ARCHIVED -  Transcript - Burnaby, BC - 2000/11/21

Transcripts

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

Contents.

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.

Transcription

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.

Applications for FM radio licences

Demandes de licences de radio FM

PARA.

NO.

PHASE I

APPLICATION PAR / APPLICATION BY

Telemedia Radio Inc. / Telemedia Radio (West) 1615

APPLICATION BY / APPLICATION PAR

Harvard Developments / Craig Music & Entertainment Inc. 2039

APPLICATION BY / APPLICATION PAR

Classic 94.5 FM Ltd. 2568

Vancouver, B.C. / Vancouver (C-B)

--- Upon resuming on Tuesday, November 21, 2000,

at 0907 / L'audience reprend le mardi 21 novembre

2000 à 0907

1608 THE CHAIRPERSON: Good morning.

1609 Madam Secretary, please.

1610 MS VOGEL: Thank you, Madam Chair.

1611 Our first presentation this morning will be the Application by Telemedia Radio (West) Inc., on behalf of the company to be incorporate, for a broadcasting licence to carry on an English-language FM radio programming undertaking at Vancouver.

1612 The new station would operate on Frequency 94.5 MHz, with an effective radiated power of 37,000 watts.

1613 The Applicant is proposing a Smooth Jazz specialty format, with 70 per cent of the music drawn from subcategory 34, which is Jazz and Blues.

1614 Please go ahead.

APPLICATION / APPLICATION

1615 MR. BEAUDOIN: Madam Chair, Commissioners, CRTC staff, good morning.

1616 My name is Claude Beaudoin, and I am the President and Chief Executive Officer of Telemedia Radio Inc. and Telemedia Radio (West), which groups our Western-based radio stations.

1617 I would like first to introduce our panel.

1618 On my far right, Mr. Hugh McKinnon, Executive Vice-President of Telemedia Radio (West). Hugh was formerly a major shareholder of Nornet Radio and the Okanagan-Skeena Radio Group.

1619 Mr. Dave Calder, on my immediate right, is Senior Vice-President of Telemedia Radio (West). Dave, formerly a senior executive of Okanagan-Skeena, lives in Vancouver.

1620 At the table behind me, starting from your right:

1621 Mr. Mario Cecchini, Telemedia Vice-President, Sales, Research & Marketing;

1622 Mr. Chris Weafer, our legal advisor, from Owen Bird, Vancouver;

1623 Ms Betty Selin, Group News Director, for Telemedia Radio (West). Betty joined Okanagan- Skeena in 1989;

1624 Mr. Jason Mann is Group Program Director for our B.C. south stations. He has been with the company for six years.

1625 At our third table, from your right:

1626 Mr. Chris Lecomte, Telemedia Director of Finance;

1627 Mr. Tom Keenlyside is a professional musician and composer, and a recognized expert in the jazz genre.

1628 Mr. Peter Stigings is a long time high school educator and, among his many accomplishments, he is Past President of the International Association of Jazz Educators.

1629 And back to this table, on my immediate left, Ms Nanon De Gaspé Beaubien, one of our shareholders. Nanon plays an active shareholder's role in the company.

1630 Nanon.

1631 MS DE GASPÉ BEAUBIEN: Thank you, Peter.

1632 Good day, Madam Chair, Commissioners and CRTC staff.

1633 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.

1634 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 Vancouver. I have lived here for the past eight years.

1635 We are delighted to present today a compelling application for Smooth Jazz 94.5 FM, Specialty Format, to serve Vancouver.

1636 Telemedia's commitment is to be a strong radio company, providing service in markets large and small, the programming of which creates local and regional content which is relevant and connected to the needs of our audiences.

1637 Telemedia is committed to British Columbia. This is Telemedia's second application to the Commission to serve the Vancouver FM Radio market. In 1996, the Commission determined that a new ethnic service was the appropriate licence for Vancouver. Since then, we have been building our presence in Western Canada through the acquisition of Okanagan-Skeena Radio. Now, through adding a Vancouver station to Telemedia's strong regional News and Information services, we would strengthen regional radio in B.C., and bring a distinctive new voice to Vancouver.

1638 Our commitment to the Smooth Jazz format is underlined by the fact that only Telemedia, amongst all the applicants appearing before you at this hearing, applied to introduce a Smooth Jazz format to Calgary. Madam Chair and Commissioners, we hope to have the opportunity, with your approval, to give jazz fans and artists a strong voice in Western Canada.

1639 MR. McKINNON: Thirty years ago, my family founded Nornet Radio in Fort St. John, B.C. I operated Nornet for several years and, more recently, I became involved with the Okanagan-Skeena Radio Group. Our western company had a clear focus on acquiring radio stations and improving services to small and medium markets. I am proud of the local information system we built in British Columbia and Alberta. It is not equalled by any other broadcaster, public or private, or any other media outlet.

1640 My co-workers and I have worked hard to provide a strong local service in all of our smaller markets. When Telemedia acquired Okanagan-Skeena, we gained resources to enhance that service. The Vancouver application today is very important to us, as it completes our vision of B.C. by filing a strategic gap and allowing better service to all the communities we serve.

1641 MR. BEAUDOIN: Let's now review the details of our application.

1642 You emphasized, in Decision 2000-392 (Kingston), four factors which are key in the licensing of a new radio station. We would like to address each of them: (1) The impact a new entrant will have on the market; (2) the implications with respect to the diversity of editorial voices in the market; (3) the competitive state of the market; and (4) the quality of the applications.

1643 MR. CECCHINI: (1) The Impact of a New Entrant on the Market. "Vancouver is a strong market that will continue to grow in future in terms of population, retail sales, GDP, and radio airtime revenues". This is a quote from a study done by PWC (Price Waterhouse Coopers) on the impact of Smooth Jazz 94.5 FM on the Vancouver market. This report concludes that radio revenues will grow at an average annual rate of 4.1 per cent from 2000 to 2006, and that existing FM stations will likely continue to have strong revenue and profit growth despite the addition of a new station. Beyond our research, three of the applicants for Smooth Jazz already have two stations in the market. Existing operators know better than anyone how healthy the market is, and no incumbent station has intervened against the issuance of a new licence.

1644 MS SELIN: (2) Diversity of Editorial Voices in Vancouver: Telemedia is not now a licensee in Vancouver. By approving our application for Smooth Jazz 94.5 FM, a new news voice is introduced to the market. At a time when other news voices are being consolidated, this is a significant benefit.

1645 In addition, the Commission, through approval of our application, would allow us to add a vital link to our province-wide News and Information exchange service.

1646 I am very proud of our local news teams. Our B.C. journalists and stations have won 29 awards in the past five years. For example, our Terrace news team won a CAB Gold Ribbon Award and a Jack Webster Award for "Carving the Future", an in-depth, 20-year profile of the Nisga'a treaty process. This material was so thorough that it was acquired by the B.C. Ministry of Education for the high school curriculum.

1647 Telemedia's News and Information exchange system serves our non-metro communities well. Our Vancouver journalists, unlike any other Vancouver station, will have access to our province-wide news gathering resources. This is what we mean when we talk about connecting communities and creating a strong regional news voice in B.C. With a news force of 27 journalists across the province, only Telemedia would be able to bring stories from Trail and Prince Rupert, Penticton and Salmon Arm, and connect them to the lower mainland.

1648 Telemedia believes in mentoring. Many of our news people in our smaller stations are ready to advance their careers. We want to keep these talented journalists within the company, in the region they have roots in. A Vancouver station will enable us to do that.

1649 MR. BEAUDOIN: (3) The Competitive State of the Market: The Commission need not be concerned about competitive balance in Vancouver, or the ability of Smooth Jazz 94.5 FM to succeed. The Vancouver radio market is a healthy, competitive, and balanced market. We know that Smooth Jazz 94.5 FM will succeed in Vancouver as a stand-alone station. Telemedia has the advantage of knowing British Columbia well, and we will be able to capitalize on the marketing and sales synergies with our existing regional stations. We have the strength, the financial and human resources, and the major market experience to compete.

1650 And finally, no. 4, Our Business Plan: Let's talk about why Smooth Jazz is the appropriate format for Vancouver now. Here's a Specialty Format which adds diversity to the Vancouver markets, answers market demands, and has strong community support.

1651 In addition, we believe: (1) That the Commission should licence a Specialty Format station to ensure diversity is created and maintained; (2) That a new entrant should be licensed to increase the diversity of editorial voices in Vancouver; and (3) that Telemedia's proposal best meets the Commission's criteria for licensing a new radio service in Vancouver.

1652 Let's review the highlights of our Business Plan, starting with our research.

1653 MR. CECCHINI: Impact Research, a major Canadian research company, surveyed Vancouver, and probed interests and musical tastes. There is one format, Smooth Jazz, that is not now available in Vancouver and can be expected to build a strong audience: 46 per cent of the respondents to this survey said that the Smooth Jazz format interested them; when we played a montage of Smooth Jazz music to our respondents, 53 per cent said they would be very interested in listening to a station playing this type of music.

1654 A new Smooth Jazz station in Vancouver will find an eager audience.

1655 The market feedback translates into a commercially viable radio audience, with a realistic market share projection starting at 4 per cent and building. Our market research also indicated that the "Smooth Jazz listeners" are well educated and affluent.

1656 This audience profile is valuable to advertisers. We are confident the revenue projections in our application are realistic.

1657 MR. MANN: Let's review how Telemedia's new station will provide high quality local programming for Vancouver.

1658 Our programming strategy is built on meeting listeners' needs. We have researched the market and met with musicians, educators, jazz event promoters, and many others to help us understand what a great Vancouver Smooth Jazz station would sound like. Here is what we heard, and how we will meet each need.

"...play Canadian jazz artists..." We will play 180 or more of them, a larger Canadian music universe than many Pop and Rock stations. Our music will include artists like Diana Krall and Brian Hughes, and lesser known artists like Jeremy Hepner, Metalwood and Vancouver's Megan Fanning. Ironically, many of these performers receive regular airplay on Smooth Jazz stations in the U.S., but are not widely heard on air in Canada.

"...don't forget the jazz greats..." We won't. Smooth Jazz 94.5 FM will have Showcase Retrospectives on jazz greats like Oscar Peterson, Rob McConnell, Tommy Banks, Paul Horn, and more.

"...promote jazz in Vancouver..." We will! "Smoothtalk" will feature profiles of Jazz artists appearing live in Vancouver.

"...remember jazz is best heard live..." We agree! Twenty-six "Saturday Night Live" concerts on Smooth Jazz 94.5 FM will feature Canadian jazz artists live. We will make these programs available to all other Smooth Jazz stations in Canada.

"...reflect our love of the arts...". We promise to do that! "SmoothArts" runs 21 times a week to promote and profile performances from all of the fine arts. Our "Fine Arts Alive" campaign is designed to promote the value of attendance and participation in Vancouver's cultural communities.

"...be local!" We hear this message. Virtually all programming and all news will originate from our Vancouver studios. Smooth Jazz 94.5 FM will provide Vancouver with 106 newscasts weekly, along with local weather, traffic, and other essential information.

1659 The un-served Jazz audience and the un-played Canadian jazz artists in Vancouver deserve a radio station they can call their own.

1660 MR. BEAUDOIN: Let's talk about Canadian content.

1661 In May 2000, we filed an application for Smooth Jazz 94.5 as a Category 2 station with a Canadian Content level of 35 per cent. On June 21, 2000, the Commission implemented new content categories as provided for by Public Notice CRTC 2000-14. As a result of this new policy and in response to a staff deficiency letter dated August 2000, we confirmed that the station would be a Specialty format, as 70 of the music will be from sub-category 34. We are committed to fulfil our 35 per cent Canadian content commitment, as originally filed.

1662 MR. CALDER: Vancouver is a city with an emerging and thriving jazz community. We are confident that Vancouver will embrace Smooth Jazz 94.5 FM. We were met with an enthusiastic response when we went into the community to ask what we should do to support local jazz musicians in Vancouver. From the great ideas we fashioned a unique, substantial, and progressive Canadian Talent Development program.

1663 Let's look at the elements of this innovative plan, built in five parts.

1664 Part 1: The first element of Telemedia's Jazz Vancouver Program is "Jazz in Schools". Almost every week of the school year, professional Vancouver jazz musicians will be in a greater Vancouver 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. Up close, this is proof you can succeed in music. Our jazz artists, as professionals, will be paid. The total commitment to this phase will be $378,000.

1665 Part 2: "Jazz in Schools" will be part of the core curriculum, and that's important. We will provide direct support to Vancouver High Schools to develop the needed learning materials. Thus, "Jazz in Schools" is a long term part of music education. Our commitment to this direct support is $182,000.

1666 Part 3: Each year, "Jazz in Schools" builds to the grand finale -- the Telemedia Jazz Vancouver Showcase. Vancouver professional jazz musicians and our best students share the stage in venues like the Chan Centre for the Performing Arts. Smooth Jazz 94.5 FM will promote the show extensively, and broadcast the Jazz Vancouver Showcase. The combination of seasoned jazz professionals and bright, new artists ensures strong interest. Our commitment to the Jazz Vancouver Showcase is $140,000.

1667 Part 4: Our next partner in Telemedia's Jazz in Schools Program is Tech BC, the newest University in British Columbia. In the words of its President, Bernard S. Sheehan, Ph.D.:

"History will be made through our graduates. They are the achievers -- people who will build new companies, develop new technologies and contribute to the success of society in 21st century B.C.".

1668 Jazz performers have a history of being at the forefront of adopting new technologies as they create music. Since the days of Herbie Hancock, Chick Corea and Paul Horn, jazz improvisers and composers have been quick to experiment with breakthrough electronic instruments.

1669 Digital technologies have already had an enormous impact on the way music is played, composed, recorded, and distributed. TechBC's Interactivity Lab will investigate the potential for further refinement of current practices and the development of innovative approaches to the authoring, performance, and dissemination of audio content. This ultimately benefits both the artistic and production sides of these complex processes, with immediate benefit to local artists.

1670 Our commitment to build TechBC's Interactivity Lab is $350,000. Our investment will trigger $395,000 of additional funding through government programs, for a total of $745,000.

1671 Part 5: Our next initiative exposes our best local jazz artists to the largest live audiences of the year -- the duMaurier International Jazz Festival. This is where those who love jazz mingle with those who merely like it, and bring their friends who have never heard jazz before. With the Telemedia Jazz Vancouver Program support of $1,400,000, the Vancouver International Jazz Festival has committed to showcase local jazz artists.

1672 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". This will be as true in Vancouver as it is in Hamilton.

1673 Quantity and quality. Our quantity is $2,639,000, including our $189,000 to FACTOR. With our indirect benefits, our total commitment is $5,789,000. I would like to talk about the quality.

1674 Telemedia believes that Canadian Talent Development must focus not only on the actual expenditure, but also on the direct benefit to the Canadian music industry and the broadcast system.

1675 As this is a new format, we must create a local star system for Vancouver's jazz musicians. We will identify these future stars, develop them, and expose them to the leading edge of music recording technology. Most importantly, we will provide the platform for them to perform on, a platform rock artists have had for many years. This is a direct benefit to the Canadian music industry.

1676 The Smooth Jazz format supports our Canadian Talent Development efforts, and these efforts, in turn, support the Smooth Jazz format. This is a direct benefit to the Canadian broadcast system.

1677 We have heard this called... "Bang for the Buck", and we agree.

1678 MR. BEAUDOIN: In conclusion, "What is the best use of the 94.5 frequency in Vancouver?". We believe that Telemedia's proposal is the appropriate answer to that question. Why?

1679 First, and foremost, for Vancouver: (1) Telemedia is a new news voice, bringing increased editorial diversity to a market that has recently seen consolidation of news voices; (2) we propose a distinct new Specialty format that expands the playing field for Canadian jazz artists, and Telemedia is committed to the Smooth Jazz format; (3) Telemedia has the strength and resources to build a successful stand-alone FM station in Vancouver; (4) Telemedia's Canadian Talent Development (CTD) program is about quality, and not only about quantity. Our efforts directly support the Canadian music industry and the Canadian broadcast system.

1680 And an added value for British Columbia: Approval of Telemedia's application adds a vital link to the British Columbia news and information system. The Commission, through issuing a licence in Vancouver to Telemedia, takes advantage of the opportunity to strengthen regional radio in B.C.

1681 Madam Chair and Commissioners, we are prepared to answer any questions you may have.

1682 Thank you for your attention.

1683 THE CHAIRPERSON: Thank you very much.

1684 Commissioner Pennefather will question you but, before we start, we would ask everybody to turn off their cell phones while they are in the room, including panel members. I would appreciate your cooperation.

1685 Thank you.

1686 COMMISSIONER PENNEFATHER: Thank you, Madam Chair.

1687 Good morning, ladies and gentlemen.

1688 I have some questions regarding your Application, and I will use as well your presentation this morning, which brings some new details to some of the areas of the application. So, if you will forgive me, we will move back and forth from this morning's presentation to your original application.

1689 The areas to discuss are the market analyses for the format proposed, your Canadian talent development initiatives -- I did have a question on Canadian content, which you have clarified, but I would like to discuss it further -- technical issues and, finally, the Telemedia strategy, which you have referred to several times this morning as well.

1690 On the market analysis, just two basic areas. Firstly, regarding the impact study, which I have read and which is obviously part and parcel of your proposed support for the Smooth Jazz format, could you just clarify for me the fact that the study, at several spots, let's say page 60, which is the conclusion of the study, indicates that this would be one of several formats which may work in this market. Oldies was one that came up on the top of the list, perhaps more AC, but whey did you see the NAC/ Smooth Jazz format as emerging as the choice for your proposal, considering that there seemed to be some equivocation on their part that it was the format to choose?

1691 MR. BEAUDOIN: Before asking Mario Cecchini to perhaps add more information to this question, you are right, we had done our market research study, we investigated a few formats. As you noticed, other formats could have been successful in the Vancouver market.

1692 I guess one of the key reasons why we are proposing the Smooth Jazz, there are a few elements that we need to take into consideration. Number one is not only how the format was received in the market, but also the audience profile that would be reached. There is a key factor to making your revenue projection, which is the kind of profile that you are reaching.

1693 Number two, the growing interest against a Smooth Jazz format. If you noticed, in our studies we investigated the US markets. In the last ten years, there was a growing interest for that format, and this is an element that we took into consideration in recommending this format.

1694 Number three, the fact that Smooth Jazz is a specialty format which would allow us to create and maintain diversity in the market.

1695 So beyond the share itself, I think these three key factors were taken into consideration to recommend the Smooth Jazz format.

1696 Maybe, Mario, you would like to add a few comments.

1697 MR. CECCHINI: Very few comments, Claude, more in the sense that also, if I can only add, is the uniqueness of the offer and our ability to brand this unique station to advertisers and also the high, well educated and affluent audience, which directly goes to one of the things that we do best, probably.

1698 COMMISSIONER PENNEFATHER: So it is a combination of all of that.

1699 When you say "branding", what do you mean?

1700 MR. CECCHINI: In terms of selling the station in itself, we have an opportunity here to offer really something unique, that therefore can become a brand to advertisers, which always drives much more results in terms of association.

1701 COMMISSIONER PENNEFATHER: That leads me to some of my next questions, which really come from your description of the format as unique, because in your analysis, your own projections, you are drawing audience and revenue from what you call a universe, in which we can assume there is some similar forms of music.

1702 To be precise, my question concerns pages 8 and 9 of your revenue projections and audience projections. Here is the first question on that score.

1703 You are expecting to repatriate audience from out of market stations to your proposed station. Would you please identify which stations you would expect to repatriate audience from, and quantity your expectations in each case.

1704 MR. CECCHINI: First of all, in terms of amount, we estimate that we will repatriate 5 per cent of the out-of-town tuning, which for us will translate into one share point.

1705 In terms of identifying the stations, it is very difficult, as you know. We ask BBM for listings of stations that are not measured in this market. What I can tell you, as we indicated in our research, it is going to come from a plethora of different stations to minimal impact these outside stations.

1706 If you refer to pages 8 and 9 of our document, we also applied the way that we build the universe -- the 53 per cent of the tuning level that we expect that constitutes what we call "the universe" -- applied also to the out-of-town tuning, which is a rationale to get to these numbers.

1707 COMMISSIONER PENNEFATHER: That is in fact what I wanted to ask you about.

1708 In applying the same formula, the same methodology, to the out-of-market stations as you did to the in-market stations, which is on the previous page, you indicate "same attraction factor", which is your methodology, and yet you are unable to identify what those stations are.

1709 Where are these 4 million hours tuned coming from? Which stations?

1710 MR. CECCHINI: I have a list with me, if that is what you mean precisely, but we were not able to pinpoint any of the stations. This is why we used the average in this case.

1711 COMMISSIONER PENNEFATHER: Would you not take into account the specific out-of-market stations which play Smooth Jazz as opposed to all the out-of-market stations?

1712 MR. CECCHINI: They are and, based on that point, we can even say, using the attraction factor that we use for the in-market, it can be seen as conservative when we look at the out-of-town tuning.

1713 Specifically referring to the Smooth Jazz station, they have, if I recall correctly, a 0.7 per cent share in the market.

1714 COMMISSIONER PENNEFATHER: So your calculations out-of-market tuning include the U.S. stations, such as the National Public Radio Station carrying Smooth Jazz and the Seattle station carrying Smooth Jazz, but are you telling me that the out-of-market studies that you have done is just Smooth Jazz stations?

1715 MR. CECCHINI: No.

1716 COMMISSIONER PENNEFATHER: So your out-of-market tuning calculation of 5 per cent is based on all out-of-market tuning, not just Smooth Jazz?

1717 MR. CECCHINI: That is correct.

1718 COMMISSIONER PENNEFATHER: On this matter of the tuning to out-of-market stations, yesterday we also discussed this point on a broader level, about the comparison to the U.S. experience. You also have a document in your Application.

1719 I was wondering if you could explain to us how you feel that it is appropriate to compare the U.S. markets, and here you have explained to us that you have taken all out-of-market tuning, not just Smooth Jazz stations. How do you use that fairly to compare it to the Vancouver market? How is the U.S. experience really a telling one in terms of the Smooth Jazz format accessing this market?

1720 MR. BEAUDOIN: Before I ask Mario to comment on that, I would say, Madam Pennefather, that it is -- as you saw in our research, it was also to learn from the U.S. experience, and as you saw, I think we have studied many stations in many areas of the U.S. The objective was really to determine what kind of share they could get, what kind of revenues they generate.

1721 So it was more like learning from their experience since the last ten years -- they have been growing so fast -- and see how we can learn from that in looking at our own market research.

1722 Maybe Mario would like to add some comments to that.

1723 MR. CECCHINI: Again what I could add to that also was to learn about the profile of the audience. As you saw also in our U.S. experience document, we also focused on the specific region of the United States, which is probably somewhat similar to audience composition to what Vancouver is.

1724 COMMISSIONER PENNEFATHER: All right. I will come back to that point a little later, on another matter.

1725 Let me turn now to some questions regarding programming, and the Canadian talent development proposals. I think you have developed your proposals a little differently this morning, although it adds up to the same in terms of numbers. Let's look first at the Vancouver International Jazz Festival, which in your Application you called "a unique agreement" with the Vancouver Jazz Festival. It has two components: $200,000 cash a year over seven years, and $100,000 a year in marketing and promotion.

1726 I think this morning you made an indication of how the cash contribution would really benefit Canadian talent, and in particular local talent. Can you explain that to me again, because you presented it this morning, and tell me what guarantee you have that that will take place.

1727 MR. BEAUDOIN: Yes. Before I ask Dave Calder to give you some comments on that, it is important to note that our financial commitment to the Jazz Festival is earmarked to local artists. We are not talking here of what could be called a generic sponsorship. We are not trying to replace DuMaurier here. We are trying to support directly Canadian talent development. This is why we believe that is a significant contribution to the Canadian music industry.

1728 Dave, would you like to add some comments on that?

1729 MR. CALDER: Just to piggyback on what Claude was just describing, pretty much from square one, a year or so ago when we were building some of these concepts and piecing our CTD proposals together, it was our drive to ensure that it came at us from the stakeholders back, if you will. We basically zeroed in on the issues that were important to us, and had them help us create this. So the easiest way to answer your question is just to maybe go through some of the key elements from the Coastal Jazz and Blues Society, that we have reached agreement in terms of how the monies would be allocated.

1730 COMMISSIONER PENNEFATHER: In this case, you are referring to the Vancouver Festival?

1731 MR. CALDER: Correct.

1732 COMMISSIONER PENNEFATHER: Because I will go back to jazz and schools as a second --

1733 MR. CALDER: Yes, this is separate.

1734 Specifically to your question on the $200,000 annual directed to the Coastal Jazz and Blues Society, which is the group that operates the International Jazz Festival.

1735 It is pretty much linked. In fact, I am going to go down to the bottom of my correspondence with Robert Kerr, because I think this is very material to what Claude was just saying.

1736 More than 65 per cent of our program is Canadian -- this is Robert Kerr's notes -- and the majority of these artists are from Vancouver and elsewhere in B.C. This is also the most difficult aspect of our work to obtain private sector support for, because these are generally not the big name popular stars. As such, this crucial aspect of our programming is also the most vulnerable.

1737 The fact is that in this particular case, what we are zeroing into is also the area where, as the sponsorship transitions from DuMaurier, they are likely to need the most help. So it is a true win-win situation.

1738 Here are some of the key areas that we have developed: New works and special projects, by both established and emerging B.C. artists; showcasing rising B.C. and Canadian artists as headliners in feature Jazz festival concert series at the Vancouver East Cultural Centre, performance works on Gravel Island and the Volk Theatre; showcasing new and emerging B.C. artists as opening acts for major international headline artists -- I would have put that at the top of the list, if I were writing this -- at the Volk Theatre, Cormiter Ballroom and Orpheum Theatre; creating broad public access to B.C. artists, through major free outdoor events, such as Gastown Jazz and Jazz at the Roundtoast; and special collaborative projects that create an artistic exchange between B.C. artists and other Canadian and international artists. These artistic exchanges lead to both artistic and career growth for B.C. artists.

1739 I would be happy to table this agreement, if that is necessary.

1740 COMMISSIONER PENNEFATHER: Thank you. I will leave Madam Chair to comment on that, but we did discuss this yesterday as well.

1741 Madam Chair also discussed with one of the other applicants, with due respect to the nature of the Festival and all the different components you have just described, in and of itself being of great value to the artists, as we say in French, "ça va de soi" perhaps that you would be involved with the Vancouver Festival.

1742 I was wondering if you do not see it as just the course of business and something that you would do in the normal course of events, of creating an audience, creating support in this community for what you, yourselves, have said is a niche format, one which will require building the audience.

1743 How should we evaluate that kind of contribution which, in effect, is, yes, supporting the artists but it is also supporting your position. Relative to the revenues that you will be making in this community, where do you situate that particular contribution?

1744 MR. BEAUDOIN: Before Dave offers his comments, I think that is a very key question. It also comes down to what is the Canadian Talent Development Program, what makes it eligible.

1745 I think the key reason why we strongly believe that this investment is a direct contribution to the Canadian music industry is that this is not, as I said, a generic sponsorship. If we were just going to have sponsoring the International Jazz Festival without earmarking where the money goes specifically, then I would probably agree with you that this is part of our marketing plan.

1746 We are not trying here just to put our station name upfront, we are trying here to invest money to showcase local artists. And this is I think where we have to make the difference.

1747 If our investment was strictly to market and advertise our radio stations, I would agree with you that this is part of our business and marketing plan, but what we are proposing here is really investing money against specific elements. There again I think we have reached an agreement that confirms that.

1748 MR. CALDER: Just to expand on that a bit, there is no question, from a marketing perspective, that this station will want to be all over the Jazz Festival. Not only that, but the Coastal Jazz and Blues Society don't just operate for two or three weeks. They run forty-plus concerts a year, year-round, which, frankly, are somewhat more challenging to promote and get behind, because they are not under that umbrella that sort of creates the energy of the Jazz Festival. So from a marketing perspective, we would be all over all of those elements.

1749 But that is quite separate from sort of drilling down and having support for a free stage for local Vancouver players or, even to use the example when I was reading from Robert's piece about the headline artist versus the local artist that opens the show, from a marketing perspective, setting the CTD aside, we would want to be all over the headline artist in terms of showcase and what we were promoting and being a part of with the Jazz station.

1750 These monies are quite separate, quite focused. I would accept the fact that they have value to, generally speaking, promoting the genre, but they are, in my mind, quite distinct and focused, and not necessarily where you would deploy them if you were putting together a marketing plan.

1751 COMMISSIONER PENNEFATHER: If I follow you on the point, there are hopes that support such as this will be on a continuous basis as opposed to just part and parcel of a strategy aimed at another goal. You have to play this discussion from both sides.

1752 You say you have a letter from the Festival, confirming their agreement to this approach]

1753 MR. CALDER: Yes.

1754 COMMISSIONER PENNEFATHER: If we turn to the Jazz in Schools Program, which you have outlined in more detail this morning, and I thank you for that, because I was interested in the Showcase concert component and how that fits into the scheme for Jazz in Schools.

1755 First, a detail question. Is the cost of that concert part of your indirect events, $150,000 a year? You have another indirect cash commitment of I believe $150,000 for events, concerts, performances and so on, annual total. Is the Jazz in Schools Concert part of that, or is it over and above that?

1756 MR. CALDER: I will answer some parts of this, then -- I am delighted to have Mr. Stigings with us, because I am going to sort of hand some of your questions back to him. I am happy to give him credit as one of the architects of this program.

1757 When we were first putting the program together, I went to a number of people, including Mr. Stigings, who is a long-time high school educator here, a music educator in the lower mainland, and basically said: We want to direct these monies to have the greatest impact in terms of monies flowing to professional players and, at the same time, we want to have an impact at the educators level.

