ARCHIVED -  Transcript / Transcription - Toronto, Ontario - 2002-09-20

Multiple broadcasting and ownership applications &

applications further to Public Notice CRTC 2002-39

"Call for applications for a broadcasting licence to carry on

a radio programming undertaking to serve Toronto, Ontario"/

Demandes de radiodiffusion et de propriétés multiples ainsi

que des demandes suite à l'avis public CRTC 2000-39

"Appel de demandes de licence de radiodiffusion visant

l'exploitation d'une entreprise de programmation de radio

pour desservir Toronto (Ontario)"

HELD AT: TENUE À:

Travelodge Hotel Hôtel Travelodge

Toronto Yorkdale Toronto Yorkdale

2737 Keele Street 2737, rue Keele

Toronto, Ontario Toronto (Ontario)

September 20, 2002 le 20 septembre 2002

Transcripts

In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

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

and staff attending the public hearings, and the Table of

Contents.

However, the aforementioned publication is the recorded

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

either of the official languages, depending on the language

spoken by the participant at the public hearing.

Transcription

Afin de rencontrer les exigences de la Loi sur les langues

officielles, les procès-verbaux pour le Conseil seront

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

membres et du personnel du CRTC participant à l'audience

publique ainsi que la table des matières.

Toutefois, la publication susmentionnée est un compte rendu

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

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

officielles, compte tenu de la langue utilisée par le

participant à l'audience publique.

Multiple broadcasting and ownership applications &

applications further to Public Notice CRTC 2000-39

"Call for applications for a broadcasting licence to carry on

a radio programming undertaking to serve Toronto, Ontario"/

Demandes de radiodiffusion et de propriétés multiples ainsi

que des demandes suite à l'avis public CRTC 2000-39

"Appel de demandes de licence de radiodiffusion visant

l'exploitation d'une entreprise de programmation de radio

pour desservir Toronto (Ontario)"

BEFORE / DEVANT:

Andrée Wylie Chairperson / Présidente

David Colville Commissioner / Conseiller

Andrée Noël Commissioner / Conseillère

Cindy Grauer Commissioner / Conseillère

Andrew Cardozo Commissioner / Conseiller

ALSO PRESENT / AUSSI PRÉSENTS:

Joe Aguiar Hearing Manager / Gérant

de l'audience

Pierre LeBel Secretary / Secrétaire

Alastair Stewart Legal Counsel /

Conseiller juridique

HELD AT: TENUE À:

Travelodge Hotel Hôtel Travelodge

Toronto Yorkdale Toronto Yorkdale

2737 Keele Street 2737, rue Keele

Toronto, Ontario Toronto (Ontario)

September 19, 2002 le 19 septembre 2002

PAGE / PARA NO.

PHASE I (continued)

PRESENTATION BY / PRÉSENTATION PAR

Radio 1540 Limited 785 / 4702

Toronto, Ontario / Toronto (Ontario)

--- Upon resuming on Friday, September 20, 2002

at 0843 / L'audience reprend le vendredi

19 septembre 2002 à 0843

4694 THE CHAIRPERSON: Good morning to everyone.

4695 Mr. Secretary.

4696 MR. LEBEL: Thank you, Madam Chair.

4697 We will now hear Items 10, 11 and 12 on the agenda as a block. These applications were submitted by Radio 1540 Limited, and the first of these applications is to convert CHIN-AM from the AM to the FM band on frequency 101.3 MHz, channel 267A, with an effective radiated power of 90 watts.

4698 The second application is for a licence to operate a commercial specialty FM ethnic radio station in Toronto.

4699 The new station would operate on frequency 101.3 MHz, channel 267A, with an effective radiated power of 90 watts.

4700 The third application is to amend the licence of CHIN-AM by changing the frequency of its CHIN-FM- 1 transmitter from 101.3 MHz, channel 267LP, to 91.9 MHz, channel 220A1, and to increase the effective radiated power from 22 to 35 watts.

4701 Mr. Lombardi will introduce his colleagues. You have 40 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

4702 MR. LOMBARDI: Thank you.

4703 Madam Chair, Members of the Commission, thank you very much. We apologize for the delay and we appreciate your patience.

4704 My name is Lenny Lombardi, and I am President and CEO of CHIN Radio 1540 Limited. Before we begin our presentation, I would like to introduce the members of our panel.

4705 With me at this table are Shan Chandrasekar, President and CEO of Asian Television Network; Joe Mulvihill, Executive Vice-President and Chief Operating Officer, Radio 1540; my sister Donina Lombardi-Hartig, an on-air radio and television broadcaster with CHIN and Director of Public Affairs and Vice-President Television Programming, and my other sister Theresa Lombardi, Vice-President Special Events and Administration.

4706 At the table behind me are Bob Culliton, Vice-President and General Manager, Radio 1540; Dario Amaral, CHIN Radio's Programming Director. Unfortunately, Jai Ojah-Maharaj has yet to join us, but I am sure he is in transit. He is the Associate Producer of our Caribbean programming. Grace Fusillo-Lombardi is responsible for community consultation, and John Hylton of the law firm Borden Ledner & Gervais, our legal counsel for this application.

4707 At the third table, we have Debra McLaughlin, of Strategic Inc., our expert on the radio advertising market; Kaan Yigit of the research company Solutions Research Group; and Wayne Stacey, our broadcast engineering consultant.

4708 I am very pleased to introduce here this morning for the panel of Commissioners, the many of our asosciate produces from CHIN Radio as well as ATN who are here in the audience, and I think showing and reflecting their support for our application. I would just like to ask them to stand and say hello.

4709 Thank you all for coming.

4710 This is the first CRTC hearing for CHIN without the company's founder, my father, Johnny Lombardi. He is not physically present here today with us, but I can assure you that he is here, in spirit, in us. He was actively involved in the discussions that led to these three applications, and they are:

a) an application for a new FM station;

4711 b) an application to convert CHIN-AM to an FM station;

4712 c) an application to change the authorized frequency and transmitter power for CHIN-1-FM, the CHIN-AM low power FM repeater.

4713 These three applications, and heir interrelationships, are complicated. However, that complexity is unavoidable because we find ourselves in a very difficult position.

4714 On one hand, we want to respond to your call for applications for new ethnic radio stations. We have long believed that there is a need for more ethnic programming in Toronto and that CHIN could play an important role in meeting that need. As you know, CHIN was an applicant for AM 740 in 1999 here in Toronto.

4715 On the other hand, we have to respond to the threat posed by the potential loss of our low power FM repeater. In good conscience, we simply could not ignore the impact on CHIN-AM listeners, our associate producers and the communities that they serve.

4716 In our presentation today, we will briefly review each of our applications, beginning with our application for a new FM station. We will then conclude with recommendations on how, in our view, the Commission might best deal with these applications in light of the objectives set out in Public Notice 2001-39.

4717 The new FM station.

4718 CHIN is a successful ethnic broadcasting company, with a dynamic spirit and a distinguished history. We pioneered ethnic radio broadcasting in Toronto in the late 1960s. Today, we are proud to say that CHIN-AM 1540 and its low power FM repeater on FM 101.3 and CHIN-FM 100.7 are a vital part of daily life in ethnic communities throughout the Greater Toronto Area. These complementary radio stations provide a rich cultural mosaic of entertaining and informative programming.

4719 We are proposing an outstanding new FM service that will further reflect the diversity of languages, as well as the multicultural and multi-ethnic reality of the Toronto area. New FM 101.3 will make an immense contribution to ethnic Canadian talent development and will provide much needed programming for underserved and unserved linguistic groups.

4720 Like all CHIN radio stations, New FM 101.3 will embrace the broad service requirement of the Ethnic Broadcasting Policy. We will provide programming in the most languages of all the applicants, with a fair distribution of programming hours between all linguistic groups.

4721 The following brief video highlights many of the strengths that CHIN brings to this application, as well as those of our principal programming partner, ATN.

--- Video Presentation / Présentation vidéo

4722 New FM 101.3 will offer programming for at least 24 linguistic groups, including at least six groups that are currently unserved by local ethnic radio stations in Toronto.

4723 We developed the program schedule for New FM 101.3 based on our extensive knowledge of local communities, backed up by comprehensive demographic research by Solutions Research Group, one of Canada's leading broadcast market research companies.

4724 FM 101.3 will employ CHIN's long-established and proven Associate Producer model. We invented this model. We work with Associate Produces as partners, providing them with the production facilities and other resources that they need to create diverse, high-quality programming. CHIN bears much of the economic risk of production, making it possible for Associate Producers from even the smallest groups to offer high quality, attractive programming.

4725 In that regard, let me once again introduce Shan Chandrasekar, Canada's most experienced South Asian broadcaster and a trailblazer in our industry. Shan pioneered South Asian television programming beginning in 1971 on Rogers Cable, followed by Citytv and CFMT. He then launched Canada's first South Asian specialty television service. His company, ATN, is now one of Canada's leading ethnic media companies, with a number of ethnic specialty services providing programming in a variety of South Asian languages.

