 We will also include new artists and emerging Canadian and local artists in our Clash of the Fresh Cuts nightly feature.

954 Let's give a listen to the finished product.

--- Video Presentation / Présentation vidéo

955 MR. TYSON: Unlike the formats proposed by the other applicants, the variety of our music selections means that core audiences for the incumbents will be unlikely to switch from current stations entirely. For the listener hooked on country or rock or ballads, this is not the station. However, tertiary listeners will find a home at the Mix where the variety and concentration of highly popular music will make a compelling listening option.

956 MR. OLSTROM: The core audience identified in the Pollara research also had clear preferences for programming beyond music. The consistent message was that local programming with relevant discussion and information was of greatest importance. News about our city and community received the highest marks. Based on this research, the Mix's plans for local reflection include:

957 News traffic and weather. Between 5:30 and 9:00 a.m., we will feature news every half-hour and every hour between 9:00 a.m. and 6:00 p.m. Our news packages will cover the headlines and issues important to Albertans and provide a balance of local, regional and Canadian news. Up to the minute traffic reports and weather forecasts will be a key component of our morning and afternoon drive programs.

958 Access Calgary is an hour-long community-based access show hosted by our news director, providing a forum for discussion of current hot topics: C-Train expansion, rising crime rates, et cetera. Community participation will be encouraged through an aggressive schedule of promotional announcements that will run throughout peak listening periods and on our Web site.

959 Community Counts runs five times per day, highlighting community events and broadcasting public service messages from Calgary and the surrounding area, not only on-air, but also on our Web site.

960 Club Mix airs five times a day. The Mix will take a look at the happenings at the local club scene. We will tell our listeners where they can see the best in local entertainment.

961 Mix Minutes. Scheduled to run three times a day, Mix Minutes will feature events and happenings in the Calgary area. If you want to know where the next pancake breakfast is being held or what time the victory parade will run to help celebrate our beloved Stampeders Grey Cup win, Mix Minutes will keep you informed.

962 The Local Music Scene. Mix 98.5 will promote local musical talents by broadcasting at last once a week from Calgary clubs.

963 Then there is the Mix 98.5 Web site that is going to be an extension of the station, offering listeners and the community the opportunity to interact with us, and to submit information for features like Community Counts and Mix Minutes.

964 I will also be a place to promote local talent, to host pages for local artists, give people the opportunity to sample and buy their music online and connect to a new fan base.

965 MS STRAIN: It is my pleasure to talk about the part of our application of which we are particularly proud. That is, our Canadian Talent Development Fund of five million dollars, the highest of all the applicants for this frequency. Our concept for CTD is based on a five-point plan:

966 These would be direct expenditures to eligible third-party organizations as contemplated in relevant Commission policies; 25 per cent or $1,250,000 will be paid for FACTOR. The remaining $3,750,000 will be made available to Calgary organizations directly involved in developing and showcasing Canadian and local talent.

967 The funds will be disbursed on a yearly basis. A volunteer advisory board consisting of one Harvard member, on Craig member, one member of station management and two representatives from the local arts community will seek out groups and organizations to discuss with them how our fund can support projects that will best develop Canadian talent.

968 Finally, we will file with the Commission an annual report detailing how the funds have been spent and with whom.

969 We have spent a significant amount of time talking top a number of Calgary groups from the Opera to the Calgary Performing Arts Centre to colleges, school boards and even individual band teachers in the city.

970 Calgary is not just about the Stampede and hockey and skiing. We have been, frankly, delighted and surprised by the depth and the breadth of the artistic and musical talent in this city and the effort that is well under way by many different organizations to make Calgary known as a cultural centre.

971 I want to talk about one organization in particular and that is the Music Conservatory at Mount Royal College. There is no institution comparable to this one in Canada, other than the Royal Conservatory in Toronto.

972 Several years ago, the Mount Royal Conservatory launched a project they refer to as The Music Bridge Program. This is a unique international summer school dedicated to providing a world class artistic meeting ground for exceptional students in violin, viola, cello and piano.

973 It is aimed primarily at Canadian kids aged 12 to 18 who are extraordinarily talented. Students from Mainland China also participate in the program. The college brings these students, about 50 in total, to Calgary to perform together and work with a faculty consisting of some of the best music instructors in the world. The performances are recorded on CD and the program culminates with a gala concert at Calgary's Jack Singer Concert Hall.

974 The objectives of the program are to identify and promote outstanding musicians, to create enhanced educational opportunities for them and to promote intercultural understanding and mutual respect among all the participants.

975 This program, I have discovered, is unique in the world and it just lost its major corporate sponsor. Because of the profile of this program and its financial need, we have agreed with Mount Royal that we would commit $500,000 to it should we be licensed.

976 This is just one example. Others include supporting the educational initiatives of the Calgary Opera, the Organ Foundation and a local non-profit society that has been set up by parents of a Calgary school to support their music and band program, one of the largest in western Canada and chronically in need of funding just to maintain instruments. We believe our CTD fund can and will have a real impact on this.

977 MR. COWIE: In summary, Commissioners, Harvard and Craig bring to this application experience, a diverse voice and a fresh, independent brand, the opportunity to maintain service to smaller communities in Regina, Winnipeg, Brandon, with the strength that a major market station would add, a format that is glaringly absent from the market and is supported by consumer demand, opportunities to support local talent and a $5 million Canadian talent development commitment, with $3.57 million dedicated to the local community.

978 I thank you, Chairman Williams, Commissioners, Commission staff. We look forward to your questions.

979 THE CHAIRPERSON: Thank you, Mr. Cowie, and the Craig team members.

980 As we said prior to your presentation, we will be taking our afternoon break now. We will break for 20 minutes and we will return for questions on your presentations.

981 MR. COWIE: Thank you.

982 THE CHAIRPERSON: Mr. Secretary, what time do we return.

983 MR. BURNSIDE: We should be back at 10 minutes to four.

--- Upon recessing at 1530 / Suspension à 1530

--- Upon resuming at 1553 / Reprise à 1553

984 THE CHAIRPERSON: Ladies and gentlemen, if you would be seated we will begin with the balance of the afternoon, which will be the questions directed to the application put forward by Craig.

985 Commissioner Cram, if you would lead the questioning for us.

986 COMMISSIONER CRAM: Thank you, Mr. Chairman. Welcome.

987 I do want to make one thing clear, it is Craig and Harvard and I just wanted to make that clear for the record. I certainly don't mean to contradict the Chair, just to make sure we know where we are at.

988 I wanted to start, if I could, and it will seem rather disjointed because I wanted to ask questions first about your written presentation today and then we can move on to the other issues that I had clarified.

989 On page 2, Mr. Cowie, you have your second reason and on page 3 you have your third reason. I am thinking it sort of looks like you are speaking out of both sides of your mouth. You are saying a new ownership and a distinct new voice, but you know the market and you have been here. Can you sort of tell me the distinction between those two reasons?

990 MR. COWIE: I think the reference to do we know the market is primarily to our partner, a channel who is here, has been in business here for three years. The other part of that reference was to Paul Hill and Harvard Developments who are very active in the Calgary business community and the social world of Calgary. So we are not total newcomers is I guess the sum of the two.

991 COMMISSIONER CRAM: So then it's really not a new ownership and a distinct new voice because A-Channel is here.

992 MR. COWIE: This station is a stand-alone application which will have its own management team. It will not be managed on a day-to-day basis by either Harvard or by Craig and, therefore, is a new voice in the market.