1758 So the three components -- if you will allow me, I would like to tie the three together, although I will respond to your question specifically about the showcase. The three components should be considered as one building on the next. The first component of putting the professionals into the schools, the money earmarked for that is strictly to pay those professionals to perform at the schools. An easy way to look at it, it is $54,000 a year; we estimate roughly $300 per musician.

1759 So we have 180, if you will, paid folks to account for during the year. If it is a trio, it is going to cost $900. If it is a 15-piece big band, it is going to cost $4,500. So it is really not up to us to determine what works best in a particular situation. We will leave that to the music educators, and Peter can speak to this.

1760 So the first component pays musicians to get into the schools.

1761 The second component was actually suggested to us by Mr. Stigings and one of his colleague, Brian Knapp, who is a high school educator at the largest high school in the lower mainland, Killarney, who basically said, you cannot make this happen at the school level if you don't provide some funding for curriculum materials to attend these performances. So that is component no. 2.

1762 The third component, in answer to your question about the showcase, was also not our idea, it was the educators' idea. What they said was, save and aside from the performances in the schools, what would really kick for the kids is to have some type of performance showcase where the high school players could play side-by-side with the pros in a performance venue. The monies specifically amount to $20,000 a year. It is our rough estimate to pay for the Chan Centre, to pay for the musicians, the professional musicians who would play at the concert, and to pay for the sound system that would be required to provision the concert.

1763 Maybe at this stage I will let Peter comment on a couple of these items, but one thing to be clear is that we have not reported in our CTD expenses that are attendant to us running the show live on air, to us promoting the show. Those are indirect. Those are our responsibility.

1764 COMMISSIONER PENNEFATHER: That is part of why I asked the question, to clarify what is the connect -- and I will have a question about that too -- between this money to the third parties, the educators, and the learning materials, and the artists who will perform and work in the clinics, but also what are you doing internally, and is that part of the event's $150,000 or is there more. So we can come to that when we look at the indirect list as well.

1765 MR. CALDER: Okay.

1766 Peter, would you like to add to that summary?

1767 MR. STIGINGS: Thank you, Dave.

1768 As a music educator with 25 years experience, now retired and working at the University of British Columbia as a sessional lecturer and faculty advisor, I have watched the development of jazz education in our schools for many, many years.

1769 There have been enormous cuts in the educational budgets. In particular, these cuts have really affected the arts area. Music educators welcome the support that has been outlined in this proposal.

1770 I think it is very important that we give serious consideration to involving professional jazz artists coming into the schools that can act as mentors, that can perform in front of our young folk, who can provide clinics and workshops. There have been some badly needed that have been cut in the last few years, because of the cutbacks in education budgets.

1771 We welcome the opportunity of having this culminate in a real live performance of having professional jazz musicians standing and sitting side by side with our young players in a performance venue such as the Chan Centre, not in a competitive festival, in a non-competitive festival, educational festival setting, where we are all there, sharing our music together and where the young players and singers can be rubbing shoulders with professional musicians, of which we have so many in B.C.

1772 COMMISSIONER PENNEFATHER: Thank you.

1773 On the matter of education then -- we will come back to the indirect concert support again later. I would like to turn to TechBC now, and your proposal regarding $350,000 to TechBC.

1774 You describe this in your Application as support in the form of bursaries, scholarships, foundation grant, I believe. As you know, normally the Canadian Talent Development Initiative in this regard should be directed to students in, and I quote from 1-1995-196, "music, journalism, and the arts".

1775 Can you explain to us and clarify how you see the TechBC support, which you are proposing, which you have described this morning in terms of electronic instruments, in terms of digital technologies. Can you also give us a little background why you picked the Technical University of British Columbia, just newly started, as your focus, and why we should see it as Canadian Talent Development in music.

1776 MR. CALDER: I would be delighted to. And I agree and understand why it may take some explanation, because the benefits perhaps are a little richer and more complex.

1777 First, our proposal, as outlined in the Supplementary Brief. As I am sure is the case with other applicants, once your initiatives become public and you begin to have dialogue, ideas are developed, discussions take place. We have been very high on TechBC, because the tech in TechBC is technology and there are three primary disciplines in this new, what is a one-of-a-kind university in Canada.

1778 Of the three primary disciplines, one of them is Digital Arts, audio and video. The other two are related to the web, the internet, information technology, but one of the three disciplines is digital arts.

1779 We have, through other funding, provided bursaries and scholarships to TechBC. What that has allowed us to do is generate some deeper dialogue with them in terms of: We want to get behind this digital arts program; how best to do that, from the perspective of students coming in, specifically in that discipline?

1780 Borne out of that was the TechBC interactivity lab, and it is a fascinating proposition. The total cost, just for your interest, of making this lab happen is approximately 1.3 million dollars. That is the capital required to put all of the technology necessary into the rooms necessary to make this lab function.

1781 TechBC has already raised a little over $525,000 dollars from the Canadian Foundation for Innovation. So they have already raised roughly a third, a little more than a third. Our $350,000 will trigger an additional $395,000 from the B.C. Knowledge Development Fund. I should note, while we covered it in our oral presentation, our CTD total does not take that into account. I think it is material to note that under the category of leverage, it does trigger other funds. So we can get this thing going -- and it is going to be utilized in two ways that are relevant to your question.

1782 First of all, the students going into that particular discipline come from Fine Arts backgrounds. They are composers, they are artists, they are performers, and what they are pursuing at this stage is interactive, it is digital, one could argue it is the future of pretty much any electronic media and it should be paid attention to if you are a performer.

1783 So you have relevance immediately to the students in their ability to access and create/generate performances from the lab. Also, typical of the university environment, you have performers coming in to work with the students. George Lewis is one that comes to mind, a trombonist who has played with Count Basie, is a regular visitor to the marketplace, and will be interacting, doing seminars with the students there. He is a key leading innovator in terms of digital authoring, composing. There are others presumably locally who will be able to avail themselves on the professional front to interact with students.

1784 So you are dealing with the creative environment. Perhaps an even easier to understand description of it is -- I am going to ask Tom Keenlyside to add a couple of words on this front. Tom can give you a little bit about his background, but one thing Tom and Peter and I all have in common is that in the mid-70s at UBC, we experienced a very comparable thing, and I will get Tom to perhaps add to this.

1785 MR. KEENLYSIDE: Hello, everybody.

1786 I am a saxophone player. I have played acoustic music, a lot of jazz and a lot of other kinds of music, all my life. If you told me 20 years ago that now I would have a recording studio of my own, which is absolutely choccer-block full of digital recording gear and pro tools and platforms and max systems and everything, I would have laughed. The technology and the application of it now is amazing.

1787 Right now I am working on a television series called "Big Sound", for which I am doing the music, which is directed by David Steinberg, a fellow from Winnipeg. To be able to do that and to be able to operate all this stuff, you have to have a knowledge that would have surprised me years and years ago.

1788 As Dave says, in the 70s they used to work in an electronic music lab on a big huge thing that looked like it could brew cappuccino and everything else. It has a patch bay and everything like that, and knobs that you turned and everything else. Within five years, or less, when the students went in working on that, they were working on comparable things that were the size that would fit on a table top. So the actual change in how artists relate to the digital age, the electronic age, is amazing.

1789 My son is 13 years old. He plays in a band called "GUM", which stands for "Give Us Money", as I found out. He has a website which his friend the guitar player, who is 14, has developed. They have musical samples that you can download from the Internet and everything. So they are totally in tune with this, and I am pretty excited about the fact that some thought is being put into putting some money into kind of looking at the technical aspect of it, the digital aspect of it, because that is where it is all at nowadays.

1790 COMMISSIONER PENNEFATHER: Thank you. As you note, imagination is not wanting when it comes to music of all kinds, and that has been very helpful. Let me ask you this, though.

1791 If, after due consideration, the Commission did not see this particular proposal as Canadian Talent Development, would you still make the same contribution to TechBC?

1792 MR. BEAUDOIN: Yes.

1793 COMMISSIONER PENNEFATHER: In terms, then, of your total Canadian Talent Development that removes, strictly speaking, $350,000 from that total commitment, would you take that same amount and put it to another recipient and other third party?

1794 MR. BEAUDOIN: Yes. You mean if the TechBC program was not acceptable to the CRTC?

1795 COMMISSIONER PENNEFATHER: That's right -- to maintain your Canadian Talent Development level.

1796 MR. BEAUDOIN: Yes. Definitely.

1797 COMMISSIONER PENNEFATHER: Thank you, and thank you for that discussion. It was very helpful.

1798 Continuing again on that last question, I believe you clarified this this morning but I would ask you to repeat for me. In your Canadian Talent Development total, there is the $27,000 a year under the CAB plan, and in your Application you did not indicate who would be the third party recipient.

1799 Am I to understand that it is FACTOR?

1800 MR. BEAUDOIN: Yes, it is.

1801 COMMISSIONER PENNEFATHER: Do you have any kind of agreement with FACTOR that that money would, as far as possible, go towards artists from Vancouver and British Columbia?

1802 MR. BEAUDOIN: At this point in time, we don't. However, based on previous experience with FACTOR, we would be willing of course to earmark that investment with FACTOR and ask them to direct that money in Vancouver. We understand from FACTOR that they are open to this approach.

1803 COMMISSIONER PENNEFATHER: Thank you.

1804 Just as a general question on the Canadian Talent Development and then I think we will take a break -- Madam Chair has indicated that we will be taking a break shortly.

1805 If you could step back and describe your overall strategy for Canadian Talent Development and juxtapose that, if you would, with your commitment to jazz in your normal course of doing business in this community. How would you compare that?

1806 MR. BEAUDOIN: I think what we are trying to do here is not only to respect the wording of the CTD plan, but also the spirit of the CTD plan.

1807 Our radio station will be doing some marketing investment, programming investment. We think this is part of our business plan. Let me give you some examples.

1808 The "Saturday Night Live" shows. This is going to cost us money. Some applicants can think this is CTD. We don't think so. This is part of our programming investment. Some could think, "Are you going to have a website?" Yes, we will. like most of the major Telemedia markets will. "Are you going to do some streaming audio?" Yes, we will, as most of our Telemedia radio stations do. But this is a marketing investment for the station. We do not think this is part of the CTD. We believe this is part of the business plan.

1809 Producing CDs. Our Montreal radio station just launched a CD last week. This is a marketing strategy for our Montreal radio station. We do not think that this is necessarily a CTD.

1810 So we have tried to separate what is our current business programming marketing investment versus what we should do to support the Canadian music industry and the broadcast system. We believe that what we are tabling today is direct investment to support Canadian music industry and build the broadcast system. And this is quality.

1811 If I may add, Madam Commissioner, on the quantity, one could ask, is this sufficient? We believe -- and again I am referring to the direct investment of 2.5 million. We believe that this is a very significant investment for a stand-alone FM station entering Vancouver. Why do we believe that? Why are we proposing a 2 million dollar investment?

1812 We have heard yesterday that the average FM station in this market will generate revenues of around $10 million, and we know and we have heard that again yesterday, that the PBIT -- the average per station is about $4 million. There are two ways that we can enter the Vancouver market: through a new licence, or through acquisition.

1813 If we are having to make an acquisition, on an average basis, what would be the cost of acquiring an FM station in Vancouver? Some could say $20 million, and I heard people saying that is low, and I would agree with that. I think this is low.

1814 If you just use this $4 million and apply in multiple between 8 and 12 -- let's say 10, as an average -- the market value is probably closer to 40 million, and let's use the CRTC's own ruling and policy, of that 6 per cent benefit test, and that is what we have done. Six per cent of 40 million is essentially $2.5 million. This is using CRTC's policy, the kind of investment that we would have made through acquiring a new radio station in Vancouver.

1815 Why should we be penalized if, instead of acquiring a radio station, we are successful in obtaining a new licence?

1816 This is why, Madam Commissioner, we came to the fact that a $2.5 million contribution was in line with the CRTC's expectations, and especially if this $2.5 million is directly invested here in the local community, directly to support the Canadian music industry, and link in building a strong broadcast system.

1817 COMMISSIONER PENNEFATHER: Thank you.

1818 We can take a break now, Madam Chair, if you wish.

1819 THE CHAIRPERSON: We will take 15 minutes, and reconvene at 10:30.

--- Upon recessing at 1013 / Suspension à 1013

--- Upon resuming at 1045 / Reprise à 1045

1820 THE CHAIRPERSON: I'm sorry we were a little late getting back. We will now proceed.

1821 Commissioner Pennefather.

1822 COMMISSIONER PENNEFATHER: Thank you, Madam Chair.

1823 Rebonjour. I have a question on employment equity. Perhaps you could clarify for me.

1824 Schedule III in your Application should describe employment equity initiatives. I assume you have employees, over a hundred there, under the Federal Act, but Schedule III indicates you have no initiatives in this regard, quote. Could you explain?

1825 MR. BEAUDOIN: Yes.

1826 We would be ready to file, Madam Commissioner, Schedule III, as mentioned in our documentation, if it is appropriate. I have it in front of me.

1827 Essentially, we have in Schedule III here, a detailed plan on employment equity. If I may just highlight very quickly, with T3 objectives.

1828 Objective 1 is on the hiring process, to ensure that in considering candidates for hiring or promotion in on-air positions, we have key actions that are in place to address this number 1 objective, favour at the hiring level.

1829 Objective no. 2 is on the training and development process. We also have actions here that are describing Schedule III to meet this objective.

1830 Objective 3 is to ensure that our management and our staff is well sensitized on the employment equity issues and how we can address this.

1831 If appropriate, Madam Commissioner, I would be willing to file this Schedule III.

1832 COMMISSIONER PENNEFATHER: Thank you, Mr. Beaudoin. I will ask Madam Chair on that point later. I appreciate the clarification.

1833 Continuing on now on programming, let me ask for another clarification. Canadian content, page 14 of today's presentation. You describe there the process of your Application in this regard, which includes an application for Category 2 at a content level of 35 per cent. You describe the new content strategies and a deficiency letter dated August 14, 2000, in which you confirm your specialty format and 70 per cent of the music will come from sub-category 34.

1834 In this paragraph you also say you are committed to fulfil 35 per cent Canadian content, a commitment as originally filed.

1835 It is our understanding that in the response to the deficiency letter in which you indicated your choice for the specialty format, that you indicated a Canadian content of 25 per cent. Can you explain if your comment today represents a change in your Application, as gazetted?

1836 MR. BEAUDOIN: If I may first remind the Commission that in May, as most of us, we did file for a Smooth Jazz format. At that time, this format was under Category 2 and, as we all know, Category 2 is a 35 per cent Canadian content level obligation. In discussion -- there was no discussion, I guess, we had to respect that.

1837 When the deficiency letter came, and following the June 21st implementation of the New Content category, we realized that this format was no longer Category 2 but the fact that 70 per cent would be from Category 3 would be, therefore, a specialty format. On the current CRTC policy, this format should call for 10 per cent Canadian Content.

1838 We had, I guess, discussion within our management team and programming people, and we thought that from 10 per cent to 35 per cent, one could say it is fairly bold. So that was the discussion.

1839 We said, however, we are convinced that we can go significantly above the 10 per cent. There was no doubt within our management team that we can go significantly above the 10 per cent, even if CRTC's policy was for 10 per cent. So we did file the 25 per cent. We have talked to the staff of the CRTC. We have to recognize that there was some confusion between August -- so we filed the 25 per cent in good faith.

1840 Today, we have to recognize that. And, Madam Commissioner, we do recognize that as filed in response to the deficiency letter, that we are committed to 25 per cent.

1841 What we are saying today is simply that, because of this new policy and this change within this 90-day window, we would be willing to come back to the original filing of our Application in May. Why is that? Because since then and in the last few weeks or few months we have been continuing investigating the music supply and so on. Not only do we think that the 25 is fine, but I think we could go as high as 35.

1842 What we are saying today, Madam Commissioner, is that we would be willing to respect the original commitment of 35.

1843 COMMISSIONER PENNEFATHER: Mr. Beaudoin, the original commitment of 35 was for Category 2.

1844 MR. BEAUDOIN: Within of course, Madam Commissioner, Category 3. It has been changed through the new policy since then, as Category 3.

1845 COMMISSIONER PENNEFATHER: Your Application, as gazetted, so that I am clear, was for Specialty Format, Category 3, for 25 per cent. That was what was gazetted. So today are you saying that the 35 per cent Canadian content is (a) for Category 3 and (b) that represents a change in your Application as gazetted?

1846 MR. BEAUDOIN: My answer to that is yes. When we are referring to the 35 per cent, Madam Commissioner, it would be 35 per cent for both the Category II and Category III.

1847 COMMISSIONER PENNEFATHER: Thirty-five per cent for both; in other words, Category 2, 35 per cent, as per the regs, which would be 30 per cent of your music programming as a Specialty format at 70-30, but your Category 3 specifically, your Canadian content in Category 3, sub-category 34, is that Canadian content percentage 25 per cent or 35 per cent?

1848 MR. BEAUDOIN: In our official filing application, as in the August document, it is currently at 25, and we are willing to respect this. However, if we have the authorization by the CRTC for the Category 3, we will accept to increase it to 35, as per the original programming thinking that was filed in May.

1849 COMMISSIONER PENNEFATHER: So the end result is 35 per cent of Category 3, sub-category 34, which is a change from your Application as gazetted, which was 25 per cent. Is that correct?

1850 MR. BEAUDOIN: If the CRTC, and it is up to the CRTC to decide if this amendment is acceptable or not, but if this amendment was acceptable by the CRTC, we would accept, as a condition of licence, to honour a 35 per cent Canadian content level for Category 3.

1851 COMMISSIONER PENNEFATHER: Thank you, Mr. Beaudoin. We will come back to that point later perhaps with legal. May I ask you another question, though, related to that generally.

1852 Having discussed with you this change, it is clear that, generally speaking, there has been some discussion around Category 3, and I am just talking about Category 3 now, in terms of Canadian content, some saying how much is possible in terms of Canadian content, some saying not so much as possible. It would help us to have your rationale behind your thinking that you could accomplish that level of Canadian content which, as you just explained, is a change from your original application.

1853 MR. BEAUDOIN: Yes, and, Madam Commissioner, I think this will also help to understand why we would be willing to take a more significant commitment on the Canadian content, because we have done some significant work over the last few weeks on this.

1854 I would like to ask Jason Mann to talk about the work that we have done in investigating not only music supply but also other work in music scheduling.

1855 MR. MANN: Thank you, Claude.

1856 As Claude mentioned, we have done some significant research. We took it upon ourselves to develop a music scheduling database of Smooth Jazz Music, Category 3, and built a sample week, including Category 2 in the Mix as well, of course.

1857 In the sample week, as the station has proposed, we found 182 distinct Canadian artists who are scheduled, representing 291 distinct Canadian titles. With 182 distinct Canadian jazz artists, we were able to generate a music log representing a weekly Canadian content level of 36.8 per cent, without concern for burn of any one title or any one individual artist.

1858 Another highlight might be there was no material difference between the highest played Canadian songs and the highest played international songs. I have the schedule in my hand here. I do have the list of the 182 Canadian artists with me, and would be prepared to file that, if the Commission so deems so.

1859 COMMISSIONER PENNEFATHER: Thank you. I will defer to Madam Chair regarding that filing, but that answers my question. Thank you.

1860 Technical matters, one of our favourites in this discussion. As you know, other applicants have filed to use this frequency, 94.5, in Vancouver. One of these applicants is the CBC, which proposed to use this frequency for its "la Chaîne culturelle" transmitter.

1861 You have not proposed any alternative frequencies that might be suitable either for your application or for the CBC.

1862 Have you or your engineering consultants conducted studies to find alternate frequencies that could possibly be used in Vancouver, either for your application or for the CBC and, if so, what are your findings?

1863 MR. BEAUDOIN: Yes, Madam Commissioner. We have asked our consultant to investigate this issue. I have with me the feasibility study, that I would be pleased to file if you think it is appropriate.

1864 Essentially what we have asked them is another FM frequency and, if so, what could it be.

1865 There is no doubt that the 94.5 frequency remains the best frequency, ensuring the larger coverage of the area. Therefore, we submit that this frequency should belong to one of the stations that could attract the larger audience.

1866 Therefore, we submit that CBC could envision other options to their proposal. According to this study, the first solution that could be investigated is the frequency of 88.1, which could be used by the CBC. Without getting into the details -- and I have to apologize, our engineer had last-minute difficulties and I am not a technical expert, so please -- but I am sure your people will be able to verify all this. The 88.1 frequency could be used by the CBC and yet reach and provide sufficient coverage against the francophone in this area.

1867 Another option that could be investigated for the CBC project could be the use of an AM frequency, while using the current FM frequency for their Chaîne culturelle, and use the AM frequency for La Chaîne première.

1868 We have this document, and this document could be filed, if it is appropriate, and that is what we found.

1869 COMMISSIONER PENNEFATHER: Let me ask you, though. You are saying that those are possibilities you are proposing for CBC. In so saying, I think you said that 94.5 is the more appropriate frequency for your application. Can you explain why, in your opinion, 94.5 would be granted to you rather than to the CBC or to any other applicant at this hearing.

1870 MR. BEAUDOIN: Purely on the technical front, the 94.5 Class C, in terms of footprint and coverage capacity -- we have been well informed, I think, by our consultants and engineers -- that is the frequency that will ensure the larger coverage and the best coverage of the area. This is why we believe that this should belong to a station that will be appealing to the larger portions of the population.

1871 On the Radio-Canada issue, I guess we all have to appreciate the Radio-Canada mandate, and respect the mission of providing high quality service throughout this country to francophone, and I think that is not the real debate. I think we are respectful of that and understand that, and I do not think that is the issue.

1872 The issue is, could they achieve that mandate through another frequency, understanding that this 94.5 frequency is the one that will be able to serve part of the population. Again, I am not an engineer but based on the feasibility study that we have, it seems that the CBC could achieve this goal of providing on two frequencies, both for La Première chaîne and La chaîne culturelle, these services to the francophone.

1873 Without getting into the technical aspects, I think for us that is how we should reflect and investigate, and we have heard other applicants yesterday providing other technical options. So it seems that not only the one that we have been told by our own engineer, but also other applicants also could propose other ways to allow the Radio-Canada group to yet meet the mission and their objectives.

1874 COMMISSIONER PENNEFATHER: What about this scenario. If 94.5 in Vancouver were not available to you, would you be ready and wiling to use another frequency, if another one was found for your proposed station?

1875 MR. BEAUDOIN: The answer is yes, subject, of course that the engineers would confirm that that would be acceptable from a technical standpoint, but based on the assumption that there was another frequency that would be acceptable, we would be willing to consider it.

1876 COMMISSIONER PENNEFATHER: Would you be willing to use an AM frequency for your proposed station?

1877 MR. BEAUDOIN: Not for this music orientated format.

1878 COMMISSIONER PENNEFATHER: Thank you, Mr. Beaudoin.

1879 My final area was really to go back to a matter raised in the presentations by you and your colleagues this morning, and that is what I have termed the Telemedia strategy. Your Application schedule certainly brings this out as well.

1880 In several areas in the Supplementary Brief you refer to some synergies between major and minor markets. Here in British Columbia, I think it is a component of your presentation today as well.

1881 Can you be more specific on what you mean by these synergies?

1882 MR. BEAUDOIN: I think this is a very key element in our Application. Following the acquisition of Okanagan-Skeena group of course today we have a fabulous group of stations allowing us to reach about half a million population in British Columbia.

1883 I would like to ask Betty Selin to talk about what we mean by synergies in the news front, and I could maybe come back and provide you with additional comments in the management and sales front.

1884 Betty.

1885 MS SELIN: Thank you, Claude.

1886 We have right now four what we consider regional news centres. Those are in the Peace Region, in northern B.C., the Okanagan Shuswap and in the Kootenay. While we are independent and broadcast on each of our stations, we share resources. What I mean by that is -- maybe I could just give you an example. It might be best.

1887 For example, during the Salmon Arm forest fire, many of the 7,000 people evacuated during that fire. They were evacuated to Vernon, which is the community where I live and broadcast in. So I personally went to Salmon Arm to get the information on the air for those people who were concerned about their homes. But not only did I broadcast in Vernon every day live, I was also able to give telephone reports to our stations in Kelowna and Penticton who have family in Salmon Arm. So we use the resources on a regional basis. That is what we are talking about when we talk about synergy.

1888 Frankly, there is a big hole in our regional system, and it is below our mainland. A lot of news happens here, and we don't have a Telemedia station in Vancouver. So we think there is a hole in our regional news system in B.C.

1889 MR. BEAUDOIN: Betty, you may want to expand on these four newsrooms, as you see it and --

1890 MS SENN: Okay. Thanks, Claude.

1891 Basically, they each operate independently, but what we do is share stories, like the example I just gave you. We also share ideas every day. We have, through fax and e-mail, a system set up where each day we share, with our other B.C. stations, the kind of news and information that we are doing that day. We think that Vancouver is missing. The reality is that we do not have a station in Vancouver that we have editorial control over.

1892 At Telemedia, we have a philosophy and a style of news, and we believe in putting the newsmakers on the air. Right now, we do not have that ability, and we would really like to be able to share our stories with Vancouverites, but we also want a Telemedia perspective on what is happening in the lower mainland, because frankly it affects often the rest of us around the province. We do not have that, and we would certainly like to have that ability.

1893 MR. BEAUDOIN: If I may, just to complete, on the synergies and how we see it. This is a very important element. There is a new system gathering the information that we have. And these stations reach about half a million in population, as I said. Realizing, of course, that Vancouver is 2 million in population, you can appreciate how this Vancouver market could become a key anchor to all these smaller communities that we serve. That brings us to also --

1894 We believe that, even as a stand-alone FM station in Vancouver, we are going to be able to take advantage of regional sales by connecting Vancouver to our regional stations, marketing synergies also that we can envision.

1895 The way we sort of picture this is that we have this great group of small market stations that reaches the population. If we could have the opportunity, through the addition of an FM station in Vancouver, to connect, really connect these smaller stations to a major market station, I think what we are achieving is strengthening regional radio in B.C. Think about news. Think about programming exchanges, if it is appropriate. Think about sales synergies. I think that is where we bring, in our view, a very significant added value through the addition of a Vancouver station for Telemedia.

1896 COMMISSIONER PENNEFATHER: Thank you, Mr. Beaudoin.

1897 Thank you, Madam Chair. Those are my questions.

1898 THE CHAIRPERSON: Thank you, Commissioner Pennefather.

1899 Commissioner Cram had some questions.

1900 COMMISSIONER CRAM: I am getting back to my obsession, the "bang for the buck".

1901 You will recall in Calgary I talked about the sort of effectiveness of the money spent in terms of what we see either on the screen or what we hear on radio. I have done my normal analysis -- as you know, my math is not that hot. I have a ratio of 1.5-to-1 between what I would call the upper pyramid and the lower pyramid, the lower end of the pyramid.

1902 The Jazz Festival and FACTOR add up to the 1.5, which is direct to the top of the pyramid in terms of artists in jazz. Then, a factor of 1, which includes the school initiatives, the material, and B.C. Tech.

1903 When I look at the lower end of the pyramid -- right now, it is 1.5-to-1, the ratio of money spent to the top end to the lower end, but at the end of the day, when we look at what we get out of money going into the schools and the materials and TechBC, would it really be 1.5-to-0.5 in terms of effectiveness, or -- what do you think?

1904 MR. BEAUDOIN: I think we have -- it is interesting that you look at it this way.

1905 What you call the lower end of the pyramid, the first million dollars, we should think about it as a grassroots action. And it is probably less expensive to have results -- everything is relative, but my point, what I am reflecting on, is that because the plan is really a grassroots approach, we do not have to pay the students in order to reach them, I think we can -- let's not minimize the impact on a mid-term basis of this plan.

1906 What you call the upper end of the pyramid, maybe it is also a question of now we are getting into allowing these people to perform, to have their first experience, to showcase. I guess as they grow and hopefully get to that level, maybe it could also require a more significant investment.

1907 I will let my expert reply.

1908 MR. CALDER: It is always dangerous to be pegged as an expert!

1909 Having experienced this line of questioning in Calgary a couple of weeks ago, I am going to desperately attempt to avoid criticing your math. However, if I were to add up, using the same criteria, the very first thing I would do is to say in the Jazz in Schools program, virtually all of the $54,000 per year is to professional musicians, period. That adds up to $388,000.

1910 If I were to look at what we propose to do with the Jazz Showcase, of the $20,000 per year, I suspect that the majority of that money will end up in the hands of the professional players who are going to be paid to be at the showcase. The other hard cost being the Chan Centre, at the risk of having a little wishful thinking here, one would hope that other corporate citizens are going to come along and get behind this, but let's be conservative and say that perhaps 100,000 of that 140,000 is going to go directly into the hands of professional players who are playing alongside the students.

1911 So, Commissioner Cram, my attempt at adding this up says the score is 2 to 0.5. I am not so sure that I would want to dive into the dialogue about the immediate impact of what goes on TechBC, because I acknowledge this is capital, and it puts gear in place.

1912 There is a key point that you heard from Mr. Keenlyside, even on that front. Tom is doing television shows, and he is surrounded by digital gear. The vast majority of players in this marketplace do not have that luxury. So if they are going to access and compose and create right now -- not tomorrow, but right now -- they need venues, one could argue public venues, in which they could go and do so.

1913 I will go along as the expert to say 2 versus 0.5, but one could really make the case for this other component.

1914 COMMISSIONER CRAM: I take your point. Thanks.

1915 The next issue is the Jazz in Schools and the Association of Jazz Educators -- I forget the acronym -- that you are working through. Is the Association, the proper name which I forget, is it throughout all of the schools in the Vancouver area? I am sure there are different systems. Is it sort of an association of all of the different school systems?

1916 MR. CALDER: I am going to let Mr. Stigings address what the options of distribution might be. I think it is safe to say, given the meetings I had in Calgary versus the meetings I have had in Vancouver, in Calgary you have two school districts, public and Catholic --

1917 COMMISSIONER CRAM: There is a Christian and a private and something else.

1918 MR. CALDER: Exactly. So in Vancouver, of course you have this multiplicity of districts. We have met with the Vancouver School Board and the Superintendent and Assistant Superintendent who are responsible for directing Fine Arts allocation. So we are aware of the fact that the monies can be routed by school board directly to this Jazz in Schools program. That is one option.

