ARCHIVED -  Transcript - Hull, QC - 2001/05/25

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In order to meet some of the requirements under this Act, the Commission's transcripts will therefore be bilingual as to their covers, the listing of CRTC members and staff attending the hearings, and the table of contents.

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Multiple broadcasting and ownership applications &
applications further to Public Notice CRTC 2000-153
"Call for applications for a broadcasting licence to carry on
a radio programming undertaking to serve Ottawa/Hull"/
Demandes de radiodiffusion et de propriétés multiples ainsi
que des demandes suite à l'avis public CRTC 2000-153
"Appel de demandes de licence de radiodiffusion visant
l'exploitation d'une entreprise de programmation de radio
pour desservir Ottawa/Hull"

Conference Centre
Portage IV
Outaouais Room
Hull, Quebec
Centre de Conférences
Portage IV
Salle Outaouais
Hull (Québec)
May 25, 2001 le 25 mai 2001

Volume 4


In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of

However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.


Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès-verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.

Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.

Canadian Radio-television and
Telecommunications Commission

Conseil de la radiodiffusion et des
télécommunications canadiennes

Transcript / Transcription

Multiple broadcasting and ownership applications &
applications further to Public Notice CRTC 2000-153
"Call for applications for a broadcasting licence to carry on
a radio programming undertaking to serve Ottawa/Hull"/
Demandes de radiodiffusion et de propriétés multiples ainsi
que des demandes suite à l'avis public CRTC 2000-153
"Appel de demandes de licence de radiodiffusion visant
l'exploitation d'une entreprise de programmation de radio
pour desservir Ottawa/Hull"


Andrée Wylie Chairperson / Présidente
Joan Pennefather Commissioner / Conseillère
Andrée Noël Commissioner / Conseillère
Jean-Marc Demers Commissioner / Conseillèr
Andrew Cardozo Commissioner / Conseiller


Lynne Poirier Hearing Manager and Secretary / Gérante de l'audience et secrétaire
Donald Rhéaume

Matilda Haykal-Sater

Legal Counsel / conseillers juridiques

Conference Centre
Portage IV
Outaouais Room
Hull, Quebec
Centre de Conférences
Portage IV
Salle Outaouais
Hull (Québec)
May 25, 2001 le 25 mai 2001

Douglas E. Kirk 1002 / 5785
Standard Radio Inc. 1116 / 6506
Radio 1540 Limited 1118 / 6523
Coopérative Radio Ville-Marie Outaouais 1119 / 6533
Harvard Developments Inc. 1123 / 6563
914258 Ontario Limited 1124 / 6570
Fondation Radio Enfant 1129 / 6597
Newcap Inc. 1133 / 6624
Yves Belzile 1134 / 6630
Gary Farmer 1134 / 6638
Douglas E. Kirk 1135 / 6647

Hull, Quebec / Hull (Québec)

--- Upon resuming on Friday, May 25, 2001 at 0900 / L'audience reprend le vendredi 25 mai 2001 à 0900

5778 LA PRÉSIDENTE: Bienvenue à cette quatrième journée de notre audience. Welcome, ladies and gentlemen, to this fourth day of our hearing.

5779 Madame la Sécretaire, s'il vous plaît.

5780 MS POIRIER: Thank you, Madam Chair.

5781 We will conclude this morning Phase I of the hearing by hearing an application by Douglas E. Kirk on behalf of a corporation to be incorporated, to carry on an English-language FM radio station in Ottawa/Hull.

5782 The new station would operate on frequency 97.9 MHz (channel 259B) with an effective radiated power of 27,500 watts.

5783 The applicant proposes a New Adult Contemporary/Smooth Jazz musical format.

5784 Mr. Kirk.


5785 MR. KIRK: Thank you very much.

5786 Chairperson Wylie, Commissioners Noël, Pennefather, Cardozo and Demers, good morning.

5787 My name is Doug Kirk. I am chairman of a new company to be incorporated, applying for a new FM broadcasting undertaking to serve Ottawa/Hull.

5788 Before we begin our presentation, I would like to introduce our panel.

5789 On my right, in the rear seat is Andrew Forsyth of Bohn and Associates, Canada's foremost radio consultants. On my immediate right is Steve Kassay. Steve Kassay is Operations Manager of Wave 94.7 in Hamilton, Canada's only new adult contemporary/smooth jazz station.

5790 Immediately behind me is Mary Kirk, my wife. Mary is a director of Wave 94.7 and chairperson of the music committee at the station.

5791 On my left -- and we had to work this out, because on my left is Mr. Wright.

--- Laughter / Rires

5792 MR. WRIGHT: I was going to be on the right, and I said no, let's get on the left.

5793 THE CHAIRMAN: You can't believe how often we have talked about making the right decision.

5794 MR. KIRK: Thank you. I hope you give that consideration here.

5795 COMMISSIONER CARDOZO: But he is on our right.

5796 MR. KIRK: John is well-known to the Commission and has recently signed on CIKR-FM, or K-Rock, 105.7 in Kingston. John is my partner in this application and will be president and chief operating officer of the new company.

5797 Behind me, slightly to my left, is Sharon Musgrave. Sharon is a Hamilton-based Canadian smooth jazz artist. Beside Sharon, on my far left in the back row, is Kim Wright. Kim is John's wife and a director of K-Rock in Kingston.

5798 So you have all the families here today.

5799 This is a very exciting application for us. It brings together John and me as partners, two independent radio operators who have a great passion for this business and a commitment to continue to grow.

5800 As you know, I am licence-holder of KX96 in Ajax, Ontario, and The Wave 94.7 in Hamilton, Canada's only smooth jazz station. The Wave, as you know, was licensed in May of 2000, just a little over a year ago, and we put the station on the air in just four months after Commission approval.

5801 I have a minority interest in John's successful application in Kingston, which the Commission heard a year ago. This licence was approved in September, and John signed the station on in February of this year, just five months after receiving Commission approval.

5802 I think that shows our commitment for this business. We share a love for it and are looking forward to expanding our partnership here in Ottawa/Hull.

5803 I would like to begin our presentation now.

5804 We are here applying for a new FM broadcast licence to serve Ottawa, to be called The Wave, Ottawa's smooth jazz station. We believe approval of this application will significantly increase choice and diversity in the Ottawa/Hull market by offering local listeners access to new and distinctive new adult contemporary/smooth jazz, the new adult contemporary/smooth jazz format, and greatly expanding the availability of local news and information programming.

5805 This will be a very different FM radio service than others currently available in Ottawa.

5806 We are a new independent radio broadcasting company. Approval of this application will increase the diversity both of ownership and news voices in Ottawa/Hull.

5807 Our presentation today will address the criteria set out by the Commission for a new licence and provide the Commission with the reasons why we believe we should be approved.

5808 First, we will address the financial state of the Ottawa market, the impact of The Wave on existing stations in the market, the quality of our application and Canadian development initiatives, and the diversity of voices in Ottawa.

5809 We are the only applicant with hands-on experience operating a new adult contemporary/smooth jazz station in Canada. We believe the lessons learned and the experience we have gained in the last year at Wave 94.7 in Hamilton help make our application most realistic.

5810 I would like to now turn to the Ottawa market.

5811 Ottawa/Hull is the fourth-largest urban area in Canada. The population is expected to grow from 1.1 million in 1996 to 1.3 million by 2006.

5812 Ottawa/Hull's transformation from a government-based economy to a private sector-based economy, driven by technology, has been truly remarkable. It has become the envy of many other Canadian cities wanting growth without dirty factory industrial growth.

5813 Average family income exceeded the national average by 22 per cent. Education level is the highest in Canada. And Ottawa/Hull is expected to lead all Canadian urban areas in economic growth between 2000 and 2004.

5814 There are currently 12 commercial radio stations that meet the Commission's definition of a local market radio station. Ownership of the English stations is highly concentrated. Two companies control eight of the nine local English stations: Rogers with four and CHUM with four.

5815 The market is strong. According to CRTC statistics just recently released, Canadian revenues -- and these are industry revenues -- grew an average of 5.9 per cent per year from 1996 to 2000. During this same time frame the Ottawa/Hull market grew at 7.4 per cent at an average annual rate and reached a total revenue of $46.6 million in fiscal 2000.

5816 Looking at other measures of profitability and financial health, the picture continues to improve.

5817 Canadian radio operating income, or EBITDA -- that is earnings before interest, taxes, depreciation and amortization -- improved by an average of 23.4 per cent for the Canadian radio industry between 1996 and 2000. Ottawa, on the other hand, grew at an average annual rate of 53.8 per cent over the same period, to have operating income of $10.6 million in fiscal 2000 and an overall marketing operating margin of 22.7 per cent.

5818 Similarly, PBIT, the Commission's profitability measurement, grew 30 per cent nationally on average over the five-year period. Ottawa grew at an average of 117 per cent per year between 1996 and 2000.

5819 I don't want to belabour this, but the story continues with year-to-date revenues in the Ottawa radio market growing up 8 per cent for the seven months ended March compared to the top 11 national markets at 5.3 per cent.

5820 The conclusion is that Ottawa is a very buoyant and prosperous market, experiencing remarkable growth. The Ottawa radio industry is also prosperous, showing significant annual revenue gains and exceptional profit gains.

5821 It is with this vibrant local cultural scene and presence of numerous educational institutions, combined with the growth of the market, that the Ottawa/Hull market clearly has the necessary infrastructure, both social and economic, to support additional local radio service.

5822 Andrew...?

5823 MR. FORSYTH: Now let's have a look at the impact The Wave might have on existing stations in the market.

5824 This is a market graph showing the placement of all the Ottawa stations and our new NAC/Smooth Jazz station. The chart shows the positions of the current radio stations in Ottawa by format style.

5825 Above the line is new music, so at the top would be stations that play only current music. Below the line is old or gold music, so the very bottom would be stations playing only older music. To the right is soft music and to the left is hard music, rock music.

5826 The proposed NAC/Smooth Jazz station, The Wave, sits apart from the other Ottawa/Hull stations on the hard/soft scale. The instrumental content, combined with soft vocals, make this format very distinctive, and clearly it will be the softest sound in Ottawa/Hull.

5827 Demographically, The Wave will also be different from stations currently in the market. As in most all Canadian markets, the various different FM formats currently on air all have their core audience in the 18-to-49-year-old demographic. It gets pretty hard to jam more subdivisions of pop, rock, dance and country into what is already there and call it diversity.

5828 This chart shows the 35-to-54-year old audience composition for each of the Ottawa/Hull FM stations as reported in the latest BBM.

5829 The first column shows the percentage of each station's listeners in that demographic. The second column shows the percentage of average quarter hours from the 35-to-54-year-olds.

5830 We have compared the audience composition of Ottawa's FMs with the profile of The Wave, the NAC/Smooth Jazz station in Hamilton. Clearly, The Wave skews to a much older audience, garnering almost 90 per cent of its hours of tuning from the 34-to-54-year-old cell, 20 per cent more than adult contemporary stations, Magic 100 and Rock Détente at 68 and 69 per cent.

5831 New adult contemporary/smooth jazz is not your grandparents' swing, beebop or Dixieland jazz, nor is it your parents' middle of the road adult standards light rock. NAC/smooth jazz is a pop format where the tune, rhythm and mood of the music is much more important than the words. NAC/Smooth Jazz's unique format is integral to its success.

5832 Steve...?

5833 MR. KASSAY: The new adult contemporary/smooth jazz format is new to Canada. Its essence is a mosaic of contemporary instrumental music primarily from the U.S. and Canada, blended with selected pop vocals. The instrumental component runs at 55 to 60 per cent, with vocals making up the balance of 40 to 45 per cent.

5834 NAC/Smooth Jazz is not traditional jazz. While there are jazz elements and flavours in the instrumental and vocal music, it is not considered to be jazz in the traditional sense of the word as it is widely understood in Canada. NAC/Smooth Jazz has a feel to the music.

5835 Our experience with the format in Hamilton gives us a sense of what will work as NAC/Smooth Jazz. This format will provide significant exposure for a wide variety of recording artists who currently receive little or no airplay in the Ottawa/Hull market.

5836 The Wave will be much softer, a much softer station than any now in the market. Demographically it will be older and the music played will be very different from the music currently on the radio in Ottawa/Hull.

5837 We will not be getting our audience at the expense of any one other station, which would happen if we were playing a subdivision of the rock/pop or country musical genres already offered in the market. We will get some hours tuned from people currently listening to many other stations and many other formats.

5838 In year one we are projecting a 1.7 share of audience. No single station will be affected by more than a fraction of a share point.

5839 Our revenue projections show that 24 per cent of our revenue will come from existing stations, but that represents only .5 per cent of current radio revenues. We will have a negligible impact on the revenues and the audience of the existing Ottawa/Hull stations.

5840 This is very much a niche format, as the experience in the U.S. has shown and our experience in Hamilton has indeed confirmed.

5841 We have reviewed the new CRTC regulations dealing with specialty licences. The NAC/Smooth Jazz format needs the flexibility of being mainstream and not specialty to avoid the endless debate, analysis and possible compliance issues relating to the category assignment of music. Is it pop vocal or contemporary jazz? Is it new instrumental music or contemporary jazz?

5842 The diversity in this license is achieve and assured in our 35 per cent instrumental content commitment.

5843 Over the past year we have reviewed hundreds of recordings in the process of building the music universe at Wave 94.7 in Hamilton and it has been a challenge find playable Canadian music to fit the format.

5844 However, we have discovered several new artists who are thrilled to have their first radio airplay ever. They are producing new recordings on format which will help build this genre of Canadian music.

5845 Considering our 35 per cent commitment to instrumental music, we are promising a minimum of 20 per cent Canadian content, which is the amount required by the CRTC for our programming proposal.

5846 We have examined the Canadian music available. It is our belief that the NAC/Smooth Jazz format cannot be executed currently if Canadian content numbers are higher than the current CRTC regulations.

5847 We believe this is why the CRTC, in its wisdom, has set the Canadian content levels at a minimum 20 per cent for our proposed programming format.

5848 MR. WRIGHT: A really important part of our application is our four point plan to support Canadian talent development. This is the part that is, I think, the most fun part for broadcasters as well.

5849 Point one is our sponsorship of concerts. $50,000 annually will be allocated to showcase Canadian contemporary jazz artists in concert hall-type events.

5850 This amount does not include the airtime schedules, announcer MC charges, on-air contesting and other promotional elements that will also be provided to create listener demand for these concerts. The value of this promotional element is estimated at $100,000 annually.

5851 We will provide $10,000 annually to the National Capital Region Kiwanis Music Festival.

5852 We will contribute $25,000 to the sponsorship of the NAC/Smooth Jazz artists at the Ottawa Jazz Festival.

5853 Finally, we will provide $15,000 annually to a small venue concert series.

5854 This touches the grassroots of NAC/Smooth Jazz musical genre. It rewards and encourages the musicians who have chosen to perform professionally and are not yet well enough known to sell out the larger venues.

5855 Again, these smaller venue sponsorships would be accompanied by an intensive on-air promotional campaign to create awareness and also start that sort of star quality for these budding NAC/Smooth Jazz artists. These indirect expenditures will total $50,000 annually.

5856 All these expenditures will enhance and promote the NAC/Smooth Jazz genre in Ottawa/Hull and are patterned after the Canadian talent development program already running in Hamilton.

5857 Over the seven year term of the license, this adds up to $700,000 in direct expenses, plus $1,050,000 in indirect expenses, for total commitment to support Canadian talent development of $1,750,000.

5858 I think it is important to look at how this compares to contributions from already established radio stations.

5859 In Public Notice CRTC-1995-196, a new approach to contributions by radio stations to Canadian talent development, the Commission set out the following direct financial commitments required by radio stations.

5860 In major markets, Toronto, Montreal French and Vancouver, the amount is $27,000 annually. In large markets, which includes Ottawa, the amount is $8,000 annually.