4726 We are delighted that Shan and ATN have agreed to work with us on an exclusive basis as the Associate Producer for South Asian programming on New FM 101.3.

4727 Shan.

4728 MR. CHANDRASEKAR: Thank you, Lenny.

4729 Commissioners, it is an absolute pleasure being here. After a gap of about six years I am appearing in front of the Commission for something very positive and very exciting. I am very glad at being here.

4730 We at ATN believe that there is a real demand for and a need for more South Asian radio programming in Toronto.

4731 The South Asian mother tongue population in Greater Toronto is expected to reach almost 400,000 by the year 2006. The demand for radio programming in South Asian languages is increasing rapidly, as is the economic base to support that programming.

4732 New FM 101.3 is a fabulous opportunity to meet the demand for South Asian radio programming by combining our programming expertise and resources with the industry-leading ethnic radio broadcasting resources of CHIN.

4733 ATN has an established track record, with proven Canadian programming resources, including well-known Canadian on-air talent. We have strong working relationships with international broadcasters and have access to extensive international news resources in many South Asian languages.

4734 CHIN is Canada's leading ethnic radio broadcasting company. There is no radio broadcaster in this country with more experience or better equipped than CHIN to provide Associate Producers with the sales, marketing, administrative and other broadcast management resources necessary to support the production of high-quality, community-responsive ethnic radio programming.

4735 We plan to produce at least 48 hours of programming each week for the South Asian community, to be delivered in the heart of the regulated broadcast day. We will also produce overnight programming, offering South Asian music programming to complement the station's daytime programming all night.

4736 The South Asian community includes people who have come to Canada from many different geographic areas, not just South Asia, including Africa, the Caribbean and Europe. South Asians speak many languages, have diverse cultural heritages, and hold differing religious beliefs and political points of view. The Commission can be assured that our programming would reflect the complexity of the South Asian community in a knowledgeable, fair and balanced way.

4737 We will offer programming in a minimum of 10 South Asian languages, including programming for totally unserved linguistic groups such as Gujarati, Malayalam, Telegu, Kannada and Marati.

4738 We will also address issues that are of interest to, and of significance for, the South Asian community as a whole. We will reach out and build connections between various linguistic groups within our diverse community and between the South Asian community and other Canadian communities.

4739 We will work with community-based groups, such as the Canadian Association of Physicians of Indian Origin, to provide information on healthcare, which is so badly needed in our South Asian community. We will promote understanding and integration by providing information on Canada's system of government, immigration policies, employment equity and human rights.

4740 Our programming will include entertainment, education, news, current affairs in the Canadian context and in the international context, and highly compelling live-to-air talk shows with the opportunity for the public to interact with political and community leaders, as well as celebrities. Program features will address the interests of women, youth, seniors, and will draw on a wide variety of community-based resources.

4741 Thank you.

4742 Len.

4743 MR. LOMBARDI: Thank you, Shan.

4744 We are committed to offering the highest level of service to the South Asian community and to providing for a diversity of voices. Shan and I feel so strongly about this that we would not be adverse to a condition of licence requiring FM 101.3 to broadcast at least 48 hours of programming produced by ATN each week.

4745 Let me now turn to more examples of FM 101.3 programming.

4746 Jai Ojah-Maharaj -- I am very happy to say that he has been able to join us -- is our Associate Producer for Caribbean programming in FM 101.3.

4747 Jai has over 20 years of experience as the producer/host of Caribbean programming on CHIN radio. He is well-known and well-respected both in the industry and in the Caribbean community. He has won numerous awards for his on-air work, has served as a judge for the prestigious Juno Awards, and is actively involved in many community events, such as the Caribana Festival and our own CHIN International Picnic. He is much in demand as a guest commentator and correspondent for radio stations in the Caribbean and North America.

4748 Jai's knowledge of, and involvement with, the Caribbean community will make it possible for us to significantly expand our Caribbean programming under his help and direction.

4749 Jai.

4750 MR. OJAH-MAHARAJ: Thank you, Lenny.

4751 Thank you very much for accommodating me and waiting on me.

4752 There are almost 250,000 people of Caribbean origin in the Greater Toronto area. We come from many countries, including Barbados, Trinidad and Tobago, Jamaica, Grenada, St. Vincent and the Grenadines, Dominica, St. Kitts and Nevis, St. Lucia and Guyana. Our culture heritage is a diverse fusion of the different cultures of many countries and regions throughout the world, including Britain, France, Spain, Portugal, India, Africa and the Middle East.

4753 New FM 101.3 will offer 14 hours of Caribbean programming each week, scheduled in prime time on weekdays and weekends. Our goal is to provide a forum for the positive, proactive expression of the diversity of local Caribbean communities and Caribbean cultures. New FM 101.3 will expand on the themes that we have successfully developed on Caribbean Connection, our Caribbean programming on CHIN AM.

4754 The "Chutney Cruise" is new music from the Caribbean -- a fusion of East Indian rhythms with the calypso/soca genre, in both English and Hindi. This music is of particular interest to the Indo-Trinidadian and Guyanese population.

4755 The "Canadian Caribbean Showcase" features up and coming Canadian Caribbean talent. Many well-known Canadian musicians and groups got their start on this program, including Juno Award winners Debra Cox, John Perez, Liberty Silver and Otis Gayle.

4756 "Insight" focuses on the issues of the day in the Caribbean community. It offers news and information, along with timely and in-depth interviews with members of the local Caribbean community, including entertainers, community leaders, mentors, educators, entrepreneurs, politicians and other newsmakers.

4757 "Island Life" is the French Caribbean, featuring music in the Zouke, Cadence and Compas genres, performed by Canadian and international musicians.

4758 "Hot Soca Jam" is the newest and hottest music, both Canadian and international, in the musical genres that have their origins in the Caribbean.

4759 Caribbean programming on FM 101.3 during the day will complement the programming that we currently have on CHIN-AM in the late evening. It will increase the choice and diversity of programming for Caribbean Canadians, giving us more of the programming that is really needed.

4760 Dario.

4761 MR. AMARAL: Thank you, Jai.

4762 I am the Programming Director for the CHIN radio stations and for the New FM 101.3, if you approve our application. We have developed a program schedule that will address the needs of many other larger and smaller unserved and underserved ethnic groups in the GTA.

4763 For example, the Spanish community is expected to continue to grow strongly, increasing to 100,000 people by 2006. Spanish-speakers came to Canada from different countries throughout South and Central America, Cuba, Dominican Republic, Mexico and Spain. They have different cultures and customs but are united by their language and by their need for information about Canada.

4764 FM 101.3 will offer 14 hours of Spanish programming each week. Our programming will complement the limited amount of Spanish programming that is currently available. It will facilitate integration by providing useful and relevant information on the Canadian legal system, healthcare system and government.

4765 Music and entertainment programming will be of interest both to newcomers and to longer-established members of the Spanish community, helping them to retain their heritage language and cultures and to learn about Canada.

4766 FM 101.3 will also significantly increase the amount of programming for many smaller, underserved ethnic groups, such as: Arabic, Farsi, Filipino, Mandarin, Russian, Somali and Vietnamese.

4767 Third language programming on FM 101.3 will be complemented by regularly scheduled, interactive, cross-cultural programming designed to address issues that cross cultural and regional borders and demystify cultural celebrations and customs.

4768 Donina.

4769 MS LOMBARDI-HARTIG: Thank you, Dario.

4770 New FM 101.3 will make an immense contribution to ethnic Canadian talent development.

4771 The station will exceed the minimum Canadian content requirements. At least 10 per cent of all musical selections will be Canadian in Year 1, increasing to 12 per cent by Year 4.

4772 In addition, we will spend $455,000 on six major Canadian Talent Development initiatives. Three of these initiatives will focus on ethnic Canadian talent in the Greater Toronto Area.

4773 We will conduct two new competitions each year for ethnic song-writers. One will be modelled after the highly successful CHIN Music and Song Competition, open to all members of all ethnic groups. The other competition will be devoted exclusively to talent within the South Asian community.

4774 We will create a mentoring program for local ethnic musicians -- the Multilingual Music Initiative. It will allow young and aspiring ethnic musicians to benefit from the advice and experience of established ethnic musicians.

4775 We will provide scholarships for the study of Journalism and Radio and Television Arts at Ryerson.

4776 The remaining three initiatives will provide support for ethnic Canadian musical talent across the country.

4777 We will contribute $10,000 each year to Canadian Music Week and FACTOR to support the development and promotion of recordings by Canadian ethnic musicians. We will contribute an additional $3,000 each year to the ongoing development of a catalogue of Canadian ethnic recordings by the Canadian Association of Ethnic Broadcasters.

4778 Above and beyond this, New FM 101.3 will spend $350,000 to undertake new initiatives on the Internet. The FM 101.3 Web site will offer live audio streaming and will provide listeners with access to archived programming and to a wide variety of important information in third languages.