1919 I will get Peter to address the differences between the IAJA as a possible initiator of this money. The third option of course would be the B.C. MEA, which Peter is also past president of. I am sorry to have you suffer from acronym overload here. Peter can clarify those organizations and how that could be deployed. I think that is what you are looking for.

1920 Peter.

1921 MR. STIGINGS: Thank you, Dave.

1922 The music educators to the mainland school districts all have their own entity. For example, Vancouver has the Vancouver School Music Teachers Association. Burnaby has a similar organization. And I see us dialoguing with those respective organizations that are active and functioning in each of the school districts.

1923 To the larger picture, there is, for lack of a better word, a mother organization, the B.C. Music Educators Association, which all these district organizations feed into. Of course the B.C. Music Educators is representing the total province.

1924 As a past president of the B.C. Music Educators, we have been in regular dialogue and communication with that organization, and we have their support. They are very happy to know that Telemedia is willing to provide support into school systems in the lower mainland in the listing area they hope to broadcast in.

1925 To go further afield, there is also another organization, the International Association of Jazz Educators. That is another organization in which many music educators in this province to belong to, which is strictly a volunteer organization in terms of whether the educators actually register and belong to that organization. They have been very active in encouraging jazz education throughout the world, and encouraging the promotion of curriculum materials to be developed in respect of constituencies.

1926 COMMISSIONER CRAM: Is it your intention, Mr. Calder, that the money would go to all schools, no matter what the religion, no matter if it is private or separate or -- is that the intention of the whole Jazz in Schools program?

1927 MR. CALDER: One of the things -- the short answer to that is yes. But I would like to elaborate just a wee bit, because we have done a lot of background work on this.

1928 As most major cities in Canada, you do have situations where there are haves and have-nots in terms of school districts. We are aware of that, but the people who are even more aware of that are the educators themselves, the BCMEA, and the jazz educators in the lower mainland. That was the same situation in Calgary, although in Calgary it was part of Calgary to part of Calgary within the same school district. Here, it tends to be quite a variance city to city.

1929 What that is likely to dictate is there may be some initiatives that will not come from Telemedia, because that is not our area of expertise, but initiatives from the educators to say: We really should execute this type of performance to really pump the kids up in this particular school district, because it is an area that is underserved for this particular type of initiative, versus another location that might benefit more by putting a single musician in to go one on one on the training front, doing those clinics, simply because more of the kids are in more music programs, that are taking private lessons, and so on.

1930 I think it is safe to say our intent is to see it as widely impactive as possible, but we would of course be delighted to see the educators themselves direct where that would take place.

1931 COMMISSIONER CRAM: Mr. Mann, I only have one question. When you were talking about the distinct Canadian artists and distinct Canadian titles, does it cost more to air Canadian artists, either in terms of money or revenue that you cannot earn, as opposed to artists from anywhere else of Canada?

1932 MR. MANN: I am not sure if I understand the question.

1933 COMMISSIONER CRAM: Does CANCOM cost money?

1934 MR. MANN: All the music that we play is subject to a fee.

1935 COMMISSIONER CRAM: Does Cancon cost more money, either in lost revenues or in purchase costs, than music from --

1936 MR. MANN: Not historically, not with any radio station that I have been involved with at the programming level. We have not had to pay extra or more money for it.

1937 MR. BEAUDOIN: If I may add, on the sales front.

1938 I guess there is no easy answer to that. One could say the fact that we have to respect some Cancon level, we might not be as performing as a radio business, and therefore losing listeners, and therefore losing money. One could say no, this is a playing field for all the radio stations, everything being equal, so at the end of the day the listeners are -- it is part of life, and I do not think you lose money.

1939 Based on our experience, I think the rulings that we have in this country, both for French content or Canadian content, I think provides some kind of level playing field. I think it would be dangerous to say that you lose money because of Cancon.

1940 COMMISSIONER CRAM: Thank you very much.

1941 THE CHAIRPERSON: Thank you.

1942 I have a couple of questions. First of all, on your employment equity report that you talked about earlier and offered to file, and I appreciate hearing it, I wonder if you could give me some of the highlights of it. I am sure you were here yesterday when I said to Mr. Slaight that I was sort of struck by the look of this room and the business, and we talked about four designated groups and certain initiatives that have been undertaken by broadcasters, whether it is CWC, and some of the other things. They do not seem to have translated into visible minorities or women in senior management in broadcasting.

1943 I may be wrong, but I wonder if you could just talk a little bit about your company and what your specific goals are, and how you really -- and I say this not to you, but to all of them, what does it really mean and how serious are the goals?

1944 It strikes me that you want to reflect your audience, but maybe you could elaborate on that.

1945 MR. BEAUDOIN: It is a challenge. Let's recognize that. I don't have with me today, unfortunately, the data that were filed to HRDC, but we have to recognize that it is a challenge to have results -- not to make the effort, but to have results in terms of employment equity.

1946 Making the effort, I think a company like ours, through the years I think management and staff is sensitive to the challenge and respectful of what we have established in terms of framework to favour employment equity.

1947 The results, and you are probably right to highlight that, are disappointing.

1948 When I look at a company like ours, I think we are making progress on different fronts. I look, for example, in the sales area. I am amazed to see how many women are now part of our sales team. I don't know if Dave has some numbers in B.C., but I know in some areas -- that is a way to grow and become senior management. We have a lot of --

1949 In the sales area, we have been making some very good progress. In other areas, it has been much more difficult. Also, I found it varies from one province to the other sometimes. On the on-air staff, for example, I think we have been more successful in Quebec to have a much more significant presence of women on-air -- for example, to take one versus other areas of the country. Why is that? It is difficult to answer.

1950 On the visible minorities, of course it is even more difficult.

1951 I do not have the data in front of me, but what I could share with you, I think one has to recognize, although I think over the last few years we have been sensitized to that issue, I think we have been acting in good faith and making a real effort to make progress.

1952 I heard your comment yesterday, and we have to recognize that the results, unfortunately, are probably not yet at the level that we would expect. I some of my colleagues want to add, please do so.

1953 MR. CALDER: At the risk of taking a couple of steps to a few questions that came a while ago, a couple of things come to mind when I hear your questions.

1954 I have been in the business for 20 years. Like one of my colleagues yesterday responded to this question, absolutely I see significant progress on a lot of fronts. I sit on one of BCIT's advisory boards, and we have seen that this sort of iterance in terms of how diverse their choice between journalism and operations -- for example, 20 years ago you did not see very many women going into BCIT's television operations program. So the good news is there is progress there at entry level.

1955 Up until last year, my responsibilities were for primarily working with the team that was in charge of small and medium market operations in B.C. and Alberta. I have no problem sharing with you wonderful success stories of where our senior female managers have gone to. The answer is, they have gone to other companies in major markets, much to my chagrin, but pleasure at the same time.

1956 They come from all areas. We have had sales managers, we have had incredible talent on air. We have had television news anchors from our small market stations in Dawson Creek and Terrace. So the good news is, there are some incredible talent that is moving its way up through the ranks.

1957 I am happy to tell you that in our Tony Radio West group we have a number of very senior female managers. One of my four cluster managers is an incredibly talented lady -- I am not about to share her name here when all my competitors are in the room -- and our group news director, Betty, obviously is here with us.

1958 Roughly, I would say the balance in sales in the West is probably 60-40. There are still a few more men than women, but it is getting awfully close to 50-50. But we are really the feeder system, if you will. One of the things that delights me about seeing us take some initiative through major market operations is from an employment perspective we will be able to help our own talent that we are growing migrate to our own stations.

1959 Betty.

1960 MS SELIN: From the news perspective, it is getting easier to hire women. More women are becoming educated in the news field. For example, I don't keep track personally but I just did a quick calculation, at Okanagan-Shuswap Regional Centre we have 11 employees, 6 of them are women. So I think that from the news side we are making some significant progress.

1961 We also, as a company, have decided that we need to go outside and tell people in those groups about the opportunities available. I am actually just waiting for a confirmation date to speak to the North Okanagan First Nations Employment Services Group, to just let them know that there are career opportunities available, because they don't seem to realize that broadcasting is an area that they should look at for education because there are employment opportunities out there. Companies like Telemedia are ready and waiting to hire them once they are educated. So we have taken that step, to let people know about the career opportunities available.

1962 THE CHAIRPERSON: (Off-microphone) is one area that certainly visible minorities, aboriginals or others. Do you feel, as a federally regulated company, and one that is using the public airwaves to do your business, any special responsibility to be really proactive and take the initiative in these areas. I really mean in terms of seeking out the four designated groups.

1963 MR. BEAUDOIN: My simple answer would be, Madam Chair, that an opportunity like today, being challenged or asking for comments publicly is a good way to remind us about our responsibilities.

1964 THE CHAIRPERSON: Thank you.

1965 One other area, and I talked about this a bit with Mr. Slate yesterday, and that is the whole issue of ownership, and local ownership, and large companies operating here in British Columbia.

1966 This is a very profitable market, the Vancouver market, underserved in terms of what we have heard, in terms of FM licences. I know your financial projections show you profitable in Year 2. We do not regulate the activities of any given corporation in terms of its corporate behaviour, in terms of the extent to which it engages in a community. And I am not talking here about CTV, and I am not talking about benefits, and I am not talking about on-air programming. I am talking about as a corporation how you might behave.

1967 So you are a Montreal based corporation. You have acquired a lot of stations in British Columbia through the OSG acquisition and Nornet, and are looking to do this. I just wonder how you approached the markets in which you operate, and I am not talking just about being a good local broadcaster -- put that aside -- but just as a corporate citizen and how you view corporate citizenship in the markets, that are not where your head office is.

1968 I think everybody knows that where a head office is benefits greatly from this kind of activity, so I wonder if you could just tell me a little bit about your philosophy in that area.

1969 MR. BEAUDOIN: Madam Chair, having the privilege to have the owner of the company just sitting on my left, if I may, I would like to ask Nanon to make some comments on that.

1970 MS DE GASPÉ BEAUBIEN: I that is a very delicate question on one hand. I would not want the CRTC to disqualify if we were ever to apply for an Ontario licence because none of the shareholders' owners don't reside there. That would be a question.

1971 There is no question that on a personal basis I have to say that living out west, I definitely bring a different flavour to the table when I sit at our outside board with my two other brothers, and my experience out here really adds to that.

1972 I think that a company like ours, that is a national company, definitely benefits from having owners residing in the west and owners in the east. So I think there is a sense of responsibility that comes with ownership and residing, I would have to say, on a personal basis, does help.

1973 MR. BEAUDOIN: Hugh McKinnon might want to add some reflections on that.

1974 MR. McKINNON: Thanks, Claude.

1975 As a former owner of a group of stations here in western Canada, local ownership is something that is very near and dear to me.

1976 My family, as you know, has been involved for 30 years, and I have been involved for 20. We have always had a strong belief that local ownership is vital to the strength of radio.

1977 Over the last few years, we saw the consolidation of radio and realized that the landscape of radio is changing, and it was virtually impossible for an owner to live in every community that they own radio stations. What is really really important to us was the fact that companies must empower their people in local areas, so that they don't feel the head office is Vancouver, Montreal or Toronto. They must feel that the local town is their head office.

1978 One of the things that we try to do, in Nornet and in Okanagan-Skeena, and one of the reasons I am still part, as an owner, still part of the Telemedia management team, is the fact that they empower their local managers to feel that they take ownership in their community and are involved in their radio stations.

1979 The other thing, when you talk about the objectives of what stations do within the communities. Broadcasters tend to be humble when it comes to this, in a lot of areas. We do things on an ongoing basis, we get involved in the community, whether it be public service announcements -- especially in small markets, we are, in a lot of cases -- I used to call it the Community Bulletin Board. We are attached to the community, and we have always taken the fact that, number one, our news has to be local, our people have to be local and relevant to the area, and we are filled with that.

1980 All things being equal, I think local ownership should be brought into the equation, but I don't think now in this landscape that it can be the deciding factor.

1981 THE CHAIRPERSON: Perhaps I should clarify, just so you understand.

1982 There is no question that we are undergoing a period of consolidation, and not just in this industry, in lots of them. What that has led to is in fact a loss of local ownership. I am not suggesting we turn back time or that it is necessarily a bad thing. And I am not saying one way or another that it is going to affect how stations operate.

1983 The question is, is there an interest to the country in having diversified ownership, geographically and regionally, and I am talking about not just how well a broadcaster can serve local communities -- I don't take issue with that. I am really talking about the presence of a head office, and what it means to the growth and development of any province, city, or whatever. And I am talking about what is going to be a very profitable station for, let's say for the sake of this discussion, the Smooth Jazz applicants.

1984 There is going to be a lot of profits made, and to what extent are the profits reinvested in the community and not just moved elsewhere. Again, it is not necessarily just the issue of ownership if in fact corporations -- and these are not areas we regulate, so I want to be clear and I don't want --

1985 How do you view that, as now a big player in British Columbia, how do you view your responsibilities to this community as a whole, aside from whatever commitments there may be here with CTV and local programming, etc.

1986 MR. BEAUDOIN: I can see the question you are raising. I guess maybe two comments.

1987 One is, yes, we see a lot of consolidation, but at the end of the day, when we look, for example, into the media industry of all the major players, one could say that, when you think about it, you probably have today what we have today, a fair distribution of, to use your words, head office. One could say, I would like to see more in Montreal, and someone else could say, I would like to see more in Vancouver and less in Toronto, and we could all agree with that. Maybe we have already some kind of distribution of head offices across the country.

1988 Beyond the head offices, is it not a risk to ask the question in that sense? I was in the room yesterday when you made the comment that, yes, but where is the head office? It may be more easier to have more community involvement and give back more to the community.

1989 Beyond that, maybe we are privileged with the kind of business we are in, that maybe in that kind of business maybe it is not as significant an issue. I would like to reinforce what Hugh McKinnon said, especially with radio being -- radio depends, at 70 to 80 per cent, depending on the size of the market, to local revenue. It is managed locally. It is produced locally. It is such, in that specific case of radio, such a local business, I would like to say, and my colleague could confirm that to you, the success of this company won't occur by the head office of Toronto and Montreal. The success happens in each of our radio stations, and I really mean it. I really mean it. This is where the action is, and this is where we can be successful.

1990 Maybe in the case of radio -- I cannot speak on behalf of the other media -- I think the issue of the head office, just to take a picture, might not be as significant, because of the nature of our business.

1991 THE CHAIRPERSON: And what about profits?

1992 MR. BEAUDOIN: There are many ways to look at it. Today, for example, our western division is far behind, far behind, our major market stations in the eastern part of the country. It is good to see that there is some fair balance, and maybe we can share not only values but financial resources too.

1993 THE CHAIRPERSON: So at this point in your operation, the investment is happening by the head office into western operations as opposed to the other way around. I do not want to get too distracted in this area, because it is really -- it is just an overall view.

1994 What you were saying is that your western operations are not doing so well, so in fact the investment of profits is going into the west from the east at this point in the development of your corporation.

1995 MR. BEAUDOIN: Yes, and especially a company like ours, following this very recent acquisition, as you can envision, especially for a company like ours is a very significant financial support.

1996 THE CHAIRPERSON: Thank you.

1997 Commissioner Cram.

1998 COMMISSIONER CRAM: I know a broadcaster who has a policy of corporate donations, that they will only give corporate donations in the places in which they have stations. They give them in a type of a pro rata way. I believe that is somewhat what Commissioner Gauer is getting to, that the corporate donations, the benefits of the profits, do you have such a policy?

1999 MR. BEAUDOIN: Our policy is fairly simple. First of all, we consider that we make a significant contribution to the Canadian music industry, and I would like to share with you that this is directly linked with the presence of our radio stations by area.

2000 If I may, I would just remind the CRTC, for example, that following the acquisition of OKS, there was a significant benefit test attached to this acquisition. The investment following this acquisition is directly related to British Columbia. This, in our view, is something that we should keep in the back of our minds.

2001 What a company like ours favours the most is not necessarily the cash-out contribution but, more importantly, what we can do to support causes through our radio stations and, through this policy, principles. I think we do, therefore, ensure a good balance throughout the country, throughout the company.

2002 THE CHAIRPERSON: Thank you.

2003 Legal?

2004 MR. RHÉAUME: Thank you, Madam Chairperson.

2005 Brièvement, Monsieur Beaudoin. You have discussed frequency 88.1 as possibly suitable for CBC. In your studies, did you find other frequencies that would be available, for you, let's say?

2006 MR. BEAUDOIN: The study that I have in front of me, legal counsel, no. It was specifically to identify this 88.1 frequency.

2007 MR. RHÉAUME: So when you answered the question from Commissioner Pennefather that you would accept another frequency, you don't have any idea if there are any available out there?

2008 MR. BEAUDOIN: Based on the documents that I have in front of me, yes. Of course I heard the comments yesterday but, based on MDS's own feasibility study, this is what I have in front of me.

2009 MR. RHÉAUME: So it is pointless to ask you at this time if your project would be viable in terms of business plan and CTD commitment on another frequency, because you did not look at that. Is that a fair statement?

2010 MR. BEAUDOIN: I would nuance this. I would say that the business plan would be affected if we were going to be on a frequency that would be providing a different coverage. However, that does not mean that we would not have an acceptable business plan.

2011 MR. RHÉAUME: But you might have to revise your Application. That is all I am saying.

2012 MR. BEAUDOIN: In terms of financial projection, yes, we could -- we might have to revise this.

2013 MR. RHÉAUME: Thank you.

2014 Thank you, Madam Chairperson.

2015 THE CHAIRPERSON: Thank you.

2016 MR. BEAUDOIN: If I may , legal counsel. I am not implying here that we would be revising our CTD commitment. We would respect this commitment.

2017 THE CHAIRPERSON: Thank you very much.

2018 MR. BEAUDOIN: May I make a final remark?

2019 THE CHAIRPERSON: Mais oui!

2020 MR. BEAUDOIN: Last night, in thinking about my closing remarks, I proposed that maybe for my final two minute remarks that I should maybe stand up and sing, and they said, no, Claude, don't do that, and Carol Welsman is much better looking than you are!

2021 So I think why do we believe that this is the appropriate answer? Five reasons. When I say five reasons, I am looking at each of you. You know what, I have one reason for each of you.

2022 To you, Mr. Cardozo, a new news voice. And I think this is very significant. In this market, you have the opportunity to add a new news voice that will bring diversity.

2023 COMMISSIONER CARDOZO: I anted to sing!

--- Laughter / Rires

2024 MR. BEAUDOIN: My second reason would be for you, Madam Cram: A specialty format, that will also not only create diversity, but maintain diversity. And you know, because you were there three weeks ago, what we mean by being committed to the Smooth Jazz format.

2025 Monsieur Demers, évidemment you may wonder about a stand-alone FM in such a competitive market. We are in competitive markets in many parts of this country, and we have the strength and the resources to succeed as a stand-alone station.

2026 Madam Pennefather, you asked a lot of questions about the CTD, and you are so right. And I hope what you heard from us was that beyond quantity, we believe that we bring quality. We say that because I think we respect the spirit of what should be a CTD commitment, i.e., a program that is supportive to the Canadian music directly and locally, but also build a broadcast system.

2027 The fifth, and not the least, for you, Madam Chairperson. By issuing a licence to Telemedia we really believe that you have the opportunity to strengthen regional radio in British Columbia, and this is a significant added value.

2028 To all of you I would simply say, I think Telemedia is the only one that can mean not one out of five, not three out of five, but five out of five of these very strategic criteria to serve Vancouver.

2029 Thank you very much for your attention.

2030 THE CHAIRPERSON: Thank you.

2031 We will hear from Craig.

2032 MS VOGEL: Madam Chair, I understand they will need about 10 to 15 minutes to set up.

--- Off-record discussion / Discussion hors-micro

2033 THE CHAIRPERSON: We will take a 10-minute break, and return for our next presentation.

--- Upon recessing at 1150 / Suspension à 1150

--- Upon resuming at 1204 / Reprise à 1204

2034 THE CHAIRPERSON: Madam Secretary, please.

2035 MS VOGEL: Thank you, Madam Chair.

2036 Our next Application will be 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 Vancouver.

2037 The new station would operate on frequency 94.5, with an effective radiated power of 37,000 watts. The Applicant is proposing a Smooth Jazz Non Specialty Format, airing predominantly popular music, Category 2.

2038 Please go ahead.

APPLICATION / APPLICATION

2039 MR. COWIE: Chair Grauer, Commissioners, ladies and gentlemen, good morning. My name is Bruce Cowie, and I am here representing Harvard Developments and Craig Music and Entertainment Inc., who are the co-applicants in this proceeding. Before beginning our presentation, I would like to introduce the other members of our panel.

2040 On my right is Jennifer Strain, Vice President, Corporate and Regulatory Affairs, for Craig Broadcast System. To Jennifer's right is Alan Cruise, President and CEO of Craig Music and Entertainment. To my immediate left is Russ Tyson, Vice President of Programming and Operations for Craig Music and Entertainment. To Russ' left is Michael Olstrom, Operations Manager for Regina Radio.

2041 In the row behind me, from your left to right is Clayton Bzdel, Vice President, Investments, for Harvard Developments. Beside Clayton is Debra McLaughlin, Vice President, Director of Research for Airtime Sales. Beside Debra is John Donnelly, President of Smooth Productions, a Vancouver-based concert production company. Beside John are Jan and Ted Hasiuk, Vice President and President respectively, of JazzLynx, a company that has researched and followed the evolution of the Smooth Jazz format for more than ten years and manages several smooth jazz artists in the Vancouver area. Ted also produces and hosts a weekly show called Café Jazz that airs on CJUM in Winnipeg.

2042 In the far back row from your left to right is Ian Menzies, a local jazz musician and President of Mo'Funk Records, an independent Vancouver record label specializing in various jazz related genres. Beside Ian is Drew Craig, President and CEO of Craig Broadcast Systems. Beside Drew is Paul Hill, President and CEO of Harvard Developments.

2043 Commissioners, we are delighted to be here today to talk about our application for a new Vancouver FM station offering a New Adult Contemporary/Smooth Jazz format. You have many competing applicants before you at this hearing, Madam Chair. We strongly believe our proposal represents the best package, for the following reasons.

2044 First, our application is unique among the others applying for a smooth jazz station. This station will not be a traditional specialty format. Our playlist will include New Adult Contemporary artists, Pop artists, World Beat, Instrumental, Easy Listening, as well as more traditional Jazz and Blues. This mix is similar to what some of the most successful smooth jazz stations in the United States and around the world play today. The Breeze will customize the format for Vancouver and play a minimum of 35 per cent Canadian content.

2045 Second, based on the demographic make-up of Vancouver, this market is where new AC/smooth jazz is most likely to succeed. The target audience for The Breeze is adults, 35-54, an underserved demographic group in this market.

2046 Third, we have developed specific, on-air and financial initiatives to foster local and Canadian smooth jazz talent. On-air music features will help drive the format and create new opportunities to expose these artists locally, nationally and internationally. And through our Canadian talent development fund we will expend with local organizations 5 million dollars to develop and promote Canadian and local NAC/Smooth Jazz talent.

2047 Fourth, we are not an incumbent. We bring new ownership and a distinct news voice to the Vancouver market.

2048 Fifth, Harvard and Craig's corporate record is one of community service. 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. We will apply that philosophy to this new station.

2049 And sixth, Craig and Harvard between them have over 75 years of broadcasting success in radio, television and distribution in western Canada. This speaks to the viability of our business plan and to both our capacity and commitment to make the new station a success.

2050 Debra.

2051 MS McLAUGHLIN: The Vancouver CMA is economically vital. Close to 26,000 new jobs were added to the market in 1999 and the momentum continued into 2000, with 7,700 new jobs in the first quarter. This helped fuel retail sales growth of 1.7 per cent in the first three months of this year alone. Office and industrial vacancies are at an all time low, showing the continued faith of new business in the market. In fact, the industrial vacancy rate is the lowest in Canada.

2052 Not surprisingly, the Radio Market Bureau Tracking Reports continue to show growth in overall sales. According to national advertisers, Vancouver is a "must buy" and this, in combination with inventory shortages, keeps it as one of the first markets purchased by agencies.

2053 The CRTC Financial Summary for Radio indicates one of the highest levels of profitability in the country is achieved in the B.C. region. The economic estimates for the market have been updated since our filing, and Vancouver is now expected to rank number 2 in real GDP by next year and retail sales are expected to grow by 21 per cent by 2004. This growth will strengthen local ad sales, the primary source of radio revenues.

2054 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, Brandon and Winnipeg. A new Vancouver station is a natural fit for both Harvard and Craig, because we share a compatible business philosophy and strategy for expansion.

2055 Russ.

2056 MR. TYSON: The NAC/Smooth Jazz format is a hybrid format drawing artists from many diverse musical backgrounds. It blends smooth vocals with contemporary instrumentals into a unique and special sound.

2057 Some of the instrumental music that is played on the NAC/Smooth Jazz format finds its roots in the 1970s. It is more or less a natural evolution of fusion (a combination of jazz and rock) that was being played at that time. Artists such as George Benson, Spyro Gyra and Larry Carlton, among others, are still prominent on NAC/Smooth Jazz format stations. Indeed, George Benson's hugely successful 1976 hit "Breezin" was the prototype for the kind of music that we know today as NAC/Smooth Jazz.

2058 Many artists in the format have evolved their styles from popular music into NAC/Smooth Jazz -- artists such as Peter White, who played with pop star Al Stewart for 20 years, Rick Braun, who toured with War, another pop group, and Sade. Still other artists in the format have their roots in traditional jazz, gospel, R&B, New Age, etc. This contributes to the format's eclectic sound and the difficulty in categorizing music selections.

2059 Despite the broad mix of artists that make up the format, it has characteristics that distinguish it from other formats. It relies on melodies and harmony to create a very polished "feel good" sound. It creates a mood. While it is difficult to describe in words, the sound is easily identifiable. Let's take a listen to The Breeze.

--- Audio presentation / Présentation audio

2060 MR. TYSON: This format is particularly well-suited to the West Coast feel and lifestyle. In the U.S., for instance, smooth jazz stations in the Pacific Region enjoy a significantly higher market share than do smooth jazz stations in other regions. And we know that our format works in Vancouver because it is here, at least in part, now.

2061 KWJZ, an NAC/Smooth Jazz station from Seattle, is received in some areas of Vancouver. The phenomenal growth of tuning to this service, without the benefit of promotion or local news content, speaks to the immense appeal of the music in this market. According to BBM, hours tuned in Vancouver to KWJZ has grown from 77,000 hours in the fall of 1999 to 124,000 in spring 2000, an increase of just under 50 per cent. The Breeze's combination of NAC/Smooth Jazz with local content and artists will provide a compelling alternative and repatriate those listeners.

2062 Based on a survey conducted by Canadian Facts, we know 15 per cent of the Vancouver market would definitely listen to The Breeze, and a further 48 per cent stated they would probably listen. We know from U.S. data the characteristics of the core audience for the New AC/smooth Jazz, and they are a perfect match for culturally rich and trendy Vancouver: Primarily between the ages of 35 to 54; an equal balance of males and females; reflect the ethnic composition of the market; live in middle and high-income households; have more extensive post-secondary education.

2063 This format has evolved and spread across the U.S., but it is also recognized and is gaining in popularity worldwide: in Japan, England, Germany, and in Latin America.

2064 Canadian NAC/Smooth Jazz artists such as Four 80 East and Brian Hughes receive airplay on U.S. stations and on stations like Relax-FM in Munich, Germany, but receive very little airplay at home.

2065 Even Russia has a station that devotes time in its schedule to NAC/Smooth Jazz programming.

2066 Clearly, this is a world-wide phenomenon that crosses boundaries of geography and race and is thus well-suited to a culturally diverse community such as Vancouver and the Lower Mainland.

2067 Michael.

2068 MR. OLSTROM: The Breeze's plans for local reflection include:

2069 News, Traffic and Information -- Between 5:30 a.m. and 9:00 a.m. We will feature news every half-hour, with news updates at noon, 3, 4, 5 and 6 p.m. Our news packages will cover the headlines and issues of importance to B.C. residents, providing a balance of local, regional, Canadian and international news. Ferry and border crossing information is important as well. We will also air news on weekends, identified in our research as important to our NAC/Smooth Jazz listeners.

2070 Traffic updates will air four times an hour during morning and afternoon drive. Weather updates will be featured hourly.

2071 We also have "Access Vancouver", a weekly, hour-long community based show, hosted by our news director, providing a forum for discussion of current hot topics. Community participation is going to be encouraged through an aggressive schedule of promotional announcements that will run throughout peak listening periods and on our web site.

2072 "Community Counts" - This runs five times daily, highlighting community events and broadcasting public service messages from Vancouver and the Lower Mainland, not only on air, but also on our web site.

2073 "A Breeze Moment" - This is scheduled to run three times a day. It features events and happenings in the lower mainland.

2074 Then there is "thebreezefm.com", our web site, which is already up and running. It will be an extension of the station, offering listeners and the community the opportunity to interact with us. It will also promote smooth jazz artists and other local talent. We will host pages for local artists, give people the opportunity to sample and buy their music on-line and connect artists to a new fan base.

2075 Russ.

2076 MR. TYSON: Our on-air plans to promote NAC/Smooth Jazz artists include:

2077 "The Breeze Top 10 at 10": A daily top-ten countdown of popular NAC/Smooth Jazz songs. This will provide an important new outlet for the music industry, creating a strong new sales tool for artists and help to build the star system for this important new format.

2078 "Live from the Breeze": This show will feature the best in local and touring smooth jazz artists in "live" broadcasts.