993 COMMISSIONER CRAM: I then wanted to talk about page 6 and the issue of:

"Expansion into larger markets in western Canada is critical to maintaining the viability of the stations that we operate in (God's country) Regina, Winnipeg and Brandon."

994 Wouldn't you agree with me that Telemedia could probably give the same argument because they are giving coverage to smaller parts of Alberta and they need the cross-subsidization of the larger market and pretty well the same about Newcap because they have got the smaller markets in Atlantic Canada?

995 MR. COWIE: I couldn't disagree with that. However, by extension we own two stations total in Regina. We do manage two stations for Craig in LMA.

996 COMMISSIONER CRAM: You are speaking for Harvard right now?

997 MR. COWIE: Yes.

998 If I might put it in degrees, it is much more critical for us, the two stations we own are in a tertiary market. They are in a chronically tough economy in Saskatchewan. I guess it speaks to, and I am going to have Paul Hill speak to this later in the session, but it speaks to our desire to stay in the business. We think that by participating in larger markets it will provide the economic clout for us to maintain those stations over time and to be active players in the radio business.

999 COMMISSIONER CRAM: I will say all of the applicants here for the frequency for which you are competing, would you say that yours was the most extreme in terms of the cross-subsidization necessary?

1000 MR. COWIE: I am guessing that just on the basis of the other applicants, all of whom are national companies with resources much larger than ours. I don't for a minute take away from the work they have done in smaller markets in keeping stations alive and so on. We live there, so we know how important that is.

1001 In speaking for Craig, the branded market is also a tertiary market and they face the same kinds of problems we do there. So I think it is a matter of degree in dealing with that particular issue.

1002 My guess is that some of the larger companies could have failures on their hands and some small stations survive very nicely.

1003 With our ownership if we fail we're out. We have a very keen desire to be in.

1004 COMMISSIONER CRAM: Mr. Tyson, I will be getting more to programming later on, but I wanted to talk about on page 8 your convergence issue and the mix concept. I am having some problem based on the audio/video that we had. Are you telling me that all of these different formats or types of music will be within the same hour or will it be sort of today we are doing eighties and nineties at this hour and contemporary hits now. How is it going to work?

1005 MR. COWIE: It will be a mix throughout the entire day. That's the strength of this format. It does draw from all these different other kinds of music. I guess one can only look at the back of radio and records which is something that most programmers look at and there are now 12 different charts there. So it draws from that and I speak for that familiarity the older songs from the eighties and nineties and our research certainly indicated that, that that would be a strength, so it would be throughout the entire day.

1006 COMMISSIONER CRAM: You talk about the number of charts. Tell me, from what charts will you not be playing? Maybe that's easier, in terms of --

1007 MR. TYSON: I would probably say the Urban. I mean there will be some cross-overs. Because of those some charts, there are cross-overs there. Urban CHR, for example, there are cross-overs there. There are cross-overs to CHR to soft AC or AC, to country, to smooth jazz. So it does draw from all of those.

1008 COMMISSIONER CRAM: So then are you telling me there won't be any charts from which you won't be playing?

1009 MR. TYSON: Well, yes, I mean we will be looking at the Hot Adult Contemporary chart, which is a very viable chart or a very viable format in other markets, especially in Winnipeg, for example, which I'm very familiar with.

1010 COMMISSIONER CRAM: I come right back to -- because you talk about the full range and the number of charts from which you will be taking songs -- but are there any charts from you will not be?

1011 MR. TYSON: Yes, I'm sure we will not probably be playing Urban music, for example. I don't think we will be playing music from Hard Rock charts. But, again, that's hard to say because of the fact that there are soft ballads that do chart on Hard Rock charts and can cross over.

1012 COMMISSIONER CRAM: I understand the concept of cross-overs, yes.

1013 Now I will be going to the CTD development. Initially, I see there is the amount of money going to FACTOR -- and I take it, Ms Strain, you will answering these questions.

1014 Will the money be tagged in any way? Or is FACTOR accepted as sort of a designation, in any way, of --

1015 MS STRAIN: No, Commissioner Cram. We are sending it to them and they can spend it as they see fit.

1016 COMMISSIONER CRAM: The remainder of the moneys, the $3.75 million, you talk about the moneys going to Calgary organizations and you then, at page 12 of your presentation, talk about the volunteer advisory board and you talk about one Harvard member and one Craig member. Is that somebody simply designated by Harvard and Craig?

1017 MS STRAIN: Yes.

1018 COMMISSIONER CRAM: A member of the station management and two representatives from the local arts community. How will they be chosen?

1019 MS STRAIN: Commissioner Cram, as Mr. Cowie already mentioned, Mr. Hill has lots of contacts in the city; certainly A-Channel has made tremendous inroads in the community here. We haven't selected two individuals yet but we don't anticipate, certainly given the discussions we have already had with some of these groups, that there would be anybody not willing to volunteer on that particular advisory board.

1020 COMMISSIONER CRAM: They would essentially be given over administration of the funds?

1021 MS STRAIN: We would administer it collectively. They would be there to give us input as to how we could best direct those funds to make sure that they are going to the right kinds of initiatives, and of course we would be there to make sure that they complied with CRTC policies as well.

1022 COMMISSIONER CRAM: With the eligibility issues.

1023 MS STRAIN: Yes.

1024 COMMISSIONER CRAM: How would you publicize the availability of these moneys?

1025 MS STRAIN: We spent quite a bit of time talking about that but I think it gets back to what I said earlier, which is that I don't think we will need to. Good news travels very quickly, and we already, as I say, have feelers out in the community all of the time and we don't anticipate having any problem finding places to put this money.

1026 COMMISSIONER CRAM: I guess if you didn't publicize it I would have a problem because there are the little people who may not be necessarily in the right grapevine.

1027 So are you planning on publicizing it?

1028 MS STRAIN: To be honest, we haven't decided completely as to how we were going to approach that because -- and I understand where you are coming from, and that is our concern too. We purposely wanted to make sure that we had -- you know, if it was only $5,000 that might help some small organization or school, if that would get them over a major hurdle, we wanted to be able to provide that kind of funding. So that is something that we will -- we would certainly think about doing that, putting it on our Web site perhaps, perhaps making mention of it on the air as well.

1029 COMMISSIONER CRAM: Have you got any guidelines about -- or criteria?

1030 MS STRAIN: As to how the money would be spent?

1031 Well, it starts, I guess, with your public notice -- and, I'm sorry, I don't have the number in front of me, it's in the oral -- which talks about eligible third-party organizations. So we would start with that. From there, we look at how best can we get that money doing what it's supposed to do, which is to develop Canadian talent.

1032 Maybe I can just give you a few examples because I have spent a great deal of time talking to some of these organizations and have been absolutely astounded by the things that are going on and where this money could be used.

1033 One example would be the Calgary Opera. The Opera has a significant educational mandate. One of the things they do is they work with about four or five schools in the area and they go in and they teach these kids how to write and stage an opera, everything from the music to the staging, the whole bit, and that's a program they would like to expand.

1034 We talked to Mount Royal about their Music Bridge Program, which we referred to in our oral, but we also talked to their communications department. They have a number of different subdepartments within the communications faculty. One of the things they talked to us about that they would like to do is help students in their radio program develop ethnic programming, and that sounded very interesting to us as well.