4779 Joe.

4780 MR. MULVIHILL: Thank you, Donina.

4781 New FM 101.3 will meet its commitments to listeners and to the Canadian broadcasting system. It will be a strong and successful radio station, capable of providing consistently high-quality programming.

4782 New FM 101.3 will benefit from CHIN's detailed knowledge of the local market and from the operating efficiencies and synergies that will arise from owning other local ethnic stations.

4783 New FM 101.3 associate producers will benefit from CHIN's long-established and proven training and development programs. We will control administrative costs by sharing senior management resources and by relying on centralized engineering, accounting, financial and traffic systems.

4784 The station will have full access to established music libraries, Canadian and international news feeds and to regional programming.

4785 In addition, FM 101.3 will benefit from significant cross-promotion opportunities with other CHIN radio stations and with CHIN multicultural and multilingual television programming on Citytv.

4786 Grace.

4787 MS FUSILLO-LOMBARDI: Thank you, Joe.

4788 Community responsiveness and reflection will be assured through the establishment of a Community Advisory Board.

4789 CHIN has played an active role in the life of many ethnic groups in Toronto since 1966. Our close working relationships with these groups ensure that we provide a wide range of ethnic programming that is truly reflective of, and responsive to, the local community.

4790 If this application is approved, we will formalize these relationships by establishing a Community Advisory Board. The Board will have a mandate to provide advice on the overall programming and community access objectives of all the CHIN radio stations in Toronto.

4791 We are pleased and honoured that Mr. Mario Calla, Executive Director of Costi Immigrant Services, has agreed to serve as Chair of the CHIN Radio Community Advisory Board. You will have a chance to meet him during the intervention phase of this proceeding and to hear his plans for the work of the Community Advisory Board.

4792 Lenny.

4793 MR. LOMBARDI: Thank you, Grace.

4794 If you approve this application, CHIN will own three radio stations in Toronto. This would be well within the bounds of the established ownership policy of the Commission.

4795 FM 101.3 will increase diversity. The associate producer model ensures that each of our stations offers a diversity of voices and editorial points of view that is truly reflective of the communities being served. In addition, our South Asian programming will be produced by ATN, introducing the respected voice of that broadcasting company into the radio market.

4796 FM 101.3 will have a positive impact on competition. It will place CHIN on a more level playing field with its competitors -- most of whom have pursued strategies of diversification and now benefit from cross-ownership and significant cross-media sales, marketing and programming synergies.

4797 Moreover, we believe that any potential concerns should be weighed against the significant benefits for listeners, for the ethnic communities and for Canadian talent that will arise from the approval of this application.

4798 Now we would like now to turn to our other two applications.

4799 The threat facing CHIN-AM. Since its inception, CHIN-AM has operated under severe technical restrictions. During the day, the CHIN-AM signal reaches approximately 6 million people throughout the Golden Horseshoe area. At night, when we are required by international rules to modify our signal pattern and to reduce power, our signal reaches fewer than 600,000 people.

4800 There are significant holes in our coverage in the Greater Toronto Area, especially in the west.

4801 My father worked tirelessly for over 30 years to try to overcome these technical problems. We thought that we had found a long-term solution in 1997 when we received the approval of the Commission to establish a low power FM repeater, using FM frequency 101.3.

4802 That repeater extends the CHIN-AM service at night into western Toronto and makes CHIN-AM programming available to an additional one million people. FM frequency 101.3 is third adjacent to CHIN-FM 100.7, so under the old Industry Canada rules only we could use it.

4803 We were shocked when we read in the Commission's Public Notice that a change in Industry Canada rules could shut down our low power repeater by putting FM frequency 101.3 up for grabs at this hearing.

4804 We recognize that it was not the intention of the Commission or Industry Canada to cause harm to CHIN or its listeners. However, the loss of our low power repeater, if that were to be the only result of this proceeding for CHIN, would be a disaster for our listeners, for our associate producers and for our company.

4805 One million people, or about 66 per cent of our potential night-time audience, would no longer have reliable access to CHIN-AM programming. Our advertising revenues would decrease by over 20 per cent, putting CHIN-AM in a loss position for at least the next five years.

4806 Theresa.

4807 MS LOMBARDI: Thank you, Lenny.

4808 Conversion of CHIN-AM to an FM station using FM frequency 101.3.

4809 Our second application, often referred to as a "flip" application, seeks authority to convert CHIN-AM to an FM radio station using FM frequency 101.3.

4810 Its approval would provide a long-term solution to the technical problems that Lenny has just described, resulting in significant benefits for listeners.

4811 Broadcasting on FM frequency 101.3, CHIN-AM would consistently reach approximately three million people in the Greater Toronto Area, including most of the communities and the listeners that the station seeks to serve. Listeners would benefit from consistent, rather than inadequate and irregular, access to the full CHIN-AM programming service, day and night, on the same frequency, with the added benefit of a high quality FM signal.

4812 We will operate the new FM radio station based on the rigorous conditions contained in the most recent CHIN-AM licence renewal. The station will provide programming for a minimum of 23 different cultural group in a minimum of 17 languages and will contribute no less than $27,000 each year to Canadian talent development.

4813 In addition, if you approve this application, AM frequency 1540 will become available for another user.

4814 Lenny.

4815 MR. LOMBARDI: Thank you, Theresa.

4816 New FM frequency for CHIN-1-FM.

4817 Our third application is designed to maintain the status quo with an FM repeater, to avoid an unwarranted loss of serve for the CHIN-AM audience.

4818 We have applied for a technical amendment to change the authorized frequency of our low power repeater from FM frequency 101.3 to FM frequency 91.9, and to reclassify the transmitter as a Class A-1 transmitter.

4819 Listeners will benefit because they will continue to be able to receive CHIN-AM programming at night. In addition, our use of FM frequency 91.9 will be protected, so listeners will not be subject o service disruptions in the future.

4820 Madam Chair, Members of the Commission, we believe that the approval of our application for the new FM radio station that we have called New FM 101.3 and our application to use FM frequency 91.9 for our low power repeater would result in the best and most effective use of available radio frequencies.

4821 FM 101.3 will be an outstanding new FM radio service. Of the many applications before you, ours best responds to the policy objectives of the federal government to the objectives of the Ethnic Broadcasting Policy and to the objectives that you established for this hearing.

4822 We very much appreciate this opportunity to take you through the rationale for, and the benefits of, our applications and we, of course, would be very pleased to answer any questions that you may have for us.

4823 Thank you.

4824 THE CHAIRPERSON: Thank you, Mr. Lombardi and family and your colleagues.

4825 Vice-Chair Colville, please.

4826 COMMISSIONER COLVILLE: Thank you very much, Madam Chair.

4827 MR. LOMBARDI: Actually, Madam Chair, I missed a page of my presentation.

4828 COMMISSIONER COLVILLE: I thought you were going to save that to the end when you read the bullets as to why it is the best use, but if you want to read it now go ahead.

4829 THE CHAIRPERSON: You can't do it twice.

4830 MR. LOMBARDI: We will save it for the end.

4831 COMMISSIONER COLVILLE: Really it's up to you. If you want to read it in the record now.

4832 MR. LOMBARDI: No, we are fine to go ahead with questioning right now.

4833 COMMISSIONER COLVILLE: Okay.

4834 THE CHAIRPERSON: Did I miss my cue or did you?

4835 COMMISSIONER COLVILLE: No, he did.

--- Laughter / Rires

4836 COMMISSIONER COLVILLE: Well, good morning, Mr. Lombardi, you and the members of your family which I guess now includes Mr. Chandrasekar as a member of the Lombardi family.

4837 MR. LOMBARDI: Shani Lombardi.

4838 COMMISSIONER COLVILLE: Shani Lombardi. There you go.

--- Laughter / Rires

4839 COMMISSIONER COLVILLE: I always thought we should have given you a licence for the Comedy Channel.

4840 MR. CHANDRASEKAR: It is not too late.

--- Laughter / Rires

4841 THE CHAIRPERSON: Category 2.

4842 COMMISSIONER COLVILLE: Welcome to all your associates this morning as well.

4843 You have been here through the week, Mr. Lombardi, watching the proceedings thus far. So I guess it's fair to say you know the drill. I guess we are not here to -- although it may appear to be such -- test to see whether you know your own application.

4844 We have a lot on file on all of the applications and so we are really here to kind of fill in the blanks and get a better understanding of some of the issues. So if we don't ask questions on some of the issues that you think are very important it's because we are satisfied. We have enough information to make a decision about them.

4845 I would like to start off today by kind of just going through a bit of an overview of the applications, what sort of brought you to the conclusions that you came to.

4846 As you said at the outset it is a bit of a complicated group of applications. So what I would like to do is go through a bit of a 30,000-foot view of it, if you will, and then go through each of the applications. I guess I would propose to go through what I understand them to be in the order of the agenda which would first be the AM to FM flip, and then the New FM and then finally the technical amendment of 101.3 to 91.1.