2079 "Coastal Jazz and Blues": A weekly highlight for The Breeze, co-hosted by Robert Kerr and John Orysik, founders of the Vancouver International Jazz Festival. This show will look at the contemporary Canadian and international jazz scene.

2080 "World Beats": Hosted by local Vancouver world beat expert, Jack Schuller, will be a weekly treat of Cuban, Brazilian and Latin rhythms and flavours, plus much more...

2081 "Forays into Future Jazz": Hosted by Vancouver Groove Jazz pioneer Ian Menzies, will feature one of the most vibrant genres in jazz today...all the latest releases from the most progressive jazz/dance producers featuring acid jazz, groove-based jazz fusion and modern sounds.

2082 Alan.

2083 MR. CRUISE: It is my pleasure to talk about our Canadian Talent Development Fund -- five million dollars over the first five years of the licence to eligible third party organizations.

2084 Twenty-five per cent, or $1,250,000. will be paid to FACTOR, to help fund the production of CD's, tours, and videos by Canadian NAC/Smooth Jazz artists.

2085 We have also committed $225,000 per year to Vancouver's Coastal Jazz and Blues Society, which has garnered an international reputation for high calibre concert and festival productions. We have developed, with them, an innovative Canadian talent development program as follows:

- $100,000 annually will be used to feature Canadian artists in the Vancouver International Jazz Festival. This will help expose Canadian artists to larger audiences and create opportunities for them internationally.

- $50,000 annually will be used to create a Vancouver "New Jazz" Showcase. This will contribute to establishing a new concert series featuring Vancouver artists in a variety of styles that suit a NAC/Smooth Jazz format. They will receive rehearsal and performance fees and will be encouraged to perform new and original music.

- $45,000 annually will be used to create an innovative Composers Residency. This initiative will bring a well-known national or international composer to Vancouver for a week-long residency focused on writing original music for smooth jazz ensembles. Scholarships will be awarded to qualified local composers by a panel of experts. At the end of each residency, the resident composer will give a concert performance that will include selections of the pieces composed by the participants.

- $30,000 annually will be used to create a Jazz Improvisers Residency, which will see an international artist lead a week-long residency on jazz improvisation, and also concludes with a concert performance.

2086 We have also pledged to create a scholarship program in the amount of $50,000 per year, at the Centre for Digital Imaging and Sound, which offers professional audio recording programs for Canadian musicians. These scholarships will be awarded to local performers who aspire to work in the NAC/Smooth Jazz and Traditional Jazz music fields.

2087 Jennifer.

2088 MS STRAIN: The remaining $475,000 per year, $2.375 million in total, will be made available to Vancouver organizations directly involved in developing and showcasing Canadian and local talent. In order to ensure the best use of the funds, we will establish a Volunteer Advisory Board consisting of two members of station management and at least three representatives from the local music community. We will file with the Commission an annual report detailing how the funds have been spent and with whom.

2089 We have spent a significant amount of time talking to a number of Vancouver area groups -- from the Pacific Music Industry Association to the Victoria Jazz Society, Folk Music Festival and others. We have lots of ideas as to how this money could be put to good use and know there will be many more that develop over the course of the licence term. We want the flexibility to be able to support these.

2090 MR. COWIE: In summary, Harvard and Craig bring to this application:

- a format that is a perfect fit for Vancouver. It will attract an audience that is currently underserved, reflect the West coast lifestyle and have broad cross cultural appeal.

- airplay for a new generation of artists that will drive the success of this format and create international stars;

- a five million dollar Canadian Talent Development Fund focused on developing and showcasing Canadian and local talent;

- experience with start-up operations;

- a diverse news voice;

- strong community emphasis;

- the opportunity to maintain services to smaller communities in the Prairies.

2091 This format is about creating a mood and a lifestyle. What is missing from the Vancouver lifestyle is...The Breeze.

2092 Thank you, Madam Chair, Commissioners and Commission staff.

2093 We look forward to your questions.

2094 THE CHAIRPERSON: Thank you.

2095 Commissioner Cardozo.

2096 COMMISSIONER CARDOZO: Thank you, Madam Chair.

2097 Welcome, Mr. Cowie and colleagues.

2098 Let me outline the six areas that I would like to take you through. We will deal with the first one, then get some nourishment, and then I will put you through the rest after that.

2099 The first will be programming; (2) Canadian Talent Development; (3) marketing; (4) finances; (5) technical issues; (6) I will call it "local positioning", which will deal with issues of reflection, connection and ownership. I will go through programming with you now, if that is okay.

2100 I wonder if I could ask you to take us through the slides that you have attached, because that may in fact answer some of the questions that I have planned.

2101 MR. COWIE: We will have Russ Tyson take you through those.

2102 MR. TYSON: As you can see, our first slide is how we have broken out our percentages as far as vocal and instrumental -- 50 per cent vocal, 50 per cent instrumental. Of that, we have broken it down into categories. From Smooth Jazz, on our next slide, we can expect anywhere between 60 to 65 per cent. Also attached there are some Canadian artists who are getting very little airplay in Canada, and of course in Vancouver, and some international artists, just as examples.

2103 The following slide is NAC and AC. We expect 25 to 30 per cent of our selections to come from those categories. Again, a list of Canadian artists that are probably getting some airplay in this market and in markets across Canada, and international artists.

2104 That is followed by Other Jazz and Blues, which is equal to about 10 per cent. Again, that includes Canadian and international artists, as examples.

2105 The last one is our Canadian Content Summary, which tells you where we expect to get our Canadian content from of course in those categories, from NAC and AC, 15 per cent, from Smooth Jazz, 15 per cent, from Jazz and Blues, 5 per cent. That would give us a total of 35 per cent.

2106 COMMISSIONER CARDOZO: Could you do that last one again.

2107 MR. TYSON: From the categories that you see there, from NAC and AC, from that category will equal 15 per cent of our Canadian Content.

2108 COMMISSIONER CARDOZO: So it is not that 15 per cent of that content will be Canadian.

2109 MR. TYSON: In total we will have 35 per cent Canadian Content, and this is how we anticipate it coming from those categories to get to that 35 per cent.

2110 COMMISSIONER CARDOZO: Sorry -- I look confused, don't I.

2111 Of the NAC and AC portion, how much of that will be Canadian content?

2112 MR. TYSON: Fifteen per cent. We will play 35 per cent of that category, but in total it will equal 15 per cent of our broadcast week.

2113 COMMISSIONER CARDOZO: Thirty-five per cent of each of these will be Canadian content.

2114 MR. TYSON: Yes.

2115 COMMISSIONER CARDOZO: Let me take you -- and maybe my puzzlement will ease up as we go along. You note in your Application, and you have stated clearly here on page 2 of your oral presentation that unlike the other applicants for this type of format, you are the only one who will not be a traditional specialty format.

2116 I wonder if you could share with us why you decided not to go for a Specialty format, and I recognize that the original application was filed before we amended our categories.

2117 MR. COWIE: Perhaps I could begin the answer on that, Commissioner Cardozo.

2118 We looked at both, and indeed looked at the Hamilton proposal, then looked at where NAC's Smooth Jazz is and how it is evolving, both in the United States and around the world.

2119 We took the view that in order for the NAC's Smooth Jazz format to be successful in the long term, it needs to evolve over time. The Canadian portion of that in a Smooth Jazz artist has to be grown. It is there now in its beginnings, but we don't believe strong enough yet to carry a format. So the mixture of more Easy Listening music from other genres will be used for a time, while that side of the format begins, flourishes and provides national and international stars. So it will change over the period of the licence that we are asking the Commission for.

2120 Going in, we believe that this was the best way to begin the format and to focus all of our energies from the playlist to developing new Smooth Jazz artists in Canada to build it over time.

2121 COMMISSIONER CARDOZO: Given that there is not a lot of Canadian grown Smooth Jazz now and you are planning to grow that, will the amount of Smooth Jazz that you carry grow over time?

2122 MR. COWIE: Yes, it will. Yes indeed, it will.

2123 COMMISSIONER CARDOZO: What is the percentage breakdown of these three categories that you will be playing? Leaving aside the question of Canadian content, how much NAC, AC, how much Smooth Jazz, how much Jazz and Blues?

2124 MR. TYSON: In total?

2125 COMMISSIONER CARDOZO: Of each.

2126 MR. TYSON: From Smooth Jazz, it will be 60 per cent.

2127 COMMISSIONER CARDOZO: So that goes back to the other --

2128 MR. TYSON: Right.

2129 From NAC and AC, approximately 25 to 30 per cent, and then from Traditional and Blues, it would be approximately 10 per cent.

2130 COMMISSIONER CARDOZO: Could you repeat that? That is different from these figures.

2131 MR. TYSON: We are talking overall. Approximately 60 per cent from Smooth Jazz will be featured on our radio station. Approximately 30 per cent from NAC and AC, and 10 per cent from Jazz and Blues.

2132 MR. COWIE: Just as an illustration, the music you heard on the video contains 10 pieces of music; 60 per cent of that would have been the same breakout as we propose. So that gave you a typical hour of what the station would sound like, and against that breakout.

2133 COMMISSIONER CARDOZO: If we go to our categories -- and when we talk about categories, I am grateful that a session like this is not being televised because it is hard enough for us to keep track, I can't imagine the viewer trying to understand Category 2, 3 and subcategory 34 -- how would it break down in terms of categories 2 and 3, 3 being primarily subcategory 34?

2134 MR. COWIE: I'll let Jennifer answer that.

2135 MS STRAIN: I will try and answer that, Commissioner Cardozo.

2136 NAC, AC, I guess we would say would fall under Pop Rock & Dance, which would be Category 21 -- subcategory 21.

2137 Other Jazz and Blues, and what we have called Smooth Jazz, would likely fall under subcategory 34.

2138 If I could just make a point, that under what we call Smooth Jazz, we have some confusion categorizing some of these things, and that is where some of the difficulty may be. I think some of those selections fall under subcategory 34, but Smooth Jazz, as a style of music, could also be Easy Listening, and it could also be Pop. There are Pop artists that find themselves on Smooth Jazz charts in the U.S. So that is where some of the difficulty may lie.

2139 COMMISSIONER CARDOZO: Would Smooth Jazz not be more a subcategory 34 than --

2140 MS STRAIN: I think it would be primarily subcategory 34, yes.

2141 COMMISSIONER CARDOZO: That is the part you told me would be subcategory 21, or did I understand you wrong?

2142 MS STRAIN: The NAC, AC part would be subcategory 21.

2143 MR. COWIE: The Easy Listening, and Jennifer can support me or correct me, would come primarily out of Category 2, subcategory 24, which is Easy Listening, Instrumentals, and would be found there.

2144 COMMISSIONER CARDOZO: And why did you choose not to apply for a Specialty format?

2145 MR. COWIE: I guess for the same reason that I opened with. We think this format needs to evolve over time. It is still new. Part of that advice we got from our friends from Winnipeg, who have been working with this format for over ten years, and with the reality that we think we need time and to direct our resources to build specifically smooth jazz artists to do that.

2146 We just thought we had more flexibility outside of a specialty format to do that. And at some point I am sure the question will come, we can answer it now, we believe very strongly in this format that it can succeed, that it offers the best chance for this licence to be viable, and to create the funds that we need to push the other side of the envelope, which is to create the new artist, to support the format, which is circular in that sense. So we are committed to it for the long term, and I think it is the right way to go.

2147 COMMISSIONER CARDOZO: On that question of the long term, one of the outcomes of a Specialty format would be a Condition of Licence. If you are not applying for a Specialty format, there would not be a Condition of Licence.

2148 Some might argue that with a Condition of Licence there is more of a guarantee that the market has that diversity continuing. In your case, we could license you for this, since it is a blended format, which would not be a Specialty, and a few years down the road you find that it is a lot tougher than you think it is and you can flip the format pretty easily, what can you say to me that would --

2149 MR. COWIE: We would be quite prepared to accept the Condition of Licence.

2150 COMMISSIONER CARDOZO: We don't regulate formats.

2151 MR. COWIE: I appreciate that, but in any event we feel strongly enough that in fact if you did, we would without hesitation accept a Condition of Licence that we would stay in this format.

2152 MS STRAIN: Commissioner Cardozo, I'm sorry, could I just add one thing.

2153 COMMISSIONER CARDOZO: Yes, please.

2154 MS STRAIN: We don't have difficulty committing to the Smooth Jazz format. Our difficulty is that as the format does evolve over the next seven years, we don't know that the subcategories, as laid out in the Commission's policy, are going to be same. We think you are going to have lots of cross-over between Pop and Instrumental and Easy Listening and Smooth Jazz, and that we are going to get into an exercise of trying to make sure we are 70 per cent out of one category and 30 out of another.

2155 What we are saying is that we are absolutely committed to the format, but that the format itself we think is going to see a lot of change within the first licence term.

2156 COMMISSIONER CARDOZO: Are you saying that the CRTC's categories are not crystal clear?

--- Laughter / Rires

2157 MS STRAIN: I don't think I said that, did I?

2158 COMMISSIONER CARDOZO: Let me ask you, just for our understanding, how you see the difference between Smooth Jazz and Contemporary Instrumentals, in terms of --

2159 MR. COWIE: I have a bevy of answers for that question. I think I am going to start with Russ and then I am sure that Jan and Ted, who are really our spiritual leaders in this one, would be helpful in this question as well.

2160 MR. TYSON: Thanks, Bruce.

2161 I think probably the hardest thing is to put a description on any of this type of music. It does create a mood and a lifestyle. I take you back to our video presentation. I think the best quote in there was from Myles Davies, who said, "I'll play it first and I'll tell you what it is later". I think that sort of sums it up.

2162 Some of the artists don't know where they fit in in this whole thing. I think Ted Hasiuk can explain that to you better. He has had over ten years of following this format and putting it into this mood and lifestyle that this format has become.

2163 MR. TED HASIUK: Thank you, Russ. I will try my best to explain this.

2164 I have read extensively on the subject, plus followed Smooth Jazz for the last ten years or so. In some cases, it is not totally crystal clear to me where a particular selection would fall.

2165 It is true that some of the music that would be played on The Breeze would clearly fall in Category 3. However, after speaking with artists and interviewing them, they themselves feel that their music may in fact be a little bit more oriented towards the Pop field, or perhaps described better as instrumental music.

2166 When I interviewed Dan Siegel, one of the pioneers of the music, whose career dates back to the early 80s, I asked him where he would categorize his music. He merely stated it was Instrumental. This was not an isolated event. Many NAC/Smooth Jazz artists, their styles are based on a Pop background, and some of them were mentioned earlier in the presentation, Peter White, for one, played with Al Stewart for over 20 years.

2167 Another artist, Rick Braun, who is now considered to be one of the top or hardest star of the CNA/AC Smooth Jazz format, states that smooth jazz is not always smooth, and it is not always jazz. Rick considers himself a Pop artist.

2168 An article which appeared in the Calgary Herald dated December 17, 1997, quoted Ray Mansroll, who is a saxophonist born in Windsor, Ontario, who plays with Earl Clew. He was one of the artists on our list. Ray says that the music is Instrumental Pop. He says there is no shame in calling it Pop, but don't call it Jazz.

2169 The NAC/Smooth Jazz format is perhaps the most creative format that has ever existed in radio. I think the only real limit to the format is the imagination of the programmers.

2170 MR. COWIE: We have been spending many many hours trying to do two things. First, trying to get our arms around what the format really is. I heard someone say this morning, they coined the phrase Smooth Jazz. It is probably closer to Soft Jazz, which I think some of the commissioners were using in their description of it.

2171 I was in New York earlier this week and had breakfast with the President of National Public Radio in the United States, who listens to a Smooth Jazz radio station in New York. I asked him to help me with this. He said, "Well, it's Easy Listening, with a jazz base". So that is where we are coming from in this, and trying to marry the two over time.

2172 In our first experiments, again referring to the music you heard on the tape, it sounds pretty good. It has a kind of a mood to it, and a sort of laid back lifestyle attraction to it.

2173 COMMISSIONER CARDOZO: Let me try just one more question on this -- not to say that you are not answering my questions, you are, but I am just trying to get more and more precision to the answer.

2174 Let me take you to the September 13th letter from you, Ms Strain. There was a list that you had -- in one of the Deficiency questions, we had a list of artists.

2175 MS STRAIN: I believe it was that letter. I have that list.

2176 COMMISSIONER CARDOZO: If I look at that list, comparing it to the Schwan record catalogue, the majority of those seem to be more subcategory 34. Do you agree?

2177 MS STRAIN: Yes, I do. I guess what we are getting at is that with the enormous growth that we have observed in this format in the U.S., that that may be the case today and it may be the case in a year, in the first few years of the licence, but it may not be the case in Year 6 or 7 of the licence.

2178 To give you an example, I understand that on Smooth Jazz charts in the U.S., for instance, you have Sting, Bette Midler has been on the Smooth Jazz charts, Michael McDonald, Steely Dan. The question is, are these Pop artists or are they subcategory 34, if you want to use that --

2179 Getting back to my original point, we just find that categorization down the road could become a little problematic for everybody.

2180 COMMISSIONER CARDOZO: So essentially, Mr. Cowie, your friend in New York saying that it was Easy Listening with a jazz base seems to me what you are defining it as, and you just don't want to have too many parameters around it, because it is hard to define now and it may change over time.

2181 MR. COWIE: We think it will change. It is changing in the United States. It is spreading out now into Europe and to Asia. It is being played in Latin America and so on, and it is changing.

2182 I really think what will change it the most is the growth of Canadian artists who have a place to play, and have a defined format with which they can get their minds around and create music for.

2183 We think it will change in that way, and we think it will also proliferate. I would not be surprised at all if frequencies are available to see this format played in most major cities in this country, as it is going in the United States.

2184 It will evolve, and I think some of the questions and some of the confusion about where Steely Dan is on Monday and not on Tuesday with a different song, is really what we are faced with her. It may be Pop one day, and it may be Smooth Jazz the next. This format allows that cross-over to happen, as long as it is within the mood and it is within the sound of the radio station.

2185 COMMISSIONER CARDOZO: Do you, as Craig, or as Craig and Harvard, have plans to try this format more down the road in other parts of the country?

2186 MR. COWIE: I would hope we could. And certainly if we don't, somebody else will. We just have a feeling that this is the new format, sort of unused in radio, that everybody has been looking for.

2187 You can do New Oldies and you can a new AC, and you can do a new this, that, or whatever. This is a brand new format. Not only that, it is a brand new opportunity for Canadian artists -- brand new.

2188 I think the growth of this appeals to what broadcasters need, and I would hope to the Commission, in terms of its mandate to grow Canadian talent. We just think there is a powerful opportunity here.

2189 COMMISSIONER CARDOZO: On the breakdown of vocal and instrumental, in your slide you said 50-50. My understanding in the United States is that the experiences tended to be two-thirds instrumental and one-third vocal. Is that your understanding?

2190 I just want to get a sense of why you want 50-50.

2191 MR. TYSON: We decided to go 50-50 basically to enhance our Canadian commitment to 35 per cent, which we will borrow some softer AC music, like you did here, Gino Vanelli on the tape, for example, where soft AC stations, and maybe even Oldy stations, would play.

2192 We envision this growing, as Mr. Cowie expressed earlier. As the format grows, we expect probably that most of the growth will come from the NAC/Smooth Jazz area, which will be primarily instrumental. Again, the Canadian artists will grow with it, and we feel this is a starting point.

2193 MR. COWIE: I think also there is another point there that we ought not to miss, and that is that by having a higher level of vocals in your rotation, it makes the format more accessible, instead of it being a very strong tendency to instrumentals.

2194 COMMISSIONER CARDOZO: Making it more vocal and accessible?

2195 MR. COWIE: For vocal performers, at the higher percentage of vocals.

2196 COMMISSIONER CARDOZO: Sorry. Say that again?

2197 MR. COWIE: By having a higher percentage of vocals in the format, it makes it more accessible for the performers.

2198 COMMISSIONER CARDOZO: Do you have any sense from the perspective of listeners whether in this genre they prefer instrumental or vocal?

2199 MR. TYSON: Again, it is all about the mood. You heard Mr. Hasiuk talk about it earlier, the mood and the lifestyle, because it draws from whatever.

2200 I know Mr. Hasiuk on his show in Winnipeg has played things like "It's all in the game", which is a pretty old song, but it did fit in the whole mood of the show. I think it is the type of vocal that is played is very important.

2201 Perhaps Ted can talk about that.

2202 MR. TED HASIUK: Thanks, Russ.

2203 I think Russ really hit the nail on the head a short while ago when he said that as the format grows, what we can see happening, or foresee hopefully happening, is that there will in fact be more instrumental artists develop in Canada.

2204 As was mentioned in the introduction, we do manage a few local artists, and they are instrumentalists. With the proper exposure, we can see more and more local talent developing as well as across the rest of Canada.

2205 I think the vocalists in the AC market are pretty well served right now. I could see that this format will, if anything, allows the instrumentalists to grow and that we would move away from a 50 per cent instrumental to a larger component, perhaps something like the statistics that you quoted.

2206 COMMISSIONER CARDOZO: Can I ask a little bit about Spoken Word. You have talked about news, which will be more drive time news, and there would be local, regional, national and international.

2207 What kind of news staff do you plan to have? Would you be having reporters of your own? I note in your oral presentation today you are talking about updates and headlines. So would you be having your own reporters as well?

2208 MR. COWIE: It is not a large staff. It is a music format, and the news would be in the form of headline news. I will have Michael Olstrom take you through that.

2209 MR. OLSTROM: Starting with the staff, there will be three bodies primarily designated, including the news director dedicated to the news department. There will be an additional body that is part of the morning show that is also a news presenter. That will help, based on the determination of the news director, to assign someone as a reporter at times. We do not intend to be a news driven radio station. There are radio stations in this marketplace that do that very well. But we will present the news and hopefully gather some of that news with bodies at times being able to be designated to gathering that information.

2210 We do have news that is four minutes, at 6:00, 7:00 and 8:00 a.m., also at 5:00 and 6:00 p.m., throughout Monday to Friday. The rest are the bottom of our newscasts in the morning, and the remainder at the top of our newscasts are 94 second updates.

2211 We also have news on weekend, because 95 per cent of respondents to our research who would listen to this format indicated that news was important to them. We also determined that we would do news on Saturday and Sunday, 6:00, 7:00, 9:00 and noon, and those are all four minute newscasts.

2212 The total for the week is just over three hours -- 3 hours 15 minutes.

2213 COMMISSIONER CARDOZO: So for the most part you will be taking the news off wire services --

2214 MR. OLSTROM: Primarily, yes.

2215 COMMISSIONER CARDOZO: A couple of programs that you mentioned in your oral presentation, "Access Vancouver" and "The Breeze Moment", would those be covering general issues? When you talk about hot topics, would they be general issues of interest in Vancouver, or are they more skewed or reflective of the genre?

2216 MR. OLSTROM: It is a program that is wide open to whatever the issues of the city and area are. They will delve into whether it is local politics or there is a major issue within the city. That is what that program is designed to address.

2217 COMMISSIONER CARDOZO: And what Spoken Word, or is there any? Are you planning any Spoken Word support for this genre of music?

2218 MR. OLSTROM: That would be within --

2219 COMMISSIONER CARDOZO: Are they talking about what is on in the clubs or announcements about people coming through?

2220 MR. OLSTROM: That Spoken Word would come within, for example, "A Breeze Moment", which can be a highlight program. As well, there are some other additional programs, music programs, that we talked about that would include Spoken Word content, interviews, artists in the studio to discuss their music, that type of thing as well. Whether it is the "Forays into Future Jazz" or whatever, where we are interviewing artists. So there will be Spoken Word within those programs themselves.

2221 COMMISSIONER CARDOZO: Maybe, Madam Chair, this would be a good time to take our break.

2222 THE CHAIRPERSON: We will reconvene at two o'clock.

--- Upon recessing at 1300 / Suspension à 1300

--- Upon resuming at 1400 / Reprise à 1400

2223 THE CHAIRPERSON: We will continue.

2224 Commissioner Cardozo.

2225 MR. COWIE: Commissioner Cardozo, before we move forward, I wonder if we might revisit the percentages of Canadian Content that we talked about earlier.

2226 COMMISSIONER CARDOZO: Feel free to do so.

2227 MR. COWIE: I think we served to confuse the Commission with that explanation, and we don't want to do that. If we could just go through it one more time, so that it is clear for you.

2228 MR. TYSON: From the Smooth Jazz category, 60 per cent -- 25 per cent of that would be Canadian.

2229 From the NAC/AC category that we gave you, 50 per cent of that would be Canadian.

2230 From Other Jazz and Blues, 50 per cent of that would be Canadian.

2231 This would, in total, equal 35 per cent.

2232 COMMISSIONER CARDOZO: That is quite different from what you had said earlier --

2233 MR. COWIE: We wanted to make sure we clarified that.

2234 COMMISSIONER CARDOZO: I will ask you to do that again, so that I can write it down.

2235 MR. TYSON: Okay.

2236 From the Smooth Jazz category, 25 per cent of that total would be Canadian.

2237 From NAC/AC, 50 per cent would be Canadian.

2238 From Other Jazz and Blues, 50 per cent would be Canadian.

2239 This gets us to the 35 per cent total overall.

2240 MR. COWIE: Thank you for allowing us to clarify that.

2241 COMMISSIONER CARDOZO: Thank you. I am kind of pleased it was not my total forgetting of math in that. That feels like it adds up to 35.

2242 We will go to Canadian Talent Development now, and get some clarifications.

2243 The $27,000, which is part of the CAB plan, is that part of the overall figure that you are looking at, or is that beyond it?

2244 MR. COWIE: It would be part of it in the first five years of the licence, then would stand alone beyond that as a minimum.

2245 COMMISSIONER CARDOZO: So then we are talking about $250,000 per year to FACTOR less $27,000?

2246 MR. COWIE: No. No, no.

2247 The breakouts that we have proposed as part of the Focus Canadian Talent are as we presented them. It will reside in the residual amount of money. There is an additional 2 million dollars uncommitted.

2248 COMMISSIONER CARDOZO: So FACTOR will be getting $250,000 a year for the first five years, plus $27,000 a year for seven years?

2249 MR. COWIE: I'm sorry. We were still answering the FACTOR question here on my right, and I sort of missed that.

2250 Do you want to clarify that --

2251 MS STRAIN: We are going to commit, on average, every year to FACTOR, for the first five years, $250,000. In our financials in years 6 and 7, we have $27,000 each year.

2252 COMMISSIONER CARDOZO: So $27,000 for the first five years is included in that $250,000?

2253 MS STRAIN: That is correct.

2254 COMMISSIONER CARDOZO: In your oral presentation today, you had clarified for me -- is this additional information, or are you identifying or designating some of the $750,000 to eligible third parties?

2255 On pages 11 and 12 of your oral presentation, you talked about there are four specific programs here. I take it those are --

2256 What you have said in the information we have had to date, that there would be $750,000 per year, which you would be providing to third parties. Am I right to read that the amounts that you have included on pages 11 and 12 are part of that $750,000, which leaves $475,000 mentioned in the second last line on page 12, that would be designated thereon?

2257 MR. COWIE: That is correct.

2258 COMMISSIONER CARDOZO: Can you tell me a little bit about how you go about deciding on how the third party money goes, whether you have criteria, whether you have priorities, whether there is publicity that goes with it, so that people who are interested in this kind of support might come to you?

2259 MR. COWIE: In a general sense, those dollars that are designated to this point are all focused on creating new Smooth Jazz players and artists. If you look at them in context, you will see that they all point in that direction.

2260 A hundred per cent of the dollars go to these designations. There is no other purpose for it.

2261 COMMISSIONER CARDOZO: There is no administrative overhead?

2262 MR. COWIE: None.

2263 COMMISSIONER CARDOZO: And that is done through the station?

2264 MR. COWIE: That is done through the station. And with the public input of three members of the community on the advisory board.

2265 COMMISSIONER CARDOZO: I might have missed that. Was that in your Application, or is that new that you have provided to us today, the advisory committee?

2266 MR. COWIE: That is new.

2267 COMMISSIONER CARDOZO: Do you have criteria or priorities for this money?

2268 MR. COWIE: We have criteria. The priority is a universal thing, and it follows the rest of the package. It is undesignated, because we don't know where it will go, and we want to make sure that, should we received the licence on the ground that we have a chance to react to others who could benefit from these funds in terms of growing their talents --

2269 That is why we have kept a pool available for that purpose. And we will go out into the community and find out where it can have its greatest effect, both through the committee and on air to invite those who would be interested and fit into this package to come to our advisory committee and make their pitch to us.

2270 COMMISSIONER CARDOZO: Is there any sense of how much would go for Smooth Jazz and how much for NAC/AC or Jazz?

2271 MR. COWIE: Our first focus is Smooth Jazz, but not to the exclusion of NAC. If it fits the format, as we think the format is going to evolve over time, but our primary focus is Smooth Jazz artists.

2272 COMMISSIONER CARDOZO: How would you monitor that the money is designated?

2273 MR. COWIE: I think our intent from the beginning in putting these packages together was to make sure that we are involved with the process upon the ground, in Vancouver, to follow them through. We were fortunate to have John Donnelly work for us through this process, who lives and works here, knows the community very well, is one of the top producers of Canadian talent. So with his advice and the advice of others, we would make sure that -- you can't guarantee after you have written the cheque, but we would certainly want to have a clear indication of where those artists were trying to work.

2274 COMMISSIONER CARDOZO: With other experience you have had in this area, do you tend to give out the full cheque at the front end, or do you stagger it over a period of time?

2275 MR. COWIE: I will have to ask Drew to speak to that. This is a first for us in this -- a first for me, at least, in this, and I am not quite sure how that works.

2276 We would want to have some control over time -- in a universal way, that it gets to the format. I am not quite sure how we would do that. Perhaps the first order of business would have the advisory committee arrive at that criteria and at management.