5861 These are all stations with revenues in the millions and, I must say, many of them have profits than are far greater than the projected revenues for our NAC/Smooth Jazz station in Ottawa/Hull, and yet our Canadian talent development proposals are almost four times greater than the commitments of such hugely successful and profitable stations as CHFI and CHUM-FM and 12 times greater than the other stations operating in Ottawa/Hull.

5862 We point this out not to make light of accepted commitments from other broadcasters, but rather to support the magnitude of our commitment, $700,000 in cash and $1,750,000 in total. We are making this commitment as an independent with the resources of this proposed radio station as the only source of funding for our Canadian talent development program.

5863 We have based these investments on the resources we will develop according to our business plan. We developed our business plan based on our research of the format in the U.S. and, of course, our experience operating Canada's only smooth jazz station, The Wave in Hamilton.

5864 Our business plan is driven by the audience potential of the format. We have projected our year one 12-plus audience share at 1.7, growing to 3.5 per cent by year five.

5865 Our research shows that the NAC/Smooth Jazz format achieves an average 12-plus market share in the U.S. of about 3.5 per cent. These stations are, by and large, mature properties that have developed their audience share over many years and may rating books. We also have the new experience of The Wave in Hamilton. The Launch Book was a 1.5 share. The most recent book just out was a 1.7 share. So the average for the first year was a 1.6 share.

5866 This is a niche format and we are projecting a 1.7 share for the first year in Ottawa/Hull.

5867 MR. KIRK: I would like to touch on diversity. We will be a new voice and a new operator in Ottawa/Hull. In addition to bringing a distinctive new --

5868 THE CHAIRPERSON: Your microphone, Mr. Kirk, please.

5869 MR. KIRK: I'm sorry. I'm sorry. You are off, I am on.

5870 We will bring a new voice and be a new operator in Ottawa/Hull, in addition to bringing a distinctive new, innovative programming format to Ottawa/Hull, NAC/Smooth Jazz, we are a brand new independent company bringing diversity and license ownership and a new editorial voice to the market.

5871 Our news and information programming will focus on the Ottawa/Hull region and will be local and connected to the needs of our distinct audience.

5872 The Commission stated in Public Notice CRTC-1998-41, when the ownership regulations were changed, that the intended result was to improve the financial condition of the industry by allowing consolidation.

5873 At the same time, the Commission made it very clear that the new policy would pave the way for new operators to come into the business.

5874 As the industry took on a more consolidated and financially robust character, the Commission indicated that it would be prepared to considered new entry into local markets to further enhance choice and diversity for listeners.

5875 In the new Commercial Radio Policy the Commission stated, and I quote:

"In order to encourage competition and choice for listeners, the Commission has also revoked its radio market policy. The Commission, following its consideration of applications for new market entry, will be prepared to issue licences depending on the individual merits of the applications, in particular, the benefits approval will bring to the community's concerned and the broadcasting system as a whole." (As read)

5876 As we have already noted, the Ottawa radio market is financially robust with a consolidated local ownership structure.

5877 We believe we are exactly the type of new operators the Commission had in mind when it established the new Commercial Radio Policy. We are experienced operators, we have a passion for the business and a burning desire to grow.

5878 This Ottawa licence is critical to our growth strategy, providing us with critical mass to a group of stations from Hamilton to Ajax to Kingston and to Ottawa. We are a regional Ontario broadcaster. The Ottawa station is a pivotal point that would allow us to leverage our synergies. Proximity is the key factor here, allowing us to multi-task, share management and maximize our resources and programming benefits between the stations.

5879 With Ottawa as a centre point for our organization, we will be better able to compete in a very consolidated industry -- and it is consolidating by the hour -- now dominated by multi-station owners.

5880 In summary, we believe the application to establish The Wave, Ottawa's new adult contemporary smooth jazz station will have the following benefits.

5881 Number one, we will increase the choice and diversity of high quality radio programming in the Ottawa/Hull market by offering listeners a distinctive new programming format that includes musical selections from many Canadian and international recording artists that currently receive little exposure in this market, and by offering listeners a substantial amount of new, intensely local community responsive news and information.

5882 Number two, we are a new independent radio broadcasting company bringing diversity of ownership to the Ottawa/Hull market.

5883 Number three, we will have no material negative economic impact on the existing radio stations in the market.

5884 Number four, our application will make a significant contribution to the Canadian broadcasting system as a whole by directing $1.75 million, including over $700,000 in direct expenditures over seven years to the development of Canadian musical talent.

5885 For all these reasons, we believe the proposed new FM station meets the licensing criteria that you have established and will directly contribute to the achievement of the broadcasting policy for new commercial radio established by the Commission in 1998-41. We believe our application would be in the public interest.

5886 Thank you for your attention and we would be pleased to answer questions you may have.

5887 THE CHAIRMAN: Thank you, Mr. Kirk, Mr. Wright, and your colleagues.

5888 Commissioner Cardozo, please.

5889 COMMISSIONER CARDOZO: Thank you, Madam Chair. Good morning, Mr. Kirk and team. Welcome.

5890 I will go through a few questions and then others may want to add some. I will just go through the list of areas that I will cover. Can you hear me okay?

5891 MR. KIRK: Yes.

5892 COMMISSIONER CARDOZO: Okay. We will go through questions on ownership, then programming, diversity of news voices, Canadian talent development, human resources, a few questions on your current station The Wave, your business plan and then a couple of technical questions.

5893 I will just direct the questions to you, Mr. Kirk, but if others want to join in, I will let you handle that.

5894 Let me start with the ownership issue and just understand the creation of what would be your new company. As I understand it, and you can correct me, your application -- if the station was licensed, you would be creating a new company which would be held 50-50 by Mr. Kirk and Mr. Wright. Is that correct?

5895 MR. KIRK: Yes, that's correct.

5896 COMMISSIONER CARDOZO: Now, these are different from the ownership arrangements you have got for Hamilton and Kingston. Is there anything relevant to us as to why each one is organized differently?

5897 MR. KIRK: I think it's to a great degree history and how it has developed. I have been involved in the business for 15 years. Ajax was the first station, Hamilton the second, Kingston the third. This is the fourth of the stations where we feel there is a core or a group of stations that we can put together.

5898 Our proposal in this market resulted from the excellent partnership that John and I feel we have developed through working on the Kingston application. We are both of a like mind, passionate about the broadcasting business, and want to continue to develop our expertise and leverage our management strengths.

5899 So it's been a progression, if you will, over time and each company, as the Commission knows, is organized separately. The thread in it though, my ownership -- partial ownership in Kingston but controlling ownership in Hamilton and Ajax. John controls the Kingston licence. We have come together here to try and build this group into a sound regional group of stations by owning this licence.

5900 COMMISSIONER CARDOZO: If this were to be licensed, the others would likely stay in the arrangements that they have or would you see them evolving to a 50-50, the way you plan this station?

5901 MR. KIRK: You know, for the moment they would stay as a group, but we can see down the road many opportunities. John may want to speak to the point. There are additional opportunities that we can see putting the stations together and ultimately we may evolve it into a larger organization with John being an owner.

5902 In this organization Mary is also an owner. She certainly has a significant piece of the Ajax station. Steve Kassay has an ownership position in the Ajax station.


5904 MR. KIRK: So we see that potentially in the future growing to a larger group which you may be able to put all those ownerships in one.

5905 COMMISSIONER CARDOZO: I don't want to pry into how you have organized it. I'm just thinking in terms of the issues you have raised about small players becoming medium-sized players and that type of issue. I just want to understand that there is a growth pattern or plan.

5906 MR. WRIGHT: We certainly have our eye on future growth and we would like that future growth to be in the Ontario region where we think it's a very manageable area for us to work in.

5907 With our ownership link we can then call on synergies that we can use with our talent. Our managers can multi-task, we can keep managers longer. As our good people develop and we are in smaller markets and as our good people develop, naturally they are attractive to other broadcasters.

5908 By getting bigger and being able to share in multi-task, we will be able to offer challenges to our management people and our talent and we will be able to retain these people longer and grow.

5909 Yes, we have certainly great desires to get stronger in the Ontario region where we can utilize this multi-tasking and having people working together.

5910 COMMISSIONER CARDOZO: For the Ottawa company then, who would be the Board members?

5911 MR. KIRK: The initial Board members would be John Wright and me.

5912 COMMISSIONER CARDOZO: Okay. And do you have 50 per cent each of the shares?

5913 MR. KIRK: That's correct.

5914 COMMISSIONER CARDOZO: What happens if there's a deadlock between you two? I know you guys are getting along wonderfully now, but you never know.

5915 MR. KIRK: We have seen situations before that got along wonderfully and then doing different. The situation we have organized now, to give comfort to the Commission, as it's organized the shares will be on 50-50.

5916 The President of the company who the Board will elect will be the Chief Operating Officer and have the casting vote, so as we have organized it now, John will run the company and have the final say in any decisions where we don't agree.

5917 The proposed agreement that we have speaks as well to if there is an impasse reached, it triggers a buy-sell. John would sell to me or I would sell to John. There is a process that would be triggered there if we reached a deadlock. So there would be a control. It would not end up being a deadlock situation for a long period of time.

5918 COMMISSIONER CARDOZO: Okay. Thanks for all that. Let me move to programming. I have got a couple of questions here. I want you to understand that what I am trying to do is simply to understand what exactly you are applying for. I'm not going to push you one way or the other, box you in or let you out of the box or whatever. It is for you to tell us precisely what it is you are applying for.

5919 This issue of how we categorize, smooth jazz and NAC is one that is causing quite a discussion as we go through. Indeed during this hearing with other applicants and in recent hearings we have had quite a bit of discussion around this. So I'm trying to get an idea of what it is you are planning and also what your thoughts are about our policy as it stands.

5920 I have listened to what you were saying earlier. I guess it's Mr. Kassay who addressed it most. Given what you said, you said your application is within the policy of the Commission. I just want to add the other part to it which is that as a result of the changes to our music category definition of January 2000 in Public Notice CRTC-2000-14, including the deletion of the old subcategory 24.

5921 Jazz oriented musical selections, smooth and soft jazz styles, both instrumental and vocal now fall under Category 3, music, jazz and blues, subcategory 34. You are nodding. I'm glad somebody understands what I'm talking about here. I'm always glad these things are not televised.

5922 MR. KIRK: We have read that and we have tried to understand as well.

5923 COMMISSIONER CARDOZO: So maybe you can tell me how you feel you will be able to offer a smooth jazz music station within a conventional non-specialty format which is what you are applying for when the smooth jazz music in our categories is captured under the contemporary jazz element of subcategory 34, jazz and blues.

5924 MR. KIRK: We have -- this is a matter of debate. I'm sure it's a matter of debate among the Commission. We are trying to as well understand this format the best we can.

5925 I guess the question comes down to what is NAC Smooth Jazz. In our look at it, and I will ask Steve and Andrew and Mary and Sharon ultimately to speak to this point because it is a matter of debate. Through the various presentations you have seen on this format this week there is diversity. There is diversity within the applications here.

5926 Our view is that smooth jazz, as Steve was mentioning, is not traditional or even contemporary jazz. It's a blend of pop, vocal, jazz flavoured and jazz elements, but you get into sort of defining grey areas. What really is a soft contemporary jazz selection? The format is chosen selection by selection.

5927 You can have pop artists, you can have music that will appear in smooth jazz stations. You can have jazz or a jazz influence to artists. You can have selections that will work in this format.

5928 It's very, very difficult at this stage. The format has been on the air since September in Hamilton and that's it. We don't have a deep experience with this in Canada.

5929 Quite frankly, we wrestle with music classification, if you had to put into -- is it Category 24 or Category 34 music? There is a grey area, and we are always wrestling with that issue selection by selection.

5930 We have the experience here. We have the one that is on the air, and that is very important to us, because we have to make this format work in Canada. As a new and diverse radio station in the market, The Wave in Ottawa will be new and diverse in this market. We have to have that flexibility, in our view, to select the music selection by selection to put the smooth jazz format together for this market.

5931 To us, strapping it all into a Category 34 classification would, in our view, do great harm to the format. We don't think we can operate and have the flexibility to choose the music properly.

5932 I am giving you the big picture here, but I would like to turn it over to Steve for further comment and I will ask others to address it. It is a very crucial and important element to what you are considering and what we have proposed.

5933 MR. KASSAY: We are glad you asked, because the NAC/Smooth Jazz format is not comprised of traditional jazz songs. Smooth jazz is contemporary easy listening, or pop music without the vocals. That is the smooth jazz format as it is known south of the border, and the only one north of the border. That distinction is very important to us.

5934 This is why over the last nine months we have had the challenge of finding the appropriate music. As Doug suggested -- and it is very true -- it is a track-by-track selection process.

5935 That is why we feel it is, without question, a Category 24 format.

5936 COMMISSIONER CARDOZO: Are you suggesting that we should be calling it easy listening and not call it NAC/Smooth Jazz?

5937 Or is that how you are approaching it?

5938 MR. KIRK: I think you are talking the mechanics. There is a difference between the name of the format, what works on air, what you call the radio station, and the actual mechanics of operating the format. The two are different.

5939 In terms of smooth jazz, it is almost, to a degree, misnamed because people think of it as a subdivision of jazz. It is not a subdivision of jazz. It is a brand name that is evolved out of the U.S. It has been quite successful in the U.S. But it is not all jazz music. There is a lot of pop music --

5940 COMMISSIONER CARDOZO: So it is more just a marketing concept, smooth jazz.

5941 MR. KIRK: The name or brand smooth jazz is a marketing or identifier or positioner of the format on the air.

5942 MR. KASSAY: However, in addition to that, it should be noted that this style of music is different from what you hear on radio in Canada in that it does have a jazz attitude and it is mostly instrumental. The artists, like Sharon seated behind me, are not getting any -- it is not a commercial format yet at the industry level. They are not getting airplay anywhere.

5943 It is a type of music that is unto itself -- to answer your question on the jazz elements, it does have a jazz root to it. It's got a groove. This music has a groove, and it is mostly instrumental. It is different.

5944 But it is a pop style of music. It is not jazz in the traditional sense of the word jazz trio.

5945 COMMISSIONER CARDOZO: All right. Did others want to comment? I have more questions.

5946 MS KIRK: Maybe I will make a comment or two since I have been involved very closely in the process of making these selections one at a time. It is very laborious and slow, but it is quite exciting at the same time. We have a music committee that meets every week, and literally we get new CDs across the desk every week from budding new artists. We are sent stuff by the big record companies, much of which we don't even listen to because it is totally unsuited to our smooth jazz format.

5947 In those weekly meetings, we can't lose sight of the importance of the word "jazz" in the smooth jazz phrase. It is not just a marketing device; it is a way for us to select within what you would consider smooth or soft or easy listening realms of music those selections that fit our format.

5948 There are particular easy listening selections, whether they are instrumental or vocal, that will fit and others that won't.

5949 We will listen to something tried and true like Phil Collins and say no, no, no and yet every once in a while there is a cut that comes across that we say yes, that is smooth jazz.

5950 I guess we are listening to the music with an ear to certain jazz elements. We are listening for the instrumentation that is used, or we are listening for a jazz rhythm. We are listening for some sort of improvisation, whether it is vocal or in the background, or any combination of those things. They may all exist or they may exist one at a time, and they are enough to give a jazz flavour to the music so that we say yes, that is smooth jazz.

5951 COMMISSIONER CARDOZO: You are saying that for the most part you set Phil Collins aside, but every now and then there is a Phil Collins which meets your criteria?

5952 MS KIRK: I shouldn't say that. I am not familiar with absolutely everything he has ever written; but yes, this is what is happening.

5953 And the same is happening on the other side. We have jazz artists like Brian Hughes, Carol Welsman, Diana Krall -- whom everybody recognizes. We were interested in her music primarily because we wanted to beef up our Canadian content, but find that of course there isn't anything she has recorded except for one song called "Jimmy" that is Canadian. As a result, we have had to look hard and long at some of the things we were playing by her, because they really were traditional jazz that jazz purists love to hear.