4847 If you would prefer a different order, we could do that, but that would be my proposal.

4848 So I guess, first of all, just to kind of set the stage for all of this -- again, as you noted, this is a somewhat complicated group of applications -- I guess I would like to hear from you sort of in your own words when this whole issue, you noted in your presentation this morning when the Public Notice came out you were -- I forget the term you used, shocked or taken aback.

4849 So I presume then it was sort of time to get the family together and your business colleagues and sit down and map out a strategy as to, "Okay, how are we going to respond to this", and I guess I would just like to get a sense of what your approach was in terms of sitting down and saying, "How are we going to respond to this? What should we do about this?".

4850 MR. LOMBARDI: Thank you, Commissioner Colville.

4851 The notice of the call was quite alarming and quite disheartening, but to be honest we weren't surprised because, having done our own research with regards to 101.3 and the call to Industry Canada to reassess the playing field, if you will, in the Toronto market for available frequencies, we saw the writing on the wall, and perhaps we saw the writing on the wall every earlier than that.

4852 When we first applied for our repeater for 101.3 as a solution to our technical problems with 1540, we did so at a higher protected power because under the old Industry Canada rules we were the only ones to use it, but we wanted to secure that frequency for a long-term solution and we were left, unfortunately, with an uncomfortable position to accept an unprotected low power licensing.

4853 So we always kept a close eye on that, and in fact filed an application in advance of the call with respect to an idea that we had that would bring new services to the Toronto market, and at the same time remedy and provide a long-term solution to our 1540.

4854 Then that proceeding halted and an Industry Canada study was initiated. We waited until that study came forward. Sure enough that study identified frequency 101.3 as a frequency that could be optimized.

4855 So we had always had a view of the Toronto market and wanting to provide additional programs and we demonstrated that in 1999 with an application for 740. We answered that call and prepared a comprehensive application doing many of the same things that we are proposing in this application to many of the same cultural groups that we identified then with some modifications and changes to the FM frequency and a different pattern.

4856 But that's really the basis of how we have arrived here, but the most significant thing is that for the last six years we have utilized 101.3, have made it work for CHIN-AM. We have developed a listenership, a loyal listenership on FM 101.3 for our AM programs, much of which would not have succeeded or enjoyed the success that they have without the aid of that service.

4857 Many of the groups that are assisted by that frequency are underserved and are too small to really work as well unaided, either with additional programs or with the aid of a repeater in areas where the signal couldn't be heard at all at night.

4858 So it's a very valuable asset. It's a very valuable component of our radio service and without it, as I said in my presentation, if that were the only conclusion of this hearing for CHIN Radio, if we were to lose that repeater it would be quite devastating for us.

4859 COMMISSIONER COLVILLE: And in weighing the audience reach of the various scenarios, I guess I was struck, when I read the applications, in your original covering letter -- that was the same letter attached with all three of them, it was in order sort of A, B, C, the A being the technical amendments to change the frequency of 1540 to 101.3. So the flip was A, B was the technical amendment, and C was the new station.

4860 I guess absent reading a deficiency response I would have thought that's probably the order they wanted to apply for them. Then we asked the deficiency question and you came back and, as is evident today. I don't know how many pages are devoted to the New FM quite appropriately, obviously the New FM was your number one choice. Was there a reason for the order of the first letter as compared to the ultimate preference in terms of "if we could only have one we would want the New FM"?

4861 MR. LOMBARDI: I can't really recall the intense discussions that went on with regards to preparing three applications. that, number one, was a very difficult and complicated effort on our part. But once we had decided that that's what we wanted to do, we saw that all three provided solutions to, and answers for, the policy objectives and projections for CHIN Radio.

4862 We saw that independently, and in any order you like, solutions to the problem for CHIN Radio 1540 and also in answer to the policy requirements for new services of the market, the manner in which we listed them in our letter was there strictly to just clarify our position that we are filing three and not necessarily in that order.

4863 We were prepared to, either in deficiency or here at this hearing, discuss what order of preferences that we preferred. And we have answered those questions.

4864 COMMISSIONER COLVILLE: Well, let's just pursue that a bit because it wasn't clear to me actually in the original application.

4865 I thought I had read that -- and it would take me a minute to find it now -- "if you were to licence someone else for 101.3, then we would want 91.9 to replace it for the AM". I didn't see actually, but I think you have clarified it today, but I will just ask the question anyway, that "if you actually licence us for 101.3, as the new station, then we would want 91.1 to replace 101.3 as the repeater for the AM".

4866 Is that correct?

4867 MR. LOMBARDI: Yes.

4868 COMMISSIONER COLVILLE: If you get 101.3 as the new station you would want 91.9 to replace it.

4869 MR. LOMBARDI: That would be the optimum decision for CHIN Radio because we would (a) be able to provide 24 distinct linguistic and cultural new programs to the Toronto market, and (b) protect our AM 1540 programs with the replacement of the lost repeater. That's one choice, and that's a very good choice I might add. But it's not the only choice the Commission has.

4870 COMMISSIONER COLVILLE: No, no, we have lots of choices here --

--- Laughter / Rires

4871 COMMISSIONER COLVILLE: -- which go beyond just the three you have in front of us which makes it extremely difficult for us when we go back to the ranch to decide what to do about all of this.

4872 So it is clear then. You would want 91.9 to replace it, and I think I just heard you say that that would be the ideal choice. That would be your number one option for -- well, you responded to the deficiency letter and said, "Our first choice would be to get the New FM". In fact, as I take it, your first choice would be, "We want the New FM and 91.9 as the fill in for 101.3 for the AM".

4873 So your first choice is a combination of the New FM and a replacement.

4874 MR. LOMBARDI: That's correct, Mr. Colville.

4875 COMMISSIONER COLVILLE: Now, if you didn't get 91.9 -- and I think somewhere in here you talk about it being a disaster, I think is the term you used -- what would the impact be?

"Loss of our low power repeater, if that were to be the only result of this proceeding for CHIN, would be a disaster for our listeners, for our associate producers, and for our company".

4876 MR. LOMBARDI: That's right.

4877 COMMISSIONER COLVILLE: Can you just explain the nature of this disaster?

4878 MR. LOMBARDI: Well, the repeater plays a vital role in reaching a part of the GTA that our nighttime pattern on 1540 is unable to do. It's very, very restricted within our interference-free contour of 600,000 people, less than 600,000 people.

4879 The repeater alone brings in a million people. So what that has unable us to do is to fill out the reach within the GTA to a reasonable level that has provided some level of comfort and extension of many of the programs that are affected by low power.

4880 The difficulty of lower power -- essentially CHIN 1540 is a daytime station and so we are influenced by the nighttime patterns and it's extended in the winter months. You can imagine our morning drive doesn't go to full power until a quarter to eight in December and January. In those months we are signing off -- we are going to low power at 4:45 in the evening. So a huge chunk of our prime programming is lost to low power. And this varies. Sometimes our communities can reach us, sometimes they can't. We are influenced by all kinds of technical difficulties with AM 1540 throughout the year. So on an average, 30 per cent of our programming is at low power.

4881 So that not only is a difficulty for us to build audience where we can do a good job in the summer months when the hours are extended, we do a terrible job in the winter, and without the repeater we couldn't do a job at all.

4882 So that is why it is so vitally important. But over the last six years we have come to rely on it, from an economic point of view as well. We estimate that the loss of hours tuned to CHIN-AM through 101.3 could result in upwards to 20 per cent of our revenues to fall off.

4883 So if you combine that, then, with the threat of a new ethnic player licensed in the market or, for that matter, even more than one licence in the market, we are virtually a crippled station with intense competition in the marketplace. We feel an exodus of associate producers and programmers from CHIN going to stronger signals and just a total reworking of our program schedule, just to make something that doesn't work whole again.

4884 We really don't have another solution to that problem, except for the options that we propose here.

4885 COMMISSIONER COLVILLE: I suppose the answer to this question may be a bit obvious, but I want to hear it from you anyway, for the record. What would be the impact on 1540 if none of these applications were approved -- if none of your applications were approved?

4886 MR. LOMBARDI: If none of our applications were approved, of our three, what would happen to 1540?

4887 COMMISSIONER COLVILLE: Exactly.

4888 MR. LOMBARDI: In that result, we would lose the repeater.

4889 COMMISSIONER COLVILLE: So you lose the repeater, you don't have the new FM and you don't flip the AM to FM. So have 1540 there with no repeater. You are back to where you were before you got 101.3. So what happens to --

4890 MR. LOMBARDI: Six years ago. We take a huge step backwards. The audience that we have built over the last six years would immediately fall off. Those program and schedules that we developed would --

4891 COMMISSIONER COLVILLE: I'm sorry to interrupt you, but let's assume in your answering this question that indeed we have licensed one of the other applicants for 101.3.

4892 MR. LOMBARDI: And assume that you have licensed a competitor?

4893 COMMISSIONER COLVILLE: Yes.

4894 MR. LOMBARDI: Big trouble. Big trouble for CHIN.

4895 We have estimated 20 per cent revenue reduction and that goes hand-in-hand with a decimated programming schedule that wouldn't work any longer, because we have come to rely on the assistance of that repeater.