2277 COMMISSIONER CARDOZO: Do you want to add anything, Mr. Craig?

2278 MR. CRAIG: Commissioner Cardozo, if I might add.

2279 I think the way we have contemplated dispersing the funds, it would be 50 per cent upon presentation from the various groups that might come forward, and 50 per cent on completion of the projet is how we have talked in general terms, so that we get some results.

2280 I think the other thing that is worth mentioning is that we have committed to report to you on an annual basis what these activities are. We have committed to file annual reports with the Commission that indicate where the money is spent, where it went, and who got it.

2281 I think in that sense, with the reporting procedure, with the local committee and the local input, and the criteria that we have set out, where we will not just write the cheque out a hundred per cent, I think we can ensure that we are going to get some results from the Canadian Talent Development initiatives.

2282 COMMISSIONER CARDOZO: Could we move to a few marketing issues.

2283 The priority age group that you have identified is 34-55. I just wanted to find out what the reasoning was for that.

2284 MR. COWIE: I should tell you, Commissioner Cardozo, that one of our troops went down this morning with a bit of the flu bug, so we will use our researcher more than we might otherwise. She knows this territory very well.

2285 I would ask Debra McLaughlin to respond to that.

2286 MS McLAUGHLIN: Thanks, Bruce.

2287 The demographic that has been identified for this format has been arrived at in two ways. First, the primary research was to examine the type of audience, which included demographics, that this format is currently drawing in the U.S. We have quite a wealth of information because, as you know, it is available and growing in the U.S. The primary demographic for this format in the U.S. is 35-54.

2288 We also conducted customer research in the market with Canadian facts, and we sampled 600 residents, which is a typical sample size for this market. We asked them directly how much this format interested them. They could respond in one of five ways: No Answer; they would definitely listen; Probably listen; Most likely not listen; and Definitely not listen.

2289 We found that the highest interest came from the 35-54 age group.

2290 COMMISSIONER CARDOZO: Beyond that actual finding, is there any sense of why you think people of that age group are more likely to listen to Smooth Jazz?

2291 MR. COWIE: I could start this, and it is really where we have spent a lot of our time trying to answer that question, which in turn answers the viability of the format in the long term.

2292 It is a lifestyle, it is a mood, it is easy listening. We see this as being a very strong in-office format. We see it being a very compatible format, where people are doing audio streaming on the Internet while they are working with their computers. We see it as a relaxer in traffic.

2293 I can just see somebody sitting back listening to Smooth Jazz. Well, in Vancouver at five o'clock you don't go anywhere.

2294 It is all of those things, and we think that is attractive to that age group.

2295 The second subset is 55-plus, so it seems to fit that lifestyle.

2296 COMMISSIONER CARDOZO: Are we getting sort of close to just doing Easy Listening here? The way you define why you think this age bracket would be interested in Smooth Jazz, it seems to me would apply for Easy Listening as well.

2297 My thought is, how is this Application different from an Easy Listening straight up?

2298 MR. COWIE: It is different because it has the potential to produce a whole new era of Canadian artists who are playing jazz a different way, who are playing smooth jazz. That is the real benefit.

2299 People have been trying forever to play jazz on the radio, and it has not been successful in most cases, unless it is in a very very large city, Los Angeles, New York and others.

2300 Smooth Jazz can get you there, and the Easy Listening part of it is part of the transport system. Someone discovered it along the way. Even our own consultants tell us that they tried 10 years ago to put this kind of format on radio stations and the station owners told them to go away and come back with something else, because it would never sell, it would never work. But somebody found the key to it, and the key seems to be that it is the easy listening sort of mood presentation of really good music, and a lot of it comes from the jazz base.

2301 So it presents an opportunity that I guess we missed along the way, but we see it there and that is why we are so very strong on our commitment to it.

2302 COMMISSIONER CARDOZO: On the theme of marketing, there has been a fair amount of talk so far in the last couple of days about the demographics of the Vancouver market, the multicultural, multiracial nature. You have talked about this format as being fairly cross cultural in its appeal.

2303 One of the applicants yesterday suggested that Smooth Jazz rates a bit higher among visible minorities than the population at large. Did you get a sense of any of that in your marketing studies? Do you have a sense of how this will appeal to the diverse communities in this area?

2304 MR. COWIE: Again, I will ask Debra to respond to that.

2305 MS McLAUGHLIN: In fact, one of the measures that we take of this format was to understand the composition of the audience as it pertains to the ethno cultural groups that reside in the market.

2306 We found that, for the group that would listen to this, only 65 per cent of the listener base for this population comes from the traditional mainstream. The other 35 per cent come from the cultural groups that make up the Vancouver CMA.

2307 For example, 14 per cent of the audience would be Chinese, and that includes both the Mandarin and Cantonese -- we did break it down.

2308 We have 3 per cent of our listener base coming from the French population. We have representation from Italian, Asian. While the percentages vary somewhat in terms of the distribution of the market, they are very broad. So we do not seem to be finding groups that are left out or disproportionately under-represented or over-represented.

2309 I think the thing that is unique about this format is because it is intensely music base and there is a high instrumental content, it translates, there isn't a language barrier. So intuitively it makes sense. A melody is a melody. A smile is a smile. It does not rely on language cues. That is why intuitively and empirically we have evidence that shows that this is a good format to have a broad reach within all of the groups.

2310 MR. COWIE: We found, in looking at the stations across the United States, which at this point has to be our benchmark for where they are going, on the west coast, which has historically kind of a slower, more relaxed living style, this format does better, because it blends in with that living style. That is sort of the Easy Listening part of it, I guess.

2311 The other thing is that it is a format that allows you to customize. I am sure that the Latin Americans are playing more Latin American music as part of their mix in their NAC format.

2312 The format is likely different in Los Angeles than it is in San Francisco. And we would be closer to a San Francisco format than Los Angeles, for example.

2313 So it has those I think very positive side opportunities that go along with it.

2314 COMMISSIONER CARDOZO: Among the Chinese Canadian population, did you find any higher degree of interest in this as compared to other ethnic communities? I am just thinking that one hears often that piano schools or music schools have a high number of Chinese Canadian kids in music, and I am wondering if that bears itself out in in any of this kind of research you have done.

2315 MS McLAUGHLIN: Certainly within the context if we look outside the mainstream and outside the 65 per cent, the Chinese group has the highest level of interest, at 14 per cent. And that may be by virtue of population, because this is of the total spectrum. But within the context -- because this will be an English language station, for all intents and purposes, where there is Spoken Word, we did not take a sub-sample of the Chinese population, and therefore I cannot say "X" per cent of the Chinese population is interested. I can describe it in context of how our listenership will be constructed but, to answer your question, I would have had to survey in Mandarin and Cantonese.

2316 COMMISSIONER CARDOZO: Do you know, or maybe it would be Mrs. or Mrs. Hasiuk who would know that, whether among new developing artists, whether there is any noticeable number of visible minority, young artists in the Smooth Jazz or other fields?

2317 MR. TED HASIUK: Yes, actually that is very true, there are. There is one saxophone player, Danny Young, who I believe originates from South Korea, and he is bringing his music across to North America. There is another one that we manage, who I believe until just recently lived in Vancouver and has taken his show on the road, so to speak, Kim Nisjikawara(ph). He is also another sax player.

2318 So definitely there is that visible minority there.

2319 COMMISSIONER CARDOZO: In your research, to what extent did you look at the Seattle and Portland stations? For example, have you looked at specially Seattle as being a comparable market in terms of the kind of offering that you are going to be presenting?

2320 MR. COWIE: We have. There are 124,000 hours there of tuning into the Vancouver market that are of very high interest to us. We believe that --

2321 COMMISSIONER CARDOZO: Sorry. I don't want to talk yet about the repatriation.

2322 MR. COWIE: Non, no.

2323 COMMISSIONER CARDOZO: I am thinking more just about how those markets are doing on their own. Is there much you can pick up from them that will apply here?

2324 MR. COWIE: I will have Russ or Hugh speak to that part of the question.

2325 MR. McKINNON: Certainly the Seattle station has been very successful. At one point, and I don't have it right here with me, I believe it was no. 4 overall in share in the market. Probably the most successful radio station in this format is KWV in Los Angeles who, in 1999, built $41 million. So it is a very successful format on the west coast. So we did take that into consideration, and looked at it.

2326 COMMISSIONER CARDOZO: And in terms of repatriation, you are looking at repatriating some of that listenership, Mr. Cowie?

2327 MR. COWIE: We would hope so. What I was going to say in answer to your question was that that audience is obviously of interest in the Vancouver market, so we did look at what they are doing. Because of that interest particularly, and they are playing an NAC/Smooth Jazz format, on that basis we would hope to be successful in some level of repatriation here.

2328 COMMISSIONER CARDOZO: In terms of the projected audience, you have provided us figures for the 12-plus category. I am wondering if you have projected audience share for your target age group, namely the 35-54?

2329 MS McLAUGHLIN: I do not have those figures with me, but if the Commission wishes, we can file those.

2330 COMMISSIONER CARDOZO: You do have --

2331 MS McLAUGHLIN: We have calculated them for the purposes of developing ratings, but I do not have them at my fingertips.

2332 COMMISSIONER CARDOZO: It would be useful to have that.

2333 With regards to your ad revenues, you have given us a breakdown of where you anticipate getting some of these ad revenues from. If I go to page 364 of our record, which is in the letter of August 16th -- tell me how you project these figures. This is the letter of August 16th, page 4.

2334 If you could tell us a bit about how you come to these figures. You are projecting revenues from television stations, 5 per cent revenues from newspapers, 25 per cent, and so forth. How do you make those calculations?

2335 MS McLAUGHLIN: I'm sorry. If I could just ask you to repeat the question. We were switching paper here.

2336 COMMISSIONER CARDOZO: Sure.

2337 The question was about where the revenue would be coming from in terms of advertisement that is elsewhere now. I am just wondering how you come to these approximations, such as, revenues from existing stations, 40 per cent, revenues from television stations, 5, newspapers, 25, other media, 10.

2338 MS McLAUGHLIN: In terms of revenues from existing stations, part of the research that was conducted to test this format also asked the respondents what stations they were currently listening to, and not only what they were listening to, but what was their favourite, what did they spend the most time with.

2339 We used that to determine who would be impacted, and the list is in that letter that you have before you. For those who do not, it is CBU, CBU-FM, CHQM, CKVD, CKKS, CKSR.

2340 Obviously in terms of revenue, CBU and CBU-FM do not count, but the other ones are the primary source where we think we would draw audience, and revenues will, to some extent, follow audience. So that is where the 40 per cent came from.

2341 In terms of the 5 per cent from television stations, there still tends to be a very high demand for TV time and radio time in this market that cannot be met, and when it cannot be met, the rates go up. So we believe there is some dissatisfied television advertisers who would see a new opportunity on radio and one that reaches a very difficult target to reach, and that is the 35-54, as being an attractive option.

2342 In terms of newspaper, the 25 per cent really is derived less than from the 35-54, but the lifestyle of the target audience for The Breeze. And these are people, as we said partially in our oral, that certainly the research that we have from the U.S. supports. They tend to be higher users of computers, they tend to be higher users of high end products. For example, car dealerships. You typically do not find a Lexus ad on a radio station today. That is not because they don't believe radio works, it is because the focus on this target just is not there. They either have to buy multiple stations, which are not their target, or they have to buy stations that capture part of this. So it is not efficient.

2343 We believe we will be able to draw some revenue from advertisers who typically have to use the sections of the newspaper to tightly target this group.

2344 The 10 per cent of Other Media is exactly the same thing. Outdoor is an excellent way to reach the group, because of their active lifestyle. So a great deal of money and strategy goes into placing the outdoor ads.

2345 In terms of the 20 per cent, we believe that there are people trying to reach this target market which, again I have to emphasize, is less defined by that 35-54 character than it is by their lifestyle habits and their product usage.

2346 We have a wealth of material, that unfortunately got cut from the oral, about their preferences of wine over beer and Aeroplan -- it frankly would have bored you. It is very lengthy, but it is also very distinctive, and it is a very important aspect in terms of where the revenue would come for this --

2347 COMMISSIONER CARDOZO: Don't worry about boring us; we live to be bored by detail of this kind!

--- Laughter / Rires

2348 MS McLAUGHLIN: Then I'm your person!

2349 COMMISSIONER CARDOZO: The audience can laugh, but so do they!

2350 On the matter of outside media, you said their lifestyle would be sort of outdoorsy. You would be taking that away from outdoors, and it would be going to your station. Right?

2351 MS McLAUGHLIN: What I am saying is, they are active, which means, whether it is just driving to the airport to go somewhere or driving to a restaurant, they are active. So an excellent way to reach this target market is outdoor, and the positioning of outdoor signs.

2352 The optimum way to reach them is radio. Unfortunately, there isn't an efficient way at this point in time to do it, and The Breeze would offer that.

2353 So we do believe we would take some of that money back from outdoor, which is seen as the second option, but still the only efficient one at this point in time, for several advertisers.

2354 COMMISSIONER CARDOZO: And repatriated dollars. Is there a lot of advertising dollars going out of the country at the moment, south of the border, rather?

2355 MR. COWIE: The repatriation we speak of is in audience, that hopefully we could sell in the retail market here, if we are able to repatriate it. We have not put anything in our projections for revenue repatriation.

2356 COMMISSIONER CARDOZO: Your income projections that you provided us are fairly low in comparison to existing non-ethnic stations in the market. Where the average is around 10, even 16 million, you are projecting something like 5.4 in year 5. Are you giving us a conservative, careful level?

2357 MR. COWIE: It is careful, it is conservative, and goes to our overall thinking that the format we propose to you is going to evolve over time. We would hope to reach those levels at some time in the future, but coming in, it was a bit unknown to us in terms of the totality of the format. It is better now. We are more comfortable with it.

2358 We think it will compete as a mainstream station. So, if anything, these numbers are a bit on the conservative side.

2359 COMMISSIONER CARDOZO: Maybe this is an unfair question, but if you thought you were going to end up in the 10-plus million range within five years, would your CTV package be more generous?

2360 MR. COWIE: It might have. We certainly did not believe we would.

2361 COMMISSIONER CARDOZO: Let's move on to technical.

2362 We talked about other frequencies that may be available, and I will just read off six of them: 88.1, 88.3, 91.9, 92.3, and 106.7.

2363 Have you looked at these other frequencies?

2364 MR. COWIE: We had two looks at it, one from D.M. Allan & Associates who will, by the way, be here after we return from the break, next week, and will be available for the Commission at that time. Unfortunately, both of the reports we had done looked at ways of providing an alternate frequency for the CBC. And both looked at 88.1. While it is deficient in some areas, I think Abbotsford and other areas, with some technical adjustments it could be done. The problem there was with the CHEK transmitter from Victoria. It could be done and could provide, in the view of both these engineers, a viable alternate for the CBC.

2365 107.1, which was talked about by one of the other applicants earlier, neither of these proposes 107.1 as a viable option.

2366 They did not look at the other options that may or may not exist.

2367 So that unfortunately is the extent of what I can offer today, to answer that question.

2368 COMMISSIONER CARDOZO: So you have looked at 88.1 and 107.1?

2369 MR. COWIE: Yes.

2370 COMMISSIONER CARDOZO: And they are saying they are both not great?

2371 MR. COWIE: They say that 107 is severely limited, and with 88.1, while it would give coverage to the marketplace, there are some fringe areas -- I shouldn't say that, Abbotsford is not a fringe area, but there are some outlying areas --

2372 COMMISSIONER CARDOZO: In a technical sense.

2373 MR. COWIE: In a technical sense, where it would be difficult.

2374 It might very well, in the view of both of our engineers, capture the kind of audience that CBC was interested in achieving in the greater Vancouver marketplace. So I think on that basis it may be helpful for the Commission to have the benefit of their combined thinking on that issue.

2375 COMMISSIONER CARDOZO: Sorry if I am trying to summarize or read between the lines here, Mr. Cowie. You are saying we should give one of these frequencies to the CBC, and 94.5 would be optimum for you, as opposed to --

2376 MR. COWIE: Yes. Speaking for ourselves, and I am sure you have questioned other applicants as well, we think that the best use of 94.5 is for a mainstream broadcasting station, particularly in our case, because we do think this format is going to take some time to grow. The larger the coverage area to work with, the better the opportunity at viability.

2377 So, yes, we do agree with that.

2378 COMMISSIONER CARDOZO: If 94.5 were not to be granted to you, would you rather have one of these, rather not, be licensed? What would your preference be there?

2379 MR. COWIE: We would accept another FM designation if it were technically feasible to do so. The answer to that is yes, we want to launch this format in the Vancouver market.

2380 COMMISSIONER CARDOZO: And either of these two frequencies we have talked about would be an acceptable second choice?

2381 MR. COWIE: I don't think, until further study, that we could conclude that. I am seeing this material, one of them at least, for the first time today. The first report we got said the 88.1 was not acceptable. We are now finding that 88.1 might be, with some technical changes and agreements and so on.

2382 I would not reject these out-of-hand. We would agree that if there was another viable frequency available in the market, and we were asked to move there in order to obtain a licence, we would agree with that.

2383 COMMISSIONER CARDOZO: If you can be any more specific about that in subsequent phases, it would be useful. It helps to have the most precise information on the record.

2384 MR. COWIE: Yes, of course.

2385 COMMISSIONER CARDOZO: Would your projections in CTD commitments be the same with a different frequency?

2386 MR. COWIE: Yes. They are committed.

2387 COMMISSIONER CARDOZO: Let me move to local positioning. First, let's talk about employment equity.

2388 I noticed from your Application, page 323 of the record, that in terms of employment equity, you said you don't have an employment equity plan. I understand Craig has over 100 employees. Would that be right?

2389 MS STRAIN: Commissioner Cardozo, we certainly do plan -- we do not have one now because if licensed, we would be a new licensee altogether, but certainly Craig does have, and Harvard as well has employment equity initiatives in place. I might ask Drew to speak to some of that.

2390 MR. CRAIG: Certainly.

2391 Craig is over 100 employees, and we do have an employment equity plan in place. This is a little bit different situation, because it would be a new licence and would not fall under that, but we would expect that we would be fully compliant. And we would utilize all the benefits that Craig has in terms of its employment equity objectives. For instance, we have a consultant who works with us, and this new licence would have the benefit of the experience that we have had as a larger organization, and we would expect that we would certainly have an employment equity practice that would be acceptable.

2392 COMMISSIONER CARDOZO: Maybe you could clarify for me. The way I understand it is, it may be a separate licensee but the way we look at the more or less 100 employees is to look at the company as a whole, as opposed to each licensee separately.

2393 MR. CRAIG: It is our understanding that it would fall under a separate category.

2394 COMMISSIONER CARDOZO: For the rest of Craig, do you have the same ownership with Harvard?

2395 MR. CRAIG: No.

2396 COMMISSIONER CARDOZO: So this is --

2397 MR. CRAIG: This is a new kind of ownership structure. But if it is was acceptable to the Commission, we could certainly roll out the Craig employment equity plan into this new licence.

2398 COMMISSIONER CARDOZO: So in terms of your planning for a station in Vancouver, you had not started to look at how you would go about that, about the staffing of it, with employment equity being part of how you approach it?

2399 MR. COWIE: Certainly we had thought about a transference of what Craig does and what we do at Harvard into this new station, in terms of both our hiring practices. In addition to that, making sure that the four points are uppermost in the minds of the managers who will be hired to operate the station on a stand-alone basis in the Vancouver market, but complete adherence to employment equity principles.

2400 MS STRAIN: Commissioner Cardozo, we did offer some information on that as well in section 5.9 of the Application, some of the initiatives we would think of, were we licensed.

2401 COMMISSIONER CARDOZO: Let me just pursue one general question that Madam Chair was asking the previous applicant. I am not necessarily looking at your company specifically, but in terms of the people appearing before us, when you look at the equity issue, I suppose the radio industry, and certainly the management of the radio industry, has not included women a whole lot, although this panel may have been maybe more reflective of the reality of society than some of the others. I am thinking particulary of Smooth Jazz, where Jazz has its origins in the African-American experience, and I don't notice anybody with much diversity in the people they are bringing in. Is that an issue that does get attention, is not important?

2402 MR. COWIE: Beginning at the fact that this is new licence and a new stand-alone business that we are proposing for Vancouver, maybe the way to come at it is to talk about experiences for a minute, then transpose those into what you can expect in this radio station, should we be successful.

2403 My history has been in television and, for the long part of my life, with CTV. While I was there, and before I was there and after I took less of a role, the changes in that company are night and day in terms of employment equity.

2404 Most of the senior managers in the CTV network are women, the Senior Vice President of the Executive Vice President and Managing Director, Trina McQueen. The Senior Vice President of Programming, Finance, Sales and Marketing, Human Resources, are all women. The Manager of the Calgary station, Pac McDougall, the first woman station manager in the group. In addition to that, CTV has been a very strong supporter of CWC.

2405 Going over to the others side, into radio, in Regina -- and I will have Drew speak to this as well -- we have had a proactive all inclusive operation in that Prairie city for many years. Unfortunately, we have been a training centre for -- in particular, most of the aboriginal employees who come to us end up working somewhere else. In fact, the lead anchor in the APTN is one of our graduates.

2406 Just recently -- I just found out about this in the last day or two -- I was asking about the program "My Partners, My People", I don't know whether you have ever seen that, it is an aboriginal program that now runs on the National Aboriginal Network, and I had not seen it in 20 years. I funded the first edition of that in Regina, 25 years ago.

2407 Just recently, I was asking about some of the people. I came up with the name I was looking for. I just said his name is Will, that's all I could remember. I just want to relate a short anecdotal addition to this, of what happened with an aboriginal employee we unfortunately just lost, but lost in a good way, and I would like Michael to tell you about that.

2408 MR. OLSTROM: Thank you, Bruce.

2409 As a manager in Regina, it is always difficult finding employees, and good employees, great employees, who will stay with you, because they do move on, and careers move on.

2410 I have one employee, William Alexander, probably the best voice we had in our building, did afternoon drive on our AM Oldies station. I unfortunately lost him to the Okanese First Nation, his home reserve, where he went back to, along with donations that the company has made with old equipment, to put together an Application to the CRTC for a community radio station. He is going to manage and program that radio station.

2411 In addition, it again becomes a training process that we go through in the smaller markets. We lost one of our producers, a great producer, who moved on to another company, an aboriginal as well.

2412 MR. COWIE: Thank you for that.

2413 That was to illustrate that we do have a total inclusive philosophy in terms of our operating, and we do look towards and will discriminate in favour of, particularly in Regina, where we have a very large aboriginal population, we will try to find aboriginal talents that can come to work for us. While we hate to see them go, we always wish them well if they are moving to a higher level.

2414 You can expect the same of us in Vancouver, and our home here would reflect the cultural diversity of the marketplace.

2415 I am just going to ask Drew to --

2416 MR. CRAIG: Commissioner Cardozo, I think our industry has come a long way. I, like Bruce, have spent most of my career in the TV side of things, and I think, in terms of employment equity, things have moved ahead a lot further in television than they certainly have in radio.

2417 When you walk in this room and you take a look at the number of males in executive positions and the lack of females, I think it is an indication that the radio business has a long way to go.

2418 In our particular case, we have taken some very aggressive steps to change that. We have a relatively small executive team at our company. The Vice President of Corporate Development is a woman, the Chief Financial Officer is a woman, the Vice President of Legal and Regulatory Affairs is a woman. We have women program managers, and so on.

2419 We have also made an attempt to put women on our board. It is one of the initiatives that I think the CAB is certainly behind. I think that is where it starts. It starts at the top down.

2420 I think we would be the first to admit that the radio industry as a whole has a long way to go, and we are certainly wary of that and concerned about it, and we are proactive in our approach in terms of recruitment.

2421 COMMISSIONER CARDOZO: So is it fair to say that as a Prairie based company, where there are large aboriginal populations in the major cities, that that is an area where you have focused and have had some success?

2422 MR. CRAIG: We have had a lot of success in that area. It is challenging. But we have been very proactive.

2423 A lot of our stations are smaller stations, and I think one of the things that you have heard other applicants say is that when you do develop talent -- for instance, we have developed a lot of aboriginal reporters and producers, and we have lost a lot of those people to larger organizations. We have taken a lot of pride in the development of these people's careers, but unfortunately it is harder for some of the smaller organizations to hang on to them when there are other career advancement opportunities.

2424 COMMISSIONER CARDOZO: I suppose the poaching will stop when the critical numbers get there, and you will be poaching from each other instead of always away from you.

2425 Often in this discussion there is a suggestion that is very hard to do, it is very difficult, it is challenging, but I am wondering if you think that the challenge is more in terms of finding and promoting people, or is it in finding the will to do it?

2426 MR. COWIE: In our case --

2427 COMMISSIONER CARDOZO: And not necessarily just in terms of the top person of the corporation, but in terms of the people, the middle management who are doing the actual hiring and promoting.

2428 MR. COWIE: The will to do it is resident in this group. It is difficult, in many cases, to find the people to put into place and grow. But we continue to be committed to that.

2429 COMMISSIONER CARDOZO: My last comment on this, I am struck, as we discuss employment equity in this province, it is the one where you are not talking about some elusive goal but rather trying to catch up with reality, where this is a province that has had the first female premier and the first visible minority premier, where each of them, it would seem, took over from other fellows who were resigning under a cloud -- I don't want to get too political, especially as we are heading into a federal election.

2430 It is worth pointing out that this is a province that has made some steps, and it is not a matter of coming up with a reflection of something that does not exist, but rather just reflecting the reality.

2431 Connection to the local community. I notice in today's oral presentation you talked about an advisory committee. How do you connect yourselves to the local community?

2432 MR. COWIE: The advisory committee we spoke of will have two functions. The first one is to assist with the distribution of the Canadian Talent Development funds, and to help us find our way around the community to make sure that nobody is missed, where we might be able to offer some real assistance. That is one.

2433 The second part of it is, we will hire against a policy which is -- I shouldn't use the word "policy", against a type of person who will -- I like to say that home is where the heart is -- who will be busy in this community and making sure that we visit every corner of it, and that we are involved in the life of the community on a day-to-day basis. This has nothing to do with Canadian Talent Development. This is our commitment to the marketplace, and making sure that if it's good for Vancouver, it's on our air.

2434 You can't do everything, but it would have to be something really foreign to the goodwill of the city for us not to consider doing it. So we will hire against that kind of individual.

2435 By the way, it is that kind of individual who makes radio the business that it is, that hours don't matter, it is getting the job done and making sure that intimate connection we talked about in our oral presentation is made, because that is what makes radio a success.

2436 COMMISSIONER CARDOZO: So it is some of the programming you have talked about --

2437 MR. COWIE: That is part of it.

2438 COMMISSIONER CARDOZO:  -- "Access Vancouver", "Breeze Moments" --

2439 MR. COWIE: That is part of it. If I can, in an anecdotal way, talk to you about the Saskatchewan Rough Riders for a minute. If it wasn't for radio and personal attachments over the years, that franchise would not exist. It just wouldn't, because it is something that the people want and need, and therefore it is in our best interest to support it. But that is just one facet of life.

2440 In the radio stations we have now, we are into every part of the community that needs us there, and we expect to be there, and are happy to be there. If you do that right, you will be successful in this business.

2441 COMMISSIONER CARDOZO: What you won't have is local reporters. Am I correct?

2442 MR. COWIE: It's not that we will not have access to local news.

2443 COMMISSIONER CARDOZO: I am thinking more of the men and women who will go out and talk to people and --

2444 MR. COWIE: Again, as part of -- we will be a small staff in terms of what you would require to run a full fledged news operation, but we will --

2445 COMMISSIONER CARDOZO: So you would anticipate having developing personalities who would be sought by community groups to host events --

2446 MR. COWIE: Yes.

2447 COMMISSIONER CARDOZO: Lastly on ownership. We have talked about this a bit over the past couple of days.

2448 What is your advice -- I have a sense of what your advice would be, but I wonder if you could say it anyhow -- in terms of ownership, whether local ownership, Vancouver, B.C. ownership is important. I am thinking of some of the issues that Madam Chair and others have talked about, that sometimes a company headquartered here may have a certain approach, but I am also thinking of the either symbolic or the emotional tie that people have to a national or a large regional corporation that is headquartered in the province, whether there is any role for the Commission, whether we should be concerned about where companies had headquartered in this age of consolidation, where the consolidation tends to focus towards the Toronto vortex.

2449 Is it important to have some kind of B.C. based owned companies in the overall picture?

2450 MR. COWIE: I think first it is important to have diversity of voices. And that is one of the criteria that you have set out for yourselves in dealing with these licence applications.

2451 I think that companies that operate in the region might have a better understanding of the marketplace, might have, and that does not for a minute suggest that a company from Toronto can't come to Vancouver and do a great job of running radio stations, and be great community supporters.

2452 Our view on that, we are talking about coming from another place, is that when we come here, it will be an independent business to live and work in Vancouver. The people will be Vancouver residents, and will be charged, as part of their review, if you want to put it that way, with their input to the community, with their contribution to this community, as we would do in Calgary or Edmonton or Regina or anywhere else.

2453 I think diversity of voices is the answer to your question, and licensing good operators, who you believe in and who the Commission might test on that over time, in terms of what they have done.

2454 In our case, it would give us an opportunity to assure that some tertiary markets we have continue to be independent, and are not lost to consolidation.

2455 I understand your concerns about consolidation. I think if through that, as a Commission, you can find your way to making sure you get applicants who will live, work and become an integral part of the community, and also provide diverse voices, I think then you will have done well.

2456 COMMISSIONER CARDOZO: Let me put it differently and see if I get a different answer -- not that I want a different answer, but I am just trying to get more your sense of this, and either you or Mr. Craig may want to answer this.

2457 Craig is a western based company, as is Harvard. Should that, in any way, get preference over a Toronto based company, where most corporations tend to be headquartered? Is that an issue that the Commission should concern itself with?

2458 MR. COWIE: I will let Drew speak to this, but I think the criteria, it is my view, that I presented to you a minute ago, about good citizenship, a major, complete and unquestioned commitment to the community should be the criteria.