5954 But our audience, I think, is what the jazz purist would turn their noses up at and say: "You are not really jazz fans. You are something different."

5955 Yes, it is a commercial version of jazz. And maybe one day, if this takes off, they will allow us to include smooth jazz as a sector of the jazz market. But right now they don't look upon us as real jazz.

5956 I was at an opening the other night for a young group called Metalwood, surrounded by jazz fans, and I heard someone at the next table say, when they began to play: "That's not real jazz."

5957 It was a little hard for our station, but this is the new contemporary direction that jazz is taking. These artists are hopeful that there will be a market for it.

5958 COMMISSIONER CARDOZO: Ms Musgrave...?

5959 MS MUSGRAVE: I would like to say that in looking at smooth jazz, it is more melodic. There is more simplicity. It is not as complicated as your traditional jazz.

5960 It gives the musicians or the selection that they play -- you can really hear the musicians. It gives the song time to breathe, which you would not hear on mainstream radio.

5961 With a radio station that is geared to young people, to a younger crowd, the vocals are important, and they fit all the vocals in in that three minutes. For us, the more mature audience, with the smooth jazz we are able to hear music where you can hear -- you are able to take a breath between the chorus and the verses because you are able to hear someone really play.

5962 That is another thing, too. You are able to hear real musicians play, other than listening to mainstream music where it is mostly programmed and it is all in a set formula.

5963 This kind of music or smooth jazz gives the music a chance to breathe so that we, the mature crowd, can appreciate that more.

5964 My music, as well, is like that. I have a lot of brilliant musicians on my CD who are able to play. They probably wouldn't play that on mainstream because "oh, it's a solo" and they are basically going for that commercial format.

5965 For me as a listener, that is what I get out of the 94.7 smooth jazz station.

5966 MR. FORSYTH: If I may add, to bring this full circle back to your original question relative to the format and whether we are talking subcategory 24 or subcategory 34, and is this a specialty service or is it not a specialty service, I think what NAC/Smooth Jazz -- certainly the Hamilton experience and what is being talked about today is that the licensee would like to have some flexibility to be able to program this wide scope of music without being constrained by a requirement that they live up to a category that they do not feel very comfortable with.

5967 In other words, this is much more a pop leaning format than a traditional jazz leaning format. That is sort of the summary of it.

5968 It is to give the station the flexibility and not to, number one, have to look over its shoulder every day when it programs its music and say "have we got the right amount in here relative to this", and certainly even perhaps from the Commission staff viewpoint of not having to worry about which category this fits in or does not fit in, on a record by record basis. It gives them that type of flexibility.

5969 COMMISSIONER CARDOZO: On that, the playlist that you had sent us turned out to be 58 per cent jazz. So it seems to me that you are not having a hard time finding or including the jazz.

5970 MR. FORSYTH: Perhaps Mr. Kassan or Mary could respond to that.

5971 COMMISSIONER CARDOZO: You still prefer to be a conventional non-specialty station.

5972 MR. KIRK: The 58 per cent jazz was a rating done by whom?

5973 COMMISSIONER CARDOZO: I think that was yours. If it is not yours, it was by our team but looking at the Schwab catalogue and other catalogues of that kind.

5974 Is 58 per cent too high as a representation of what you play?

5975 MR. KIRK: It could well be. We did not put 58 per cent on that, because quite frankly in a lot of this music we don't know where it fits.

5976 It illustrates the point that someone says it is 58 per cent jazz. We have a radio station that we are trying to program into a market and make this new format work. The format has a lot of potential, but it needs that flexibility. It may be 58 per cent jazz, but quite frankly I think it is a detriment to what we are trying to do, to be counting and saying: Is this jazz or is it not jazz?

5977 As you have heard, it illustrates the point. It is difficult to range where a lot of this music ends up.

5978 COMMISSIONER CARDOZO: One of the arguments in favour of a specialty format is that it offers you a certain amount of protection and that somebody else seeing the success of your format won't flip and get into your field. So you have a certain amount of protection there.

5979 Is that something that is of interest to you?

5980 MR. KIRK: In our experience, in the U.S. where the format has been operating for over ten years we have seen virtually no cases where there has been an overlap in the format. It is a distinct niche format.

5981 COMMISSIONER CARDOZO: As I understand it, you don't want a condition of licence that would require you to play less than 70 per cent Category 2, which would mean over 30 per cent Category 3.

5982 MR. KIRK: We have not applied for that.

5983 COMMISSIONER CARDOZO: What is your source of category --

5984 MS KIRK: May I make one final point to wrap up the question of where our music falls.

5985 I have a quote from Gordon Sheard, who is a fairly renowned Canadian jazz artist who has been on the contemporary jazz scene and the international jazz scene for some years.

5986 He wrote an intervention and I thought he had a very good comment to make when he said that he often found that his music falls between the cracks in terms of public exposure in general and a radio airplay in particular.

5987 It is perceived by radio programmers as not fitting into any of the formats that have traditionally been available in Canada, on the one hand. It is paradoxically often thought of as being too commercial to conform to the requirements of jazz broadcasters, while, on the other hand, stations playing pop music, popular music, find it too jazzy to be viably played and commercially viable for them. So he doesn't get any exposure whatsoever because he is somewhere in between.

5988 I think the music that we are choosing he finds a Godsend. We are successfully sort of filling this gap in the market. There are many, many artists like Gordon Sheard who are awaiting this kind of breakthrough for what they consider to be jazz, but many jazz purists don't consider to be jazz.

5989 COMMISSIONER CARDOZO: Okay. When you are categorizing music, what is your source of deciding where it falls? Do you use the Schwab catalogue, for example, and then what do you do when it is new music which wouldn't have made it onto a catalogue yet?

5990 MS KIRK: We don't really use a lot of cataloguing. We are certainly looking week-by-week at the charts. There are a number of smooth jazz charts in the U.S. that list the songs that are skyrocketing to the top.

5991 Funnily enough, some of that music we find out -- when I went to the States and bought a CD which was heading upwards on the charts, only to find when I brought it home from the U.S. that is 100 per cent Canadian product made by some Toronto fellows called Four 80 East and that their first CD had been in 1998 at the top of the charts for 12 weeks straight and their single off that CD had been the seventh most played song in the U.S. in that format. Their new CD out now has another hit that I was after and I didn't think I could get it and it turns out I couldn't have gotten it except by calling Rob DeBoer personally, which I did afterwards when I found out that he was from Toronto and his group was here.

5992 Then, of course, he sends me CDs in the mail and a package to my house. That is how I am getting that product.

5993 But he goes to the record store in New York, sees his product heavily stocked, and he said he can't find it anywhere here, although he has hired a group to distribute his music.

5994 COMMISSIONER CARDOZO: It almost sounds like you have to collect illicit material or something.

5995 MS KIRK: So we are looking at the charts to the south and we are listening with our ears. As I said, we are aware of which cuts from CDs we are getting that are known, are popular and rising and paying attention to that.

5996 But if it just somebody like a Maurice Gordon who walks in one day, wonderful artist who spends his time in Toronto and partially in Jamaica, handed us his CD and said "Could you play my music". We listened to it and said "Yes, we can play almost all of it. You are bang on. It is instrumental and we are just listening for those jazz components and sort of an upbeat rhythm."

5997 I guess you are just listening with your ears and listening for those jazz flavours that Steve was talking about.

5998 MR. KASSAY: Some of it you can add, some of it you can't. It is a format-specific thing. It comes down to choosing music appropriate to the NAC/Smooth Jazz format. It's music with a groove.

5999 It's obviously a partially subjective thing from person to person. We will find an album that someone may say is from a terrific jazz artist or not and we may find one track that fits the format. We all agree it fits the format and the music is added and, so far in our experience in Hamilton, accepted.

6000 MR. FORSYTH: If I may just sort of conclude on that point.

6001 Like any format, whether we talk country or adult contemporary, rock, classic rock, smooth jazz -- NAC/Smooth Jazz has consensus music. There is music that works within the format. The format collectively has determined what that list is. The reason for that is, specifically in the very large markets in the United States -- if we talk about Los Angeles, we talk about New York, some of those markets -- that music is actually tested amongst those listeners.

6002 Certainly Hamilton is not at the stage yet where they would be, number one, financially able to do this and, secondly, have enough knowledge of the music in the market to do this type of testing. But the music is tested on a format basis and that draws the line and says "This is what works relative to the format."

6003 So in that sense it can vary from market to market, but there is no one centre point or no one reference that says "This is smooth jazz", "This is not smooth jazz."

6004 COMMISSIONER CARDOZO: Can I ask a couple of more questions on programming and then we will move on.

6005 What is the proportion of NAC versus smooth jazz that you would be playing? Could you give me a sense of that, or is that like trying to nail jello to the wall?

6006 MR. KIRK: Maybe jello or smoke.

--- Laughter / Rires

6007 MR. KIRK: As I said, it's a blend.

6008 I would ask Steve and Mary if they would like to answer that.

6009 We don't say it's NAC or smooth jazz. The whole format is NAC/Smooth Jazz. It is a mosaic of instrumental and vocal.

6010 COMMISSIONER CARDOZO: Would any amount fit under -- well, let's say jazz versus NAC? Can you give me a breakdown that way?

6011 MS KIRK: Could I answer that?


6013 MS KIRK: I'm not sure if this is an answer --

6014 COMMISSIONER CARDOZO: If you can, yes.

6015 MS KIRK:  -- but as soon as you asked the question I thought: How can you differentiate between one and the other?

6016 I think NAC is in there, in a way, to alert everyone to the fact that some of the smooth jazz we are playing is NAC.


6018 MS KIRK: From that format we are selectively drawing particular --

6019 COMMISSIONER CARDOZO: That answer gives me a sense of how you are approaching the --

6020 MS KIRK: There is an overlap there, so there is no real boundary between the two in many cases.

6021 COMMISSIONER CARDOZO: How about instrumental versus vocal?

6022 MS KIRK: That we can do.

6023 COMMISSIONER CARDOZO: What is the proportion of instrumental to vocal?

6024 MR. KIRK: Right now I will ask Steve to give you a little more detail on that and he can give you some finer breakdown.

6025 Currently the station is running approximately 60 per cent instrumental and 40 per cent vocal. It runs in boundaries.

6026 You know, the availability of this stuff, the availability of the product, as we have mentioned, is unique. You can pick things from pop vocal, pop instrumental. So it does have boundaries on it, but it is designed now to run 55 per cent to 60 per cent instrumental, 40 per cent to 45 per cent vocal.

6027 Steve.

6028 MS. KASSAY: Which, luckily enough, is about the ratio of the output of material we are getting as well.

6029 Again, that is the beauty of the format. That is what makes this such a wonderful format. It adds diversity to the airwaves. Most of the product is instrumental. From there we apply the same criteria that we have, hopefully successfully explained in choosing what songs are appropriate for it and which are not.

6030 COMMISSIONER CARDOZO: Can I just clarify your Canadian content level?

6031 Do you want to tell me what your Canadian content level is.

6032 MR. KASSAY: Oh, we are committing to playing a minimum of 20 per cent.

6033 COMMISSIONER CARDOZO: Okay. That is because of the -- it's not 35 per cent because of the instrumental level?

6034 MR. KASSAY: Correct.

6035 MR. KIRK: I just want to continue to re-emphasize the point that the diversity in this format is the instrumental component, whether it's jazz or contemporary easy listening. That is what makes it different.

6036 When you put the radio on you can say "Yes, this is a smooth jazz radio station", it's just like that. You know it's there. It is because of the instrumental component of the format that works. It's hip, it's contemporary, it's new. Whether it's pop or jazz, whether the vocals are pop or jazz or whether you could fit them into those categories, it is really secondary. It is the sound of the radio station that pops out of the speaker or out of the dashboard that makes it work.

6037 COMMISSIONER CARDOZO: I have a question about diversity of news voices.

6038 You have indicated that licensing you here would offer a diversity of ownership, diversity of news voice.

6039 This is more a general question than to your specific application, but what do we mean when we talk about diversity of news voices? Is it simply one more news voice, one more studio that would be delivering news which comes off the wire or the Internet or whatever, or is there a different orientation that you might bring to the news market?

6040 I'm thinking, you know, are you more environmentalist, are you more -- do you think there is need for more business-oriented news or more high-tech-oriented news?

6041 MR. KIRK: I will ask Steve to comment more specifically on it.

6042 Factually, just from a numeric point of view, it adds another distinct unconnected news gathering and broadcasting operation to this market.

6043 So factually, yes, it adds to diversity. I think that is one part of the question.

6044 The other is approach. We have been doing this now in Ajax for six years, in Hamilton now for just under a year. John has just started a station in Kingston with a local news orientation, and that is key.

6045 I don't think we are in the business of gathering and disseminating news to take certain positions on things, we are not editorializing, we are gathering and broadcasting news.

6046 These stations, CJKX in Ajax, The Wave in Hamilton, K-Rock in Kingston, all have a very distinctive approach to local news.

6047 I will ask Steve to give you more of the mechanics.

6048 But if you wanted to describe the approach, it is look at the local market, reflect that local market, get into the fabric of that local market. That is the approach to news.

6049 We don't lead with national or international stories on these radio stations. People who are interested in that have already seen it on CBC Newsworld or CNN, or whatever they are consuming the night before, in their morning news run. We are not telling them much new. But we are focusing on stuff, news items, developments, issues in the local market that they wouldn't have seen on other electronic news media.

6050 I will ask Steve to explain how we do it. This is not a large organization, but the approach and the way that Steve has organized it in Ajax and Hamilton it is quite effective.

6051 Steve?

6052 MR. KASSAY: Yes. We consider ourselves winners in those markets. We have applied and developed a news strategy where we have enough people on staff in the news process to attack the local market.

6053 You are familiar with Ajax. We are in the shadow of many large stations immediately to our left if you are looking north, and we win. We win in many ways with that station in that market.

6054 One of the ways we win is our commitment to local service. Local service goes a long way. As Doug mentioned, there are many media outlets and national outlets providing global news or news from around the world where we win locally. We have enough people to be on the air all day, we have beat reporting, we have people on assignment going to local places of interest where news is happening.

6055 And it is the same here. People who live in Stittsville want to know what is going on if it is happening in Stittsville, Gloucester, Nepean, Kanata to Orleans. This is our approach.

6056 There are a collection of communities in this area and we want to fulfil the needs of those in those areas. If news is affecting them, we want to be there. We have a very grassroots approach to covering our news.

6057 COMMISSIONER CARDOZO: Okay. I have a few questions on Canadian talent development.

6058 You have talked about playing an active role in the local community in general and in terms of distributing Canadian talent development benefits. Have you started developing local contacts or how would you go about doing that?

6059 MR. KIRK: We have identified local institutions and organizations.

6060 We have made a contact through the Kiwanis Festival. That's one specific benefit that we have connected. That was an outgrowth of that initiative we made in Hamilton where we sponsored the jazz segment of the Kiwanis Music Festival of the Greater Toronto area which included Hamilton, Burlington.

6061 It allowed them to have a much more vibrant festival this year. They were able to stage it in a larger location, provided the funds to hire a professional adjudicator for the jazz segment. The Kiwanis organization was very pleased with that initiative. It was a targeted initiative into the jazz area. These are young artists coming up and competing.

6062 Out of the initiative we made there, they were also able to give two small scholarships out of that that went to the winning entrants. We expect this to be an ongoing thing. We have connected with those people.

6063 There's a similar festival in Ottawa and we have made a commitment to that organization as a specific initiative. There are other initiatives in the market. The Ottawa Jazz Festival, we are aware of the people involved there. We have not made a specific contact yet, but certainly if licensed I'm sure they would be pleased to hear from us.

6064 John I think wants to comment a little further.

6065 MR. WRIGHT: I think the whole promotion of and working with the artists, that's the passion of the business. That's the part that all broadcasters I believe get really excited about.