4896 With the added threat of a competitor in the market, I fully expect that we wouldn't be able to continue to provide services to those communities that we have been serving up until now, because we wouldn't have the ability to do that any longer. So we would either lose them to the competitor, or they would just simply disappear.

4897 That's basically the scenario.

4898 COMMISSIONER COLVILLE: Can you elaborate as to what those groups would be?

4899 MR. LOMBARDI: Spanish.

4900 COMMISSIONER COLVILLE: So we would lose Spanish from your station.

4901 MR. LOMBARDI: Right. We would lose Spanish, our Greek programming, our Caribbean programming. I would have to pull out our schedule, but Arabic programming.

4902 COMMISSIONER COLVILLE: So essentially, Mr. Lombardi, are you saying -- again I apologize for interrupting, but essentially the associate producer model, are these the groups that are largely done through the associate producers?

4903 MR. LOMBARDI: I'm sorry, sir, I didn't hear the question.

4904 COMMISSIONER COLVILLE: The ones that would fall off 1540, are they largely the ones that are dong through the associate producers?

4905 MR. LOMBARDI: Yes. For the most part, yes.

4906 We would be affected as well in our Italian programming formats, as well as our Chinese formats. To a lesser degree, because they are both in the morning and drive time, but the programs are large enough that we would get into high-power programming hours generally within that block.

4907 But, for example, in our Chinese programming block on AM, during January we sign off at 4:45. Our Chinese programming goes until 7:30. So that block is gone from a high power. But we still are able to maintain even a few hours during high power at three o'clock.

4908 So the effect in those language groups is minimized slightly, but it has a greater effect for programs that traditionally occupy the later hours of the program schedule.

4909 COMMISSIONER COLVILLE: On the lower power in the evenings, you mentioned, I think, that you were down to about 600,000 audience coverage.

4910 Given the area that that is restricted to and what you were just talking about in terms of the particular ethnic groups that would be eliminated, I guess I'm trying to get a sense of: Does the remaining nighttime coverage -- I don't know whether Mr. Stacey is more familiar, but presumably you are -- still cover where many of or some of those groups tend to be based, tend to live? I'm not that familiar with the area of Toronto in terms of where that nighttime coverage pattern is and where a lot of those people might live.

4911 MR. LOMBARDI: We didn't do an ethnic breakdown of the ethnic population, mother tongue population within our nighttime contour. We just look at the total reach from an audience perspective of who we could reach, and then we just combine that with the reach of the low-power FM for a total of just under two million that we reach, 1.6 million, is generally what we can do.

4912 COMMISSIONER COLVILLE: One of the questions we have been putting to everybody, I guess as you have seen over the past few days, is in your sense what is the best use of the frequency, this 101.3. We have been saving that for near the end to give you an opportunity and we can come back to it with those bullets that you had on the second last page that you skipped.

4913 But including the bullets, if you want, perhaps you can answer that question. Maybe you already have, but I'm going to let you to it anyway.

4914 Overall, then, looking at this whole picture and your picture of the applications, what do you consider to be the best use of the frequencies here?

4915 MR. LOMBARDI: The best use of 101.3, in our opinion, is to provide new essential services to unserved and underserved communities in Toronto. I think our application best illustrates how that can be done in the most effective way.

4916 But at the same time, saying that, we feel that the issue of CHIN's 1540 nighttime problem needs to be addressed in an important and significant way.

4917 Again, our choice was to look for optimization of 101.3 with a new service, combined with the 91.9 as a repeater for 1540. That, in our opinion, would be the optimum choice for CHIN and, in our opinion, the optimum choice for the City of Toronto.

4918 Does that answer your question?

4919 COMMISSIONER COLVILLE: Yes, it does. Thank you.

4920 You used the term "diversity" somewhere in your opening remarks here this morning. On page 17 you say:

"FM 101.3 will increase diversity."

4921 You go on on page 18:

"... we believe that any potential concerns should be weighed against the significant benefits for listeners, for ethnic communities..."

And so on.

4922 I guess I would like some comment from you -- this again is a fairly general comment I guess and then we will get into some of the specifics on the applications.

4923 I guess there are two ways to look at diversity in terms of the applications that we have before us here.

4924 One approach would be to have an existing experienced player with particular skills in this market combined with the skills of Mr. Chandrasekar to offer a new service and provide more groups with more programming.

4925 Another approach to it would be to say: Well, perhaps we can get more diversity in the market by having another player who may serve the same or different groups.

4926 I guess I would like to get your comment on why licensing you would better satisfy the diversity issue than licensing somebody else who would be a new player into the market perhaps, or another existing player, but why in particular licensing you rather than somebody else would bring more diversity?

4927 MR. LOMBARDI: I think our track record and commitment to ethnic policy over the last 36 years I think clearly illustrates the direction that CHIN radio has always pursued and strived for.

4928 We have built this radio station, I think, in the early years with the help of our programming to the Italian community, but we never stopped there. We looked at the development and the needs of many, many different ethno-cultural groups.

4929 In order to do that successfully, my father developed this partnership relationship with like-minded individuals. He brought in people like Sam Yuchtman, who was one of the first Jewish language program producers in Toronto into CHIN Radio, and John Loncaric and Mike Milicevic, and the list goes on and on and on about associate producers who have been with CHIN Radio and looked at CHIN as their home.

4930 Each one of those individual associate producers brings a sense of diversity and new voices to the marketplace.

4931 What CHIN Radio did, and what my father did, was just facilitate that opportunity.

4932 Then he took it one step further. He got all of them together and he created events like the CHIN International Picnic and other cultural events that went on to legitimize multiculturalism in a city that still was grappling with the whole notion. In other words, the time when to say you were proud of your heritage meant you were un-Canadian. We have a totally different view of that now. That is because of the work that my dad did in the early, early years.

4933 So that model is firmly entrenched in what we are doing, and it is firmly entrenched in what Shan is doing.

4934 So when we look at an opportunity to bring a new service to the market, and when we say we are going to provide 24 new languages and programs to 24 distinct cultural groups, we are not going to do that by importing foreign signals or purchasing canned material or piping it in from somewhere else in Canada, we are going to create it here.

4935 The only way we are going to create it is in the way that we only know how to do it, and the best way we know how to do it is by going into the local communities, working with associate producers that we have cultivated and found that have a passion for this business, just as we do, to create those types of programming.

4936 So just because it is under one umbrella, just because CHIN Radio would then be perceived as having three stations, they are three very distinct operations. They have three very distinct conditions of licence. This new service that we are proposing is going to be targeted in a very distinct and direct way. Our core language group is going to be South Asian. The remaining 14 languages that we have introduced here are going to be largely unserved or underserved, and that is our condition of licence. That is our promise.

4937 It has really nothing to do with the other two operations, except the great synergies that we can provide for the success of the station, because that is really what everybody wants. I think at the end of the day what we all really want is good quality programming, and we can do that and we are best equipped to do that.

4938 So if you as me why CHIN and why ATN, 36 years of experience. Shan has been in the business since 1971, as you saw on that videotape with the hair and the moustache. We know our business and we are committed to this business and it is something that we continue to show a passion for and a desire to be part of and grow with.

4939 I think it is just a part of the make-up of our organizations to model it in the manners in which we do.

4940 So I don't see this argument of the so-called monopoly or a lock-on on the message and the philosophy of multiculturalism because it is under the CHIN umbrella, it is as distinct and different as all the members of CHIN Radio are.

4941 All of these individuals here are associate producers from CHIN Radio. That is what makes CHIN Radio as distinct and as different as it is. It is as distinct and as different as any other of the ethnic stations. What we do provide them is a greater means of promoting excellence and quality in their programming.

4942 COMMISSIONER COLVILLE: I guess they must have left their T-shirts at home.

--- Laughter / Rires

4943 COMMISSIONER COLVILLE: I wasn't so much asking the question in the context of a criticism from a monopoly or under one umbrella --

4944 MR. LOMBARDI: I know. I couldn't help myself.

4945 COMMISSIONER COLVILLE: -- as much as sort of what is the best way from our point of view in terms of deciding on this to ensure that we do get diversity in the marketplace in terms of concept or whatever. I think you have answered that.

4946 In terms of the relationship with ATN, is that contingent upon getting the New FM? Would there be a continuing relationship here of some sort in any event, or is this largely dependent upon getting the New FM.

4947 MR. LOMBARDI: I would like to first answer that question and then invite Shan to respond, as well.

4948 Shan and I have known each other for years. I remember Shan in the early years at Citytv. I have watched his career and he has watched mine. We are members of many of the same associations and continually have crossed paths.

4949 We happen to like each other very much.

4950 When this opportunity became available and when we looked at this whole issue with regards to diversity, I wanted to make the impression that especially with South Asian programming, CHIN and Shan, CHIN and ATN, could really meet that call for diversity in the marketplace, and we could bring something new in the way of voices and editorial points of view, specifically in our core language group of black languages and South Asian.