2459 We think, in our particular case, this licence would help us accomplish something else, and at the same time transport our kind of business operations that are successful, that are well received in the communities we serve, into the Vancouver market. And I think we would melt into the countryside here pretty nicely.

2460 But, is there a preference for us, because we are a western based company, over a company from Toronto? Probably not, but we would have, I think, a closer affinity to our western roots than perhaps someone from Toronto would have. Whether that makes a difference that is measurable, I don't know.

2461 I'll ask Drew to respond as well.

2462 MR. CRAIG: Commissioner Cardozo, you heard us speak out against consolidation at a lot of different hearings. I think, frankly, diversity of ownership is important in Canada. I think it is an underlying issue that I think we are going to have to wrestle with as an industry, but really I think in terms of this particular case, I think it is the order of magnitude of the players.

2463 Large players have a lot of opportunity to raise capital, to buy stations, to sell stations. Large players can get into this market by buying an outlet if it comes up for sale.

2464 I think, in a new licence proceeding, it is an opportunity to introduce some fresh blood into the particular market that you are looking at, and I think that is what you have in our Application. I think we have demonstrated our ability to do start-ups, to move into a community, to dig in, to have the passion to really make a difference, and I think the group of people that you have in front of you are quite prepared to come out to this market and demonstrate that as well.

2465 We are both small to medium size players, and I think that the size that we both are, in terms of our respective radio holdings, allows us to put a different spin on how we approach the market. We are both very much entrenched in our local communities that we serve, and I think that is what you would see.

2466 You really haven't had a chance to hear from some of the people on the panel about some of the initiatives in the local community, but I think that we can bring an excitement, enthusiasm and passion to this market that perhaps bigger applicants can't do. It is just another outlet that they look at on their financial results every month, to see how they are doing.

2467 So I think this is a great market, it is an important market. We are very enthusiastic about the format itself. It is breaking new ground, it is starting something new, and I think that players our size are good at that.

2468 I just sort of leave you with that.

2469 COMMISSIONER CARDOZO: Thank you.

2470 Do you have any summarizing or closing comments you would like to make?

2471 MR. COWIE: I would ask you to consider the fact that we want very much to introduce this format into the Vancouver market. We believe it has the best opportunity to be successful here.

2472 The opportunity to be at the beginning of a new force to create a whole new wave of Canadian talent is very appealing to us, and we think that the circle works; if we create the talent, the talent will support the format, and the format will be successful.

2473 We have a track record that should give you comfort, that our business plan will work, that we are committed to what we are offering here, and that we think that as these licenses proliferate in other cities across the country, that we might be a pretty good basis for future decisions on those applications, and hopefully might be a part of the applicants because, as Drew put it, this is likely at the beginning level, at a new station level is likely our only way in. We can't afford to pay those prices that radio stations are going for these days, but we can build one, and make a contribution to this community very quickly, and based on some solid past success.

2474 COMMISSIONER CARDOZO: Thank you, Mr. Cowie and colleagues.

2475 Madam Chair, that completes my questions.

2476 THE CHAIRPERSON: Thank you, Commissioner Cardozo.

2477 Commissioner Cram.

2478 COMMISSIONER CRAM: Thank you.

2479 My first question was about the market study. I will be asking Ms McLaughlin, but it doesn't mean anybody else can't answer.

2480 Both here and in Calgary I have seen studies done based on names of the artists, "Would you like to see a radio station where Mary Anderson, Mickey Most and somebody else play?", or, where the actual genre was given, "Would you like Soft Jazz?", "Would you like Classic?", would you like this --

2481 In your case, you did a montage, if I understand correctly, of sounds.

2482 Are there studies that show which is sort of the more reliable?

2483 MS McLAUGHLIN: You can appreciate that if we are confused about the categories in the descriptors, on a consumer level, who gives it no thought whatsoever, nor should they, there is a great deal of --

2484 COMMISSIONER CRAM: This is CRTC land -- I understand.

--- Laughter / Rires

2485 MS McLAUGHLIN: There is a great deal of confusion, so to describe a format as Soft Rock leaves a lot of room for interpretation. What you try to do in research is narrow down that potential bias, by being very specific in what you ask the respondent.

2486 In the research that was done by Canadian Facts, it was approached on two levels. I cannot speak to what other applicants have done either here or in Calgary, but each of the respondents were asked, describing a format by the artist. So, for New AC/Smooth Jazz, it would be Diana Krall, some of the names you have seen here today.

2487 Certainly if you were outside of that group of listeners, people who would be buying CDs or going to concerts, you are not going to recognize those names. So the response rate is going to fairly low.

2488 What it tends to do is depress the overall interest levels, because music is an experience, and to describe Diana Krall without having her voice, the music, the whole feel of the song, unless you know her, you are not going to say, yes, I would listen to it.

2489 We also asked people about their purchase habits, in terms of what they were buying, what CDs. So it is really two approaches to the measurement.

2490 Very often, the type of research used to program a station involves listening and getting people's reaction, but in the context of examining the full market and what would work best in this market, you are very limited. You cannot keep a respondent on the phone while you go through playlists over and over again, and frankly despite the distinction in the categories set out by the CRTC and for many of us, music fans here, they do blend into one another on the phone.

2491 The very long answer to your question, and I apologize for that, is, yes, there are tests, and yes, there are differences, and they apply in different cases, but in order to measure a market, this is the most effective way we found.

2492 COMMISSIONER CRAM: My next question was, you talked about 14 per cent of Chinese people would be interested in this format. I note from, I believe it is The Financial Post's 2000 estimates, that in the CMA there are 5.5 per cent of the population who speak Chinese.

2493 What was the sample size of the Chinese?

2494 MS. McLAUGHLIN: I have to go back to a point that I made earlier, and that is, we did not survey any particular ethno cultural group to the extent that I could say to you that "X" per cent of the Chinese population, either those speaking Cantonese or Mandarin, would want to listen to the station. In order to do that, you would have to have a minimum sample of perhaps 400 in each one of those, which we clearly did not have.

2495 What we did have was a sample that was representative in terms of distribution of the full market. For example, if the ethno cultural group identified as Chinese represents 15 per cent of the population, 15 per cent of our sample was in it.

2496 The number I referred to earlier was the breakdown of our listening audience. It is relevant in that it represents the distribution of the market in terms of ethno cultural groups, without saying 40 per cent of Chinese people are interested in this format, because that survey just was not conducted and, to the best of my knowledge, by none of the applicants was that type of sample put into the market.

2497 COMMISSIONER CRAM: So what you did is that out of the 600 people you surveyed, you modelled it on the -- you mimicked the cultural diversity of the Vancouver CMA.

2498 MS McLAUGHLIN: What we did was we conducted a random survey, and the whole idea behind random surveying is if it is done correctly and you poll the sample correctly, when you look at the respondents, they will fall out exactly along the ethno cultural lines of the market, as well the demographics. It is one of the first things you do after you get this research back, is you go back to see where the potential bias --

2499 If we had found, for example, that had absolutely no Chinese representation, we would not have brought the survey forward, but it did meet the distribution within the market.

2500 Having said that, within that sample size, it is not sufficient to go back and make statements about any of the cultural groups outside of the whole population.

2501 COMMISSIONER CRAM: As a whole.

2502 MS McLAUGHLIN: Yes, as a whole. We just have to talk about it as a whole, but we can break out our listenership by saying, this per cent of our listenership state that they are of the Chinese culture, this per cent say they are francophones -- and that is what we did, in fact.

2503 COMMISSIONER CRAM: Do you have the breakdown for Punjabis and Hindis?

2504 MS McLAUGHLIN: I do, but I do not have it at my fingertips. I believe that those two groups combined would be 3 per cent of our listenership.

2505 COMMISSIONER CRAM: Thank you. Subject to check. If there is a change --

2506 MS McLAUGHLIN: Those cross tabs were not filed with our research. They were done -- it would have been massive. We can file those.

2507 COMMISSIONER CRAM: As long as the number is correct, that's all I am worried about. Certainly if the number is incorrect, if your memory is incorrect -- I can understand that happening, because I sometimes forget -- then you will let us know.

2508 MS McLAUGHLIN: Yes.

2509 COMMISSIONER CRAM: Thank you.

2510 Thank you, Madam Chair.

2511 THE CHAIRPERSON: Thank you.

2512 I just have a couple of questions.

2513 First, out of curiosity. I noticed that you were referring to an LA station and what it billed last year. Was it 41 million? I am wondering how you get individual station figures.

2514 MR. TYSON: Actually, it was an interview with the manager last week, in Radio and Records last week.

2515 THE CHAIRPERSON: So they shared that magic number.

2516 MR. TYSON: Yes. I was kind of astounded by the figure. That is the only one I know.

2517 THE CHAIRPERSON: Your discussion with Commissioner Cardozo on how we might be evaluating the various competing applications, in terms of whether it is ownership and size and diversity, you referenced the fact that you are a local company, have operations in smaller markets -- smaller than Vancouver markets -- in western Canada. Do you think this is an element that we might consider in looking at these applications? Some of the applicants do operate smaller market stations in western Canada, and some don't. I wonder if that is something we should look at.

2518 MR. COWIE: I think the point there, Commissioner Grauer, was that there is an opportunity here, and we believe a benefit, to keep tertiary market stations viable, if you can carry them, so to speak, and allow them to continue to serve their mandate, by being successful in larger markets.

2519 It is a straight connection that we thought was an added benefit that the Commission might be interested in.

2520 THE CHAIRPERSON: Thank you.

2521 Just so I am clear, there are a couple of other applicants. In other words, we do have some applicants that operate only in larger markets, and others who operate in both. Is that something that you think we might consider particularly with regard to smaller markets, other than just yourself, understanding, of course, that you want to make the case for your own application, but is this something that --

2522 MR. COWIE: I think you are seeing two dynamics here. One is that, firstly, we wish to expand our radio business. This is the second application where we are attempting to do that. That is one thing, and we found a compatible partner to do that, that shares our business philosophy and so on, so we wish to build our radio business from there. That is one thing.

2523 The benefit I was referring to was, if we were successful in that, it might very well allow us to stay in the radio business in those smaller markets, and not necessarily by subsidizing those markets, but being able to accept in a greater way any losses that might occur there.

2524 THE CHAIRPERSON: I understand that, and I take your point. I guess what it got me thinking, in terms of how the discussion was going, is clearly there is a lot of consolidation taking place, and clearly by the number of applicants that we have had here for this frequency in Vancouver there is a lot of interest, and a lot of companies growing.

2525 When we look at consolidation, and there is nothing wrong with it, it is an integral part of our new commercial radio policy, what is the flip side of it? I think what we have talked about a bit is maybe new voices, and there may be some other things.

2526 As we struggle with a lot of applications here, it is important to really see what the views are of the various applicants to some of these elements, which are things we might be considering, one of which is, clearly, whether it is in British Columbia, whether it is in western Canada, or whether it is in other parts of Canada, there are smaller markets that are just not as lucrative as the big ones. Should we be considering those elements when we go to license a big frequency like this?

2527 MR. COWIE: We are asking you to, in this case, and I hope you would. I can't help you philosophically as a commission with that, but I think there is some value in listing that among other benefits to the broadcasting system to maintain strong radio operations in smaller markets. And this would help us achieve that.

2528 THE CHAIRPERSON: Thank you very much.

2529 Legal?

2530 MR RHÉAUME: Thank you, Madam Chair.

2531 Mr. Cowie, I just have two questions.

2532 You would incorporate a company called "The Breeze Inc.", which would be a 50-50 proposition between the Craig Group and the Harvard Group?

2533 MR. COWIE: That is correct.

2534 MR. RHÉAUME: Who would control the company?

2535 MR. COWIE: The Memorandum of Understanding that we filed with the Commission indicates that the company would be owned 50-50. There would be a board of directors of four people, two from Craig, two from Harvard. The Chair would rotate every two years.

2536 The only other pertinent part of the agreement is that there is an arbitration clause in it, in case we decided we could not run it together somewhere down the road, but we do not anticipate that at all. That is how we would operate the business.

2537 MR. RHÉAUME: That's fine, but who makes the ongoing business decisions at the board level?

2538 MR. COWIE: The responsibility for operating the station will be the station management, and it will be a stand-alone operation, with its full management complement, and obviously the board will be a part of that in terms of annual budgets, capital expenses and those sorts of things.

2539 MR. RHÉAUME: So the chairman of the board would be a nominee from Craig or Harvard, on an alternative basis.

2540 MR. COWIE: That is correct.

2541 MR. RHÉAUME: Does the chairman of the board have a veto or have a casting vote in any fashion?

2542 MS STRAIN: No. That is why we put the binding arbitration clause in, so that decisions by the board would require unanimity between the two parties. But in the event of a dispute, which we don't anticipate, we put the arbitration clause in to deal with that.

2543 MR. RHÉAUME: Thank you.

2544 Formats. You answered a question from Commissioner Cardozo, saying "we would gladly accept a condition of licence on format". What did you have in mind by that answer?

2545 MR. COWIE: I think what we were trying to illustrate there was that we are committed to the format. It is understood that if the CRTC were to issue the licence under current policy, that we could in fact change the format down the road. So it was an attempt to convince the Commission that, if necessary, we would accept the condition to show, in good faith, that we intend to be in and grow this format through the licence period, and we are.

2546 MR. RHÉAUME: The reason I am asking, and I am not quite sure if I still understand your answer, but the format that you have applied for is a Condition of Licence. In other words, you have applied for a Category 2 format, which essentially means that you cannot become a Specialty format.

2547 I am still not sure what you had in mind when you said you would accept a condition of licence.

2548 MS STRAIN: Counsel, I guess the first thing I just want to reiterate is that the Hamilton Smooth Jazz new AC station that was licensed is a mainstream format, and has no conditions of licence. I realize that decision was made before some of the changes to the categories, but just sort of looking at it broadly.

2549 We propose to play a very similar kind of music, and our concern is that -- in the first few years, we probably would be within the realm of a Specialty format. Our concern is that in the year 5, 6 and 7 of the licence, as we see this format proliferating in Canada and in the U.S., that it will become a mainstream format and that there will be more difficulty categorizing a Sting song that might be in subcategory 34, which might also be considered a charted hit in the Popular Music category.

2550 So we would accept a Condition of Licence that we will stay in the Smooth Jazz format for the first term of the licence.

2551 MR. RHÉAUME: Well, I am going to tell you what my problem is. There is no such animal as a Smooth Jazz format.

2552 Maybe you want to consider your answer again, and come back in intervention, or possibly after the break, Madam Chairman?

2553 MR. COWIE: There is Smooth Jazz licences. What was the licence issued in Hamilton? Was that not a Smooth Jazz mainstream licence?

2554 MR. RHÉAUME: It could well be. Then, that would be a Category 2 format. If that is what your answer is, that's fine. I just want to make sure I understand what your answer is to Commissioner Cardozo's question.

2555 MR. COWIE: We will be playing the same songs as that applied for and approved in Hamilton.

2556 MR. RHÉAUME: That's fine. Thank you.

2557 THE CHAIRPERSON: Thank you.

2558 We will take our afternoon break, and return in 25 minutes, at twenty-to-four.

2559 Thank you.

--- Upon recessing at 1525 / Suspension à 1525

--- Upon resuming at 1545 / Reprise à 1545

2560 THE CHAIRPERSON: Madame Secretary, please.

2561 MS VOGEL: Thank you, Madam Chair.

2562 Our next applicant is an Application by Classic 94.5 FM Limited, for a broadcasting licence to carry on an English language FM radio programming undertaking at Vancouver.

2563 The new station would operate on frequency 94.5, with an effective radiated power of 46,000 watts. The Applicant is proposing a Classical Music Specialty format.

2564 It is my understanding that there has been a clarification that it is 85 per cent rather than 80 per cent of music drawn from subcategory 31 concert, and 15 per cent of the music drawn from subcategory 34, Jazz and Blues. Is that correct?

2565 MR. OAKES: Yes, 85.

2566 MS VOGEL: Thank you.

2567 Please go ahead.

APPLICATION / APPLICATION

2568 MS ROBERTSON: Good afternoon. I am Catherine Robertson. I am Chairman of Classic 94.5 FM Limited.

2569 I am joined today by Robert Sunter, on my far right, who is President of our company. He is a broadcast media consultant who took early retirement from CBC, having served as Head of Radio Music nationally and Head of CBC Radio in British Columbia.

2570 On my immediate right is Robert Blackwood. He is our Vice President of Programming Development, and he is the B.C. based broadcaster, media consultant, and producer.

2571 On my immediate left is David Oakes, President of Oakes Research. He assisted us with our audience analysis and revenue projections in preparing our Application.

2572 On my far left is Greg Reid, Manager of Administration and Finance for the Robertson Group of companies and Classic 94.5 FM.

2573 The row behind me, on my far right is Bramwell Tovey, Music Director and Conductor of The Vancouver Symphony Orchestra.

2574 Beside him is Lori Baxter, the Executive Director of the Alliance for Arts and Culture.

2575 Next is Eli Gershkovitch, a Vancouver business executive, lawyer, and Principal of Steamworks Brewing Company.

2576 Behind me is David Simpson, who is sitting in and will speak on behalf of Jesse Read, who is a Director of Faculty of Music at the University of B.C. David Simpson is the Director of Recording and Audio at the Faculty of Music at UBC.

2577 We are here today to propose a new radio station -- 100 per cent locally owned, operated and programmed -- that will add significantly to the diversity of choice in Vancouver.

2578 The CRTC has already licensed commercial classic music and arts stations in Toronto and Montréal. Both are thriving in terms of audience and financial returns. All major American cities have such stations. In San Francisco, it is one of the three most popular stations in the market. And in London, England, Classic FM last year won the award for the most popular station in the U.K.

2579 We believe it is time for Vancouver arts and music audiences as well as advertisers to have their own place, and the same choice as listeners in virtually all other large North American cities.

2580 What will Classic 94.5 offer to the listener? Great recorded concert and jazz music -- the best in the world -- well presented, seven days a week.

2581 Classic 94.5 FM will be unique in this market. It will offer listeners true diversity from the programming currently available.

2582 We will have hosts with knowledge, experience and commitment to the broadcasting of music and the arts.

2583 Minimum talk during most of the schedule.

2584 No commercial interruptions were inappropriate. We will play full symphonies or jazz suites uninterrupted during significant parts of our schedule.

2585 Strong emphasis on the recordings of British Columbia and Canadian artists.

2586 Arts news and arts billboards throughout the entire schedule, with additional information within the programs. This will be carried out in partnership with the Alliance for Arts and Culture -- a local organization composed of some 270 arts and music organizations and individuals -- which currently provides an excellent arts information hotline.

2587 We will broadcast live concerts, both in partnership with sponsoring organizations and as special presentations to the station.

2588 We will have specialized programs on the weekend, some of which again will be in partnership with arts and music organizations or individuals. These will appeal to the diverse specific interests of our audience.

2589 We will be developing and presenting Vancouver musicians, critics and educators as hosts and on-air contributors, and we will be creating a comprehensive website to provide playlist and other information in detail about our programming -- including links to other music and arts specialty sites.

2590 Simply stated, we will add significantly to the diversity of listener choice, just as similar stations have in Montréal and Toronto.

2591 What will we offer the advertiser? The opportunity to zero in on a specific niche market in Vancouver, a highly efficient buy for the upscale 35-plus market.

2592 We will also offer a highly targeted market for arts and entertainment businesses and organizations. Currently, these advertisers have to purchase broad-based media, with considerable wastage of promotional dollars.

2593 Our policy will be to maintain a low commercial load, in keeping with a classical music and jazz format. Advertising will be integrated with program flow and style. Ad production will be carefully monitored to maintain programming integrity.

2594 We will work with advertisers to develop sponsorship opportunities for performances as well as specialized programming.

2595 Our commitment to unique programming and to commercial opportunity is matched by our plans for the development of Canadian -- with an emphasis on West Coast -- content and thus talent.

2596 A commercial classic station is not like other commercial stations. And an independent station is not like a member of a corporate broadcasting chain. We will not be sharing music or other programming libraries. We will not embrace national syndicated formats. And therefore, we are proposing a unique approach to talent development.

2597 We see little value in contributing to FACTOR, as they do not produce music that would be presented on our station. We are not proposing, as many of the other applicants for this radio licence have, to give donations to existing institutions.

2598 We believe that what we are proposing is true talent development -- investment in the careers of local Vancouver performing artists.

2599 Our plan is to spend $50,000 in our first year of operation on direct talent development. This is direct payment to record and broadcast performances in Vancouver. We have committed a minimum of $50,000 each year for the seven-year period of the licence. In addition, we have committed that this number will increase each year as revenues for the station increase. If our revenue projections hold true, we will be allocating $164,000 a year by year seven to direct talent development.

2600 In addition, we will add an indirect contribution to talent development in Vancouver. We estimate this will bring an annual benefit of approximately $800,000 to Vancouver. Given the short time to negotiate arrangements, we were not able to include all of the detail in our submission.

2601 We would like to point out that we would undertake to implement the following activities, whether it is a CRTC requirement or not, as we feel this is a necessity to build audience support.

2602 If I could direct your attention to the chart. We have a four part program. We would be developing specialized radio broadcast talent. This is training musicians and other artists to be on-air hosts, recording engineers to master music pick-ups, and members of the music and arts community to be radio producers. We estimate it is a benefit of about $30,000 a year.

2603 The second part is an on-air exposure for young talent. We will let our audiences hear the advanced music students; we will let them hear our orchestras, recitals and jazz gigs. We plan to broadcast performances of the UBC Faculty of Music orchestra, the Opera School, and those of the outstanding music students of both UBC and the Vancouver Academy of Music. Broadcast opportunities will also be offered to non-professional local ensembles, choirs and soloists, and the advanced jazz students from both Capilano and Douglas College. The benefit of this to the community: $50,000 a year.

2604 We would also of course be doing on-air promotion of arts and entertainment events. This would bring a benefit of between $300,000 and $350,000 a year.

2605 Partnership with the visual and performing arts will bring a benefit of $400,000 a year. As one example -- and we will give more details in the question period -- we are pleased to be able to tell you that the Alliance for Arts and Culture has agreed to a partnership arrangement with us on their widely-admired "Arts Hotline". We are certain this is the first of a number of opportunities to work with the Alliance.

2606 Turning to other specifics: The Vancouver radio market.

2607 Vancouver's economy is finally on the rebound. The Vancouver Economic Development Commission is predicting a strong economic resurgence for the city after two lacklustre years. Retail sales are up 3.1 per cent over last year, and expected to do even better next year. The unemployment rate is down from 8 per cent at this time last year to 5.4 per cent. Office space availability is at its lowest level in 20 years. Many major building developments are underway.

2608 Downward blips in Vancouver's resource-dominated economy are not unusual, and this community quickly adjusts to the prevailing economic climate. In fact, in the last 10 years, Vancouver's population has grown by 20.5 per cent, a higher rate of growth than in any other of the 12 largest cities in Canada, and double the rate for the whole country. Whatever the economic status of this province, advertisers here have to serve the needs of over two million people, plus armies of tourists and conventioners who arrive here all year long.

2609 However, even in view of this cautious economic optimism, we have been conservative in our revenue projections. We anticipate revenue in our first year will be $1.8 million, rising to $4.2 million by our fourth year. This is based on a share of hours tuned to Classic FM of 1.9 per cent in our first year, rising t 3.9 per cent by the fourth year -- a much lower market share than the commercial classical stations in Toronto and Montreal.

2610 All of this makes us confident that we will gain a sustainable share of the growing annual revenue of Vancouver's radio stations. That revenue grew from a total $73 million in 1995 to $90 million last year. Growth next year is expected to be 3 per cent, rising to 4 per cent in 2003. By then, the annual radio revenue in this market will be $102 million.

2611 We calculate that even with the introduction of Classic FM, the annual income of the 17 existing stations will grow steadily, from an average of $5.28 million annually in 2001 to $6.62 million in 2007. That represents growth of 25 per cent during that time period.

2612 We will not be a threat to the existing stations. It is our belief that the diversity we would bring to this market will attract many new radio listeners and advertisers, and thus increase the size of the revenue pie. This means we would have much less financial impact on the existing stations than most of the other formats presented at this hearing.

2613 One of the questions I am sure you will ask, and we have decided to deal with it before you ask, and that is, how will we be different from CBC Two?

2614 To repeat our earlier comments, the CRTC has already licensed commercial classic music and arts stations in Toronto and Montréal, and in all major American cities as well.

2615 In every case, these stations are succeeding side-by-side with public radio -- whether it is Britain's BBC, NPR in the U.S., Montréal-based la Chaîne culturelle, or CBC 2 in Toronto.

2616 Classic 94.5 FM will be first and foremost a local station, serving the Vancouver market. CBC 2 is a national service and cannot devote more than a few minutes a day to local billboards, PSAs and arts news. CBC 2 has only one hour a week of Vancouver production.

2617 94.5 will:

2618 - Provide listeners with an unprecedented level of information on what is happening in the arts in Canada's third largest city.

2619 - Tell listeners about local events and performances.

2620 - Have interviews with local and visiting performers, artists, creators and commentators.

2621 - Have arts news stories locally, nationally and internationally.

2622 - Provide significant opportunities for Vancouver artists to be heard.

2623 To determine whether a commercial classical station would succeed in Vancouver, we looked at the history of such stations as KING FM in Seattle, which is less than two hours drive from here, CFMX in Toronto, KDFC in San Francisco, and Radio Classique in Montreal. As the total listening audience for classical music typically is 6 to 8 per cent, we decided to take a case study approach instead of an audience survey and, briefly:

- KING began in 1948 when the population of Greater Seattle was less than 500,000. Today, it is one of the most popular and profitable stations in that market.

- CFMX became a financial success in 1988 when the CRTC allowed it to move into the Toronto market in Cobourg. It now attracts a 3.5 to 5.0 market share.

- KDFC has served San Francisco audiences for more than half a century. It has been one of the top three stations there for the last three years, with a weekly reach of over half a million listeners.

- The extraordinary success of Radio Classique (CJPX) in Montreal gives us particular encouragement. Just over two years after receiving its licence from the CRTC, it is attracting half a million listeners a week and maintains a market share of 6 to 7 per cent.

2624 The musical and arts life of the city of Vancouver is large and diversified. The Vancouver Symphony is the third largest orchestra in the country and enjoys the second highest attendance. There are 40 classical music and jazz organizations in the Lower Mainland.

2625 Combining the experience in other major cities with the local interest in music, it is apparent that Vancouver would welcome a classical commercial station that was taylor-made for this community.

2626 While we have been researching and developing the business case for Classic 94.5 FM, we have been greatly encouraged by the interest and support of so many members of the Vancouver arts and business community. In fact, the usual response has been, "Tell us how we can help you get on air".

2627 We have therefore asked several of our supporters to participate as part of our presentation panel today:

2628 In addition, we would to recognize and thank the many others who wrote individual letters and e-mails in support of our Application. Some of them I believe are here today: Kathleen Speakman, program director of the Vancouver Arts Stabilization Team, which has invested millions of dollars in Vancouver's major arts organizations. Michael Noon, director of the Chan Centre for the Performing Arts at UBC. Michael Aze, director of production of the Vancouver Symphony. The Hon. Royce Frith, Q.C., former Senator and High Commissioner to London, and member of the board of the National Arts Centre. Jeff Alexander, president and general manager of the Vancouver Symphony. We also received letters from almost all members of the VSO board, two staff directors and a number of the musicians.

2629 Bruce Calder, vice-president of Telus. Jane Coop, international concert pianist and UBC music professor. Christopher Gaze, artistic director of Bard on the Beach, our local Shakespearean Festival. Leila Getz, artistic director of the Vancouver Recital Society. George Laverock, artistic director of Festival Vancouver. Abe Sacks, president of Sacks Industries. Robert Silverman, international concert pianist and UBC music professor. Ron Stern, president of Alberta Newsprint. Leslie Uyeda, composer and opera conductor. Gillian Wilder, manager of the Vancouver Bach Choir. James Wright, general director of the Vancouver Opera.

2630 We also received letters from staff managers and board members of the Vancouver Opera. Jose Verstappen, executive director of Early Music in Vancouver.

2631 I would like now to ask the other members of our panel, Bramwell Tovey, David Simpson, Eli Gershkovitch and Lori Baxter to spend a few minutes telling you why they are here to help us present our case today.

2632 Bramwell Tovey is the Music Director and Conductor of the Vancouver Symphony Orchestra. He has directed the New York and London Philharmonic orchestras. He has directed the D'Oly Carte Gilbert and Sullivan Opera Company.

2633 MR. TOVEY: As you heard, my name is Bramwell Tovey. I am the Music Director of the Vancouver Symphony Orchestra.

2634 We present a wide variety of music to the people of Vancouver, from classical to baroque to romantic, to pop, to jazz, to swing, to kids' entertainers. We do not use the term "soft" or "smooth" jazz, because such terms are musically meaningless and our ticket buyers would be extremely confused by them.

2635 Although I am a classically trained conductor and pianist, I also perform and record as a jazz pianist. So I come to you from two different musical worlds today.

2636 Last weekend was a typical weekend in Vancouver's busy cultural life. On Saturday, Vancouver Opera had a house of 3,000 for the opening night of Stravinsky's opera "The Rake's Progress". Just two blocks away, the Vancouver Symphony were playing a program of Schubert, Beethoven and Haydn to over 2,000 in the Orpheum Theatre, as we did again on Sunday, and again on Monday. Tomorrow, the VSO begins an intensive three days, performing six concerts for elementary school children from around the Greater Vancouver Area. We will have played to over 8,000 children by the time everyone in this room turns off their work station for the weekend this Friday.

2637 All this activity and energy is because of one thing: The power of music. By that, of course, I mean classical music in particular.