6066 In the last two weeks in Kingston as an example, we have done some local talent venue presentations as we are discussing doing with The Wave in Ottawa. You can just see the entire staff rallying behind it. They all go out, you know. The morning show, the mid-day people, the drive home people all go out to these events because that's why they are in the business. They love the music they are playing, they love the association with the artists and the thought of discovering, helping and developing artists is a very exciting part of the business.

6067 We have allocated funds to the small venue side of the artists development and a lot of that you need to wait until you are open and operating and going and then you start to develop those projects. That's the part that we all look forward to really getting into.

6068 COMMISSIONER CARDOZO: Okay. I have got a couple of specific questions about some of the benefits that you have listed. There is the matter of a hundred thousand to be used for the local market that you talked about in your letter of March 6 which was a response to a deficiency question.

6069 How would you go about distributing that money and what kind of guidelines or process would you be using?

6070 MR. KIRK: I think John will comment on that.

6071 COMMISSIONER CARDOZO: This is on page 2 of the March 6 letter.

6072 MR. KIRK: Okay. I will start with the approach. We had targeted a hundred thousand dollars per year over the first seven year period of the licence as a direct contribution.

6073 The thrust of that is to have it all spent in the local market. It will be the responsibility of the station manager and staff, but it will be the direct responsibility of John operating the station to coordinate that program.

6074 We have not decided to ship any of the expenditure out of the market to national organizations.

6075 COMMISSIONER CARDOZO: My question is how would you be letting people know that this is available. Do you have guidelines or a process? Do you have a deadline advertising about this fund that's available?

6076 MR. WRIGHT: The fund is, as you see, allocated. I wasn't sure whether you were referring to the hundred thousand we have talked about, a hundred thousand in direct cash expenditures annually. We also have talked about the hundred thousand in indirect promotional expenditures on our big venue concert series.

6077 I wasn't quite sure which one you were referring about.

6078 COMMISSIONER CARDOZO: Why don't you tell me about both.

6079 MR. WRIGHT: Okay. The hundred thousand in cash is divided up already. We have the $50,000 going to the concert hall type events. This is basically a reach out program. We will be working with the community and promoters and artists and developing those programs.

6080 The National Capital Region Kiwanis Music Festival is already allocated and spoken for, the $25,000 for the Ottawa Jazz Festival is allocated and then the $15,000 for the small venue series, again that's something that happens when you are in the market. It's working with the local venues in the market.

6081 We will be making contact with all the appropriate venues and indicating that this funding is available and working with them on developing programs to expend that money.

6082 COMMISSIONER CARDOZO: So there is a $15,000 amount. That is part of that hundred thousand, is it, for the --

6083 MR. WRIGHT: That's correct. So the 50, the 10, the 25 and the 15 make up that $100,000 in cash contributions annually. Then the 150 in indirect comes basically on the big venue items and on the small venue concert series, those two particular initiatives.


6085 COMMISSIONER CARDOZO: The Ottawa Jazz Festival, $25,000 a year, do you have a sense of whether that would be for local jazz artists or international artists because we have quite a range. How does that come for that festival?

6086 MR. WRIGHT: It would be our desire to have that allocated for NAC/Smooth Jazz artists at the Ottawa Festival. Certainly we would insist that it go to Canadians. It does not just go into the general coffers of the festival. It would have to be allocated to Canadian.

6087 MR. KIRK: Commissioner Cardozo, I just want to add to the point. We developed this plan based on our experience in Hamilton so far. We are only a few months old there, but initiatives we have undertaken there, for example, we sponsored Karen Welsman, who is a noted NAC/Smooth Jazz artist in Canada, known to the Commission. We sponsored her at a festival last fall in Hamilton. We paid for Carol to appear there to add to the lineup of the festival.

6088 Those are the sorts of large venue initiatives that we would undertake. We are working right now with Brian Hughes who is a noted Canadian smooth jazz artist who has also international experience, to have him at an event in the Burlington/Oakville area this summer. We would pay for Brian Hughes to come to embellish that event, to stage it.

6089 Those are the sorts of large venue items that we would go after. We have also had a small hall series for local musicians to try and increase their exposure as well. We have had three of those events in the short period that The Wave has been on the air. That again is just working with people who are known to the station. Once you get one of these stations on, it becomes a beacon.


6091 MR. KIRK: You get people grabbing --

6092 COMMISSIONER CARDOZO: Then the question becomes now how do you get rid of the money, but how do you --

6093 MR. KIRK: Allocate it.

6094 COMMISSIONER CARDOZO:  -- allocate it fairly in some kind of way.

6095 MR. KIRK: This is not just drawn completely out of the air. It's based on taking a pattern that we have had some experience with translating it to this market on a larger scale.

6096 COMMISSIONER CARDOZO: A couple of questions on human resources. In terms of employment equity, your company I take it will be less than a hundred people if you are looking at the --

6097 MR. KIRK: Yes, that's correct.

6098 COMMISSIONER CARDOZO: How would you go about implementing employment equity? Have you got policies in place in your other stations? Do you have other experience in the field?

6099 MR. KIRK: With these individual stations we are cognizant of the aims of employment equity, but because of the small size we do not have someone dedicated to that function. However, as we have indicated --

6100 COMMISSIONER CARDOZO: Oh, but you have a result at the end of the day. Do the people in your station in some way reflect the community you are serving?

6101 MR. KIRK: Yes. We try. Steve's involved and John is obviously involved more directly in the hiring process, so I will let them comment.

6102 MR. WRIGHT: Certainly we try and reflect the makeup of the community. That's a goal of the station. We are aware of that when we are hiring.

6103 COMMISSIONER CARDOZO: You don't have a policy that you could share with us, a written policy or anything like that, that would give us information how you go about ensuring you have equitable hiring practices in advertising, training, apprenticeship, any of that kind of stuff.

6104 MR. KIRK: No, we don't. We interview candidates on merit and are cognizant of --

6105 COMMISSIONER CARDOZO: That's what they all say.

6106 In terms of the other aspect of Ottawa/Hull is the bilingual nature of this nature both within Ottawa and on both sides of the river. Do you anticipate having staff that are either from the Hull area or familiar with the Hull area, speak both languages? Essentially it's an English language station.

6107 MR. WRIGHT: It is but certainly bilingualism would be a criteria that we would want for our station, not necessarily for on air people. I think there have been stations that have attempted to be semi-bilingual on air before.

6108 COMMISSIONER CARDOZO: This buzz comes and goes sometimes.

6109 MR. WRIGHT: Is it? I thought it was something I said.

6110 COMMISSIONER CARDOZO: We get this along with jazz applications.

6111 MR. WRIGHT: I see. But all the administrative sales side of the station bilingualism would be a desired component.

6112 COMMISSIONER CARDOZO: Okay. A couple of questions on your current station, The Wave. I hope you just ask me to repeat my question if you don't hear me over the buzz.

6113 I guess we have talked a bit about it in terms of how you are managing with the smooth jazz NAC component. Is there anything else you wanted to add to that? I certainly got a sense of it. Do you want to add anything in terms of how the issue of being able to deal with music selection is working in your current station and how that would apply here with a new station?

6114 MR. KIRK: Yes. Steve will answer that and I will add some comments at the end.

6115 MR. KASSAY: Not to otherwise expand on the point, it has been nine months that we have been doing this more in prep of it. You know, we have developed a real team there where everyone participates in it. This is what helps us reach our conclusions based on our own criteria which I hope we have successfully explained this morning.

6116 Many people are involved in the music since you specifically ask, many. Mary chairs the committee, myself. Doug has input. The on air people have input. They are so well experienced. It's a veteran staff.

6117 COMMISSIONER CARDOZO: How did you find it with a new station, a stand-alone station in the Hamilton area and then a new format? Is there anything you can tell us that you learned from there that would apply here in order to get you to a running start?

6118 MR. KIRK: I can tell you, having done it more than once, that start-ups are tough, they are really tough. John can speak to that as well just having started the station in Kingston.

6119 We worked very hard last summer and put The Wave on I believe in record time for a stand-alone station, from licence to on air in four months. It has been a tough start. In the market it's hard to find space. These are competitive markets. People have radio habits that have been developed over years. You have to go in and find space in that market.

6120 It requires a lot of advertising. We have done that. You have seen quoted our share numbers. They are not high enough yet, but we are working very hard on getting it there.

6121 I would say as an opening to start any of these niche oriented stations, it will be a very, very tough go. The Wave is not making money. That was expected. We projected that. We are funding it. We are continuing to build it, but start-ups are tough and it takes a long period of time, period of growth I think to get these formats going.

6122 That has been the experience in the U.S. as well. They start and grow. They grow continuously over a long period of time, but it does take a while to ramp them up. So quick starts into the market I would not expect for this format.

6123 Steve and John have much more to add.

6124 MR. KASSAY: Yes, and from the programming side, if we have learned anything, we have learned that we are quite confident coming here today and committing to a minimum 20 per cent Canadian content based on our submission for playing them on 35 per cent instrumental.

6125 We have learned a lot in nine months operating The Wave in Hamilton and specifically to the programming. Everyone knows how lively a discussion can be on this and has been for days and has been at our place for a long time.

6126 We have learned that this commitment is a fair one. We don't think we can execute the format true to the format and properly if the commitment is higher.

6127 I think that is a very important lesson for us and obviously, based on the applications we have seen this week, a model for this format in Canada.

6128 COMMISSIONER CARDOZO: What evidence do you have about the popularity or the interest in this format in this region?

6129 MR. KIRK: What we have done -- we have a model. Let's first of all say that. We have the only operating model in Canada right now.

6130 The format is growing. We had a good growth in the cume audience or the total reach of the station, first book to second book, but it is still small. We projected, based on our experience there, experience in the format, the likelihood of the market and demographics existing in this market.

6131 I will ask Andrew and John to add to the point.

6132 The market here, I believe, could accept this format. It has all the attributes of being able to accept this type of format.

--- Off microphone / Sans microphone

6133 MR. KIRK: Professional, highly educated work populace, primarily level of education. These are all things when we have done scaling or indexing of The Wave audience, they are off the end of the scale in terms of those attributes. Those are very evident in the Ottawa market.

6134 MR. WRIGHT: Perhaps I could make a comment.

6135 As you know, we have projected the lowest audience share in year one. We think the format is somewhere around a 3.5 to a 4 share format. We also know that it is directed at people 35 years of age and over, 35-to-54.

6136 I think we are all aware that as we get to that age, we have our habits more formed. So when you look at penetration and you look at stations that have very quick acceptance in the market, they are usually youth market stations because the youth market is very quick to change and adapt and to try something new if it is directed to them.

6137 When we reach a little older ages, we tend to be more set in our ways and to get us to switch to do something else is very difficult. It is a long process.

6138 If there is something we have learned in Hamilton, if there is something we have learned from all our contacts with all the American operators that have worked this format and have developed this format over many years, it is that that is exactly what it is. It is a development process.

6139 The older folks don't switch quickly. It takes a long time to penetrate and to get that movement from where we are now to another radio station, another dial position.

6140 So it is a building process. We think we are being very realistic in looking at what will be achieved in year one.

6141 MR. FORSYTH: If I could sort of add to John's point and your question -- and I don't necessarily need to draw the complete parallel between Ottawa and Washington, D.C., other than Washington, D.C. does have a lot in common. It also is a capital. You have a very highly educated, very sophisticated audience. So there are parallels between the two.

6142 I just pulled up the Washington market to have a look at that.

6143 To answer the question, the smooth jazz/NAC station there achieved a 4 share in the winter book, again consistent with what the application is headed, where this radio station should be at growth is about a 3.5 share. This station has been around certainly for a long time now and has grown to that level.

6144 That is where it comes in. It is a niche.

6145 I think the other thing that comes out of the previous question, too, relative to where Hamilton is as a radio station.

6146 One of the things I keep hearing from Doug and Steve, particularly when they talk about this radio station, is the fact that it is a format. The format, whether it is Drake Chanel Top 40 or whether it is Classic Rock, it is a format that works well if you do the format. If you stray from the format, then you are not necessarily going to achieve the audience figures because your targeting is going to be off. If you move to the side where you are becoming more eclectic -- if you become an eclectic jazz station, then you may as well become an eclectic jazz station.

6147 We know that an eclectic jazz station, using the Canadian example of CJRT in Toronto, which has many years of experience, achieved a 1.9 share.

6148 The minute you go away from the formula, you are lost and your audience is lost. It is like McDonald's. It is like the Big Mac. You take out the middle patty because you don't think your audience needs it, you're lost. They are all going to Harvey's. That is what this formula is.

6149 THE CHAIRPERSON: They are selling McChicken too.

--- Laughter / Rires

6150 MR. FORSYTH: That's right. Well, it's the hoof and mouth thing -- well, beak and claw. I don't know.

6151 The point is you have to stick very closely to where the format goes. I think that is one of the things they have learned in Hamilton.

6152 MS MUSGRAVE: From an audience perspective, I was a fan before they started playing my material. I started listening to smooth jazz. I honed in on it in my house as well as in my car. It is just tuned in to smooth jazz. Now that they play my material, it is even better.

6153 From an audience perspective everybody, people of my own ethnic background tune into smooth jazz and tell me they have heard me. This is not me telling them about it. This is people coming up to me and saying: "Oh, they are playing you too. That's wonderful."

6154 Also, at my son's daycare the teachers have said: "I have heard your name over smooth jazz."

6155 So the diversity of people that tune in to smooth jazz is so vast -- musicians. So aside from the formalities of how it is structured, whatever they are doing, they are doing it right because there are so many people who really appreciate what they are doing in Hamilton.

6156 COMMISSIONER CARDOZO: I am going to ask you this. When you hear your own song on the radio, do you sing along? You know the words.

--- Laughter / Rires

6157 MS MUSGRAVE: Actually, the other day I thought I didn't put that tape in. They were actually playing me, and I didn't realize it.

6158 No, I don't sing along. I listen to see what other people are hearing.

6159 MR. KASSAY: Commissioner, that complements our point very finely in that it is a groove thing; it is a format. We want to be true to this format.

6160 We have experienced how it works. We have done our research and discussions with people south of the border to see how this not really a young format is working and is progressing; where it stands and what our expectations should be, and most importantly how we must program it: what it must be. It is a format.

6161 You raised the question of Canadian content. It is important to debunk the myth about artists in this country and what they are. Are they smooth jazz? Everyone is talking that Diana Krall gets no airplay.

6162 I have reviewed her CDs. Do you know how many Canadian tracks there are? One.

6163 And through our process of auditioning music, I can't tell you that all of it fits the format. It doesn't.

6164 It is difficult. But we are quite proud of our progress so far, and we are proud of the people we have in order to help make these decisions. We played a minimum. We play in excess of the minimum, and we are glad we can do this.

6165 COMMISSIONER CARDOZO: In terms of the attributes that you are looking at in a community, does the multicultural nature of the city also affect how smooth jazz plays?

6166 MR. KIRK: I would say yes. We have had excellent response to The Wave, as Sharon has indicated, from a wide group within the community. It is not narrowly targeted. It is a niche format, but it is not narrowly targeted. It is broadly based in that age group.

6167 COMMISSIONER CARDOZO: You have noted in your supplementary brief that -- sorry, did you want to add something?

6168 MS KIRK: I just wanted to add that the format itself consists of a very, very broad cross-section of ethnic music. We are getting tremendous response to a lot of Cape Town artists from South Africa; we play a lot of Caribbean, some Latin jazz, some Spanish flavoured.

6169 We reviewed Jessie Cook, who is a great Canadian jazz talent, very, very popular. We can't play all of his stuff, but there is certainly an element there that we would classify as smooth jazz and are happily playing.

6170 There is a lot of French language music.

6171 The diversity in the music is appealing to a diverse audience.

6172 COMMISSIONER CARDOZO: Does the Buena Vista Social Club fit into smooth jazz?

6173 MS KIRK: You know, I hate to say it but I never did see that film. It is still on my list.

6174 COMMISSIONER CARDOZO: They have a great CD too. They have incredible music. I would like you to review that music and let me know what you think about that.