1035 We have talked to SAIT about establishing journalism scholarships there.

1036 We talked to the music director of the school, the Midsun Junior High School which I referred to. He struggles just to maintain the program. He has tremendous participation from students in that school, and after having met him I think it's because of his tremendous dedication and enthusiasm. There's all kinds of things he would like to do. There's underprivileged kids who don't have an opportunity to go to Banff Camp.

1037 So those are the kinds of things we would be looking at.

1038 As I also said in the oral, we would be reporting to you on an annual basis, we would be telling you exactly where the funds went, and if we weren't sure as to the eligibility of a particular contribution we would talk to the Commission about it.

1039 COMMISSIONER CRAM: So when you talk about "Is it doing what it's supposed to do?", can I say then the only criteria you have is that it would be in accordance with the policy of contributing to the development of Canadian talent?

1040 MS STRAIN: Yes, and we would like -- that is the thing that we would be most concerned about, yes, and then the other thing would be making sure that we are getting to the areas where there's the most need. I have to tell you that in some of my discussions it sounds like some of the areas are in public education system, those sorts of things. But it wouldn't be limited to that. I mean there's some -- I can give you one other example of the International Children's Festival, for example, which brings in performers and musicians, et cetera, from all over the world, and from Canada, certainly from Canada is a large part of that festival, and they have a Celtic band from New Brunswick coming in next year, but they have to fund the cost of bringing that group to Calgary. So it's everything from the grassroots level up to those sorts of -- those initiatives as well.

1041 COMMISSIONER CRAM: See, to me it would seem there would be more demand than there would be money. That's why I'm saying if you have any criteria or any grading or any evaluation criteria developed and would you be planning to do that?

1042 MS STRAIN: Yes, we would. We would.

1043 COMMISSIONER CRAM: And it's just a curiosity by me, why do you talk about doing this over five years instead of spreading it over the seven-year licence term or --

1044 MS STRAIN: We thought that question might come up.

1045 The reason really was that we wanted to have the maximum impact, I guess, to sort of shorten the time frame within which we would spend that money. It was really nothing more scientific to it than that. I mean our commitment is $5 million and we will spend that; we will spend it in five years. It may cross over into a sixth year if there's a program that we had funded that crossed over, but we just wanted to make the most impact in that period of time.

1046 COMMISSIONER CRAM: So there's the $5 million. But then, in year 6 and 7, there's the money still going to FACTOR. Isn't it eight thousand --

1047 MS STRAIN: Yes, it could be FACTOR or another eligible third-party organization in accordance with the CAB plan.

1048 COMMISSIONER CRAM: Yes. In my notes were "Why is there no collateral benefits for the recipients?" and then I hear you in your video talking about on air exposure for the recipients. What are your plans, in terms of -- and what I mean by "collateral benefits for the recipients" is something like doing a disc for them, giving them air time, giving them promotion. And you talked about on air promotion --"on air exposure" is the word in the video. What do you contemplate?

1049 MS STRAIN: Well, this is actually one of the areas where we really think our association with A-Channel could be extremely helpful. As an example -- and I will use the Music Bridge example again -- what we could maybe do is have some of these kids who have come over from China who are working with, performing with some of these extraordinarily talented Canadian students, we could have them on the "Big Breakfast" -- I mean A-Channel has a daily morning program called the "Big Breakfast" -- which is perfect for that sort of -- you know, it brings all different sorts of members of the community and events and all kinds of things. So that could be part of it.

1050 COMMISSIONER CRAM: You are not thinking of anything on the radio?

1051 MS STRAIN: Certainly there are opportunities to cross-promote these kinds of -- I mean I think that the strength of both a channel and the new station mix, 98.5, would be brought to bear to have an even greater impact on what we can do for these organizations.

1052 COMMISSIONER CRAM: Mr. Tyson, I then come back to what is not on your playlist.

1053 I see one of the proposed third parties is the Calgary Opera. Don't get me wrong. I hear that opera is the largest growing genre in Canada today, so don't get me wrong. In terms of collateral benefit, do you think it would fit that something -- if you gave money to the opera for something, that it would the fit on your radio station?

1054 MR. TYSON: I think it would. It certainly wouldn't be part of our music mix, but I think we would certainly promote the opera on air and the events that they had or anything that we could help them with along those lines.

1055 COMMISSIONER CRAM: Moving on to local programming and spoken word. You have gone into some depth in terms of the programs that you were proposing. I wanted to go through each and sort of talk about what they will be, and how much time in any given day or week they will be.

1056 So starting at page 8, there is a reference to: a nightly clash of the fresh cut nightly feature. That is, I take it -- is that spoken word or is that -- that's vocal or what is that?

1057 MR. TYSON: Basically, it is a feature that we have used in the past at our other radio stations and it highlights new music. We get listeners to vote for their favourite song of the night.

1058 I can give you an example. In our CHR station in Winnipeg we run this feature, it is called "Clash of the Fresh Cut". It is very hard to say.

1059 COMMISSIONER CRAM: You should get a bonus for saying it.

1060 MR. TYSON: Yes. Yes. It's a very good announcer that does that show.

1061 We had a local artist by the name of Jackie Shaw. She had come to us about playing her particular record. This was the venue that we used. She won five nights in a row and now has been added to our regular playlist. That is the type of thing that we see happening with this feature.


1063 If I could take you to page 10 of your submission today, I just need to get a little more particulars and a bit more quantifiable particulars.

1064 You talk about news, traffic and weather every half hour and every hour. How much time are you planning for that, are you allocating?

1065 MR. TYSON: Perhaps Michael can answer that better than I can.

1066 MR. OLSTROM: In terms of total news for morning and throughout the day, each top hour newscast in the morning will be three minutes in length and then additional time for sports, traffic and weather. The half hour newscast in the morning show will be 98 seconds covering off the news and sports and weather. The same thing for 9:00 a.m. through 6:00 p.m. as well Monday through Friday. In addition, we have newscasts that will be three minutes in length, Saturday-Sunday morning, 6:00, 7:00, 8:00 and 9:00 as well as noon.

1067 COMMISSIONER CRAM: So the three minutes in the morning is news and then there is plus sports and weather.

1068 MR. OLSTROM: Yes.


1070 MR. OLSTROM: One minute is sports, 20 to 30 seconds of weather -- whatever it takes to deliver the message.

1071 COMMISSIONER CRAM: And have you added that up for a week?

1072 MR. OLSTROM: For news alone, approximately two hours and 25 minutes. Sports is approximately an hour. Traffic, we have approximated about two hours if you put everything together. Weather is approximately two hours and 53 minutes. We are looking at 95 newscasts throughout the course of the week.

1073 COMMISSIONER CRAM: Then Access Calgary. Are we talking about a phone-in show? Is that what it is?

1074 MR. OLSTROM: No. It will be a one-hour produced program hosted by our news director where he will sort out or find out the local hot topics and have opposing views, whether it is a mayoral candidate, whether it is an issue of high importance to Calgarians and area.

1075 COMMISSIONER CRAM: That will be an hour?

1076 MR. OLSTROM: That will be one hour in length.

1077 COMMISSIONER CRAM: I didn't hear you.

1078 MR. OLSTROM: Sorry?

1079 COMMISSIONER CRAM: What did you say?

1080 MR. OLSTROM: One hour in length.

1081 COMMISSIONER CRAM: In length?

1082 MR. OLSTROM: Yes.

1083 COMMISSIONER CRAM: Of course minus ads. Have I got that right?

1084 MR. OLSTROM: Yes.


1086 The Community Count. How much time would that be? You say it will run five times a day. How much time is allocated to that?