2638 The very term "classical music" used to denote the world of Mozart and Beethoven. Now, the term has become generic and to the lay person it embraces a vast diversity of live performance acoustically played, all orchestral music from across the centuries, all opera, core music, notated music of the unamplified solo voice with accompaniment, ensemble music including string quartets, brass ensembles, and wood wing quintets, and all the other items found in the rich smorgasbord of live music making, including real improvised jazz.

2639 The power of this music is a language between people. It is a form of communication that transcends everyday speech, that enhances the quality of people's lives and provides challenge, solace, inspiration, illumination, and stimulation. Classical music is a sharing of the human experience. It is an articulation of the human condition. It can be administered in short or long doses. For example, a simple leader through to a Wagnerian music drama.

2640 It is not elitist. It is crowned, however, with excellence, and the two must not and should not be confused.

2641 Classical 94.5 FM would be available to everyone in our community. As CBC Radio Two with its Toronto centric outlook has now given much of its prime air time weekends and in the evenings to non-classical programming, there is a desperate need in our community for a quality station of this kind. In fact, at the moment a community based classical repertoire program, such as we are talking about, is only available for one hour a week on CBC.

2642 To support this application is to realize that there is a quality of life here in Vancouver, and a hugely popular quality of life, that is unrepresented on any TV or radio station in our community. There are literally thousands of choirs in the Lower Mainland, some of whom have recorded high quality CDs which receive little or no attention on CBC.

2643 Toronto boasts its own classical radio stations which have become icons in the community and brought many people to the life enhancing qualities of classical music.

2644 Classical FM will promote some of the finest creations of the human mind, to an audience eager to hear and in need of a stimulation that has been crowded out by the boring lyrics of Eminem or the alleged smooth or soft jazz of elevator music that is never experienced life because of its soporific qualities and the fact that it is marketable only as oral wallpaper.

2645 There is an aesthetic correlation between the world of contemporary Canadian classical music culture and the Group of 7. I would suggest to you that there will be a correlation between Smooth Jazz and the furry dice on the windshield if you were to award this particular wave length to a non-classical network.

2646 I urge you to support Classical FM.

2647 MS ROBERTSON: Jesse Read, the Director of the Faculty of Music, was unable to join us this afternoon, but he has asked David Simpson, who is an audio director of the Faculty of Music, to speak on his behalf.

2648 MR. SIMPSON: I am going to read a note from Jesse:

2649 "Madam Chair and Commissioners, I am delighted to give my unreserved support to the proposal of Classic 94.5 FM. I have lived in San Francisco and Los Angeles; the model for this kind of commercial classical radio station is already there, healthy and popular. It serves the public, the community, and provides a solid alternative for a wide audience.

2650 Vancouver, at this time, in its maturity, cultural evolution and size, is ready if not overdue for a station of this kind. The proposed format of this station seems to focus on the very needs which have been neglected or abandoned in Vancouver, and I welcome them being addressed in such a comprehensive and clear way.

2651 There is the recognition that there is a wealth of talent and a amazing slate of performers which can be shared in broadcast, and that there is an audience hungry for a serious programming of complete works, programs dedicated to composers's styles, eras or artists of the past and present. There is also a potential audience which needs to be given substantial and challenging programming.

2652 I am particularly excited that there might be some unique and productive partnerships formed from such a station which would make possible the exposure of local professional talent as well as the creation of opportunities for the young emerging top level talent from training institutions such as ours.

2653 There is an additional benefit in a linking partnership providing opportunities for young talented individuals to train and have hands-on experience in the associated arts represented -- that is, recording, editing, hosting, planning, and even in the practical and necessary aspects of funding and maintaining such an enterprise, that is the commercial end.

2654 I feel that this format fits not only our own obvious goals and ends, but relates to the university stated aims of reaching into the community, joining in projects which benefit students, creates real practical opportunities for them, and generally strengthens the often talked about potential links from the academic and artistic community to the general public.

2655 I cannot overstate the importance of this proposal, and I have every reason to believe that it will add an immense and important piece to a yet unformed cultural scene in Vancouver. Now is the time to look at culture, substance and quality, and I believe the CRTC must exercise their mandate with these aspects uppermost.

2656 Thank you for your consideration.

Jesse Read

Director of the School of Music

University of British Columbia."

2657 I would also like to add that there is deep appreciation for this proposal throughout the School of Music.

2658 MS VOGEL: Excuse me. We are at 20 minutes. Would you be able to move to your conclusion, please.

2659 NEW SPEAKER: Could I ask just one thing? We got a little bit more time yesterday for a concert. It did go to 23 yesterday.

2660 THE CHAIRPERSON: What we try to do here is be fair to all applicants. What we do is let most if not every applicant know in 20 minutes, and I think it is just a signal to wrap up, if it is going to be one minute, or two minutes --

2661 MS ROBERTSON: That is probably we have.

2662 THE CHAIRPERSON: And there certainly should be ample opportunity during the questions for anything else you want to add, to make sure that you have a chance to do that.

2663 MS ROBERTSON: We have two people who we have asked to present, and they would each be about a minute and a half. Is that acceptable?

2664 THE CHAIRPERSON: That's fine.

2665 MS ROBERTSON: Eli Gershkovitch, Principal of Steamworks Brewing Company.

2666 MR. GERSHKOVITCH: Good afternoon, ladies and gentlemen.

2667 I am Eli Gershkovitch, and I am the founder of Steamworks Brewing Company. I am its president.

2668 I am here today to speak from the perspective of a sponsor. While my remarks are anecdotal, I would submit they are also representative of other high end advertisers.

2669 Steamworks is a combination of micro brewery and pub restaurant. It produces and sells premium beers to a market that is, on average, better educated and is more refined in its taste.

2670 Steamworks also has a long association with the arts. It has sponsored numerous book launches --

2671 We have also frequently hosted Weekend Jazz, and have annually partaken in the DuMaurier Jazz Festival. And we have helped sponsor Garrison Keeler -- when the production was broadcast live from Vancouver.

2672 As a relatively small company, we have to be very targeted with our promotional dollars. At the same time, we don't want to just buy advertising time in the conventional sense. We would like to be a sponsor in the classic sense of the word, where our goods and services are identified directly with the radio production they help underwrite.

2673 If you apply these criteria to the radio market in Vancouver, none of the current commercial stations suit our needs nor, I would add, would any of the other applications which you have heard from today. The stations either offer an audience that is too broad and over inclusive, to the extent that to advertise with them is not cost effective. We simply cannot afford to use a shotgun approach to advertising.

2674 Other stations, though they might be more affordable, are unable to offer the qualified listeners in sufficient numbers to make advertising worthwhile.

2675 The Classic 94.5 application would, in my opinion, deliver a qualified audience, a targeted audience, on a cost effective basis. I see a niche audience suited to high end products and services, such as the type that we offer, and other premium retailers offer.

2676 Secondly, the type of programming being proposed by Classic 94.5 is the type that we can get more actively involved in sponsoring on a long term basis, instead of in just 30 second increments.

2677 We want to take our involvement in the community to the next level, and this Application would allow us to be a sponsor, not just an advertiser.

2678 I feel that the programming format that is being proposed is the one that will appeal to many of our customers. It is simply not something that is currently being offered on a commercial basis in Vancouver.

2679 In summary, if this Application is approved, we, and I suspect many other businesses serving the premium end of the market, would not just support it with advertising dollars but would also support the station in its mandate, to make Vancouver a more livable and a more lively place to live and work.

2680 Thank you.

2681 THE CHAIRPERSON: We are over 25 minutes. I think there will be ample opportunity during questions for anything else you want to add.

2682 MS ROBERTSON: Then we thank you for the opportunity to present our Application, and we welcome your questions.

2683 THE CHAIRPERSON: Thank you very much.

2684 Commissioner Demers.

2685 COMMISSIONER DEMERS: Thank you, Madam Chairperson.

2686 Good afternoon, Madam Robertson, and members of the panel.

2687 With my down-to-earth questions, I think, Madam Robertson, you have an enthusiastic panel that will give more panache to the answers than to the questions!

2688 I will start with questions that concerns audience, advertising marketing, and you may want to field any of these questions to your colleagues.

2689 My first question concerns the audience. In your Application, you have underlined the success of the Toronto station and the Montreal station, and today you have added more to that. Let's say that I would pose my first question in relation to CFMX in Toronto, and it concerns the audience.

2690 This station, three-quarters of the audience, of the listeners of this station are people 54 or more. Let's relate that to your business plan.

2691 Has your business plan taken into account the likelihood that you will have to sell advertisers on a more focused older listener base?

2692 MS ROBERTSON: Our target audience is 35-plus, and we certainly feel it will be at the higher end of that.

2693 David, perhaps you would like to comment on that.

2694 MR. OAKES: The CFMX in Toronto are, I believe, the no. 3 station in 50-plus. That is their major demo. They don't sell so much demo as they do the stature of their audience, which is considered to be upscale in terms of income, education, et cetera. That is pretty well their major impetus with the advertisers. The advertisers usually don't come to them and -- I'll give you an example of a Mercedez-Benz. They would not come to CFMS saying, "You have a heavy concentration of people 50-plus; we are going to buy them". They would come to them and say, "We want the upscale audience".

2695 So they are less concerned with the age, and much more concerned with the income and social status. I think social status is where you live, what type of job you have, that type of thing. They are more concerned with that than they are demos.

2696 COMMISSIONER DEMERS: So in preparing your projections of advertising revenue, for example, in what way are you different than they are in their approach?

2697 MR. OAKES: Quite similar. Very similar. In fact, I taken a lot of the audience figures from CFMX and Radio Classique in Montreal to a less extent, because it is split English and French. In Montreal, you have that unusual dichotomy of if you are a French station with English listeners, the English advertisers won't advertise. If they do advertise, they will never pay for English listeners. Same thing with an English station in Montreal that has French listeners. Where they are perfectly bilingual and can understand English, the advertisers won't have --

2698 In many ways, we have looked at the Toronto model rather than the Montreal model. I think the Montreal model is fine to look at overall share of hours tune, but I don't believe they do as well in revenue as CFMX in Toronto. So the Toronto model is, I think for us and for Vancouver, a much more realistic model for this area.

2699 COMMISSIONER DEMERS: Thank you. I will get back to Vancouver.

2700 Spring 2000 audience data for the Vancouver radio market indicate that CBC classical music FM service has made significant gains in audience share, rising from 7th to 5th in the market, as an overall share of listening.

2701 In light of the fact that you chose not to conduct a demand study that might have helped determine the extent to which there is a demand for classical music beyond that provided by CBC, would you expect CBU FM's latest success to impact negatively upon your audience projections? It is a long question.

2702 MR. OAKES: I believe the CBC numbers are basically a tip of the iceberg with classical music. I think what you have heard from the panel is that this is quite a vibrant market for classical music. There are functions, performances, et cetera, and listening to what the Conductor of the Vancouver Symphony Orchestra said about the attendance, that is staggering. So we believe that there is quite a large classical market here.

2703 I believe that since the CBC National Service only allows for one hour a week broadcasting from Vancouver, that there is a lot of misplaced demand here. Also, we are talking about classical music listeners, and the National Service has strayed quite a bit, in fact. It has become a very diverse service, and not necessarily classical music.

2704 So I really believe that those CBC numbers are the tip of the iceberg, and there is quite a substantial group underneath that. I think we have been very conservative in our audience estimates of this.

2705 COMMISSIONER DEMERS: Thank you.

2706 If we extend your projection of audience share are based, at least in the written application, if your projection of audience share were based primarily on the experience of the Toronto classical music, that is the understanding I have, and your audience projection would see you equalling CFMX Toronto audience shares levels of approximately 4 and 5 -- I believe Madam Robertson referred to that -- by year 4, and surpassing that level in subsequent years. And that is a level that CFMX took many years to reach.

2707 The question is, do you think your audience projection, and thus the advertising revenue projections, which are based upon an advertising dollar for share point methodology, might be perhaps somewhat optimistic?

2708 MR. OAKES: I don't think so. In fact, I think there is a good reason why CFMX did not do so well for so many years. They did not put any promotional dollars into the market. They did not do a lot of partnerships. It has taken them a while to get rolling.

2709 I have interviewed the sales people at length, and they know there is an excellent classical music audience in Toronto, but they felt frustrated from a sales standpoint. Their numbers have not risen so much, and they identified it as, they just have not put the promotional dollars in the market to do it. Now they are, and it is somewhat a chicken-and-egg situation with them, because they felt that initially when they got the operation up and running in Toronto, they really did not have the dollars to do it. Now that they have become successful, they have the marketing dollars to add to that.

2710 I think it would be a little different here. I think this station for sure would be more proactive. There would be way more partnership arrangements, and reaching out to the community, to the classical music infrastructure. So I think we would be ahead of them, and we certainly have learned very much by the mistakes they have made at CFMX.

2711 COMMISSIONER DEMERS: Thank you.

2712 Now I would turn to the Canadian Talent Development. I will start with my written questions, that may be completed by what Madam Robertson said.

2713 While you have not provided any specific budget breakdown for the proposed CTD initiative to show, for example, the Vancouver Symphony Orchestra and the School of Music Students from UBC, without such specifics, the Commission cannot be assured that all the money that is allocated will qualify as direct costs to CTD.

2714 Could you draw, from your experience, an outline of how you might allocate the $50,000 minimum annual commitment, as well as provide us with a general budget breakdown.

2715 MS ROBERTSON: Robert Sunter will answer this question.

2716 MR. SUNTER: The $50,000 was spent primarily hiring musicians to put on air.

2717 COMMISSIONER DEMERS: If I relate that $50,000 to the remarks by Madam Robertson, there is no change in your application in that sense?

2718 MR. SUNTER: Not in terms of the $50,000. What we have done is provide information on all the other areas which we feel may not fall within the current designation of talent development of the CRTC. We think we are in a unique situation from the Pop music stations.

2719 What we see this station being is an integral part of the community. We see a kind of symbiosis between the performing organizations and the schools of music and the station. We will be working very closely together. We will be training technicians in our studios' remote pickups. We will be doing training of hosts, we will be training musicians to be hosts. We will also be providing opportunities through the partnerships and some of the other entrepreneurial sort of things. We will get into that with advertisers to even multiply that by hiring artists for those events as well.

2720 Of course one thing we can do without our airtime is provide an enormous amount of promotion for arts events in the city. All of these things can be costed. We actually have costings for all of those.

2721 The amount we are talking about is three to four minutes an hour of promotion, which would be stand-alone promos, and also threaded through the programming. We will say, here is Prokofy's Classical Symphony, which you will be able to hear at the Vancouver Symphony's concert next Saturday and Monday. That kind of thing will go on right through the schedule, so there will be a real tie with the community.

2722 COMMISSIONER DEMERS: Thank you.

2723 MS ROBERTSON: To go back to your question, are you asking about direct talent development, which we have indicated at the top of our pyramid, the $50,000 only, or are you asking about all of the indirect talent development that I also referred to?

2724 COMMISSIONER DEMERS: The aim of my question was really to find out if what we were talking about, which was in the Application, was a minimum of $50,000, and that what you have added or what you have commented and outlined in your presentation was something, as you said in the conclusion, which is indirect talent development.

2725 I wanted to make sure that I would understand whether or not there was a change in your --

2726 MR. SUNTER: The $50,000 of course would grow in proportion with the revenue at the station. We would commit to that.

2727 COMMISSIONER DEMERS: But your commitment is to $50,000.

2728 MR. SUNTER: In the first year.

2729 COMMISSIONER DEMERS: Thank you.

2730 In programming, let's say that I start by acknowledging the experience of Mr. Blackwood and Mr. Sunter as key components of the station's operation.

2731 We note from the Application, however, that there would appear to be only two programming on-air hosts and a staff announcer projected for full-time paid staff positions.

2732 Could you elaborate on how you will provide a high standard professional 24-hour daily classical music service with few people?

2733 MR. SUNTER: We will be hiring a lot of part-time hosts, frequently prominent members of the musical community. That is part of our responsibility, training those people to be effective hosts.

2734 MR. BLACKWOOD: Commissioner, I kind of feel like a munchkin following the giants after the last few days, in terms of our financial resources.

2735 We recognize the fact that in the first year, we are going to be doing some things which are going to be inexpensive by comparison with the normal standard of those large stations that have huge resources to plough in in your first year, but it is in fact not necessarily -- it is the same thing in talent development, it is not necessarily to say the number of people who define the quality.

2736 What we have done is to do what a lot of stations have not done, that is to say, we have given you an indication that we will be putting considerable resources in terms of salaries into attracting first class broadcasters for those high audience periods, which is morning, afternoon and drive-home, that are the essence of attracting revenue when you first get started. That is very important.

2737 We admit that in some of the off hours, that is, the evenings and some of the week-end, that in fact we will be voice tracking, we will have to, and that we will be repeating programs that may already have been heard in other time periods in Year 1.

2738 What we were careful to do is not to over-promise. We did not want to over-promise in Talent Development in terms of direct dollars, and we did not want to over-promise in terms of what we would deliver in programming in the first year in terms of dollars, because to do that is unrealistic, and I think you would be taking an entirely different point of view, as you should, if we were to claim how much we would be doing on the basis of our first year revenue.

2739 However, I would also point out that one of the things that we have, both in terms of Talent Development, which does not really show up, and part of the answer to your question, and the reason we put the schedule up, there is a large block there that is called Partnership Programming.

2740 In a lot of places, there are a lot of people in this city -- a lot of people in this city -- who are experts and very entertaining broadcasters in music, and in the whole range of music, but particularly in the classical field and in the jazz field. Part of that partnership programming is attracting those people to do programs for which we will not be paying high salaries. In fact, we may not be paying salaries at all. We may in fact be inviting them to participate in particular programming which they want to present, and which their organizations will support, or which their personal tastes will define.

2741 We have one behind us. For years I listened in delight to Bramwell Tovey, out of Manitoba. Let us assume, for example, that we could form a partnership with the Vancouver Symphony Orchestra, for a weekly -- or even daily, who knows -- program that was featuring not only this conductor, but other people who are connected with the orchestra and who are not only entertaining on radio, but have a high and I think unchallenged knowledge of music.

2742 You don't need a lot of high priced on-air people to get high quality programming, providing that we follow through on what we are promising, which is that we will be providing that daily schedule core to begin with, which will be high -- very high quality, under the definition of on-air terms, host and excellent music, largely CD.

2743 The second part of it, though, the partnerships and the sponsorship programs, present us with an opportunity to do some splendid on-air things for not very much money, and do some really good talent development at the same time.

2744 I know that is a long answer, but the difficulty is we have no Canadian or Vancouver exact model that we can point to and say, that's the way we have to do it. We are going to be sorting this out as we go along.

2745 We have had so many proposals in the last six months, from so many people, as to what they would like to do, which doesn't cost us very much, except in terms of seed money, which is where that $50,000 comes in.

2746 I think there are alternatives to just buying high priced on-air talent, and we have to find some -- I think we know some of them.

2747 COMMISSIONER DEMERS: Thank you.

2748 Could you follow on that point and describe in what way you would produce, or broadcast, for example, the coverage of news and weather, sports, reports, in what way this will be in operation, in what way will you put that on.

2749 MR. BLACKWOOD: We are discussing our little bulletins there.

2750 I think it is very important to say that we are not anticipating a major expenditure in news, sports, weather, or traffic. What we will provide is what we used to call service and survival information. If I may use an anecdote.

2751 The former chairman of the CRTC, Harry Boyle, once said that you could always tell, when he was growing up in Saskatchewan in the middle of winter, you could always tell a CBC listener, because when you went past the school, their children would be out hovering in the freezing cold, because no one had told them the schools were closed. It took the CBC a very long time to overcome that; perhaps they have a little too much information now.

2752 As Harry called it, that was the days when in fact it was not accepted that every station had to tell you at least what you needed to know to get going.

2753 We do not propose to give people news. That is not the purpose of this station. I think somebody said yesterday, and they were right, we have CKNW here, we have Rogers all news, we have CBC 1. So, what that really means is that we are going to tell you what you need to know in order to get going in the morning, and if the Lions Gate bridge is closed, you better know, but we are not going to tell you that on the Westminster Highway, out in Surrey, that in fact you can't get past block this, to this, to this. That is not part of what we are doing.

2754 However, we are committing to a very significant amount of information about the arts in the city. That is our news. Our news is going to be ongoing information about what is happening in the whole arts community. Perhaps it might be useful, since she did not get a chance, if Lori Baxter talked a little bit about what the Alliance does now, because we already have a partnership agreement with the Alliance, whereby we are going to help, in the first year, to upgrade this service, and she can talk a bit about that.

2755 Then, after that, we are going to share with the Alliance what is already a good hotline service, but we are going to go beyond that and give them daily, and ensure that daily our audience is informed of what they need to know about.

2756 I started with the Harry Boyle story only because that is the way we are with the arts now. It is very difficult in this city, and if you look at the amount of information that flows every day in Toronto and Montreal compared with what we have here, we don't have a very active press. We don't have a lot of support for informing people here about what is this incredible panorama of arts and music. We don't have that from a print press. We don't have it from any other radio stations.

2757 We used to get a lot more of it from CBC too, but the fact is that the budget cuts have largely dried it all up.

2758 Part of your answer is that our most important information service is going to be arts information.

2759 MS BAXTER: If I may take a moment.

2760 That is one of the reasons why the Alliance for Arts and Culture is extremely excited about this station, not just from the broadcast bullets about events information and the connecting with their programming and local arts and cultural events, although that is quite exciting, but we are also very interested in the arts and culture sector and the news about the arts and culture sector being given more than an entertainment blip on this station, that we will be news items, that we will be able to have exposure and discussion on arts' cultural policy issues, on arts as a business, on arts and culture as educator, on public art installations, that these things will be talked about and will find a home on the classic station.

2761 That is one of the areas that we will be partnering in terms of trying to make sure that that dialogue and that discussion and that information is provided to the audience.

2762 COMMISSIONER DEMERS: And you already have an undertaking -- you have an agreement between --

2763 MR. BLACKWOOD: Yes.

2764 COMMISSIONER DEMERS: Thank you.

2765 It may be opportune at this time to ask you to describe what you said you would be. You said that Classic 94.5 would be a commercial community classic music station. Maybe you could expand on that, and relate it to your programming.

2766 MR. SUNTER: We have already touched on some of the aspects of that.

2767 We will have very close relationships with all of the major and a lot of the minor arts organizations in the city. We will, as Robert mentioned, have contracts with organizations like the Vancouver Symphony, where we would provide a weekly opportunity for them to do a program, and we do maintain control over the quality of these programs, in which Bramwell Tovey could do a preview of the concerts that are coming up in the next couple of weeks, play extracts from CDs on what works were going to be there.

2768 We could do the same thing for the opera, for the Music in the Morning Society, for the Vancouver Recital Society. The list goes on and on and on. Those people have already been in touch with us, saying, if you get the licence, we have to talk about this, and this, and this.

2769 There is an incredible energy out there in that arts community, and they see us as the lighting rod for it. And I think we can pull fulfil that obligation.

2770 MR. BLACKWOOD: Just to follow along with that, I think it is very important that we reiterate in terms of what we do on a day-by-day basis, going back to what I said earlier.

2771 From morning to the end of the drive home period, that it is going to be a service that is going to feature very popular, but excellent, classical music, with the kind of information that we have indicated. The evenings, however, and large portions of the weekend, we are going to do what Robert is talking about.

2772 I would like to raise one other thing that Eli alluded to. He raised the question of sponsored programming, and there isn't very much left in radio that is called sponsored programming that is in commercial radio, although we must remember that in the United States, the Texaco Opera is on commercial stations as opposed to public stations, as it is here. In fact, the CRTC is the agency that allowed the CBC to break its own non-commercial rule in order to maintain the Texaco broadcast.

2773 I think what Eli is alluding to, and I have heard many many approaches, we all have, about the potential, if we were to get this licence, from others, is the idea of the sponsored program. Let's give you an example.

2774 If there is live music being performed at Steamworks, and there is, Eli has given you an example of the book launches he sponsored, of the Garrison Keeler Show, which actually I produced here as the Canadian producer of it, in each case it was Eli who phoned and said, "What can I do to help? What I can do in order to help make this event successful?", and he invested funds, real funds, in making those things happen.

2775 Now what I think he is proposing, and he is not alone, is that there are other people there who are saying, it actually makes more sense for us to take an hour or an hour and a half a week, or perhaps on a week night, if it is live event, and actually have it sponsored by us. We present it. This is more effective than putting spot commercials through --

2776 With the kind of people we have in this city who are burning to do some of this, we are not talking about a great deal of expense on the part of the station, but the station must provide the impetus for people to take these kinds of things on. In the case of those kinds of programs, those sponsored shows, there is a real opportunity that exists nowhere else, and which certainly can't exist in any format that demands that you set in advance the number of commercial breaks per hour.

2777 MR. OAKES: If I could add to that, from interviewing the people at CFMX in Toronto. They were wonderful to share information.

2778 Close to 50 per cent of their revenues comes from sponsorships rather than traditional advertising.

2779 COMMISSIONER DEMERS: Yes?

2780 MR. TOVEY: Commissioner, thank you.

2781 You mentioned just now sportscasts, when you were asking a question about news and information. If I might just point out that the art of classical music, whether or not it is orchestral, romantic, baroque, whatever era, whatever kind of format it is, that such music is stimulating to the human mind. Sports information talks about the competitive world of professional sports, where people compete at a high level of physical excellence. Here, we are dealing with something that is a high level of mental excellence, when achieved as a listener or as a performer. I feel this is an essential philosophical difference that needs to be pointed out, and that it is terribly important in this application.

2782 The kind of information that the station is talking about presenting to the people of Vancouver on this particular wavelength is actually not being pursued by CBC at the moment. We call it a musical knowledge. We call it a kind of musical appreciation, but an informality of approach that is terribly important for the continuation of classical music audiences, be they orchestral, operatic, chorale, even for children's concerts, whatever kind of format we are talking about.

2783 Live acoustical performance needs to have that extra element of understanding, the kind of understanding that the station is talking about presenting to the people of Vancouver, I feel, cannot be got even on CBC most days of the week. And it is a very inspiring concept.

2784 COMMISSIONER DEMERS: Thank you.

2785 I have a question on Canadian content. I will try not to read all that I have here.

2786 In essence, Classical 94.5 has not proposed any level that exceeds the minimum regulatory requirement of 10 per cent. You have not indicated any proposed increase. It is in relation to the Commission's commercial radio clause. Is that enough, or should I --

2787 MR. SILVERMAN: I think I understand exactly the question.

2788 The problem used to be, with classical music, and this certainly was true when I was Head of Music for the CBC, that there was not enough recorded material to really generate the kind of Canadian content that we should have been generating.

2789 My response to that was to start the CBC FM 5000 series, which is now a huge collection of CDs. This is stimulating recording projects all over the country, smaller ones. So that now there is quite a body of Canadian recordings.

2790 In addition to that, we have gone through 20 years of extraordinary development of Canadian soloists and Canadian conductors, and smaller ensembles. So we don't think we have --

2791 Our first choice, if we are going to play a Beethoven symphony, the first thing we will look for is which Canadian orchestra has recorded this, and that would be our record of choice. Same thing with --

2792 We will be so Canadian, our listeners may get sick of it after a while. We are not like the private stations. We are not driven by big names. There are only 20 big names in classical music in the world that people can be guarantee to turn out for.

2793 We heard a performance last night of Jane Coop playing the Beethoven Fourth Piano Overture. I don't think there is anybody in the world who could play it better. She is a Canadian. She is living right here in Vancouver. We have records of her already. Actually, it is somebody who will be on our program often.

2794 We are passionate about this, as a matter of fact. This is not something that we will have to be regulated for. We are Canadian -- we are Vancouver, and we are going to play Canadian artists and Canadian interpreters, and Canadian composers.

2795 So you can set any figure you like. If it is humanly achievable, we will achieve it.

2796 MR. BLACKWOOD: If I could just add to what Robert said.

2797 Here is an example of where I think we can do something. Let's take Jane Coop. Everything he says about Jane Coop is correct -- would it not be?, and I love her -- but it is very difficult in Vancouver to find out who she is, the fact that she is performing, where she has been. I have been sitting here for all these hours listening to the fact that we don't know our jazz players. Well, in many cases they are right, but here we have a world class pianist.

2798 If we were to get this licence, here is what would happen.

2799 First, we would be promoting it, not with paid promotion, not paid - that is part of our service, to tell people, on our arts billboards, that Jane Coop is coming next week, that she will be at the Orpheum, that she will be playing with whomever she is playing with, or soloist. Then, we would start playing Jane Coop. It would be part of the regular programs.

2800 We are not talking about a rotation that is set a month and a half, or two months, or six months ahead of time, and which you simply rotate through.

2801 You can, in fact, program yourselves with a rotation that is not based on numbers of plays, but based on the context within the schedule. So our individual host, and we may only have three fairly high paid ones to begin with, those hosts can then talk about Jane Coop. They can play her CDs, and they can talk about the fact that she is coming.

2802 Then, there is the perfect opportunity in the weekend schedule to talk to Jane Coop, to actually ask her where she has been, how she feels about things, but she is local. If you listen to Radio Two, on the very few opportunities a year you will ever get a chance to hear Jane Coop even talk for 10 minutes, she talks about Canada. That is the mandate of Radio Two, and I don't think any of us object to that. But she doesn't talk very much about where she lives, what she does here, how she rehearses here, where she goes and what she thinks about when she is abroad or she is elsewhere in North America, talking about Vancouver, and her commitment to stay here, and the commitment of her husband, George, who also runs our Summer Festival. He is exactly the same.

2803 The opportunity to hear these people is exceedingly rare in this market and yet, unlike jazz -- and I am a huge supporter personally of jazz, but unlike jazz, we are talking about world class talents who already are established. We don't have to put Talent Development Programs in place to get them there, and we have virtually no way in this city of ever finding out what any of them do.

2804 MR. BLACKWOOD: I would simply add to that, Mr. Commissioner, that I don't think you should read in any way that the proposal to head in the direction of Canadian programming is any kind of cultural nationalism. It is simply a rejection of a cultural imperialism that might come down to us through the world of New York agents and London agents, such as we sometimes see in some of the American independent radio stations.