4951 I consider Shan one of the leading experts in South Asian programming. He is a doer. He has done it. He is licensed. He is operating. He has a full staff, and he is here to stay. He does a lot of great work.

4952 I thought it would be a wonderful combination, and I am honoured to work with him. It is specifically on the New FM 101.3.

4953 I don't know if Shan has more to add to that.

945

4954 MR. CHANDRASEKAR: From our perspective, I think there is a tremendous synergy that I saw in the discussions with respect to FM 101.3.

4955 I want to clarify that we don't have any radio licence. We don't have any over-the-air television presence in the Toronto market or anywhere across Canada at the present time. We are only operating discretionary specialty premium pay television services.

4956 We have been put in a position, frankly, which we are very delighted to do, of course, to go way beyond the call of duty with respect to serving not just the entertainment needs of the community but frankly community needs itself.

4957 In other words, there is probably not a comparison, really, because Astral is a company that I tremendously admire. But on TMN you don't really have messages for Heart and Stroke Foundation as to how to take care of your health for half an hour as a special show.

4958 And it is not appropriate, because many other regular over-the-air television stations have a mandate and they are taking care of it. Similarly, many other radio programs are doing it.

4959 We felt in the experience that we were gathering that there was a tremendous unmet need in the community with respect to the kinds of issues that came to us in our so-called national television program.

4960 As Madam Chair mentioned, the term Category 2 -- we were put in a position. Category 2 is a wonderful way of obtaining a licence, but when the Prime Minister visited China during recession on the Team Canada mission, somebody asked him: How do you start a big business in Canada if we want to come and invest? How do you start a small business, he said. Start a big business and it will become small during the recession.

4961 It is the same with cable capacity and access problems. When you get a national licence, automatically several of us have just become local broadcasters on just one cable system. So we came across tremendous community issues that we felt needed to be covered.

4962 We looked at the current radio broadcast in the South Asian community. Many independent producers, brokers, including CHIN, CJMR and Fairchild 530 AM, are doing an excellent job.

4963 In fact, to be honest with you, even some of the producers who are so-called -- people are talking about WTOR. Some people have been making statements that they want to close WTOR. My philosophy is completely different. I don't think we should close WTOR. We should be better than WTOR and take some of the best guys and cream-skim them into our programming. If they can really take that revenue down there, provide them an opportunity to work on our own base here.

4964 In fact, they have already approached us.

4965 That is the kind of positive approach we are taking. The moment you start doing something good automatically -- programming is what it is all about.

4966 With advertising sales, you could have the topmost salesman under the sky but if the programming is not good they cannot market it.

4967 We felt that there was a need for that type of compelling programming and frankly nothing was better than joining hands, when the wheel was already in motion, with an organization like CHIN. We thought we had the resources from a programming perspective. They had the economic resources, the deep pockets, the knowledge, the experience, the marketing and the infrastructure.

4968 So we thought if we join our hands together, it would be a very compelling kind of a force.

4969 I'm sorry. Thank you.

4970 COMMISSIONER COLVILLE: Don't apologize.

4971 I noticed that there was a letter of support from Punjab Star, which is already doing some programming on WTOR.

4972 MR. CHANDRASEKAR: Yes, sir. In fact, they are even going to be appearing at the intervention stage.

4973 COMMISSIONER COLVILLE: Right.

4974 MR. CHANDRASEKAR: It is not only them; there are another two or three more that we have received letters of support from. The amazing part is that we are very happy -- in fact, we didn't approach them. We were very honoured that they approached us when they heard about our association with CHIN with respect to the launch of this new application.

4975 There have been several others who have come forward, actually, and we are very delighted.

4976 We will make sure that our advisory board will be very closely involved with us with respect to the selection of these programs, as well. We are very excited about it.

4977 COMMISSIONER COLVILLE: So does that joke about making a small fortune apply to Category 2 digital specialties, as well?

4978 MR. CHANDRASEKAR: In due course of time, yes. When you run a small business -- in the little village where I was born in India, sir, there is a little joke. They say: Some people prefer to be a head of a ckicken than the tail of an elephant.

4979 The day we decided to take our company public on the Toronto Stock Exchange here on the venture exchange, we came to the conclusion it is better to own 1 per cent of a good phone company than 100 per cent of a phone booth.

--- Laughter / Rires

4980 COMMISSIONER COLVILLE: Let's go into the two applications, then. Let's start with the "flip". So we are dealing with the application to take AM 1540 and flip it to an FM 101.3; 1540 disappears and becomes available for somebody else -- although I saw an intervention that said it is probably not that good and too expensive, and who would want to go on AM anyway. But let's set that aside.

4981 You mention that currently the AM station serves 6 million people during the day when it is on peak power and shrinks to about 600,000 at night. With the FM application, your audience would be in the neighbourhood of 3 million.

4982 So daytime at least we end up losing about 3 million listeners to 1540.

4983 I would like to get a sense from you about what is that impact going to do (a) to the listeners and (b) to the operation of the station.

4984 There is a huge trade-off here, obviously. We lose 3 million in the daytime, and we are gaining the 2.4 that we lost in the AM at night. We are ending up with more net on the FM, obviously.

4985 Can you give us a sense of what the impact is going to be on that in terms of -- well, for the audience I guess it is fairly easy to figure out the numbers, but what happens with overall impact on the service, advertising and programming?

4986 MR. LOMBARDI: Actually, all positive. We projected, I think, a slight decrease in revenues perhaps in the first year due to adjustment.

4987 Basically, high power 101.3 as a flip option for CHIN is a permanent solution to our technical difficulties. What it does is give us an envelope of 3 million reach, which is primarily the GTA.

4988 With regards to the community that we are serving currently on AM 1540, that is primarily our market. That's it. We don't really have a huge listenership in Orangeville or St. Catharines or Niagara Falls. Even though we get there, we don't bring any revenues in from those markets. Therefore, they are not really our major concern.

4989 Our major concern is the GTA, and that is where we are most greatly affected by low power. That is where we are hurt and hit the hardest throughout the year.

4990 So the proposal for 101.3 at a high power gives us that comfortable envelope, gives us that reach within a 3 million population contour to finally solidify our programming format to guarantee clear reception seven days a week, 12 months a year, 24 hours a day, something we currently don't have.

4991 I think our audiences basically are going to be reached, 95 per cent of them. Sure, we are going to have a few living on the outskirts that may not be able to receive as well. But that is far outweighed by the benefits of having reliable consistent service, for that matter, on FM. That is also a key factor.

4992 COMMISSIONER COLVILLE: Are you able to measure at all what the audience loss is?

4993 We know there are 6 million people in the umbrella underneath the AM signal in the daytime. What I gather you are saying is your gut feel tells you or your knowledge of the operation tells you that virtually all of your existing audience listeners would be within the umbrella of the New FM signal.

4994 MR. LOMBARDI: Yes.

4995 COMMISSIONER COLVILLE: So you are getting very few listeners in the area that would be the difference between the two?

4996 MR. LOMBARDI: Very few; that's correct.

4997 COMMISSIONER COLVILLE: Is that just kind of intuitive?

4998 MR. LOMBARDI: It is a little intuitive, and it also relates to our business plan and where our advertisers are coming from.

4999 We don't have advertisers north of Brampton or in Niagara Falls or in Hamilton. We don't service that market in that sense for an advertising base. Our primary market is within the core of the GTA, within that contour.

5000 There is about 5 per cent -- I wouldn't pretend to say that there aren't some of our audience outside that contour. We may or may not be able to reach them. We don't know really until that frequency is on the air.

5001 The survival and stability of the radio station is in tact with this flip. It will work, from a business plan, from our programming perspective, from our commitments to the communities that we currently are serving on AM 1540.

5002 In our professional opinion, it works.

5003 COMMISSIONER COLVILLE: I don't want this to sound like a criticism, but I guess you really don't know how many listeners you have outside what the FM coverage would be, the full power 103 FM and the full power AM.

5004 I guess you wouldn't know unless you shut the AM down and waited for the phone to light up.

5005 MR. LOMBARDI: Commissioner Colville, you are right. It is very difficult for us to estimate what our listenership is, because we are so diverse in our programming schedule. We will go from Macedonian to Mandarin to Caribbean within a two-hour block. So we are constantly shifting directions in our reach and audience.

5006 We do have the avail of Statistics Canada. We have looked at population studies. I base this more on than just a hunch. We have sort of taken a pretty good look at what we can achieve within that contour, and it is very positive.

5007 The 1540 AM daytime signal is fabulous. It is 6 million people. We get right out there in Orangeville. But that is not our market. That is not a result of our poor programming philosophy. That is perhaps the reality of what it is that we are trying to accomplish.

5008 Our listeners happen to be concentrated in the GTA.

5009 Can we do a job for them with this flip, going from 6 million to 3 million? We think we can, because that is our core market. We don't need the other 3 million, believe it or not. We want the GTA. That's where our market is.

5010 That is why we believe the flip is the best.

5011 I wish it was 4 million. Sure, I wish we could duplicate the coverage. But that is not the reality. We have to work with what we have.