1087 MR. OLSTROM: If you total it up over the course of the week it is approximately 35 minutes, each one 60 seconds in length approximately.

1088 COMMISSIONER CRAM: The same with Club Mix.

1089 MR. OLSTROM: Yes. Each is a minute in length -- one minute in length.

1090 COMMISSIONER CRAM: So in a week it is 25 minutes.

1091 MR. OLSTROM: Thirty-five. And then for Mixed Minutes it is 21 minutes.

1092 COMMISSIONER CRAM: Okay. So that will be Saturday and Sunday?

1093 MR. OLSTROM: Yes.


1095 MR. OLSTROM: Sorry. No. That is only taken into account Monday through Friday, I believe.

1096 COMMISSIONER CRAM: So I was right on Club Mix: 25 minutes?

1097 MR. OLSTROM: Yes. Sorry. Yes.

1098 COMMISSIONER CRAM: And I got 56 in math in Grade 12.

--- Laughter / Rires

1099 MR. OLSTROM: Excuse me. I'm sorry. Club Mix does run seven days a week. So it will be 35 minutes. I'm sorry.

--- Laughter / Rires

1100 MR. OLSTROM: You shouldn't have got 58, but your teacher took mercy on you.

--- Laughter / Rires

1101 COMMISSIONER CRAM: So Club Mix airs five times a day, seven times a week and it is 35 minutes in total per week?

1102 MR. OLSTROM: Right.

1103 COMMISSIONER CRAM: Mixed Minutes runs three times a day, seven days a week.

1104 MR. OLSTROM: Seven days a week.

1105 COMMISSIONER CRAM: And is how many minutes in length?

1106 MR. OLSTROM: Twenty-one.

1107 COMMISSIONER CRAM: Twenty-one minutes total?

1108 MR. OLSTROM: For the week. Yes.

1109 COMMISSIONER CRAM: Total for the week. Thank you.

1110 I am not going to add all this up.

1111 MR. OLSTROM: It's just under 11 hours.

--- Laughter / Rires

1112 COMMISSIONER CRAM: Including The Local Music Scene? No, that would not be spoken word, I take it.

1113 MR. OLSTROM: No.


1115 But it is local programming. "The Local Music Scene, by broadcasting at least once a week from Calgary clubs", have you any idea of the time you have allocated to that and the type of music?

1116 MR. OLSTROM: Actually, what that is is more of a program to generate awareness for local artists, where we will have announcers out at different venues reporting back live and doing reports. It will not be a live broadcast per se.


1118 But in terms of local flavour programming, how much time is that a week?

1119 MR. OLSTROM: That would be devoted over the course of an evening, probably over the course of three hours with regular cut-ins over the course of that time.

1120 COMMISSIONER CRAM: Oh, cut-ins. Okay.

1121 Then we have your Web site, which of course we then get right into: giving people the opportunity to sample and buy their music online and connect to a new fan base.

1122 Does Craig or Harvard already have a Web site?

1123 MR. OLSTROM: Yes, we do.

1124 COMMISSIONER CRAM: Mr. Olstrom, you are talking for Craig?

1125 MR. OLSTROM: Yes, Craig and Harvard both have Web sites. I am speaking specifically of Regina. The four radio stations in Regina each have a Web site.

1126 COMMISSIONER CRAM: Forgive me, because of course I live there, can one buy music of local artists online on your site right now?

1127 MR. OLSTROM: Not at this point in time, no.

1128 COMMISSIONER CRAM: How do your Web sites presently facilitate access to local artists?

1129 MR. OLSTROM: At this point in time, it is more of a situation where we have opportunities to interact with the -- when we have interviews, we have artists into the studio and we have interviews, the listeners can e-mail right to the studio questions for those artists.

1130 That is primarily how we promote local artists to this point, other than what is happening in different clubs around town and things like that.

1131 COMMISSIONER CRAM: You do provide link ups to these local artists if they have their own sites?

1132 MR. OLSTROM: To some we do, yes. I don't know if we do at this point in time, but we have in the past.

1133 COMMISSIONER CRAM: What are your plans, then, and time lines for setting up a Web site -- should you get this licence -- for setting up a Web site and allowing people to buy music online?

1134 MR. OLSTROM: I think initially it will be fairly soon that we would like to set the Web site up, however, it will be a transition over a period of time and I would look at probably by the time we are fully functional.

1135 Initially, what we want to do is host local artists, the opportunity to sell on line not actually be the one generating the e-commerce. I think at some point in time, maybe down the road, that we can move to that avenue.

1136 COMMISSIONER CRAM: Sort of like talking about a link to their sites --

1137 MR. OLSTROM: Yes.

1138 COMMISSIONER CRAM:  -- and if they don't have one, then you would have some facility there that they could phone or something.

1139 MR. OLSTROM: Right. And we will promote local artists, that you can have access to local artists on air and direct them to our Web site.

1140 COMMISSIONER CRAM: I want to get back to spoken word and talk about in terms of all of these, news, traffic, Access Calgary, Community Counts, Club Mix, Mix Minutes, how are they scheduled throughout the day?

1141 Is there any point in time when there isn't any of this spoken word local programming?

1142 MR. OLSTROM: Overnights probably.

1143 COMMISSIONER CRAM: What do you mean by "overnight"?

1144 MR. OLSTROM: Well, midnight to 6:00 a.m.

1145 COMMISSIONER CRAM: Midnight to 6:00.

1146 MR. OLSTROM: We are talking about having it run through the morning show, through all the day-parts into evenings.

1147 COMMISSIONER CRAM: Is there news after 6:00?

1148 MR. OLSTROM: No, there isn't.

1149 COMMISSIONER CRAM: I take it, though, the Access Calgary, Community Counts, Club Mix and the other one would be in the evenings?

1150 MR. OLSTROM: No. I'm sorry.

1151 Access Calgary will run at 10:00 a.m. Sunday mornings.

1152 I'm sorry, and the other you asked?

1153 COMMISSIONER CRAM: The other one, the Community Counts, Club Mix and Mix Minutes?

1154 MR. OLSTROM: They will be scheduled throughout the course of the 18-hour day, 6:00 a.m. to midnight.

1155 COMMISSIONER CRAM: The 18 hours, okay.

1156 How do you think your local programming would distinguish itself from everything else available today in the market in Calgary?

1157 MR. OLSTROM: I think we are going to, for example with Community Counts, give an opportunity to almost become a public service with groups being able to submit what their groups and organizations are doing.

1158 They will be able to do that through our Web site as well, have contact through there. We will list a lot more, I would think, on our Web site.

--- Pause / Pause

1159 MR. COWIE: Just if I can pick that up, Commissioner Cram, all of it is designed to complete a link with the Calgary listeners, including Web site access to our control room for on-air personnel so that the instant communication with the community is constant.

1160 We think the weekly show "Access Calgary" is a very important addition to this marketplace. It is a very fast-growing city and there are lots of things going on, and so on, and you can't always tell those stories in 90 seconds, so we created this program where there can be in-depth discussion.

1161 I think by his very training Michael has not tried to oversell the Web site, but we intend this Web site to be an extension of who we are and to be open for communication on all kinds of information so that we can be the best radio station we can be.

1162 So we will be focused very much on community service and on what Calgary listeners want. These are some of the vehicles. We may create others as time goes on, but going in we think that these are very important links.