6175 MS KIRK: I will put it on the list for next week, because that Latin beat is very popular.

6176 MR. KIRK: We will undertake to do that offline, Commissioner Cardozo.

6177 COMMISSIONER CARDOZO: It is an interesting revival of Cuban music that was done with the help of an American artist.

6178 You have noted in your supplementary brief that smooth jazz gets little play in Ottawa. Do you know whether it gets any or where it gets played?

6179 MR. KIRK: We are not aware of much or any of it being played. The primary factor is the instrumental component.

6180 COMMISSIONER CARDOZO: Would you see any overlap between your station and CJMJ Magic 100, which is an NAC?

6181 MR. KIRK: It is primarily an AC, isn't it?

6182 John is more familiar with that.

6183 MR. WRIGHT: What kind of overlap? Is this a musical overlap or audience overlap?

6184 COMMISSIONER CARDOZO: I assume one results in the other; music results in audience.

6185 MR. WRIGHT: Musically, we would not be similar to Magic at all.

6186 COMMISSIONER CARDOZO: Would there be some play of smooth jazz on Magic 100?

6187 MR. KIRK: We are not aware. Maybe Andrew can talk to this, but we are not aware of much, or any, instrumental music being played.

6188 COMMISSIONER CARDOZO: It's that much word I am looking for, where you see it happening.

6189 MR. KIRK: Regarding the instrumental -- and that is 60 per cent of the selections we are playing -- we see negligible to zero overlap. There may be some small overlap on the pop vocal parts that we play. But again, you are talking about a small proportion of 40 per cent.

6190 The circles do not have a great deal of intersection, in my view.

6191 COMMISSIONER CARDOZO: You submitted a five-hour playlist to us. It was a 7:00 p.m. to midnight playlist. I am wondering is that is more or less the same type of music that plays the rest of the day as well.

6192 MR. KIRK: Yes. We don't -- I would say that --

6193 COMMISSIONER CARDOZO: You don't have a different sound in the evening?

6194 MR. KIRK: We may play some slower tempoed selections in the evening.

6195 COMMISSIONER CARDOZO: More candlelight and wine?

6196 MR. KIRK: That is an old easy listening term. I don't think you would classify this as candlelight and wine by any stretch of the imagination.

6197 We don't dramatically day part the radio station, but some slower tempoed selections would play in the evening. I think Steve can give you a little more flavour on that.

6198 MR. KASSAY: Standard day parting procedures are in effect, as they are at all radio stations, I am sure. But no, there is no distinct program segment for the evening as opposed to the general playlist throughout the day.

6199 MR. FORSYTH: It is our experience from conducting monitors in the Ottawa market on a regular basis, that Magic 100, which has almost no instrumental component to it whatsoever, unless there is a song that becomes popular. Jessie Cook is a very good example of that record that crossed over into popular music.

6200 To confirm what Doug was on about, there certainly is no instrumental flavour to that radio station.

6201 Duplication of the AC artists, the NAC/AC vocals, there is a possibility of that. But if I looked at the current radio and records smooth jazz chart, there isn't one song on there that would be played on AC. There is no crossover whatsoever.

6202 From time to time, quite correctly, there might be. Fields of Gold by Sting, as an example, might be a record that would be on both radio stations. But it is a very small component of The Wave's musical universe. Frankly, those types of records would be a very small component of Magic's.

6203 COMMISSIONER CARDOZO: I have one more question on The Wave.

6204 Ms Musgrave, this is for you.

6205 I'm just wondering, as a smooth jazz artist from Hamilton, do you find that other stations weren't interested in playing you as a local artist and that it had to be a station in your format?

6206 MS MUSGRAVE: I would say that going back to saying that I was a fan of smooth jazz, that listening to them I felt my music suited that format more so than the other stations.

6207 There are maybe one or two other stations that it would suit, but I was drawn to them because I liked what they were playing. Then eventually they started playing my music as well.

6208 I have been played on one or two other stations. They have been more supportive than the other stations, although I do get played on other stations.

6209 COMMISSIONER CARDOZO: I'm just trying to get a sense of to what extent stations of all kinds will perhaps even go outside the format and play a local artist because they are local artists. They are trying to promote local artists as well I would hope.

6210 MR. WRIGHT: I think that is a song-by-song issue as well. I know in Kingston we are playing a new cut by a group called The Mahones that is a local Kingston group that have a song out that is not getting airplay in any other markets yet. They may start to. But we are playing their song and presenting them when they come to the market and we think the music is good enough quality to do that. So I think it is a song-by-song issue as well.

6211 COMMISSIONER CARDOZO: I have a few questions --

6212 MS KIRK: Just to add to that quickly, if you look at the letters of intervention on our behalf written by smooth jazz artists, you will find the same relief over and over again, the frustration of artists who have not found a home for their music. Big artists like -- well, we think he is big anyway -- Marc Jordan who is very big in the States and has said that although he is signed to EMI there is no other type of station at all that will play his music. He is just lost between the cracks.

6213 Or a John McMurchy, a Toronto local jazz artist who has been around for years saying he is currently without a local broadcaster for the music that he and others cherish and is looking forward to a venue in Ottawa.

6214 So it is just a repetition of the same thing over and over again.

6215 COMMISSIONER CARDOZO: I have a few questions regarding your business plan. They are short, quick questions, but there are a number.

6216 Have you researched CD sales in the Ottawa/Hull area in terms of smooth jazz CDs?

6217 MR. WRIGHT: Just generally. We are told the market is reasonable buoyant, considering there is no availability of listening to smooth jazz in the market, but other than that, not any specific research.

6218 COMMISSIONER CARDOZO: Do you have a sense of what your 12-plus audience share would be?

6219 MR. WRIGHT: Yes. Our projected 12-plus audience share in year one is a 1.7 share.

6220 COMMISSIONER CARDOZO: When would you expect to launch? Like how long a time would you take to launch if you were successful?

6221 MR. WRIGHT: We are trying to set a new world record all the time.

6222 Doug launched Hamilton in four months, we were five months to launch Kingston, we went on the air in February. We would -- I think that demonstrates the fact that we do everything -- once we get the licence, we do everything in our power to get on as soon as we possibly can.

6223 I would think that that would represent about that five-six month period for launch. When we get the licence, we want to get going.

6224 MR. KIRK: We continue to do this and drive ourselves crazy when we get a licence and we seem to be habit-forming.

6225 We put them on -- now there are better times than others, so it depends on when the licence is granted. There are good times to launch, being spring and fall. That would determine somewhat.

6226 But certainly a year -- under a year. We have demonstrated that twice in the last year from a new licence to on-air in less than six months.

6227 COMMISSIONER CARDOZO: In your application you have indicated that 24 per cent of the advertising revenues would come from existing stations. Do you sense that the rest of it -- where would that come from and does your format give you either an edge or a disadvantage in terms of drawing new advertisers?

6228 MR. WRIGHT: Two parts to that.

6229 First of all, the 24 per cent coming from existing stations, I think we mentioned that represents about .5 per cent of the revenue in the market. We expect that our audience will come from a multitude of stations and we won't be taking greater than a one share from any particular station. Probably the station we would affect -- or get the most of our hours tuned from might be Magic.

6230 Again, we will -- we won't get more than a one share. We will probably get a half a share of audience from Magic. So the revenue coming from any one existing station is going to be very, very minimal.

6231 When we look at it, in most of these target demos when we are looking at 35-54 target demo, we are looking at a very highly educated, high income group of people generally, according to the stats in other markets.

6232 This is an under served radio market for advertisers. We identify an awful lot of advertisers in the financial services sector, the high-tech sector, the automotive sector in the high end. There are many areas where advertisers have not directed a lot of money to radio, because radio just doesn't seem to, up until now, have that niche that they can be comfortable spending on.

6233 So we think there is going to be an awful lot of money coming from advertisers not currently spending money on radio.

6234 MR. KIRK: Just to amplify John's point, in the latest book we did some indexing work on The Wave figures in Hamilton. One that just sticks in mind -- I don't have all the numbers voted in -- but regarding high-end cars. The Wave audience was asked the question: Would you be -- or have you bought a car over, I think it was $30,000 in the past year? The market average would be 100. It is scaled to be 100. The Wave audience scaled at 400 in the last book.

6235 That was particularly outstanding, but it just shows that that brings a new advertiser to the radio market who would not maybe want to use or pay the price for the tonnage of larger stations but would use a targeted vehicle like this to reach that high-end car purchasing using the station. A specific example which would generate new money into the radio market.

6236 MR. WRIGHT: Another broad category that NAC/Smooth Jazz stations get a lot of money from, in all the markets that they are successful in, are homebuilders. The homebuilders traditionally don't spend that much money on radio, but on NAC/smooth jazz they are a prime target group.

6237 Generally that money is newspaper money. Most markets the weekend newspaper is just jammed full of real estate ads and new home ads and this is a great prospect for NAC/Smooth Jazz.

6238 COMMISSIONER CARDOZO: In terms of the market here, do you consider the english and french-language markets as one market or two? I'm thinking primarily from an advertising point of view.

6239 MR. WRIGHT: In our business plan our share is against Ottawa central, so we are dealing with english and french as part of Ottawa central. But certainly primarily it is going to be an english radio station so the vast majority of our advertising sales revenue will be directed to the english market.

6240 When you get to agency-driven business, they tend to buy the markets separately. They don't just buy Ottawa, they would buy Ottawa francophone and Ottawa english. So most of our money will be money that is directed at the english market.

6241 In your audience projections are you projecting primarily english-speaking audience or english and french?

6242 MR. WRIGHT: We are projecting mostly english-speaking, but there will be certainly a french component. It is primarily an instrumental format, as you know, so language comes into all the information programming and the spoken word programming. So we anticipate there will be a good french component, but not a majority -- not a strong component.

6243 COMMISSIONER CARDOZO: Can you put a percentage on that?

6244 MR. WRIGHT: I can't.

6245 COMMISSIONER CARDOZO: Let me talk about the licensing that we could be doing at the end of this process.

6246 Do you any advice, given the kind of projections you have, and you talked at length about the buoyancy of the market this morning, do you have a sense of how many stations this market can take, how many new stations this market can take?

6247 MR. KIRK: Certainly from the overall numbers that we looked at the market is buoyant and profitable and revenue growth is exceeding average, even as this year goes on.

6248 The Commission has a number of proposals in front of it for various new licensing initiatives, multicultural, aboriginal, french and english-language stations. I think certainly from The Wave entry into the market it is not going to be a disruptive force economically to the market. We think our impact will be quite low on the existing stations and it has a pretty good chance of generating some new dollars.

6249 So given the strength of the market, I think this format could be introduced with other formats simultaneously.

6250 COMMISSIONER CARDOZO: So if you were, say, to be the only english licence, would licensing any french language stations affect your business plan?

6251 MR. KIRK: No.

6252 COMMISSIONER CARDOZO: If it was you and any other english language, would that change your -- would that have an affect on your plan?

6253 MR. KIRK: No.

6254 MR. WRIGHT: What it's smooth jazz?

6255 MR. KIRK: Well, yes. Wholly.

--- Laughter / Rires

6256 COMMISSIONER CARDOZO: Unless it's smooth jazz.

6257 MR. KIRK: I'm sorry.

6258 You're right, John.

6259 COMMISSIONER CARDOZO: Can the market handle --

6260 MR. KIRK: John is right again.

6261 MR. WRIGHT: Yes.

6262 MR. KIRK: If it was another smooth jazz station, yes, but certainly --

6263 COMMISSIONER CARDOZO: Can the market handle two smooth jazz stations?

6264 MR. KIRK: No. Jazz or smooth jazz, no.

6265 COMMISSIONER CARDOZO: Just a couple of technical questions, then.

6266 You have seen the range of applications that have applied for the frequency, but certainly the ones that have applied for 97.9.

6267 Could you just tell us how you feel yours makes the best use of that particular frequency?

6268 MR. KIRK: I think the coverage of the market is key. There are some bigger or smaller plans by certain applicants. I think our proposal provides adequate coverage to the overall National Capital Region. I don't think there is a whole lot to choose between the applicants on the frequency.

6269 The key is getting coverage in the built-up area of the market.

6270 COMMISSIONER CARDOZO: My next question was going to be: Have you looked at any other frequencies, but I know you have.

6271 MR. KIRK: Yes, we have. How long do you have?

--- Laughter / Rires

6272 MR. KIRK: We applied, as the Commission knows, for a third adjacent frequency which we thought would be a good idea. It would add another frequency, the next best frequency. It is a frequency 99.7 that can cover the region as well as 97.9. I know some of the other frequencies may have some issues with them as well.

6273 So this was an idea we thought and we know Industry Canada is in the midst of considering third adjacencies. That would be a proposal that we would look at as well to try to add another channel in the market that could cover the core of the market quite well and be usable. That is why we proposed it.

6274 But there is a small, tiny, tiny interference issue that under the existing rules we could not clear, under the new rules we could very well clear.

6275 That would open 99.7 as well in this market which would provide very good coverage, slightly better coverage than our 97.9, but to compare the two, I think it's a de minimis issue between using either frequency at this point.

6276 COMMISSIONER CARDOZO: But for the record, your application is for 97.9.

6277 MR. WRIGHT: That's correct. That's an approved technical brief on 97.9.

6278 COMMISSIONER CARDOZO: Have you looked at other frequencies yet? Have you looked at any other frequencies?

6279 MR. KIRK: Other than 99.7?


6281 MR. KIRK: We were in the process of honing in on a proposal. We are aware that there are several other smaller frequencies that could provide smaller coverage in the market, but we thought 99.7 was kind of a -- was unique and interesting.

6282 COMMISSIONER CARDOZO: Yes, but the other smaller ones are not ones that you have considered.

6283 MR. KIRK: We have not considered those. You do need to have good coverage within the full region. Either 97.9 or 99.7 do provide that.

6284 COMMISSIONER CARDOZO: And I would take it AM is not capable for your format.

6285 MR. KIRK: AM would not work. It would not work for us. We know of no smooth jazz music basic formats on AM.

6286 COMMISSIONER CARDOZO: Okay. Well, that covers my questions. Thank you very much. I appreciate that.

6287 THE CHAIRMAN: Thank you, Commissioner Cardozo.

6288 Mr. Kirk, let me preface my remarks by the following statement. Regulatory systems that are generally applicable, be they radio regulations or employment insurance or environmental rules, are usually not perfect. They have their loopholes, they have their difficulties and as Bryan Adams reminded us painfully, for ten years they have perhaps their ridiculous consequences.

6289 Having said that, I'm kind of puzzled by your approach. I would like to know whether you and your programming experts acknowledge or not that there is such a thing as Category 34, blues and jazz, as distinguished from easy listening.

6290 MR. KIRK: I will ask the experts to amplify, but we have read the Commission's categorizations of music. We think we understand what Category 34 means. There is a question which we have tried to articulate to you this morning, saying that this format does not specifically fit a tight Category 34.

6291 THE CHAIRMAN: That was not my question. You speak about format and the sound of your station. We speak of categories because how else are you going to distinguish that?

6292 My question is do you acknowledge that there are pieces of music that would fit under subcategory 34 and not under any other category, particularly 2.

6293 MR. KIRK: Maybe --

6294 THE CHAIRMAN: Any honest person would have to say this is 34 according to the Commission's definition.

6295 MR. KIRK: Well, by its definition, traditional jazz would be in Category 34. You could say very clearly that that was Category 34.

6296 THE CHAIRMAN: And so what you are saying is there are two categories of jazz and the mistake is in saying that there is only Category 34, that there is some jazz under Category 2.

6297 MR. KIRK: Contemporary jazz, correct. What we have been trying to say is it is a very difficult process to split the shades of grey --

6298 THE CHAIRMAN: Yes, Mr. Kirk, but you are going to get into trouble with that or we are with you because you seem to say that you don't want a specialty licence because it's not that easy to distinguish whether it's Category 2 or 3.