5012 What we have, in our opinion, is a better solution to this repeater connection with the 1540. We think the flip is a doable solution.

5013 Joe.

5014 MR. MULVIHILL: Commissioner, maybe I can add one more clarification, because we are obviously not a Broadcast Bureau of Measurement station, being ethnic.

5015 There is a reality in the advertiser's base. The majority of our advertising on our station comes from the local marketplace. Local advertisers will not spend on a station that obviously does not give them immediate results.

5016 Our advertiser base very much is within the Toronto CMA. I mean, that's the harsh reality.

5017 We have had advertisers at different times, say from Hamilton or an area like that, because there is an Italian community in Hamilton that has an affinity to CHIN because we are all extended family in the Italian community. They will try us, but the reality is they don't get the advertisers coming through their door.

5018 But if they are in Mississauga or if they are in Woodbridge, and areas like that, we definitely get a response. So I think when we say "based on our experience", our experience is also based on what we see from the advertising community. They better than us can tell us whether it works.

1000

5019 COMMISSIONER COLVILLE: Thanks for that.

5020 Then what is, since we are on this notion of advertising, your sense of the impact of the flip? Marginally more, marginally less, about the same in terms of advertising revenue?

5021 MR. LOMBARDI: I think marginally less, but we think basically the same. I think in the first little while we may have some effects with our revenues, but basically we don't expect to take a hit at all.

5022 Maybe I could ask Bob Culliton, our Chief Financial Officer, to address that question.

5023 MR. CULLITON: They would be marginally less in the first couple of years because, of course, we do lose some audience from six million down to three million. So we will probably lose some, but in our business plan we budgeted for less revenue, but not very much.

5024 The revenue that we have on 1540 now, we would say probably 90 per cent of that would turn over onto the 101.3.

5025 COMMISSIONER COLVILLE: In the case of you operation, do you feel there is a fairly direct correlation between the advertising loss and the audience? So if you say there is about a 10 per cent loss in advertising in the first couple of years, would you estimate that that correlates to about a 10 per cent loss in audience?

5026 MR. LOMBARDI: I think we draw that comparison, yes.

5027 COMMISSIONER COLVILLE: I think in our discussion we picked up several other questions that I had here.

5028 MR. LOMBARDI: I think one thing we should touch on is the fact that with the AM programming on an FM signal, and the fact that we are providing consistent programming, I think we have been cautious in budgeting a marginal reduction in revenues, but we really believe that enhanced quality of programming on an FM signal for our current AM listeners is going to be very attractive, not only to our listeners but also to advertisers.

5029 So there is also that quality and we haven't factored into that. So in fact there could be a definite upswing on that once that program is currently available.

5030 We know that listeners on 101.3 now that can reach us on the repeater stay tuned to it continually if they can, if they are not mobile because they just prefer listening to it.

5031 So we haven't really factored in the quality of signal and programming when we are able to provide it on FM, which would be a plus for us.

5032 COMMISSIONER COLVILLE: The audience you lose now in the evening, I guess you would end up repatriating them, obviously, under the new scheme.

5033 Let me switch to talent development and perhaps this is just more of a clarification than anything else.

5034 In the case of the flip -- I think I'm on the right one. I hope I haven't confused myself here -- you said -- this is at Schedule 16, talking about Canadian Talent Development:

"Our proposed New FM will be bound by the Canadian Talent Development commitment accepted by the Commission in the last licence renewal for CHIN Toronto and CHIN Toronto is committed to contribute $27,000 to eligible Canadian Talent Development initiatives".

5035 Then you listed the initiatives there.

5036 MR. LOMBARDI: This is in the flip application? We are still on the flip?

5037 COMMISSIONER COLVILLE: Yes.

5038 MR. LOMBARDI: Do you mind if I just take a moment to pull it out?

--- Pause

5039 MR. CULLITON: We have committed to the $27,000 in the flip per year.

5040 COMMISSIONER COLVILLE: So in the initiatives that are listed there are initiatives that are currently underway. There is list there going down from Factor down through the page to the International Folklore Competition?

5041 MR. LOMBARDI: Yes, they are.

5042 COMMISSIONER COLVILLE: So those are initiatives that you have underway under the current scheme.

5043 MR. LOMBARDI: Yes, they are.

5044 COMMISSIONER COLVILLE: Can you just confirm for me that the Italian Music and Song Competition and the International Folklore Competition are third-party initiatives?

5045 MR. LOMBARDI: Yes, I can. The Italian Music and Song Competition is third party and that's administered through Canadian Music Week. So they administer all of that and pay all the bills. CHIN Radio makes a contribution to Canadian Music Week and they administer the financing on that.

5046 The Folklore Competition, the artists and participants are paid directly. Competition fees and prize money, cheques are issued directly to those organizations from CHIN.

5047 COMMISSIONER COLVILLE: Okay. That's helpful. Thanks. I just wanted to clarify that.

5048 In the case of the advisory board, does CHAN currently have an advisory board for CHIN and FM radio operations?

5049 MR. LOMBARDI: No. At the current time CHIN Radio does not have an advisory board per se.

5050 COMMISSIONER COLVILLE: Now, we talked I guess about the advisory board largely in the context of the new station.

5051 MR. LOMBARDI: That's right.

5052 COMMISSIONER COLVILLE: Would the advisory board exist in the case of the flip?

5053 MR. LOMBARDI: No. We didn't envision an advisory board in the case of the flip or for the repeater because that is primarily status quo in our opinion.

5054 Let me also add that as a broadcaster for the last 30 years, along with my family and close associates, the advisory board is really made up of our upper management, in cooperation with many of our associate producers. So after our history of broadcasting we have a very good working relationship with our associate producers, our programming director, and we have something that works very well for us.

5055 We proposed an advisory board because we felt that I think it answers the call and the need for one with respect to new services. We reached out to significant individuals in the community and have approached them to sit on our board and the Chair will be appearing here before you as an intervenor, Mr. Mario Calla of Costi. As well, CHAN has some influential people from the community that he has selected to also join us.

5056 One interesting note with regards to the advisory board, however, is we recognize that an advisory board under the CHIN umbrella couldn't advise and administer one frequency without naturally having an interest in CHIN 1540 and 100.7. So we decided that this advisory board would also advise management on all three of our frequencies if we were so fortunate as to get 101.1.

5057 COMMISSIONER COLVILLE: Now this I think will be my last question with respect to the flip which is pretty straight forward because it's the existing station, and, Madam Chair, perhaps it might be a good time to take a break. We can come back and do the new station after the break.

5058 You have heard the discussion again through the week and there has been the issue raised through some of the interventions, particularly of some of the other incumbent stations about stations receiving a licence and then changing their format, or target groups, I guess, I am thinking more of the FM format.

5059 This morning in your presentation, you said at page 9:

"We are committed to offering the highest level of service to the South Asian community and providing for a diversity of voices. Shan and I feel so strongly about this that we would not be adverse to a condition of licence requiring FM 101.3 to broadcast at least 48 hours of programming produced by ATN each week".

5060 I don't know the extent to which that sort of condition might apply to the flip here, and whether you might comment on the issue in general, and in particular whether that sort of an issue would be appropriate in the case of the flip.

5061 MR. LOMBARDI: Well, I don't think it would be appropriate in that we have been licensed for 1540. We have just recently received our renewal.

5062 We have been in the marketplace for 36 years. We intend to live by the condition of licence of that current licence, and don't necessarily see the need for a condition of licence to serve the number of languages that are currently being served on CHIN Radio because that's exactly what I want to do. This isn't an end move where I am going to get an FM frequency and then make programming changes. I want to serve the communities that we are currently serving.

5063 In fact, our condition of licence is for 17 languages to 23 cultural groups. In fact, we exceed that.

5064 Dario perhaps has the figures.

5065 MR. AMARAL: Yes, we do. Right now we are serving 23 different languages and 37 different ethnic groups on AM 1540.

5066 MR. LOMBARDI: So this is what we are currently doing on 1540. So I want to take that programming format and just flip it to the FM to secure a quality frequency for them.

5067 COMMISSIONER COLVILLE: Right.

5068 Thank you for that. We may want to pursue it a little more in terms of the New FM.

5069 MR. LOMBARDI: Sure.

5070 COMMISSIONER COLVILLE: Madam Chair, I don't know which is more convenient given the sort of complicated nature of this, whether other members will have some questions on the flip or counsel, whether to do it now or wait until we go through all three and then have some follow-up questions. I'm in your hands.