1163 COMMISSIONER CRAM: Are you planning on streaming your video on the Internet?

1164 MR. COWIE: Yes, we are.

1165 COMMISSIONER CRAM: And timelines? When do you think --

1166 MR. COWIE: That would be early. That would be early on. It would be before e-commerce. We are streaming in Saskatchewan now. Craig will be streaming in Manitoba very soon. I think we are up to a million hits now on a regular basis.


1168 MR. COWIE: In Regina. So we understand how important that is.

1169 As a matter of fact, I was doing a post-game show after a football game in Regina the other day and one of the calls --

1170 COMMISSIONER CRAM: The one that won? Oh, not the Roughriders.

--- Laughter / Rires

1171 MR. COWIE: No, this is not about winning and losing.

--- Laughter / Rires

1172 COMMISSIONER CRAM: Thank you, Mr. Cowie.

1173 MR. COWIE: In fact, I would --

1174 COMMISSIONER CRAM: My brother would appreciate hearing that.

1175 MR. COWIE: One of the calls we got was from someone who was watching the game -- or listening to the game, I should say, in Calgary. So while it is hard to know where all of that stream is going, we are now starting to get the responses back and it is interesting, we are all over this country now.

1176 So we see the Web site as being very important and we see the opportunity for growing talent, young and emerging talent, be able to both talk to our listeners and to sell products that will move them along, because they all need money. As soon as we can get to e-commerce we will.

1177 COMMISSIONER CRAM: Now, I want to move to the study by Airtime Television Sales and Research.

1178 Particularly there was one -- it is at page 94 of the factum, I think it is page 3 -- yes, the Executive Summary of Airtime Television Sales. There is a reference under the third paragraph, the last sentence -- do you need to find it, or I can just read it.

"One of the effects of consolidation in radio has been to make sellers less flexible and radio more difficult to negotiate." (As read)

1179 Then there was a further reference to:

"Advertisers indicate they are turning to other media to advertise given the high cost of radio advertising in Calgary." (As read)

1180 Do you know what other media advertisers are referred to?

1181 MR. COWIE: With your permission I will have Debra McLaughlin speak to that.


1183 MS McLAUGHLIN: That reference to turning to other media comes directly from interviews with advertisers and we found that on a local level that other media is newspaper or direct mail, flyers.

1184 On a national level it can be deferring their budgets into other markets or shoring up other media buy. If they were in television they might add a little bit more to it, if they were in newspaper they might expand that coverage to a higher frequency than they were.

1185 COMMISSIONER CRAM: So maybe A-Channel has profited from this?

1186 MR. COWIE: For the time being.

1187 MS McLAUGHLIN: I would think all media in the market have profited from this.

1188 COMMISSIONER CRAM: So would the impact, then, in the long run, be to make television less flexible also, as they talk about being less flexible and more difficult to negotiate?

1189 MS McLAUGHLIN: Well, it has to do with, as I had indicated, the concentration and the ownership and the way it is sold.

1190 If you are buying radio in Calgary it is sold in packages, so you have a very targeted medium being four different targets being sold in a package. So if you are an 18 to 34 advertiser, as the previous applicant had discussed, you may be forced in a package to buy four stations. Two might be effective in that demographic to some extent and the other two are not. But is has -- and it isn't endemic to Calgary, it is to radio and consolidation across the country.

1191 So it has become problematic to sell the medium of radio as efficient generally to advertisers when they are forced to put money into radio stations that maybe aren't as effective as they need be.

1192 In Calgary, with only three principal owners, it is particularly difficult, and with the high demand it allows sellers to set the rates at a very high premium, which makes it even less efficient, taking away the fact that they have to buy stations that they wouldn't typically have bought anyway.

1193 So it is a sort of a double whammy in this market.

1194 COMMISSIONER CRAM: It then refers to:

"Advertisers identified a service targeting a younger demographic as being needed in the market." (As read)

1195 And yet our analysis, our staff's analysis, indicates that CJAY-FM and CKIK -- as I call it, C-K-I-K -- skew to a younger audience.

1196 If they skew to a younger audience and you are skewing to a younger audience, is there really a need for a new station for a younger audience?

1197 MS McLAUGHLIN: Again it gets back to the way you have to buy it. There is definitely a market for this service. It is a market that has been identified in the Pollara research. It is a market that buyers recognize aren't always easy to get to using traditionally formatted stations.

1198 The type of listener that is going to tune to a hot AC format is the tertiary listener, as Mr. Tyson referred to, to the more strictly formatted stations. So it is the type of people who listen to a couple of tunes on this station, hit one that is not familiar or they don't like and they move to the next. For an advertiser, that is the bane of their existence, because these are people who are pecking around the dial looking for music.

1199 If you mix the top hits on one station, these people are like to stay longer and de facto hear your advertising. So it is one of the reasons that it is both attractive from a programming perspective and from a buyer perspective.

1200 I think it was about six years ago, Media Buying Services, now the Media Company, did a study that showed that there was a great deal of duplication across stations and it led them to believe that what they had to do was isolate and identify core tuning because that secondary tuning, the lighter tuning to those stations weren't likely to hear the ads anyway. So it sort of put a twist on how they were buying. This hot AC format has been developed in recognition of some very easily identified tuning habits.

1201 I think when we looked at it, 61 per cent of this market duplicates which means only 39 per cent of the listening group is loyal to one particular station. That's a pretty high number when you think about it and from an advertiser's perspective going back to what has been said in it, the younger demographic -- and in this it's 18 to 44, it's not the 18 to 24, 18 to 34 as defined by other applicants -- is very attractive. It is very attractive in this market because of the high average income and it's very hard to reach when you have to vie a 25-54 station along with your 18 to 44.

1202 COMMISSIONER CRAM: Pollara talked about hot AC and top 40 being high, the most listened to formats. Help me -- recognizing that I have a classical musician background -- what is the difference between top 40 and hot AC?

1203 MR. TYSON: Well, right now I think Top 40 is definitely more pop oriented with artists like Christina Aguilera, Britney Spears, in that area.

1204 COMMISSIONER CRAM: Oh, Oops! I know that one.

1205 MR. TYSON: Oops he said it again! Very good. I think where the adult audience is looking where adults hit music more along the lines of say Santana, although that song did cross over. It is a very strong record that was played in all formats, but I think adults can identify more with Carlos.

1206 COMMISSIONER CRAM: So how would you characterize the CKIK-FM format?

1207 MR. TYSON: CHR, pop, you know, basically for a younger audience.

1208 COMMISSIONER CRAM: Not top 40 or hot AC.

1209 MR. TYSON: It's top 40 or CHR, I guess. It's kind of mixed together.

1210 COMMISSIONER CRAM: And how much -- or similar would the playlist be between CKIK and yourselves, if we had that chart --

1211 MR. TYSON: Well, definitely there would be some cross-over. Basically, as I think we said in our oral, hot adult contemporary basically takes from that CHR chart and also takes from that AC chart. So it's a combination of the two. So in exact percentages, I think it varies depending on what is happening in the music world.

1212 COMMISSIONER CRAM: So if we had the Newcap chart there and you were 100 per cent, would CKIK be 20, 30 per cent?

1213 MR. TYSON: I would guess yes.

1214 COMMISSIONER CRAM: And if I were talking then about CJAY, if we had the same chart?

1215 MR. TYSON: I think it would be very minimal.


1217 MR. TYSON: CHFM again, I think that we would draw a lot of our selections from songs that they are playing in present.