2805 COMMISSIONER DEMERS: Thank you.

2806 Now I will turn to the frequencies. I will add with that, and my colleagues may have questions for you, and I am sure I have seen many of you on the room since Monday.

2807 As you know, other applicants wish to use that frequency of 94.5 in Vancouver. One of these applicants is CBC, which proposes to use it, as we know, for la Chaîne culturelle.

2808 You have not proposed any alternative frequencies that might be suitable for your application, so my first question is: Have you, or your engineering consultants, conducted studies to find alternative FM frequencies that could possibly be used in Vancouver for your application?

2809 MR. SUNTER: I was actually approached informally by a CBC executive a few months ago, who suggested it might be more profitable for us to look for an alternative frequency.

2810 I know the engineering costs that go into determining an acceptable drop in frequency, and I said: For heaven sake, you got the money -- you do it. If you want to put the Chaîne culturelle on here, you can find a frequency. We don't have the money to do that.

2811 COMMISSIONER DEMERS: Thank you. It's your show -- it's your turn.

2812 You indicated, in your letter dated 27 July, that CBC French mono transmitters, CBUF FM, could be moved to one of the available AM frequencies in Vancouver, so that la chaîne culturelle could use its FM frequency, 97.7. Could you elaborate on the AM frequencies when you refer to that?

2813 MR. SUNTER: Actually, since we sent that letter, I have done further investigation and I find the real impediment to moving the French service to AM is that the corporation would be forced to buy a huge tract of land, which is enormously expensive in this part of the country, to put up an AM transmitter and tower. That is the impediment.

2814 I don't think it is possible for them to think of that. I think a drop in frequency is much more logical.

2815 MR. BLACKWOOD: Could I just add that since we sent you that letter, I heard in detail on Monday morning la Chaîne's position with respect to the comparison between Radio One and Radio Two in English, and the main network, and la Chaîne culturelle in French, and that there was philosophical difference between Radio One and the general service of the French service. That, we did not take into account when we wrote our position.

2816 The only thing I would add, having listened to it for a very long time in this city, is that certainly during the high audience daytime programming available, they are very similar, in the sense that they do have a morning program that is very similar to the English one -- they have an afternoon program. They are local, and they are informational.

2817 I can understand why they want to make sure that they have the widest possible distribution for that information service, because that is where their local presence in Vancouver goes. In fact, when we wrote the letter it was our impression that they would have a wider distribution for that on an AM signal that went some distance than an FM signal, which was more restrained. So, we might revise that.

2818 COMMISSIONER DEMERS: Thank you. We get to the meat here.

2819 Could you elaborate, and that is in your opinion, why 94.5 should be granted to you rather than the CBC or to any other applicant at this hearing.

2820 MR. SUNTER: We have already incorporated ourselves as 94.5 FM!

--- Laughter / Rires

2821 COMMISSIONER DEMERS: And reason number 2?

2822 MR. SUNTER: If we were offered an alternative frequency then, like all the others, we would say, yes, sir.

2823 It would be the preferred frequency.

2824 MR. BLACKWOOD: It is very difficult when asked that question, because it implies that we don't want anyone else to get a frequency.

2825 The difficulty we have had, and I think the Chair mentioned this yesterday several times, is that there is a question as to whether this market is underserved in terms of the size of the market versus the number of stations that are available.

2826 Given that, I think it is also imperative to say that there is an argument to be made for a frequency for a station of the kind that we are proposing, given the very strong and clearly identifiable cultural life of this place, which has very little outward reflection in any media -- television --

2827 If we were in Toronto, if you watch Bravo! constantly, the number of items, the number of interviews, the number of clips, the number of uses of that little studio -- an excellent, wonderful little studio they built -- it is there for you all the time. Try finding Vancouver on Bravo!, except for little snippets here and there. And I am not saying that that is not true of other places in Canada, but we are the second largest English Canadian centre, and we have no way of expressing that in any significant way to our own people, to let our own people know what is happening here, in a music industry that is thriving, and which is very large in terms of total audiences, and which will, and I think that is one of the answers to your CBC 2 question, which will try to find what it can in order to know what it is about here.

2828 But, it is also important to say that given the limitations, the arts and the music we are talking about, and that includes jazz, are also faced with a funding problem, which is going to become more acute. We are seeing the diminution of public funding on a massive scale. We could take any number of institutions and say what was their public funding 10 years ago and what is it now -- it is a fraction, a small fraction.

2829 What that implies is that there is a necessity for all these institutions to replace that funding, and that funding has to come from the private sector, and we are proposing to be a private commercial station. The opportunities for partnership, as we watch the public diminution, right across the board, in all kinds of areas, I think is significant.

2830 We cannot promise in the first year, we cannot possibly promise what the giants are promising. Some of the things I have heard -- I mean, I love it, but it is very limited, what they have promised to support, and it is in one area. What we are trying to do is say that the entire arts deserve that kind of support. But how do we get a loyal audience that really listens to you all day and whom you can entertain? It is still the fact that regardless of where we go in North America, and now even in Britain with Classic FM, that it is the popular classical music format, offering excellence, that still can attract the kind of audience whom we are trying to integrate into the whole arts and entertainment community of Vancouver, where they have nowhere to go now. Try it.

2831 I know that one member of the panel lives here, but it can be a shock to you, if you come from Montreal or Toronto, or even Winnipeg, to experience just how little opportunity there is for all that expression to be found on our airwaves or in our print press. My plea.

2832 Now, that does not attack anybody else, what it says.

2833 MR. SUNTER: If I could just add to that.

2834 One of the things that we have noticed when we have done intensive listening to Classic FM, in England, for example, is the demographic there is not the demographic we have been talking about here. It is not over 45. They have an incredible number of listeners on the air who are clearly very young, and many of them are mothers with children, who find that they are basically locked at home. We can also provide a service to those people as well, because they find that a classical station is enormously comforting to them. It is something that gives them a better frame of mind that constant Pop music.

2835 MR. BLACKWOOD And we have a very low average age of the four people behind us, all of whom are in support of us.

2836 COMMISSIONER DEMERS: A final, very short, question.

2837 Would you be willing to use an AM frequency?

2838 MR. SUNTER: AM is really not suitable for classical music. You lose, I would say, 40 per cent of it.

2839 COMMISSIONER DEMERS: Thank you, Madam Robertson and panel.

2840 Back to you, Madam Chairperson.

2841 THE CHAIRPERSON: Thank you, Commissioner Demers.

2842 I believe the panel has questions.

2843 Commissioner Cardozo.

2844 COMMISSIONER CARDOZO: Thank you, Madam Chair.

2845 Just to continue along one of the questions that Commissioner Demers asked you about other frequencies, a question you sidestepped, as to whether you considered others.

2846 If 94.5 was not to be granted to you, would you rather another frequency, or would you rather not have a licence?

2847 MS ROBERTSON: We would of course take a very careful look if we were offered another frequency. Our concern of course would be the reach that would be available, and the cost that we would have to incur in order to test the frequency.

2848 But, yes, we certainly would look very carefully if we were offered another frequency besides 94.5. We would of course have to change our name too, but that is not a concern --

--- Laughter / Rires

2849 MR. SUNTER: Could I point out, Commissioner Cardozo, that we already have an arrangement in place with the CBC to use their tower on Mount Seymour to distribute our signal. I am not sure whether 88.1 could work from there, so we would be looking for another transmission tower somewhere else.

2850 MR. OAKES: To put it in perspective, if you look at the size of the audience for classical music station, it would be below the average size of a Vancouver station. If you look at the revenues of a classical music station, they would be below the revenues of an average station.

2851 So if you would give us a signal that would cover half the city, we could be in some sort of trouble. So we would really have to take a close look at what the coverage would be of that signal.

2852 I don't know what the technical limitations are of these other signals, but if they are severe, it would be a difficult choice.

2853 COMMISSIONER CARDOZO: Let me add one more ingredient.

2854 If 94.5 were granted to La Chaîne culturelle, and you were to get another frequency, would that further erode your business case?

2855 MR. OAKES: Look at another frequency? You mean other than, say, 107.1 --

2856 COMMISSIONER CARDOZO: No. Other than 94.5.

2857 If 94.5 were to be granted to la Chaîne culturelle, which means that they would be this new classical station coming into the market plus you, and you would be on this frequency with possibly less coverage --

2858 MR. OAKES: I don't know if I am the one to answer that.

2859 COMMISSIONER CARDOZO: Do you know what my question is?

2860 MR. SUNTER: Yes.

2861 MR. BLACKWOOD: I think your question is, if la Chaîne came in -- it is really a two-part question. If la Chaîne came in, it would be an additional classical musical outlet in the market, and at the same time our coverage area might be reduced, and therefore would we really rethink our business plan or would it have a significant impact.

2862 COMMISSIONER CARDOZO: Right.

2863 MR. BLACKWOOD: I think the answer to that is twofold. I think the answer to the reduced area is that it possibly could. Because we don't know what that reduced area would be, it's hard to answer.

2864 If we still had a major signal that was effective in the large downtown and immediate suburban area, it might now.

2865 Insofar as a competitor, the honest answer to that is I don't believe in this market la Chaîne would have any effect whatever on what we are proposing. I think it is conceivable that it could have a minimal, a very minimal effect on CBC 2, but it is going to -- it will in fact offer no alternative programming for a local community oriented Vancouver station. It is another national service which is even less reflective of Vancouver than the existing Radio Two.

2866 So I would wish it well, and in fact I would like to personally hear it here, but I don't think it will have any impact whatever on what we are proposing.

2867 MR. OAKES: Certainly not -- if they broadcast in French, they are going to have a heck of a time selling to English advertisers --

2868 COMMISSIONER CARDOZO: No, it wouldn't be for them, but I am wondering if this is this other station in the market which takes up a certain amount of listenership, whether that would affect your listenership.

2869 MR.OAKES: I think I can just basically reinforce what Robert said. From Robert's standpoint, I don't believe it would be that big a competitor.

2870 COMMISSIONER CARDOZO: This is my last question.

2871 From what you have heard of the application of la Chaîne culturelle and what you know of it, are you offering anything for those listeners? You are not going to be providing French Spoken Word?

2872 MR. BLACKWOOD: You mean would we have bilingual programming?

2873 COMMISSIONER CARDOZO: Do you, in any way, respond to the needs of those listeners?

2874 MR. BLACKWOOD: I think we do.

2875 One of the difficulties of la Chaîne, and both of us spent some time on the music side, and I in fact was director of radio for the CBC in Quebec for six years, la Chaîne and the CBC have always had an agreement whereby they trade programming that is done one city to the other, which is why virtually everything you hear on Radio Two was originally paid for and recorded by la Chaîne.

2876 Equally, what you hear on la Chaîne was originally broadcast and recorded by Radio Two, so that in fact the Vancouver content of la Chaîne is a repeat. Virtually all of it is a repeat of what you have already heard on Radio Two.

2877 If what you are saying is, from a francophone point of view, would we be offering the kind of specialized talent in the French language that la Chaîne does? No, we would not. But if what you are asking is, will they hear the same kind of music? Then certainly in some of our periods -- the mid afternoons, the week ends -- yes, you would hear the same kind of thing.

2878 In fact, if you listen to la Chaîne, they do -- their recordings very much reflect the same standards of excellence that we would bring to our periods where we are playing international music.

2879 COMMISSIONER CARDOZO: I have one more last question.

2880 Any of the music you play, would that be reflected on the Smooth Jazz kind of proposal that we have heard?

2881 MR. SUNTER: Over my dead body!

2882 MR. BLACKWOOD: Commissioner, I have to say that the -- I have been to many CRTC hearings, and I was deeply impressed with your questioning earlier today in an attempt to grasp what it is that Smooth Jazz may be.

2883 The answer is, no, not on the basis of what we have heard today. But, yes, if you are talking about some of the proposals that were made yesterday, in what they called Traditional Jazz, and I am not sure in the end what Traditional Jazz was, but I will give it the benefit of the doubt, because one example I heard was Duke Ellington, that, yes, you would hear that on this station. That is Classic Jazz. That does have a place, and in fact it is arguable in some cases whether or not it genuinely fits a jazz or classical context.

2884 What I would say in answer to a previous question, that the other thing we would more likely hear is that if we had the opportunity to play Duke Ellington, for example, we would be more likely to give people a chance to hear the less known recordings that he made at the Stratford Festival than we would at Fargo, North Dakota.

2885 And to the degree that the others who are proposing a traditional part of their Smooth Jazz format, then, yes, we would be offering the same thing as they might be.

2886 COMMISSIONER CARDOZO: So I take it your colleague wants to take back his comment?

2887 MR. SUNTER: No, no.

2888 I believe in Jazz.

2889 COMMISSIONER CARDOZO: I'm just kidding!

--- Laughter / Rires

2890 MR. SUNTER: Bramwell came up with a very good definition of jazz at lunch. He said: Jazz is not notated music; it is creative, it is ex temporary.

2891 Judged by that criterion, this stuff being called jazz under the soft adjective, is not really jazz.

2892 COMMISSIONER CARDOZO: It seems Mr. Tovey wanted to add something.

2893 MR. TOVEY: Yes. If I might just offer a professional opinion on this matter, much in the way lawyers would have, if they were involved.

2894 Jazz is an improvised art from a musical cell. Sometimes that musical cell can be a song, sometimes it can be the germ of an idea, but it is an improvised art.

2895 What is being called Smooth and Soft Jazz here is essentially a contrivance that has brought about, through manipulation and recording studio, a high degree of notated music. In other words, it is completely different.

2896 To adopt the generic term "jazz" and to put the appendage "smooth" or "soft" on the front is to contrive a musical form that does not exist and is not in any one of the 20 volumes of the New Grove Dictionary published last week.

2897 COMMISSIONER CARDOZO: On that note, I will thank you.

--- Laughter / Rires

2898 THE CHAIRPERSON: Commissioner Cram.

2899 COMMISSIONER CRAM: When I first came to the CRTC, I couldn't understand how we could be counting interstitials, which are these little, little things that are a few seconds as Cancon. The sad fact of it is, we are a commercial regulator. We are regulating commerce, which are public airwaves. So we need some precision.

2900 I was listening initially to you, Ms Robertson, talking about the 5 per cent increase on what you call CTD, every year. I then heard subsequently some time somebody saying that this 5 per cent increase could be more than a 5 per cent increase. So I have two questions.

2901 Is this, what you call your CTD, is it contingent upon your revenue projections? And, no. 2, and I am a lawyer, would it grow proportionately more if your revenue grew proportionately more?

2902 MS ROBERTSON: The $50,000 is an absolute minimum that we have committed to for seven years. However, we have tied the Talent Development to a formula, as you point out. So it is tied to revenues entirely. And we commit to keep that. If revenues exceed that, which we would be delighted, of course, if they did, we will up the Talent Development Fund.

2903 COMMISSIONER CRAM: I'm sorry?

2904 MS ROBERTSON: If revenues did exceed our projections, we would increase the Talent Development Fund, but we will increase the Talent Development Fund according to our projected revenue increases.

2905 COMMISSIONER CRAM: The problem I see in something like that is the difficulty in us enforcing it, us looking at it, because I might disagree with the way you manage your shop, and say you should be making more profits.

2906 Have you got a solution for us that would not involve any contingency on either excess or revenue projections or non-revenue projections?

2907 MS ROBERTSON: It is not tied to profits, it is tied to gross revenues. So it is simply our gross revenue number --

2908 COMMISSIONER CRAM: Let's just say you're selling wrong. The problem is, it is so contingent on -- and we don't do that. We don't get into how you manage something, so once we give you a licence, you're free to win or lose money. But do you have an alternative that we could look at?

2909 MS ROBERTSON: We could certainly work on an alternative. We thought that that was a relatively simple way of ensuring that we tied Talent Development to the growth of the operation. We could certainly look at something else and submit that, if you wish.

2910 COMMISSIONER CRAM: Thank you.

2911 At page 4 and 6 of your presentation, the Talent Development commitment and the whole concept of -- the difference between you and Radio Two, the impression I get is a huge "we will not share music or other programming libraries, we will not embrace national syndicated formats, we don't see any value in contributing to FACTOR, as they won't produce music that would be presented on our station".

2912 You are talking about investment in careers of local Vancouver performing artists. You are talking about this station being a local classical station.

2913 The only thing I see in your schedule that talks about Vancouver is young performers. So what I am looking at is, is that the only program in your schedule that is going to be in concrete Vancouver performers?

2914 MS ROBERTSON: Mr. Blackwood has developed the broadcast schedule, so perhaps he should answer that.

2915 MR. BLACKWOOD: This goes back to perhaps what I did not make clear before. Where we see partnership programming, it is all Vancouver, every bit of it. It is all in partnership, with Vancouver either arts and culture institutions or whatever.

2916 We did not actually get a chance to talk about this much, perhaps because Mr. Reid, Jesse Reid, was not here. This is a draft schedule, and that's there because, for example, there are a vast number of tapes of excellent performances -- we hope that if we got licence, there would be many more of them -- of young performers connected to the University of British Columbia Music School, and more.

2917 So that is an obvious area where the performance would be Vancouver, but virtually all of the partnership, including -- not only music, as Lori mentioned. There may be other areas there which could address some of the other arts. And they would be entirely Vancouver. And the information that you are getting throughout the day is Vancouver.

2918 The example I gave of Jane Coop, who would be played in those daily programs on an ongoing basis but particularly when she was going to be here, would be Vancouver along with the information service which we have talked about with respect to the partnership with the Alliance would be entirely Vancouver. That would be within every single hour you will hear about what is happening, either from the host or from a structured arts bulletin which is worked out in partnership with the Alliance.

2919 I suppose the great performances is the least Vancouver part, which is the Saturday night, because we can't guarantee, certainly not in year one, that we could ever afford to mount the kind of program that that time period represents, because we are looking at major music events.

2920 I would point out, simply because we do want to make clear that we are not trying to take on Radio Two, that on Saturday evening on Radio Two there is no classical music whatsoever.

2921 As for the evenings, that whole period that we have identified in the evening period would, I presume, right at this point be entirely based on a Vancouver sound, a Vancouver choice, and there are plenty of opportunities for Vancouver people to talk on it.

2922 But, you know, what if --

2923 COMMISSIONER CRAM: Can you give me a number of hours per week?

2924 MR. BLACKWOOD: Of what?

2925 COMMISSIONER CRAM: A number of hours from Vancouver per week. My concern here is that we are a regulator and people get a licence, and I believe you. I believe everybody who comes in front of me that they are going to do what they are going to do.

2926 But you have also heard that if we grant you a licence, that licence will be worth 40 million dollars, and it could easily go to somebody else, or you could change your programming.

2927 So I am asking, and I apologize -- I am a lawyer, and I am a regulator -- can you give me some precision in the number of hours of programming per week, that will come directly from Vancouver, that will reflect what you say your station will be?

2928 MR. BLACKWOOD: One hundred, which is I think what we said. Or perhaps we didn't say in our Application. It is 100 per cent from Vancouver -- programming.

2929 COMMISSIONER CRAM: So all of it will originate from Vancouver?

2930 MR. BLACKWOOD: Absolutely.

2931 COMMISSIONER CRAM: No, no, no.

2932 What I want to know is, Vancouver musicians, because that was what I was referring to, your focus on Vancouver -- investment in the careers of local Vancouver performing artists, the fact that you were going to be a local classical station, and that is what makes you different from CBC, that is why you believe you should exist, because CBC is not serving it.

2933 What I need to know is, how different will you be? If you just have the same kind of programming CBC does, I have a problem. And I come back to, I am a regulator, I need specificity.

2934 In the program that you have developed already, how many hours per week are Vancouver, British Columbia, artists? How many hours per week will the listener here in Vancouver hear?

2935 MR. BLACKWOOD: That would then include -- I just want to make clear that you are talking only about the music, and not the information part at all. You don't want to hear about any of the information part.

2936 COMMISSIONER CRAM: I want both, but I want the number of hours per week.

2937 COMMISSIONER CRAM: So, the number of hours per week would be the total number of hours that we would broadcast purely -- purely -- Vancouver musicians, including CDs?

2938 THE CHAIRPERSON: This is actually one of my questions.

2939 What I was going to say, to follow up on what Commissioner Cram is saying, is that when we are valuating competing applications for this frequency, and particularly when all of you are private commercial stations, notwithstanding the nature in which you have described the programming on your station as being community oriented, classical, and all that, we need to have, in order to evaluate the competing proposals, what are you Canadian content levels.

2940 For instance, when you talk about it being a showcase for Vancouver artists and yet you are committing to a minimum of 10 per cent Canadian content, that is what goes on the licence.

2941 If you understand, the information, through a competitive process, that goes on a licence, should you be successful. So, you could turn around and sell a licence with a Category 3, theoretically. So this is why we need the kind of "A commitments, and this is why when, notwithstanding that the jazz proposals that you are hearing may not be one person's personal preference, and listeners are an important thing and bringing diversity to the market is important, critical for us are Canadian content levels, because this is how Canadian artists get airplay, and this is why we are so concerned about the amount of Canadian content private broadcasters commit to play.

2942 We are also with public broadcasters and community broadcasters, but your proposal is for a private station, it is a private commercial licence. So this is why I think we are wanting to --

2943 MS ROBERTSON: I think I understand what you are getting at. Perhaps, rather than us sitting and -- we had not looked at it in those terms so perhaps rather than us sitting here and scribbling out the numbers right now, perhaps we could take it under advisement and file that information with you tomorrow.

2944 THE CHAIRPERSON: We are going to take a short break, why don't we say ten minutes, and we will be with you.

2945 MR. BLACKWOOD: Can I ask one question?

2946 THE CHAIRPERSON: Not of me. Probably of counsel.

2947 MR. BLACKWOOD: The reason I want to ask the question, there has always been a problem with a classic station in terms of how we measure Cancon. In other words, if we were to do an hour from UBC of student content --

2948 THE CHAIRPERSON: Let's take break. I am not sure how far along all this road we want to go. It was really a matter of clarifying for us what your --

2949 MR. RHÉAUME: I can answer this, when we come back.

--- Upon recessing at 1730 / Suspension à 1730

--- Upon resuming at 1740 / Reprise à 1740

2950 THE CHAIRPERSON: Commissioner Cram will continue.

2951 COMMISSIONER CRAM: Thank you.

2952 I want to come back to the CTD, the $50,000 a year.

2953 I think I heard, I forget who said it, that the $50,000 would go to musicians, and it would be paid to them for performances that would then be aired. Is that correct?

2954 MR. SUNTER: That is correct.

2955 COMMISSIONER CRAM: And that the costs of production would be borne by Classic 94.5, or is that in the $50,000?

2956 MR. SUNTER: The recording costs were not in.

2957 COMMISSIONER CRAM: So any of the ancillary cost is simply to pay the artist, him or herself, or the group?

2958 MR. SUNTER: Right.

2959 COMMISSIONER CRAM: Secondly, Mr. Blackwood, you constantly talked about the giants that are here, excluding yourself.

2960 Is there anybody on your team that would have the broadcasting business experience to deal with the giants in this market?

2961 MS ROBERTSON: Perhaps I should answer that.

2962 We obviously have Mr. Blackwood and Mr. Sunter, who have worked in radio for a number of years. Mr. Sunter ran CBC Radio in British Columbia for a number of years, so they have experience in running radio stations.

2963 We have budgeted to hire a radio station manager, a senior manager, and we have also budgeted to hire a senior advertising sales manager as well, recognizing that we need people with commercial radio backgrounds as well.

2964 COMMISSIONER CRAM: Thank you.

2965 Thank you, Madam Chair.

2966 THE CHAIRPERSON: Thank you, Commissioner Cram.

2967 Commissioner Pennefather.

2968 COMMISSIONER PENNEFATHER: Thank you, Madam Chair.

2969 Just a clarification on one or two elements of your proposal.

2970 In reading through your approach and looking at the schedule here, there is a combination of recordings and, as I understand, live performances.

2971 The live performances, would I be correct in saying that they would turn up in the partnership specialty programs component of the schedule and, if so, would that mean that those live performances are dependent on sponsorship?

2972 MR. SUNTER: Yes.

2973 COMMISSIONER PENNEFATHER: So your budget currently would not cover the costs of that component of the schedule?

2974 MR. SUNTER: No. Only the production costs. But if you look above the New Performers, they will all be live, at least mostly live. That will be through the arrangements that we have with the Faculty of Music at the University of British Columbia, and with the Academy of Music, those of whom have offered to work with us in putting those student recitals, student orchestras and opera productions on the air.

2975 COMMISSIONER PENNEFATHER: I was trying to relate the budget you have, the proposed expenses, to the intention of the programming here, and where the money is going to come from basically in terms of particularly the live performances.

2976 I understand that is a key component, not only of the concept itself but also of the presentation related to that chart, which is the lower part of the triangle. If I see "On Air Exposure, West Coast Performances" and look over here, it ends up in that Partnership/Sponsorship box.

2977 MR. SUNTER: The on-air exposure of west coast performances, that is in the section there of new performance, four hours a week.

2978 COMMISSIONER PENNEFATHER: And that would be also sponsorship supported?

2979 MR. SUNTER: APS, yes but it may even be advertiser supported, or it may not be supported at all.

2980 COMMISSIONER PENNEFATHER: Do you have any current agreements for sponsorship of a performance component?

2981 MR. SUNTER: No. It would be difficult to, because you create an event based on the sponsorship proposal -- maybe not create an event, but identify an event in which you both can cooperate.

2982 COMMISSIONER PENNEFATHER: So the partnerships outlined on page 5 of today's presentation, which is $400,000 a year benefit, the only one lined up is the Alliance for Arts and Culture component that you described earlier?

2983 MR. SUNTER: Yes, but we do have a concrete arrangement with the Alliance, but since it represents 270 different arts organizations, there is no end to the possibility it could happen if we came into existence.

2984 COMMISSIONER PENNEFATHER: Thank you.

2985 Thank you, Madam Chair.

2986 THE CHAIRPERSON: Thank you, Commissioner Pennefather.

2987 I just have a couple of questions.

2988 One clarification I would like to make is, we talked about some frequency issues earlier and the possibility of available AM frequencies.

2989 There was some discussion, but I was not clear on whether or not you have identified AM frequencies --

2990 MR. SUNTER: AM?

2991 THE CHAIRPERSON: Yes. You had indicated, I believe, on your July 27 letter, that you had identified available AM frequencies.

2992 MR. SUNTER: There was one. I talked to the Department of Transport and they told me there was one AM frequency that was available.

2993 THE CHAIRPERSON: And do you have any studies or letters or --

2994 MR. SUNTER: No.

2995 THE CHAIRPERSON: They did not give you any details on this AM frequency, they just --

2996 MR. SUNTER: No. They laughed and said, "Oh, it's years since anybody asked us about AM".

2997 THE CHAIRPERSON: But they did indicate that there was one available, but you did not ask them what it was or get any more information. Your technical people did not --

2998 MR. SUNTER: Our technical person was totally focused on the arrangements with CBC, the transmission tower and listing the equipment we would need and doing the parameters of the transmitter.

2999 Were you going to ask me questions about the Canadian Talent level?

3000 THE CHAIRPERSON: Yes.

3001 MR. SUNTER: Thirty-five per cent.

3002 THE CHAIRPERSON: Canadian Content?

3003 MR. SUNTER: Yes.

3004 THE CHAIRPERSON: Do I take it, then, that you are changing your Application? Is that it?

3005 MR. SUNTER: Yes indeed.

3006 THE CHAIRPERSON: So you want to make --

3007 MR. SUNTER: This goes back to my CBC days. We were confused about would an hour long symphony be the same as a three minute lead by Dietrich, Fisher, Diskeau, and the answer is yes. Each of them is a cut. So, looked at that way, we have no trouble meeting 35 per cent.

3008 If you were talking time, the availability of Canadian recordings would make 35 per cent rather difficult.

3009 THE CHAIRPERSON: So you are changing your commitment from 10 to 35.

3010 My question was also, then, even within the 35 and your desire to give airplay to a lot of Vancouver artists, how much of that would be --

3011 MR. SUNTER: We calculated 10 hours a week.

3012 THE CHAIRPERSON: Why don't we deal with 35 per cent and talk about the Canadian content. How much would that be Vancouver artists?

3013 MR. SUNTER: This is very difficult for us, because it is not like a Pop music format. When we are talking about a concerto, or we are talking about a short piece by Chopin, so -- it is a hard figure to come up with.

3014 THE CHAIRPERSON: Okay. That's fine.

3015 The only thing I was going to say in our desire to discuss a lot of these things is that it is a competitive process, and there are a number of things that we have to consider in doing this, of course -- there is listeners, diversity, and local programming is important. But there is no question that a key element for us is that we give airplay to Canadian artists, because that is in fact how they are going to succeed, in whatever their genre, whether it is Classical, Pop, Jazz, whatever.

3016 MR. TOVEY: If I might, Commissioner, just address for one moment the AM frequency question that you just talked about.

3017 AM is a mono wavelength. Obviously the live acoustical experience of listening to music that is produced without mechanical means of reproduction is a stereo effect when you hear it live. Therefore, this makes FM the only reasonable way to experience classical music. The equivalent would be like going to see an art gallery perhaps exhibiting Picasso's blue period with a pair of sunglasses on.

3018 THE CHAIRPERSON: I understand, and actually my question with respect to the availability of AM frequency was not necessarily with you but just in terms of you identified there was a possibility for La Première chaîne, and we wanted to know if in fact there was a specific frequency that you had identified.

3019 I think that it is for me.

3020 Legal? No questions?

3021 Thank you very much. We will be back at nine o'clock tomorrow morning.

--- Whereupon the hearing adjourned at 1755, to resume

on Wednesday, November 22, 2000, at 0900 /

L'audience est ajournée à 1755, pour reprendre

le mercredi 22 novembre 2000, à 0900