6299 You are relying on that very distinction for Canadian content because the regulation says -- the council can pursue if I confuse matters rather than helping. The regulations say that if you play 35 per cent or more instrumental Category 2, excluding Category 3, then you are entitled to reduce your Canadian content from 35 to 20.

6300 If you claim that it's very difficult to distinguish between 34 and easy listening or pop or something else in Category 2, how are you going to know that there aren't some Category 3s in there and you should be doing 35 per cent Canadian content?

6301 The regulations say that the minute your Category 2s are in excess of -- then if it's 34 instrumental, you have to play -- in other words, out of the pool of instrumental are you going to remove some subsection 34, subcategory 34, to find out whether you are meeting the 35 per cent Category 2 instrumental?

6302 MR. KIRK: I think the question turns on the definition and categorization of those two.

6303 THE CHAIRMAN: Yes, but somewhere or other -- I understand the continuum, but somewhere or other there must be some jazz music that is Category 34, so you are going to remove that from the pool to then count whether you are of the instrumentals to see whether you actually meet the Category 2 instrumental that allows you to lower your Canadian content to 20 per cent.

6304 MS KIRK: Could I add a comment to that?

6305 THE CHAIRMAN: And you are back to the difficulty that you claim in distinguishing between jazz that fits the smooth jazz format but does not fit the subsection 34, subcategory 34.

6306 MR. KIRK: Yes. I think Mary wanted to comment on this question first.

6307 MS KIRK: You are right. We are trying to play a kind of jazz that does not fall into Category 34. Our experience in Hamilton has been yes, there is the odd selection in our play list that you would consider to be a Category 34 jazz selection.

6308 Some of that was put in out of desperation almost and has since been removed, again as the new material is being unearthed and uncovered. I don't find it all that difficult to really distinguish between jazz and blues or traditional jazz, what the jazz purists would label jazz --

6309 THE CHAIRMAN: So you wouldn't find it difficult --

6310 MS KIRK:  -- and what we are calling smooth jazz.

6311 THE CHAIRMAN: If those are instrumental selections, you wouldn't find it difficult to take them out of the pool of instrumentals to make sure that your 35 per cent is Category --

6312 MS KIRK: We did originally have Oscar Peterson selections in our flow. Oscar Peterson definitely does not belong on a smooth jazz station.

6313 MR. KIRK: The answer is yes to the question. We do not play included in the Category 4, we don't believe we play any or very much Category 4. We don't play virtually any of the Category 4.

6314 THE CHAIRMAN: Category 34 you mean.

6315 MR. KIRK: Category 34.

6316 THE CHAIRMAN: I think we will probably want to pursue this further, but we will take a break. You have been here two hours now. We will be back here at 11:15.

6317 Nous reprendrons à 11 h 15.

--- Upon recessing at 1100 / Suspension à 1100

--- Upon resuming at 1118 / Reprise à 1118

6318 THE CHAIRPERSON: Welcome back.

6319 We have before us two applicants who are saying we will bring diversity to the market by bringing a jazz station. You call it smooth jazz, but it is a jazz station and distinguishable from something else.

6320 As you know, in the last few years when the commercial radio policy was changed and with the deregulation that preceded it, format was looked at slightly differently, one would have to admit, because parties can actually change format -- we have seen something as dramatic as country to rock -- without approval. And that is accepted by the Commission, albeit it considers format as part of the business plan.

6321 In this case where we have three applicants with smooth jazz proposals and one is prepared to be bound by a specialty format, do you think that the Commission should take that into consideration in analyzing the extent to which there will be diversity brought into the market?

6322 As between those three stations, my understanding is that all three applicants have said they would not think their proposal is viable if one of the other two was also licensed. Therefore, we have three proposals: one is a specialty and the other two are not. They all say they will be NAC/Smooth Jazz.

6323 Do you think it would be fair for the Commission to take that into consideration in saying this is definitely going to be a niche that will not change without our approval?

6324 MR. KIRK: You raise a number of interesting points in the question, and we will try to address them.

6325 I will also have my colleagues speak to some of the points.

6326 As we see it, you have three very different proposals that have the word "jazz" involved with it. Ours involves it as NAC/Smooth Jazz. It is probably the furthest one away from jazz.

6327 I gather others this week have spoken about having a jazz station, which in their presentations have had large components of traditional jazz. In fact, if they wanted to do a smooth jazz, which in our view is a new adult contemporary station, you could not do that. There would be insufficient Canadian to play 35 per cent Canadian within that station. There would have to be traditional jazz selections put into that format to fill it out. That is certainly our understanding.

6328 THE CHAIRPERSON: That is the basis for this distinction you are making.

6329 MR. KIRK: Yes. What we are really talking about is the essence of a format that is called smooth jazz. As we talked about, that is the name that has been attached to it. It is new adult contemporary/smooth jazz.

6330 The substance of that is pop vocal, modern, easy listening, instrumental, and elements of contemporary jazz music or jazz flavoured music.

6331 THE CHAIRPERSON: Even your Canadian talent development say it will be to the Jazz Festival.

6332 MR. KIRK: Yes.

6333 THE CHAIRPERSON: Which artists is it going to go to, since even Oscar Peterson would not fit within NAC/Smooth Jazz?

6334 MR. KIRK: That is another interesting issue.

6335 Jazz festivals and the theme of jazz is very broad, and there are a lot of fans of traditional jazz. The market, in our view, is not well developed enough in Canada yet to have a smooth jazz festival. You have to work within that to encourage development by bringing new artists along and raising their profile in the NAC/Smooth Jazz area to get it to a large enough size that in fact there could be a traditional jazz festival or a smooth jazz festival.

6336 Certainly in the United States there is a category of music awards called The Smooth Jazz Music Awards. It is deep enough and well developed enough that it can stand on its own. It has its own following. It has its own set of stations that are format specific to smooth jazz, which is primarily pop vocal and modern instrumental music, wherever we get into the classification of that.

6337 Certainly that has developed in the United States.

6338 By saying to have a jazz festival in Canada to split it, I don't think there is a real appreciation yet of the genre of music that we are speaking of.

6339 MR. WRIGHT: We also did in our direction of Canadian talent development -- in each case we will look at having the artists we are allocating funds to be new adult contemporary smooth jazz artists wherever possible.

6340 First of all, they have to be Canadian. That is the first criterion.

6341 The second criterion we would look at is, where it is possible to do, make them new adult contemporary smooth jazz artists. We need to grow the format. We need to brand it. We need to market it. We need to get more development of it, and that is one of the ways that we are going to do that.

6342 THE CHAIRPERSON: There is a concern on your part that this format needs to have a lower Canadian content.

6343 MR. KIRK: It requires lower Canadian content at this stage of development. We are doing everything we can to exceed the amount of Canadian that we play at The Wave in Hamilton.

6344 THE CHAIRPERSON: The distinguishing factor, from a regulatory perspective, would be that you would play 35 per cent instrumental. That is it.

6345 If you were to go below, then you would do 35 per cent Canadian content. As long as you have 35 per cent instrumental, it is quite difficult to know what those would be because of this distinction you make between smooth jazz and jazz, as the Commission defines it, as a Category 3.

6346 MR. KIRK: That is correct. That is the essence of the answer, yes. The instrumental drives the diversity.

6347 THE CHAIRPERSON: Counsel.

6348 MR. WRIGHT: I'm sorry. I think your question was: If we drop below 35 per cent instrumental content, would we go to 35 per cent Canadian content?

6349 THE CHAIRPERSON: Well, presumably you would --

6350 MR. WRIGHT: Yes.

6351 THE CHAIRPERSON:  -- if that is what the requirement is in the regulation.

6352 MR. WRIGHT: I just didn't know whether we had answered that properly. But yes, we would.

6353 THE CHAIRPERSON: May question was more: That will be the actual distinguishing factor. There will be nothing else but instrumental that will bind you to this format the way you would be if it was a specialty format.

6354 MR. WRIGHT: We have made that instrumental content a condition of licence. So we would not be able to operate for a year and a half, and then all of a sudden we are all vocal. We have made 35 per cent instrumental as part of our condition of licence.

6355 THE CHAIRPERSON: Counsel...?

6356 MR. RHÉAUME: Thank you, Madam Chairperson.

6357 On that topic, 35 per cent instrumental -- I notice this in your presentation and you just mentioned you don't have a problem with a COL on this.

6358 A couple of pages prior to this in your presentation this morning, you describe smooth jazz format: instrumental selections 55 to 60 per cent.

6359 Is that right?

6360 MR. KIRK: That is correct.

6361 MR. RHÉAUME: Is this what you are doing currently in the Hamilton station?

6362 MR. KIRK: That is correct.

6363 MR. RHÉAUME: Then you want a slightly different format or just a lower commitment to make sure that you meet the commitment.

6364 MR. KIRK: As described, we are comfortable -- I suppose you could look at it the other way. If you committed to 50 per cent instrumental, there could be a lower Canadian content. We are comfortable with 35 per cent and 20 per cent Canadian.

6365 MR. RHÉAUME: That is in the regulations.

6366 MR. KIRK: Yes.

6367 MR. RHÉAUME: So whenever your instrumental varies, you are allowed to reduce, as the case may be, your Canadian content. Is that right?

6368 MR. KIRK: Yes. What you are saying is we could change it and play 35 per cent, just over 35 per cent.

6369 Is that what you are getting at?

6370 MR. RHÉAUME: I don't want to confuse the issue. It is just that on the one page you indicate 55 to 60 per cent instrumental, but then you go further and say our commitment is 35 per cent instrumental. Right?

6371 MR. KIRK: Our commitment is actually 20 per cent, or more, Canadian content because we are playing in excess of 35 per cent.

6372 MR. RHÉAUME: I should have stayed away from this one, because I thought it was pretty clear.

6373 Did you not just say that you are asking by condition of licence to have a minimum of 35 per cent instrumental?

6374 MR. KIRK: Yes, we are.

6375 MR. RHÉAUME: This would allow you, of course, to reduce your Canadian content Category 2 to 20 per cent, by regulation.

6376 MR. KIRK: That is correct.

6377 MR. RHÉAUME: What about Canadian content Category 3? In spite of the disagreement, you still admit that you are going to play some Category 3. Right?

6378 MR. KIRK: Yes, we will, up to 30 per cent possibly. In that, we would commit to play 35 per cent Canadian.

6379 MR. RHÉAUME: Maybe I missed this in your application.

6380 In your Category 3 music, you are committed to 35 per cent Canadian content?

6381 MR. KIRK: No.

6382 MR. RHÉAUME: What is your Canadian content commitment to Category 3 music?

6383 MR. KASSAY: If I may -- as I wished to have responded earlier, I am glad it is back.

6384 I think earlier Chairperson Wylie was asking us about the music and where the categorizations fell.

6385 Yes, we are applying for Category 2.

6386 Yes, at least 70 per cent of the music is Category 2.

6387 Yes, at least 35 per cent. However, the format dictates that it is higher because we want to do the format. That is the way it works. It is an instrumental format. But by the regulations, it calls for minimum 35. That happens to be no problem.

6388 Yes, the Canadian content of that Category 2 is 20 per cent minimum.

6389 Yes, it seems that if we did a major analysis, some people would say that some of the music might fall in Category 3, subsection 34. We are reasonable and I guess could accept if someone said there is 5 per cent here that is Category 3, we would say okay. And yes, we would commit to play 35 per cent of Category 3 Canadian.

6390 MR. RHÉAUME: I understand that.

6391 Did you just say that according to your interpretation, your plan is basically to program all Category 2? If the way the discussion is going -- if I understand the way the discussion is going, you considered that your music list is mostly Category 2.

6392 Is that correct?

6393 MR. KASSAY: That is correct.

6394 MR. RHÉAUME: We won't get into a debate on this, I promise. We won't make music lists or anything like that.

6395 Throughout the morning around your panel, there is a constant reference to traditional jazz as being what Category 3 is.

6396 I took some notes here. I heard: this is not traditional jazz leaning; this is not traditional jazz sounding; this is not traditional jazz inspired.

6397 In one of your last answers to Commissioner Wylie you said: "This is not just traditional jazz. It is not traditional jazz. We don't play traditional jazz."

6398 That's fine. I think we all agree that this is not your format.

6399 I have a note from one of our programming analysts: We are not talking Charlie Parker here.

6400 So if I were to tell you that in looking at the history of Category 3, which essentially includes, as discussed earlier with Commissioner Cardozo, all of the previous Category 24 -- and I guess just the common interpretation of the words "jazz oriented".

6401 I am not an expert in this, but I can tell you what the Commission intended, and then you can tell me if it is properly reflected in the regulations or not.

6402 What the Commission intended was to capture everything that has a jazz -- and you have an artist at your table, Ms Musgrave, maybe you can expand on this -- a jazz component to it. It is far from turning on the notion of traditional jazz.

6403 In fact, if you look at the definition, some of the examples you used were soft, contemporary jazz. That is in Category 34.

6404 So what is your take on this, because -- I am going to finish off with this -- it appears that other broadcasters, your competitors in this hearing -- and we have just had a round of hearings in Calgary and Vancouver, it seems to be understood and accepted by most that Category 3 jazz is very, very broad. You give it an extremely narrow approach.

6405 So maybe you could have comments on this, this long question. I apologize.

6406 MR. KIRK: Yes, it is a long question.

6407 We view this, as you say, narrowly because it turns on the question of what is jazz and what is instrumental easy listening. The vast majority of the selections that we see on format we don't believe are jazz.

6408 MR. RHÉAUME: Would they be even -- to you, what is jazz-oriented? Just to make sure we understand what your position is.

6409 MR. KASSAY: Jazz-oriented music. Are you asking what I think jazz-oriented music would be?

6410 Interpretive, improvisational, quartet in terms of jazz quartet interpretational improvisational music. The music which we play in Hamilton as part of our Wave smooth jazz format is not -- it does not match my definition of what I just explained as jazz-oriented.

6411 I'm thinking, yes, traditional jazz oriented, Charlie Parker, as opposed to contemporary -- contemporary, you know, recent recordings, contemporary, produced, what is today's -- it's brand new -- instrumentational easy listening.

6412 MR. KIRK: That is the essence of it.

6413 MR. RHÉAUME: Could I ask a question to Ms Musgrave? Is that okay?

6414 Do you have CD records?

6415 MS MUSGRAVE: Yes.

6416 MR. RHÉAUME: How do you consider yourself as an artist? Are you a soft jazz artist, a pop, soul, what?

6417 MS MUSGRAVE: I would say my music is -- well, hopefully popular, because I think pop music is something that is back by popular demand. All of a sudden everybody wants it. It starts somewhere, it starts maybe in alternative, it starts -- but then once it crosses over it becomes pop. So I hope it will be in that pop category.

6418 But my music is jazz influenced. I would not call myself a jazz musician because it is not -- it may have jazz chords at certain places, but it's just -- it's not as complicated as jazz. It is simple, it is groove based and, like Mary says, things like that fall in the cracks.

6419 Because I have been around with my agent/manager trying to fit into certain stations and it is difficult. Because if you do, for example, have an instrumental solo in the song, there are certain stations that won't want to hear it.

6420 So where do you fit it in? You can't go to the jazz station because they say it's too simple. It's not -- you know, it's not -- yes, too commercial or too pop.

6421 So I characterize my music as pop soul with a jazz influence.

--- Laughter / Rires

6422 MR. RHÉAUME: If I want to buy your CD, I walk into a record store, what section would I go to?

6423 MS MUSGRAVE: Well, hopefully pop.

6424 MR. RHÉAUME: You would prefer pop?

6425 MS MUSGRAVE: Hopefully, I -- I foresee that there will be a smooth jazz section in the next year or two because it is becoming more and more popular. Even on the Internet, when you go to certain Internet sites there is a smooth jazz section. So I would hope that in the near future there will be in record shops a smooth jazz section.