1218 COMMISSIONER CRAM: So a lot, 50-50 per cent?

1219 MR. TYSON: No, I would think in that 25 per cent.


1221 So do you think that there is an opportunity here for you to split the audiences of other stations and would everybody still remain viable within the market?

1222 MR. TYSON: I think the short answer to that is that we likely would be the least harmful, if that's a word. We are going to impact -- every station coming in here is going to impact the other stations, but I think we would be the least intrusive because while those two stations we just talked about would be the primary ones, we also will take some play from country and some with Faith Hill, for example, and others, but the people who are out there visiting formats, looking for a home, looking for their own radio station, cover the spectrum pretty widely.

1223 So we are not going to hit any one station head on. We are just not going to do that, and so for that reason we believe we can come into the market relatively unnoticed in terms of impact.

1224 COMMISSIONER CRAM: And again, I think it was at 133 in the file, the public file -- and this was in your supplementary brief, page 5, the second actual bullet.

1225 There is a reference of an advertiser saying -- when buyers were asked whether hot AC would work, the supervisor of a large Canadian agency responded, "Yes, that will provide something a little different". And I will tell you that one word bothered me more than a little because how much diversity, if we are adding something "a little different".

1226 Can you comment on that?

1227 MR. TYSON: Debra.

1228 MS McLAUGHLIN: Sorry. It will take me a little while to find the quote.

1229 COMMISSIONER CRAM: It's page 5 of the supplementary brief. It's 133 in the public file.

1230 MS McLAUGHLIN: Unfortunately, when you are doing the written word and you are putting down exactly what someone has said, you can't put the intonation and I think you read that as, yes, that probably has something a little different. I mean, it's how you read it. My impression of that interview, which is reflected throughout the whole report, is that hot AC is a format that they both recognize, they like because of the type of light tuner to any particular station they get to pick up with it and it is different.

1231 No one in Calgary -- the subsequent phrase says:

"Stations in Calgary may touch that format occasionally, but no one is really doing it". (As read)

1232 Which to me suggests that it's a recognizable format. They recognize it's missing from this market.

1233 COMMISSIONER CRAM: Thank you.

1234 Advertising revenues. Your advertising revenues are higher than any for anybody else in each of the first five years.

1235 Can you tell me why?

1236 MR. COWIE: I will have John Huschi respond to that.

1237 MR. HUSCHI: Projections at the time of the application were based on current tracking by R&B and set the local and national Calgary value, the market value, at 47.9 million. At the same time, the originating commercial stations accounted for 79.8 per cent share of the total tuning with a market value of 47.9 million. This translates to a dollar value of $601,000 per share per point.

1238 This further equates to 3.35 -- pardon me, 3.55 million in year one with a 5.9 share and 5.05 million in year five with an 8.4 share.

1239 MR. COWIE: I think, Debra, if I might, Commissioner -- Debra you might equate the 5.9 share to that so that we can extrapolate the two together to get to the 3.5 number.

1240 MS McLAUGHLIN: As John has just explained, the math that was involved in arriving at those revenue figures was calculated using the value of the share point.

1241 The share point, or the share itself, was calculated using the Pollara research and as has actually been described by the previous applicant, you asked the respondents directly if they are interested in the format and give the fullest description you can and you only use the response that shows the highest interest, and in this case we used "definitely listen". That was 23 per cent. We discounted that. Again, the previous applicant uses the same sort of approach, although people say they really like it and they are definitely going to listen to it, we know that there is a gap between stated behaviour and actual adoption.

1242 So we discounted that figure. We also took some from the "probably will listen" at a much lower rate and that's simply because those people will -- some of those people will adopt as well. That came to a reach of an estimated reach of about 21.3 per cent of the market.

1243 If you look at that in the overall perspective, that's about fourth. We took the average hours tuned for the market and we look at them by station grouping and format, and we found the one that best, or closest approximated the hot AC, which was at the top, as a matter of fact, which included CKIK and CJAY-FM, and we figured out an average hours tuned. To make sure that that was in the ballpark, we checked it in other markets where hot AC format was offered and it was. We multiplied that out, total hours tuned. When we calculated based on today's current hours, that gave us a share of about 5.9 and so it was just a straight math.

1244 COMMISSIONER CRAM: And you talk about the discount rate. No specific discount for the fact that it was year one or two?

1245 MS McLAUGHLIN: Well, yes, because what we did in estimating the total hours and the potential share was we looked at the maturity, the potential of this, and I believe we estimated -- I can check -- but I believe 9.4 was the potential of the station at maturity. Maturity was not reached in year one to five. I believe we ended at 8.4, but I would have to confirm that -- or 8.5.

1246 We did discount that by 60 per cent. That 5.9 does represent 60 per cent of the mature in year one.

1247 COMMISSIONER CRAM: And then your technical expenses are below industry norms and the competitors at this hearing. Is there an explanation for that?

1248 MR. COWIE: I will ask Clayton Bzdel to respond to that.

1249 MR. BZDEL: The reason we ended up probably lower than normal and lower than the StatsCanada reports show is we planned or intend to contract out most of our technical services and not maintaining a full-time staffer. We felt we would end up lower than the industry norm.

1250 COMMISSIONER CRAM: Any synergies planned between yourselves as a joint group and A-Channel?

1251 MR. COWIE: Initially, the synergies will be concentrated on community service and promotion of programs that are compatible between us at the time in terms of what is going on in the marketplace where by working together we can probably do a better job than separately.

1252 We have done all of our numbers based on being a free standing, independent station. We contract out some services as Clayton just discussed with you.

1253 We have not any arrangements with A-Channel nor are there any proposed at this time. However, having said that, if there were services that we might want to buy, such as accounting and that sort of thing and the service was available to A-Channel, we have not discussed that. At market prices we would consider doing that, but at the moment the numbers that are in front of you are for a full stand alone station.

1254 COMMISSIONER CRAM: Indeed, actually, Mr. Cowie, there is the letter of May 17 to Mr. Hill from I believe it was Boyd Craig contemplated that at paragraph 6, page 42 in the public record. It is page 6 of that letter, May 17, 2000 to Mr. Hill. Do you have that letter, non-arm's length transaction?

1255 MR. COWIE: Are you talking about the memorandum of understanding?

1256 COMMISSIONER CRAM: Yes. The second sentence of paragraph 6:

"In addition, to the extent available, Craig may provide to licensee facilities and services of management and staff of the existing businesses of Craig and its affiliates." (As read)

1257 So you say that at this moment in time you have no contemplation of that actually happening?

1258 MR. COWIE: No. And in the MOU it was appropriate to have that kind of language should we choose to do it in the future.

1259 COMMISSIONER CRAM: If we licensed you would you have any concerns about being a lonely only against corporate groups with four and three and two licences?

1260 MR. COWIE: No. We think certainly the market is buoyant enough to support us. We think the service that we have provided in this application will be well accepted in the Calgary market. So from an economic point of view we are comfortable.

1261 We are comforted that A-Channel is there, that they have the same kind of format in mind which is very clearly Calgary in its base. So we have somebody to work with and to help us expand our -- or to grow our wings, so to speak. So we are quite comfortable to operate a stand alone FM in this market if you should so approve.

1262 COMMISSIONER CRAM: I talked about the air time report and the fact about the difficulty in negotiating. I believe the same paragraph at page 3, the air time report, talked about the issue of an independent operator in the market.