6426 In the meantime, as an artist it is so hard because you create your music and you put it out and then there are people like you who want to put it in a category. For us, the artists, it's so difficult because, you know, you just create these things from your soul. Then once it gets into the market, you know, it has to be categorized.

6427 But if I was to put it in one of the categories, I would say soul or smooth jazz.

6428 There are certain artists out there who, maybe like Sade, would be in pop, but who would also be in jazz. So even in that way categorizing music nowadays is just so difficult.

6429 Alternative, it's really rock, rock/pop, but now there is a new alternative section.

6430 So I would just hope that there would be a smooth jazz section would be my answer.

6431 MR. RHÉAUME: Smooth jazz section is good.

6432 MS MUSGRAVE: Good.

6433 MS KIRK: Could I just share my shopping experience with you?

6434 MR. RHÉAUME: Certainly.

6435 MS KIRK: When I go to the States desperately looking for some of these hits that we need to play and haven't obtained yet, I go to Barnes & Noble and ask for the smooth jazz section of the jazz section and they show me a quite extensive selection with individual artists features, as well as some compilation CDs that are put together by record companies.

6436 When I go downtown in Toronto and ask for certain selections that are hot on the smooth jazz charts in the States, I go up to the jazz section of a Tower store for instance and they say "Oh, you are in the wrong place. You have to go down two floors for the pop rock for that or to the soul section."

6437 So we are not there yet, but maybe one day, as Sharon says, we will be able to categorize a little more fully.

6438 MR. RHÉAUME: Thank you.

6439 This is my final question: If we look at the music list that you provided and you discussed at some point with Commissioner Cardozo, the artists appearing on that music list, looking at charts -- we were just discussing charts -- they would not be, obviously, on the traditional jazz charts. Would they be found on the soft jazz, smooth jazz charts in the States? Because according to a previous answer right now you figure you are highly, highly Category 2 with a very limited number of Category 3.

6440 So looking at this music list you would say that most of the artists, most of the songs would be on a pop chart and not on smooth jazz charts. Right?

6441 MR. KIRK: No, there would be some on pop and some on smooth jazz.

6442 MR. RHÉAUME: So when you play --

6443 MR. KIRK: You were saying from a reference of the U.S.

6444 MR. RHÉAUME: Yes.

6445 So when you play recordings by artists who are consistently on smooth jazz charts, you don't consider they might be Category 3?

6446 MR. KIRK: No.

6447 MR. RHÉAUME: Why not? Because they are easy to listen to.

6448 MR. KIRK: Well, yes, they are easy to listen to. The musicians you are hearing from have explained, people who have a lot more background technically in music than I do, have explained why there is a difference between jazz and easy listening music.

6449 MR. RHÉAUME: I am --

6450 MR. KIRK: And smooth jazz, smooth jazz is Category 2.

6451 MR. RHÉAUME: I'm sorry, I lied about my previous question being the last one, this is the last one.

6452 MR. KIRK: It's okay.

6453 MR. RHÉAUME: Explain to me one more time why you consider that a Category 3 format is so constraining if you agree with the premise -- I'm not saying you do -- if you agree with the premise that your music list, as we understand it currently -- "we" being Commission staff -- is probably between 50 per cent and 60 per cent Category 3, it seems tome, and correct me if I am wrong, that you could meet the definition of a specialty format without any difficulty whatsoever.

6454 I happen to agree with that assessment on our staff.

6455 MR. KIRK: I understand.

6456 MR. RHÉAUME: This is my final question, I swear.

6457 MR. KIRK: There are three in there I think.

6458 First of all, the music list is constantly evolving and, as mentioned to you, this is a very young station and there is constant change going on in the music list. That sample music list has changed quite dramatically since it has evolved and it has shifted more to Category 2.

6459 Although I don't know how you have categorized. Commission staff have done that. We have not seen that. But I am just taking that you have made an assessment of it without debate on the question.

6460 So, number one, I think you would find the component has moved and there is a propensity to do the format properly to move more to Category 2. I think that is the first part that you were asking about.

6461 MR. RHÉAUME: I guess, in essence, or in part, what our staff looks at essentially are artists that consistently appear on or show up on smooth jazz charts, where CDs will be found in jazz sections in record stores, where artists are featured in jazz-oriented, smooth jazz magazines and publications, including the Internet. So you take all of this together. That is my understand of what our staff's approach is.

6462 I am really going to finish off on this.

6463 Once this proceeding is over, a licence has been issued, whether it is yours or somebody else's, I would invite you to talk to our staff about these issues because I think it is a significant issue when you have a station like yours in Hamilton and there is such a disagreement which could result in misunderstandings and non-compliance and the like. So I would invite you to talk to our staff when this is all over.

6464 Thank you.

6465 Thank you, Madam Chairperson.

6466 THE CHAIRPERSON: Thank you, counsel.

6467 MR. WRIGHT: If I may have a comment, our concern is certainly -- it is a compliance concern in order to do the format properly. We have been skirting around trying to answer this question.

6468 At the Vancouver hearing the transcripts, as an example, of that hearing, Mr. Slaight stated that it would not be possible to do 35 per cent Canadian content on straight smooth jazz, there had to be other elements put in there in order to allow this to happen.

6469 Our concern, again, is that the success of this format, the success of our business plan is based on doing the format which we call smooth jazz. We don't want to end up, in doing the format, be in a constant issue with trying to achieve Canadian content and then have to break format in order to add this content that will not allow us to be an NAC/Smooth Jazz station.

6470 So that is the issue. If there was more Canadian content available for NAC/Smooth Jazz, we will sure play it, and we will play it as it becomes available. We already play more than the minimum at The Wave. So that is the real issue here.

6471 MR. RHÉAUME: Just to finish off on this. The partial answer -- I should remind you that the smooth jazz format, Category 3 format, the current requirement under the regulations is 10 per cent Canadian content, 10 per cent.

6472 If you feel that 35 is attainable or not attainable or 20 per cent or 15 per cent, that can be discussed. Actually the current requirement is a lot less in terms of Canadian content in Category 3 than it is for Category 2.

6473 If you have a smooth jazz format Category 2, of course there is the instrumental issue, but your Canadian content requirement is higher than the smooth jazz format in Category 3.

6474 We will finish up on this. Thank you.

6475 MR. KIRK: I think as a comment it begs us to have a dialogue with you, ongoing with the Commission staff on it, which we will do.

6476 THE CHAIRPERSON: So, Mr. Kirk, then the only condition of licence other than the application of the regulation that you suggest you would accept is that you not during the time of the licence go below 35 per cent instrumental.

6477 MR. KIRK: Yes, that's correct.

6478 THE CHAIRPERSON: And, therefore, you would have a requirement of 20 per cent Canadian content over -- in your Category 2 music. Apart from that, you call your station smooth jazz, but it could be easy listening because there would be nothing that would bind you to have any number of jazz selections on. The only thing you would be bound by is the instrumental level.

6479 MR. KIRK: We are getting back to what is smooth jazz. Smooth jazz is easy listening, contemporary, instrumental and that's the diversity.

6480 THE CHAIRPERSON: Those are our questions. You have three minutes to convince us that you should be granted the licence as everybody else has.

6481 MR. KIRK: I think John and I would like to take a moment to speak on the point. It likely won't be three minutes.

6482 Our view here is that the application we have proposed will provide diversity in the market. It brings a new player to Ottawa/Hull. It brings a player that has experience in the format.

6483 We have been doing, if you will, a pioneering job in developing this "smooth jazz" in Canada. I think that takes it from the theoretical which a number of broadcasters have talked about to the reality that we are actually doing it and trying to execute seven days a week, 24 hours a day, a niche format that is a very interesting new format that will add diversity to the market,

6484 We have been doing it. We want to do it here. It will provide a very interesting new aspect to FM radio in Ottawa/Hull.

6485 I will ask John to address the overall corporate strategy and objectives on why this licence is so important to us.

6486 MR. WRIGHT: You know, we think that we have the realistic approach. We are looking at the proper market share. More importantly than the individual licence for Ottawa, we look at this as the development of a new Ontario regional broadcast player.

6487 Ottawa is critically important to us to develop this concept of an Ontario regional player. It gives us so much room to develop our talent. It gives us synergies between the operation. It allows us to work better with our sales areas in each of the stations. It allows for multi-tasking with our senior management people.

6488 More so than this one particular application for Ottawa which we believe we have demonstrated to have the most realistic and experience-based approach, an application that allows for the development of a new Ontario-based broadcasting entity.

6489 I think that's one of the key reasons we wish to be considered for this licence.

6490 Thank you.

6491 THE CHAIRPERSON: Mr. Kirk, we were having an argument in the back room as to whether or not --

6492 MR. KIRK: I hope it wasn't violent.

6493 THE CHAIRPERSON: Oh, no, no. We are very mild tempered. As to whether or not when you applied for the Hamilton station I am correct that in your video you featured Diana Kroll.

6494 MR. KIRK: We did so.

6495 THE CHAIRPERSON: Thank you very much. We will see you shortly in Phase II no doubt.

6496 We will take a ten minute break to allow for a change of parties.

--- Upon recessing at 1158 / Suspension à 1158

6497 THE CHAIRPERSON: Welcome back to our hearing, those who just came back. We will now begin Phase II of the hearing.

6498 Nous sommes prêts donc à nous lancer dans la Phase II de l'audience.

6499 Madame Poirier.

6500 MS POIRIER: Thank you, Madam Chair.

6501 Phase II of the public hearing is applicants reappearing in the same order that they first appear to intervene to competing applications. A maximum of ten minutes is allowed.

6502 La Phase II de cette audience est constituée des requérantes qui reviennent devant le Conseil dans le même ordre qu'ils ont comparu la première fois afin d'intervenir aux demandes compétitives. Un maximum de dix minutes est accordé pour cette phase.

6503 For the benefit of the court reporter and for the record, please reintroduce yourselves as you present your intervention.

6504 The first applicant is Standard Radio Incorporated.

6505 Thank you.


6506 MS LAFONTAINE: Good afternoon, Madam Chair and Members of the Commission.

6507 My name is Monique Lafontaine and I am here on behalf of Standard Radio Inc. With me this afternoon is Eric Stafford, General Manager of The Bear. We will be very brief this afternoon.

6508 I want to start by noting for the record that Standard Radio has a concern about last minute changes that were made in certain applications after the date of gazetting other than those made in response to CRTC requests or questions.

6509 While we recognize that the CRTC may wish to accept these changes, we think that as a point of principle these kinds of changes undermine the integrity of the process. Apart from that, Standard Radio considers that any points that it would have raised by way of intervention have been sufficiently dealt with in the public record. Therefore, we do not consider it necessary to add anything further in this phase.

6510 Thank you.

6511 THE CHAIRPERSON: Thank you, Ms Lafontaine.

6512 Is there any particular change that you are focusing on that you feel you would need more time to express yourself about? Do you feel that your client has been dealt with equitably?

6513 MS LAFONTAINE: We don't want to belabour the point, but the changes to which we refer are essentially made that by Kirk with respect to its change of frequency or the frequency that it proposes to use and the change in the ownership structure of the Craig Harvard, now the Harvard application.

6514 As I say, we do not want to belabour the point, but we just wanted to note that for the record.

6515 THE CHAIRPERSON: Is it necessary for us to give you more time to speak to these matters?

6516 MS LAFONTAINE: No, we don't.

6517 THE CHAIRPERSON: You are just noting them, but otherwise are satisfied with the process.

6518 MS LAFONTAINE: That's correct.

6519 THE CHAIRPERSON: Thank you.

6520 MS LAFONTAINE: Thank you very much.

6521 MS POIRIER: La prochaine requérante est 9098-7280 Québec Inc. Radio Nord qui m'a fait part de son intention de ne pas prendre part à cette phase.

6522 We will move to Radio 1540 Limited.


6523 MR. LOMBARDI: Thank you, Madam Chair, Commissioners.

6524 THE CHAIRPERSON: Well, I guess I can't say welcome back. It seems that you have been as constant as we are in being here every minute.

6525 MR. L. LOMBARDI: I actually enjoy these proceedings.

6526 THE CHAIRPERSON: Welcome back as a member of the panel anyway.

6527 MR. L. LOMBARDI: Thank you very much. Glad to be back.

6528 My name is Lenny Lombardi, President of CHIN radio, Radio 1540 Limited. We do not intend to intervene at this time, but I do want to say that we will be returning in reply with comments and to answer any questions that you may feel necessary.

6529 THE CHAIRPERSON: Thank you, Mr. Lombardi.

6530 I hope you have a nice weekend in a room with windows.

6531 Madame la Secrétaire.

6532 Mme POIRIER: La prochaine requérante est Radio Ville-Marie Outaouais.


6533 M. TRÉPANIER: Bonjour, Madame la Présidente, mesdames, messieurs du Conseil.

6534 La Coopérative Radio Ville-Marie Outaouais -- je suis Jean-Marc Trépanier, le président de la Coopérative, et à ce moment-ci nous n'avons pas de commentaire à faire sur les présentations, les argumentations qui ont été faites précédemment puisque notre radio est vraiment assez différente et nous croyons que nous avons quand même présenté l'argumentation qu'il fallait, et il nous reste à vous apporter les certifications des deux fréquences que nous serions prêts à assumer si 98,9 ne nous était pas accordée.

6535 Alors il nous reste à apporter les certification pour 95,7 et 89,9. Il nous reste aussi à vous apporter un ruban témoin des émissions d'une journée de CIRA-FM de Montréal. Alors ça sera fait avant la réplique finale.

6536 LA PRÉSIDENTE: Vous avez entendu, évidement, la partie qui vient de se présenter comme quoi les requérantes qui sont en concurrence n'acceptent pas facilement des changements à la demande d'une requérante qui est en concurrence. Alors peut-être que le conseiller juridique peut s'adresser à ça.

6537 Je crois que je vous ai demandé pendant votre présentation si vous aviez un certificat technique pour une fréquence autre que celle pour laquelle vous avez fait une demande, et la réponse était non.

6538 Monsieur le Conseiller juridique.

6539 Me RHÉAUME: Merci, Madame la Présidente.

6540 Vous pouvez peut-être me rappeler très brièvement. Dans votre demande je semble me souvenir que vous avez fait référence que votre demande serait acceptable sur deux autres fréquences.

6541 C'est exact?

6542 M. TRÉPANIER: C'est juste.

6543 Me RHÉAUME: Alors vous aviez votre demande qui est 97,9, mais vous avez mentionné également 95,7.

6544 M. TRÉPANIER: Oui, 95,7 --

6545 Me RHÉAUME: Alors 95,7 et 89,9.

6546 M. TRÉPANIER: C'est ça.

6547 Me RHÉAUME: Alors ce que vous nous dites c'est que vous voulez déposer les mémoires techniques qui vont avec ces deux fréquences alternatives. C'est ça?

6548 M. TRÉPANIER: Ce n'est pas ce qu'on avait compris. On avait compris certificat -- ah, oui, c'est ça, oui.

6549 Maintenant, après une conversation justement avec le conseiller technique qui nous a dit qu'on avait préparé uniquement le certificat ou le mémoire pour 97,9 que nous étions prêts à prendre une autre fréquence s'il y avait lieu, que nous n'avions pas d'objection à prendre une autre fréquence s'il y avait lieu. Il disait que les entreprises, les requérants qui ont demandé pour ces autres fréquences de toute façon, qu'il y avait un mémoire technique qui avait été présenté à cet effet-là et qu'il n'était peut-être pas nécessaire pour nous de faire un nouveau mémoire technique. De toute façon, il n'est pas fait pour nous.

6550 Me RHÉAUME: Mais qu'est-ce que vous entendez déposer? Vous avez mentionné ce matin que vous allez déposer des certifications --

6551 M. TRÉPANIER: Non, justement c'est ça. C'est une erreur.

6552 Me RHÉAUME: D'accord.

6553 M. TRÉPANIER: Nous ne déposerons pas. Je m'excuse.

6554 Me RHÉAUME: Merci.

6555 M. TRÉPANIER: J'avais mal compris.

6556 Me RHÉAUME: Merci, Madame la Présidente.

6557 LA PRÉSIDENTE: Merci, Monsieur le Conseiller juridique. Merci, Monsieur Trépanier.

6558 Nous vous reverrons donc à la Phase IV.

6559 M. TRÉPANIER: Merci, Madame la Présidente.

6560 LA PRÉSIDENTE: Bon week-end.

6561 Madame la Secrétaire, s'il vous plaît.

6562 MS POIRIER: The next intervention is presented by Harvard Developments Inc.


6563 MR. COWIE: Madam Chairperson, Commissioners, Commission staff. It is not our intention to intervene specifically against any of the applicants.

6564 We have reviewed all of the applications before you and we remain, after careful consideration -- and in some cases reconsideration --convinced of the soundness of our business plan, the strength of the format, and our ability to make this station a welcome and special part of Ottawa/Hull.

6565 We have diligently researched our proposal and we remain unswayed by the arguments that have been presented here, that there is a better use for the 89.9 frequency.

6566 Thank you very much.

6567 THE CHAIRPERSON: Thank you, Mr. Cowie.

6568 Madame la Secrétaire.

6569 MS POIRIER: I would now call 914258 Ontario Limited, Infinity.


6570 THE CHAIRPERSON: Welcome back.

6571 MS BALDELLI: Good afternoon, Madam Chair and Commissioners.

6572 My name is Ivana Baldelli. I am Chairperson of Infinity Broadcasting's Ottawa Board of Directors as well as equity partner in the company.

6573 With me are Neeti Ray, President of Infinity Broadcasting and Renu Ray, Vice President of Infinity.

6574 Madam Chair. You and your colleagues have had a long week, and so Infinity will be merciful by being brief in our intervention comments today.

6575 We, of course, reserve the right to comment further at the rebuttal phase of these proceedings next week.

6576 In reviewing the various applications involved in this public hearing process, it is probable that a multiple licensing scenario may result. In light of that, from Infinity's perspective, there could be an ethnic station, a French station, a mainstream English station, and possibly an aboriginal station licensed.

6577 Infinity's purpose in intervening at this stage of the proceedings is not as much in opposition to the other applicants as it is to underline our view that the best frequency be applied to the area of the greatest need within the Ottawa/Hull regions coverage area.

6578 While there are some very good applications here, of course, which, if licensed, would add varying degrees of diversity and listener choice to the Ottawa/Hull radio spectrum, the single greatest unfulfilled need within the National Capital Region is to fill in the missing service link, we think, and that is relative to the 400 000 ethnic Canadians who are now without a dedicated full service multilingual, multicultural radio station to call their own.

6579 Although some applicants state that their proposals are in response to a huge demand for service, that would address the most underserved portion of the market. It is Infinity's position and contention that any such service demand in underserved demographic pales by comparison with the long-suffering unserved multicultural communities who have no dedicated consistent radio voice amongst the many existing mainstream stations that are available to the English and French-speaking audiences here.

6580 And now, I turn to Renu.

6581 MS RAY: Madam Chair. There are also claims by some applicants that their proposals will reflect the multicultural diversity of Ottawa/Hull's population and as such form part of the audience they are seeking across certain targeted demographic groups.

6582 With all due respect to such claims, a mere reflection of Ottawa/Hull's multiculturalism here, and a visible minority face there, do precious little to address the reality that 400 000 ethnic Canadians living within the National Capital Region of Canada have no dedicated full-service radio station to cater to their needs.

6583 Ottawa/Hull's ever-growing multicultural population has for years been living off the crumbs deflected from around the edges of mainstream stations service menus. The time has come for Ottawa/Hull's multicultural, multilingual population to have a full course service menu of their own.

6584 In discussing various frequency allocation scenarios, it has been suggested by some that an AM frequency would be appropriate for an ethnic broadcaster, thus leaving the available FM frequencies to add additional layers of mainstream services to those already provided by Ottawa/Hull's mainstream stations.

6585 Quite aside from the prohibitive cost involved for the land assembly and tower area required by AM stations, it begs the question as to why 400 000 ethnic Canadians should have to accept second best so that considerably smaller audiences predicated along narrow demographic groupings can enjoy further service provisions.

6586 MR. RAY: Madam Chair and Commissioners. Infinity has applied for the 89.9 FM frequency because it will best enable us to reach and fully serve the multicultural, multilingual population within the Ottawa/Hull region. As such we are competing with ten applicants, including three who are mutually exclusive with ourselves in seeking the 89.9 FM frequency.

6587 It is our view that of all of the applicants Infinity is the one who will fully optimize the utilization of the 89.9 FM frequency because we are the only applicant who proposes to fulfil the single greatest service need in addressing the 400 000 ethnic Canadians who have no dedicated multicultural station of their own.

6588 If the Commission is to include an ethnic applicant, which we hope would be Infinity, it its ultimate licensing scenario from the hearing, then we urge the Commission not to licence other proposed radio services at the exclusion or expense of Infinity's use of 89.9 FM.

6589 In short, finally, the best frequency which we believe to be 89.9 FM should go to the applicant who will use it to the greatest advantage in addressing the single greatest radio service need within the Ottawa/Hull region.

6590 Thank you.

6591 THE CHAIRPERSON: Thank you, Mr. and Mrs. Ray and Ms Baldelli. We will see you again at Phase IV.

6592 In the meantime, have a good weekend.

6593 MR. RAY: Thank you.

6594 Madame la Secrétaire, s'il vous plaît.

6595 Mme POIRIER: Merci, Madame la Présidente.

6596 La prochaine intervention sera présentée par Fondation Radio Enfant.


6597 Mme SAINT-PIERRE: Madame la Présidente, membres du Conseil, bonjour.

6598 Je suis entourée de Michel Delorme, expert-conseil en radiodiffusion et de Eric Paulhus, technicien animateur radio. Je suis Caroline Saint-Pierre, enseignante à la Commission scolaire des Draveurs.

6599 M. DELORME: Bonjour, Madame, bonjour, Commissaires.

6600 Nous n'interviendrons pas directement nos positions à différentes demandes, mais on va prendre plutôt la démarche qu'on a utilisée hier pour clarifier différents points.

6601 Le premier point que nous aimerions clarifier c'est la question qui a été soulevée hier sur le point des revenus des radios communautaires.

6602 LA PRÉSIDENTE: Monsieur Delorme?

6603 M. DELORME: Oui?

6604 LA PRÉSIDENTE: La Phase II est une phase où on vous invite à faire des commentaires positifs ou négatifs sur les demandes concurrentes et les clarifications à votre demande c'est à la Phase IV, à la toute fin. Vous comprenez la différence?

6605 M. DELORME: Ah, d'accord. J'avais demandé tantôt si je pouvais apporter des corrections sur ce qui a été dit hier sur les revenus des radios communautaires au Canada et puis on m'a dit que je pouvais l'introduire immédiatement, corriger ces informations-là.

6606 LA PRÉSIDENTE: Alors allez-y -- mais ensuite le reste du temps va être utilisé dans le contexte de la Phase II.

6607 M. DELORME: Bon.

6608 LA PRÉSIDENTE: Il faut toujours avertir la présidente quand le personnel a pris des décisions.

--- Rires/ Laughter

6609 M. DELORME: Ah, excusez-moi, j'aurais peut-être dû.

6610 LA PRÉSIDENTE: Allez-y, Monsieur Delorme.

6611 M. DELORME: Donc hier il a été dit textuellement que les chiffres qu'on proposait étaient plutôt un scénario de radio commerciale puisque les revenus de la radio communautaire au Canada étaient moins élevés que ceux en termes de revenus publicitaires, étaient moins élevés que ceux qu'on proposait, et vous aviez dit même plus du tiers.

6612 J'ai consulté hier -- parce que je savais que les radios communautaires au Canada ont des revenus publicitaires beaucoup plus élevés que ceux qu'on propose -- et je n'ai téléphoné que deux stations -- j'aurais pu en téléphoner plusieurs autres -- et puis la première que je voudrais mentionner a un million de revenus publicitaires. Sur 1,6 millions de revenus globaux, il y a un million de revenus publicitaires, uniquement de la vente de publicité dans le temps d'antenne. Ça c'est la première station, avec un marché beaucoup plus réduit que celui qu'on a -- 70 000 francophones à qui ils s'adressent. Ils ont une population et un auditoire moyen de 48 000.

6613 La deuxième station, qui est toujours dans un environnement similaire, c'est une population visée de 60 000 et un auditoire moyen de 40 000. Ils ont des revenus globaux de un million et 600 000 de revenus publicitaires. Ce ne sont que deux stations parmi celles que j'aurais pu consulter.

6614 Donc nous ne serions pas la station qui propose le revenu plus élevé, mais bien beaucoup moins que ceux qui sont déjà en opération.

6615 Ça c'est le premier point qui touche le deuxième point aussi, les estimés de revenus. Je ne reviendrai pas là-dessus, on va garder ça pour la fin.

6616 Le troisième point c'était la question d'ouverture vers l'ARC. On a eu des discussions. Il va y avoir des discussions et puis probablement leur présentation, la question de l'harmonie avec l'intervention de l'ARC va se régler, et puis donc c'est là-dessus que nous on insiste sur les besoins des communautés francophones. On ne voit pas nécessairement une opposition aux autres demandes mais il y a un grand besoin des populations francophones ici dans le milieu et on insiste pour que l'utilisation de la fréquence 89,9 soit encore dédiée à des fins non commerciales.

6617 M. PAULHUS: D'ailleurs au plan technique on n'a aucune opposition, que ce soit clair, à formuler contre quelque projet que ce soit qui est présenté devant le Conseil si ce n'est que pour la fréquence 89,9. C'est une fréquence, je le rappelle, de type C qui nous permet une puissance apparente rayonnée jusqu'à cent kilowatts, 100 000 watts.

6618 On estime que tout projet qui envisage une puissance apparente rayonnée de moins de 45 kilowatts, 45 000 watts, serait un projet qui sous-utiliserait le potentiel de la fréquence.

6619 LA PRÉSIDENTE: Merci.

6620 Merci, Madame Saint-Pierre, Monsieur Paulhus, Monsieur Delorme. Nous vous reverrons sans doute la semaine prochaine.

6621 Bon week-end.

6622 Madame la Secrétaire.

6623 MS POIRIER: The next intervention should be presented by Newcap Incorporated, but they told me that they wouldn't -- did you decide to come forward? All right. Go ahead.


6624 MR. TEMPLETON: Good morning, Madam Chair, Commissioners.

6625 As I think most of you know, my name is Bob Templeton. I am President of Newcap Broadcasting and Newcap chooses not to intervene at this phase. We look forward to seeing you again in Phase IV.

6626 Thank you.

6627 THE CHAIRPERSON: Thank you, Mr. Templeton, and have a nice weekend as well.

6628 Madame Poirier.

6629 Mme POIRIER: J'inviterais maintenant M. Yves Belzile à venir présenter son intervention.


6630 M. BELZILE: Rebonjour. Je suis Yves Belzile. Je demande une station FM pour Buckingham.

6631 Je n'ai pas l'intention d'intervenir contre aucune des autres demandes. Je pense que tout le monde a fait son travail dans cette chose-là.

6632 Tel que convenu hier, nous avons déposé auprès des employés ce matin les précisions que les membres du comité ont demandées hier et nous serons disponibles pour en discuter quand bon vous semblera.

6633 LA PRÉSIDENTE: Merci, Monsieur Belzile, et bon week-end à vous aussi.

6634 Vous rentrez à Montréal?

6635 M. BELZILE: Je l'espère.

6636 LA PRÉSIDENTE: Madame Poirier, s'il vous plaît.

6637 MS POIRIER: I would now invite Mr. Garry Farmer to come forward.


6638 MR. FARMER: Madam Chair and Commissioners.

6639 LA PRÉSIDENTE: Bonjour, Monsieur Farmer.

6640 MR. FARMER: We wish to intervene against the application by Yves Belzile for a station at 95.7 MHz in Buckingham.

6641 Our intervention is strictly on technical grounds against the use of frequency 95.7 in Buckingham instead of Ottawa. Buckingham has an unused Class A allotment on 96.5 MHz. This allotment works in Buckingham but can't easily be brought in to serve Ottawa/Hull as it needs to protect the station in Pembroke.

6642 If the Commission wishes to licence the Buckingham service, it can do so using 96.5 MHz at no cost to the spectrum to the number of frequencies available for us in Ottawa/Hull.

6643 Thank you.

6644 THE CHAIRPERSON: Thank you, Mr. Farmer, and a good weekend to you too.

6645 Madame Poirier.

6646 MS POIRIER: The last intervention will be presented by Mr. Douglas Kirk.


6647 MR. KIRK: Good afternoon.

6648 THE CHAIRPERSON: Good afternoon, Mr. Kirk.

6649 MR. KIRK: As I am the only thing standing between the weekend and conclusion, I will be brief.

6650 THE CHAIRPERSON: You are a lucky man. You could do both phases in one day.

6651 MR. KIRK: Sometimes it works.

6652 We wish to intervene against the applications by Standard, application Item No. 1, and Harvard, Item No. 5.

6653 We just have some comments and questions about the business plans of those applicants. Our experience and the experience we have reviewed with respect to the proposed jazz or "smooth jazz" stations proposed indicate, in our experience, a relatively small market share. We expect a 1.7 per cent market share in the first year growing to 3.5 per cent. The other applicants in these jazz and smooth jazz formats have proposed applications with significantly higher expectations -- over 5 per cent of the total market in the case of standard, in particular.

6654 Our belief is that the format will not generate those sorts of numbers and we believe that the business plans of those applications may suffer from that assumption.

6655 Our second point is regarding Canadian talent development, particularly with the Standard application. The direct Canadian talent development commitments of over six million dollars we believe are high in consideration of the economics of the format and the ability of the station to generate revenues and operating profits.

6656 If one were to look at the Commission's test, the unequivocal benefits test on transactions now rated at 6 per cent, the CTD commitments by Standard of over six million dollars would imply a value on the licence of in excess of one hundred million dollars.

6657 Our application proposed 700,000 of direct CTD which, using the same test, of course, has a correspondingly smaller implied value, but at that we think the market can sustain that. That brings two points to bear here. The Standard application has the highest expectations in terms of market share and revenue, and we think the experience does not bear that out and to do that, to fund their Canadian talent development at the six million dollar level we think makes this an uneconomic proposal.

6658 Those are our two major points regarding the competing applications in our segment of jazz and smooth jazz.

6659 THE CHAIRPERSON: Thank you, Mr. Kirk. That completes your presentation?

6660 MR. KIRK: It does.

6661 THE CHAIRPERSON: Have a nice weekend.

6662 MR. KIRK: You too.

6663 THE CHAIRPERSON: And we will see you next week probably.

6664 MR. KIRK: Thank you.

6665 THE CHAIRPERSON: This completes Phase II of the process.

6666 We will begin Phase III at nine o'clock on Monday morning, I understand, with Mr. John Boudrias.

6667 I would suggest that you check with the Hearing Secretary if you want to advise intervenors of interest. There have been changes obviously to the chronology of the list.

6668 MS POIRIER: Most of the applicants are already aware of those changes and have already started advising their intervenors.

6669 THE CHAIRPERSON: Thank you, Madam Poirier.

6670 Alors nous reprendrons à neuf heures lundi matin avec la Phase III et le premier intervenant sera M. John Boudrias.

6671 Comme la secrétaire vient de l'annoncer, il y a des changements qui ont été relayés aux requérantes dans l'ordre de comparution des intervenants.

6672 Bon week-end à tous.

6673 Have a good weekend.

--- Whereupon the hearing adjourned at 1245 to resume on Monday, May 28, 2001 at 0900 / L'audience est ajournée à 1245 pour reprendre le lundi 28 mai 2001 à 0900

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