1263 So at this point in time you are contemplating being totally essentially independent from A-Channel?

1264 MR. COWIE: Yes, we are and the entire management and staff will be hired by a new licensee. The only meeting of minds, so to speak, will be at the board level where two of the board members will represent Craig and two will represent Harvard. In order to provide equilibrium there, over time the Chair of the board will rotate every two years. So it is intended to be a stand alone separate operation.

1265 COMMISSIONER CRAM: And I did want to talk about the issue of the rotating Chairs in terms of stability and staying the course for the radio station. Do you have any concerns on that?

1266 MR. COWIE: No. If we had we would not have entered into this partnership. We believe that we share the same vision in terms of operating this radio station and, clearly, we had the same needs and the same plans for expansion. So we are looking to be a partner with Craig in this station and, hopefully, in others for a long time.

1267 COMMISSIONER CRAM: On to the frequency, as you know there are five of you competing for the one frequency. This being the case and in the event we conclude there should be more than one of the five licensed, have you or your engineering consultants looked at another available or a comparable frequency that would satisfy your coverage?

1268 MR. COWIE: We have not. We responded to the call for 98.5. If I may answer that because I have listened to what has been going on here today.

1269 COMMISSIONER CRAM: You know the question.

1270 MR. COWIE: It is our belief, and we are not here to advise the Commission, but we would suggest the best way from our point of view to go is to license only one mainstream FM station on the 98.5 frequency, rather than two mainstream stations at this time. Our concern there is we didn't do our numbers against two mainstream, nor have the others I am sure.

1271 What we would want to do is protect (a) the viability of a new licence and, (b) our commitment to Canadian talent which is a lot of money.

1272 Having said that, it was in the Commission's view appropriate to license more than one station. We would suggest that station comes from the specialty group, rather than from the mainstream applicants before you.

1273 COMMISSIONER CRAM: That would include Telemedia?

1274 MR. COWIE: Yes, it would.

1275 COMMISSIONER CRAM: So would you be willing to revise your technical parameters to the use of another FM or another AM frequency?

1276 MR. COWIE: An AM we don't believe is in our future at this time in this market. We are after all, and you have heard this answer before, this is a music format and it really requires an FM frequency to make it a success.

1277 Obviously we would look at the possibility of another FM frequency, but we have not to this point done that. Our preference would be to win your hearts and the licence on 98.5.

1278 COMMISSIONER CRAM: I have one question and I don't know if it hypothetical or not. In the air time report, page 10 of the air time report and you don't have to look at it, they talk about the Conference Board having given Calgary a diversification value of .75. This is you, Ms McLaughlin, I suppose is going to have to hit the buzzer.

1279 I understand the concept of diversification value. What would happen to the Calgary market if, and God forbid and I am not saying it will happen, please don't ever say I am saying it will happen, but hypothetically if oil prices went down by 50 per cent, what would happen to that diversification value and what would happen to the marketplace?

1280 MS McLAUGHLIN: The diversification value is assigned on the number of industries from which the GDP is drawing. The fact that they are at .75 suggests if you compare that to other markets they are more highly diversified.

1281 COMMISSIONER CRAM: Relatively high?

1282 MS McLAUGHLIN: It's a relatively high number. I think perhaps, and I would be guessing, but I think Toronto perhaps is more diversified, but I am not entirely sure on that. I haven't looked at it for a while.

1283 The fact that oil prices fluctuate shouldn't have a long-term effect on this market. It certainly will affect segments of this market and there are fallout from those price changes, but the greater the diversification value the more sustainable economic stability is and it's a relatively high number. One of the noticeable things about Calgary is it has moved extremely far in its diversification in the past 10 years. I think it used to be at below four and now it's at .75 and growing as high tech continues to come in.

1284 Of course, when you have one industry starting to develop, it has all sorts of spinoff industry and the infrastructure for technical and high tech businesses have certainly been established here and growing.

1285 There is also the film industry which is doing well and building in Calgary and it extends across.

1286 So while oil is important and probably is the reason that it is not at a one because it still makes up a larger percentage, it is no longer the sole determinant.

1287 COMMISSIONER CRAM: So subject to check it's the second most diversified --

1288 MS McLAUGHLIN: Yes. I will check that.

1289 COMMISSIONER CRAM: Mr. Cowie, here is your chance to tell us why you believe we should -- not necessarily just Mr. Cowie but the entire panel, to sum up why you believe we should licence Craig-Harvard/Harvard-Craig and before you say anything I will thank you very much for our discussion.

1290 MR. COWIE: Thank you. I had actually jotted down 17, but I will only do six. If it sounds like I am repeating them I am because they are the basis on which this application was built.

1291 We came here to try to prove to you that this was the best use of the 98.5 frequency. We come before you with a great deal of experience in western Canada, as western Canadians. Over 75 years' of broadcasting, distribution and radio, both radio and television, with the Craig and the Hill families of Saskatchewan and Manitoba.

1292 Secondly, we believe we bring a new voice to this marketplace. There is a very heavy concentration of ownership now and fewer voices and Calgary, I think, would want more voices -- and that's why other applicants are here as well. But we think we do bring a fresh -- a voice with a western perspective here.

1293 We do know the market, both from the Craig side and from Harvard's side, and we are here -- I live here in Calgary now and it's the first time that I don't have my Chamber of Commerce speech, yet I wanted to get in on that last question about diversity and so on.

1294 We have a great deal of support from both the business and social community of Calgary for this application. We believe that our success is pinned directly on connecting with Calgarians, making sure we understand what the market needs and how we can respond to that, both in terms of spoken word programming, in terms of the music format, and particularly in terms of community service, which has been our mainstay in all of our broadcasting operations in all the time we have been in the business.

1295 There are some synergies that allow us to stand here as an independent station and, we think, thrive and carry out a service that the Broadcasting Act, if it were a person, would be happy with. The format is one that we believe in having looked at the research is that there are a lot of visitors out there who really want a station that is best identified as "Hit Radio for Adults", and we have proof that that format works in other markets. It's been successful in Winnipeg and Edmonton, and I think Toronto, and is a growing format.

1296 We are extremely happy that we are able to come forward with the size of commitment to Canadian talent development that we have and we give you our word that we will approach the disbursement of that money in a very thoughtful way with the focus clearly, and always, on the development of Canadian talent, from the grassroots through emerging young professionals, to get people to where they need to go and to try to react to all aspects of their needs, including selling their products if we can through our Web site as we go along.

1297 Last -- and I'm going to ask Paul Hill to comment on this, with your permission -- it's important for us because we are radio broadcasters and longstanding for us to be able to stay in the business and with consolidation and with more stations in major markets the siphoning effect of national revenues have created a very serious diminishing problem for tertiary markets in terms of that stream of income. We are fiercely local in those markets and, at this point in time, are continuing to do well. But, in the long term, they are indeed tertiary markets and may need some help from other parts of the company.

1298 So, with that, I think those are our best shot at well thought out reasons why you might want to issue a licence to Harvard-Craig, but I would ask Paul Hill if he would just to comment a bit on the future of both of these companies.

1299 MR. HILL: Thank you, Bruce.

1300 I think Bruce has covered it very well but I just wanted to add we have faced, in the radio business, over the last 10 years, continuing pressures on the cost side, and on the revenue side. We were a standalone operation in Regina. We could see consolidation taking place across the country. We compete against strong regional players and we were really by ourselves there. We came together with the Craig family in the form of a local management agreement. That relationship has been very productive, very strong. We recognize that both of us standing alone or independent in that market would be economically challenged and we also recognized that if we don't grow in this business outside of the market into larger growth markets that we jeopardize our future in this business. Unfortunately -- and I do everything that I can in the local Saskatchewan economy to try to help it grow, but we have a little or no-growth situation. So that's the environment that we operate in.

1301 Our family has been in business, in Saskatchewan, since 1903. We have been operating in the province of Alberta since 1948. We are very familiar with this market. The Craigs have been in business, in Manitoba, since 1948 and in the last three years of course, they have been active participants in the community here. We believe that our application coming forward is the strongest application being presented to you today.

1302 We offer a mainstream format that's glaringly absent from the market. We believe that the 98.5 frequency, this is the best use of it, and we have made the highest commitment to Canadian talent of any of the applicants. That's partly because we really believe in this market. We believe in western Canada. We plan to jointly expand our operations in other parts of western Canada as those opportunities come forward.

1303 I thank you for listening to us this afternoon. It would be an honour to receive a licence in this market.

1304 THE CHAIRPERSON: Thank you, Mr. Hill, Mr. Cowie. I will now go to other Commissioners to see if there are questions.

1305 Commissioner McKendry...?

1306 COMMISSIONER McKENDRY: Thank you, Mr. Chair.

1307 Ms McLaughlin mentioned one of the regions that makes the Calgary market attractive is the high personal income that exists here -- and that's certainly consistent with the information that our staff has put together about the Calgary market, where their analysis has ranked it number one in Canada, in terms of personal income per capita.

1308 One of the things that I found interesting, at the same time, was that it's ranked 34th in terms of retail sales per capita. I'm just wondering, in your planning, what weight you give to retail sales, in terms of assessing a market.

1309 I should say perhaps, if it's helpful to you, the staff's information is based on Financial Post's Markets 2000.

1310 MS McLAUGHLIN: Yes, we did notice that it did rank lower in terms of overall retail sales on a per capita basis.

1311 When we were calculating the strength of this market, what we looked at was retail sales and how it compared to the Canadian average and one of the interesting things is that in I believe it's in two years, possibly three -- I would have to find the page in the report -- the retail sales in Calgary will meet and then surpass the Canadian average, so it has lagged behind, and it is sort of a well-established timing that the retail sales set the tone for the advertising. So advertising is a per cent of the total retail sales, on a local level. And, generally, as retail sales build, the advertising builds as well. So when we see that Calgary has lagged behind but then surpasses it, we have every reason to believe that this market will recover and match the spending that should be attributable to an average per capita income.

1312 Why it has been there, that wasn't the sort of the realm of this investigation, but we did note that it was there and we, in fact, did chart it within the context of the report we filed.

1313 But as I say, the important thing that we took out of that was that imbalance, so to speak, was expected to change in the next two years.


1315 I just have one other question with respect to your use of your Web site to promote Canadian talent and so on, and this is a general question.

1316 I'm just wondering to what extent, as a radio broadcaster, you take into account -- if in fact you do take it into account -- the idea of moving your listeners away from your radio station into cyberspace, where they are exposed to probably thousands of radio stations.

1317 Is that something that, when you design your Web site and you promote the Web site, you factor into this?

1318 MR. COWIE: It's obviously a question we ask ourselves often and wrestle with. There are thousands of radio stations being streamed across Web sites now.

1319 We believe it may be an extension for us of our business. It has not been proved yet. We are getting some early results in Saskatchewan that are showing an enormous number of hits. We believe there will be a revenue stream that could be important to us ongoing. While we haven't forecast revenue in this application from the Web site, we would hope there is some overtime and that it helps to offset the cost of providing services on the Web.

1320 But you ask a good question. There is a growing listenership for radio on the Internet. There just is.

1321 I guess what everybody is doing, and I have been to several -- well, so have you, Commissioner McKendry, where this is discussed, and I guess we feel safer being there than not being there. That is not a great answer, but in the world of the unknown it is probably the best we can do for now.

1322 COMMISSIONER McKENDRY: Thanks very much.

1323 Thank you, Mr. Chair.

1324 THE CHAIRPERSON: Thank you, Commissioner McKendry.

1325 Five million dollars in Canadian talent development, the highest of all applicants, the highest projected advertising revenue of all the applicants, it brings to mind an old thought that when one baits a trap you must be careful not to put in so much cheese so that it makes it difficult to catch the mouse.

1326 Could you please elaborate on your optimism as it relates to advertising revenue projection, and should the revenue projections prove difficult to achieve, will this effect in any way your Canadian talent development contributions?

1327 MR. COWIE: Thank you for the question. I will answer the second question first.

1328 It will not. We are committed to the $5 million regardless of what happens to the revenue projections.

1329 Secondly, to answer your first question, we think that the pent-up demand in this market is unheard of in this country. I have been around this business for over 40 years, and while our revenue projections may appear to be a little aggressive, they are really not in terms of the history tracking we have done of our hot AC formats -- and the format grows quickly. The results that have now been charted in Edmonton, Winnipeg and other markets lead us to believe that we will be very competitive in this market. We believe the market will continue to grow. In fact, it has grown by an additional $4 million in the last year and is expected to grow. It is not my number, I heard somebody talking about 5 per cent per year over the -- I mean that is unheard of growth in the broadcasting business, particularly in radio.

1330 So in any other market you might find us being a little more timid than that, but there is nothing in these numbers: the pent-up demand. We believe that the incumbents in the market will continue to set the rates. We are not going to reduce rates, and that's great when you come into a market and not have to have that kind of effect on the market.

1331 So we are confident with these numbers and committed to the Canadian talent development package we put before you.

1332 THE CHAIRPERSON: Thank you, Mr. Cowie.

1333 What is your position with Harvard? You didn't state in your opening remarks.

1334 MR. COWIE: I am a co-owner, a minority shareholder of the Harvard stations in Saskatchewan.

1335 THE CHAIRPERSON: Okay. Thank you.

1336 At the outset of Commissioner Cram's questioning, she suggested that I may have referred to the Craig application in error and it should be more properly referred to as the Harvard and Craig application. Although Craig and Harvard will both be joint owners, that Mix 98.5, should it be licensed, I must note that the application was filed by Craig Broadcast Systems Incorporated on behalf of a company to be incorporated, which is the reason that I referred to it as --

1337 MR. COWIE: That is correct.

1338 THE CHAIRPERSON: So for the record, upon careful review of the file, it is the Craig application, OBCI, and should you be successful, then I think that the new married name would become more appropriate at that time.

1339 MR. COWIE: You are correct, sir.

1340 THE CHAIRPERSON: Legal counsel.

1341 MR. BATSTONE: I have no questions.

1342 THE CHAIRPERSON: If there are no further questions, we will thank you very much for your presentation.

1343 Do you have a final comment?

1344 MR. COWIE: No, just to say thank you, Mr. Chairman and Members of the Commission. We look forward to your decision down the road.

1345 THE CHAIRPERSON: Okay. We will close the hearing for today with a final comment from Mr. Secretary.

1346 COMMISSIONER LANGFORD: I do want to say that it is a rare day when you can find a lawyer without a question. We should mark that somewhere.

--- Laughter / Rires

1347 MR. BURNSIDE: The hearing will commence again tomorrow morning at nine o'clock.

--- Whereupon the hearing adjourned at 1712, to resume

on Tuesday, October 31, 2000 at 0900 / L'audience

est ajournée à 1712, pour reprendre le mardi

31 octobre 2000 à 0900

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