5071 THE CHAIRPERSON: You are in charge. Which do you prefer?

5072 COMMISSIONER COLVILLE: Well, there is probably a lot of people sitting with crossed legs here right now.

--- Laughter / Rires

5073 COMMISSIONER COLVILLE: Maybe it's a good time for a break.

5074 THE CHAIRPERSON: Human failings will take precedence.

5075 We will take a 15-minute break then until, by my watch, 10:25.

5076 Nous reprendrons à 10 h 25.

--- Upon recessing at 1010 / Suspension à 1010

--- Upon resuming at 1032 / Reprise à 1032

5077 THE CHAIRPERSON: Order, please. A l'ordre, s'il vous plaît.

5078 Commissioner Colville?

5079 COMMISSIONER COLVILLE: Thank you, Madam Chair.

5080 Mr. Lombardi, I understand you wanted to clarify a comment you made earlier this morning?

5081 MR. LOMBARDI: Yes, thank you, Commissioner Colville.

5082 The question with regards to the listenership and your question with regards to do we know the number of people that we could reach within the contour, or how many we are losing, at the break Debra and I were chatting. I think Debra can shed some light on that.

5083 MS McLAUGHLIN: We have to estimate the loss that would occur in either the flip scenario or the real loss of 101.3 as a low power repeater.

5084 One of the methods that we used was to take the BBM data, and while I wouldn't recommend anyone looking at these particular figures as representative of absolute audience, I think they are instructive in the relationship between their full coverage and their central area audience.

5085 What is important to note in that, I think -- and I don't have the figures before me, and I would be happy to file them with the Commission -- it's something in excess of 90 per cent of their audience currently is drawn from the Toronto area. Despite the fact that the signal carries well beyond the borders of the central area there is very little tuning.

5086 COMMISSIONER COLVILLE: Very little tuning. And so the figure we talked about earlier of about 10 per cent, would you, just based on your expertise, presume that it's probably 10 per cent or less?

5087 MS McLAUGHLIN: It is definitely less than 10 per cent.

5088 COMMISSIONER CARDOZO: Definitely less. So there is probably, then, not a direct correlation to the advertising issue we talked about earlier. It would be somewhat less?

5089 MS McLAUGHLIN: It is not as direct a relationship as it is in English mainstream radio share versus revenue, but it is more where the signal reaches and whether the advertisers themselves can hear it. It is sort of really the judgment that is made.

5090 COMMISSIONER COLVILLE: Right. Thank you for that clarification.

5091 Let's switch to the New FM and start off with a few questions related to programming.

5092 You have identified a daily one-hour local talk show directed to the South Asian community. When will this program be broadcast and will this show be targeted to any specific South Asian community or communities and in what languages would it be broadcast?

5093 MR. LOMBARDI: I will open with an answer to the question and then I will throw to Shan.

5094 The need for talk programming we feel is extremely important within the context of our programming format because there is much to do for ethnic broadcasters in interpreting and smoothing integration into Canadian society, in particular for key language groups.

5095 We have identified the South Asian community into particular subgroups within the South Asian community as being very needy of this type of programming.

5096 So over and above our one-hour talk show which is cross-cultural scheduled on our daytime format, within the South Asian block will also be a one-hour talk show specifically directed to the South Asian community.

5097 I would like to ask Shan to further describe the content of that show.

5098 MR. CHANDRASEKAR: The concept of talk shows are not really new to the community. Some of the existing radio stations are doing a fairly effective job in a couple of different languages.

5099 We would like to, frankly, introduce talk shows in most of the major languages, but primarily because of the amount of time we are allocating the talk shows would concentrate more in the Hindi programming as well as in the Tamil programming. We will have more of a focus on talk shows which will really feature some very important subjects for the community, such as women's issues, seniors issues, children's issues, parent/child relationships, employment equity, race relations, human rights. It would talk about pre-natal care, post-natal care, a lot of medical advice with respect to change in food habits for new immigrants in the country, and for people who have been here long enough there are also issues dealing with them. So those are the kinds of issues that will be pretty much discussed in the talk show format.

5100 And, of course, entertainment and celebrities and artists who come in, profiles with them. So there will be very many talk shows dealing with that as well. So the public will be greatly interested to know about some of these celebrities going live on-air.

5101 COMMISSIONER COLVILLE: Is there a particular time block within the South Asian block that you would see that fitting into?

5102 MR. CHANDRASEKAR: Yes. For Hindi we are planning on doing it between 12:00 and 1:00 Monday to Friday, and for Tamil we are planning on doing it between 4:00 and 5:00 Monday to Friday.

5103 COMMISSIONER COLVILLE: So it is 12:00 to 1:00 and 4:00 to 5:00. So it is two one-hour blocks.

5104 MR. CHANDRASEKAR: That is correct, but different languages.

5105 COMMISSIONER COLVILLE: They would be entirely talk then, would they?

5106 MR. CHANDRASEKAR: Not essentially, because if you are interviewing on a talk show a celebrity who is an outstanding musician, then obviously their music could be played. So it will become a compelling interesting show for people to tune in with different subjects every day so that people know that there is something always new to look forward to.

5107 COMMISSIONER COLVILLE: But it is primarily talk.

5108 MR. CHANDRASEKAR: That is correct.

5109 COMMISSIONER COLVILLE: It is not essentially a variety show.

5110 MR. CHANDRASEKAR: No.

5111 COMMISSIONER COLVILLE: Okay.

5112 Mr. Lombardi, you mentioned the cross-cultural talk show, which I guess is going to be done in English. Is that right?

5113 MR. LOMBARDI: Yes, that is correct.

5114 COMMISSIONER COLVILLE: Given that it is done in English, how would it differ from other sort of conventional English talk shows on more conventional stations? What would make this unique.

5115 MR. LOMBARDI: We feel the need within our programming format and the need expressed by our community is a common awareness. There are particular issues that have a thread of continuity that touch all new Canadians. The immigrant experience is similar on many, many levels and the purpose of this talk show is to kind of join that thread that connects us all in a way to this new society in which we are living and growing and understanding and planning our futures.

5116 It is a format that is designed to help integrate all of our listeners who are interested in topics such as education, health, social issues, law, understanding the municipalities that they are living in, interpreting what this whole business is of garbage collection, for example, that can be quite annoying for people that they don't really understand how to actually get results from City Hall.

5117 So this program is really designed to attract listeners from our entire broadcast format. So we would have promos running throughout our entire schedule saying: Tune in Friday where our host -- and it would be a CHIN host that would be the anchor host, with invited guest hosts from different areas of the community, and also representatives from different ethnic communities talking about particular issues of importance that have an influence and an effect on all of our communities.

5118 So we would run promotions in our Spanish programming, our South Asian block, our Filipino block, our Vietnamese block. We would run them bilingually to be sure that our listeners understand what it is and invite them to participate and listen in to a program that is hosted in English of course, and it is also an open-line talk show where we will encourage our listeners to phone in and get answers to their questions. That is basically how that format will run.

5119 MR. CHANDRASEKAR: If I could add to what Lenny has just mentioned, the cross-cultural talk show format is a great attraction to the South Asian community as well. We hope to closely collaborate with Lenny and bring in a lot of our youth issues into the cross-cultural English talk show.

5120 As you are well aware, in the South Asian community within the second and third generation there are many youngsters who were born in Canada or came here when they were very young. As the year progressed, multilingualism has somewhat faded but multiculturalism is still strong and there is a strong identity to communicate to each other using the English language.

5121 So we are hoping -- for instance, we have discussed some brief concepts. We have a support letter, as you can see, from an organization called mybindi.com, which as now become the most popular Web site for South Asian youth in the whole of Canada. It is a very attractive Web site and they have done some wonderful work.

5122 That is the kind of input that we are going to have into that kind of youth-oriented programming, so we will make that programming as compelling and as attractive as possible and with a lot of cross-promotion, as Lenny mentioned, not only on radio but hopefully to cross-promote it on television as well.

5123 We see a synergy coming out of some of these. The local issues actually which could be of national importance can also be picked up from some of these discussions and can be showcased nationally as well.

5124 COMMISSIONER COLVILLE: You mentioned garbage collection. I don't know what the situation is here in Toronto, but I get quite annoyed when I put styrofoam in the blue bag and then the garbage collector doesn't pick it up at the end of the day and there is this little tag: You idiot, you're not supposed to put" --

--- Laughter / Rires

5125 COMMISSIONER COLVILLE: -- which leads me to think that a lot of the "non-ethnic community" may have some interest in some of these issues.

5126 You use that as an example. How would you go about focusing on issues that are unique to the ethnic community as opposed to just the wider community?

5127 MR. LOMBARDI: As far as our breadth of contacts within the community that we work, as far as our contacts with Public Works, with City Hall.

5128 Working with organizations such as COSTI for example, and our advisory chair, Mario Calla, opens up a whole new opportunity to tap right into all of these social services that COSTI represents. There are over 60 associations that are representing as many cultural groups. They are designed to help integrate and explain and interpret this new society and help new Canadians find work, understand many of the complexities of this new society.

5129 That is really the key. The difficulties of a recent arrival from Vietnam, or a recent arrival from Ecuador or, for that matter, if they have been here for a few years, there are similar problems, similar problems in finding employment, getting proper healthcare, understanding the system, getting your garbage collected, knowing when to put it out and when not to.

5130 All of these issues kind of a run a thread. We have a unique opportunity to kind of tie people into our program by offering it in English, but promoting it to them specifically. We can actually target them specifically in our special programs that are directed to our Spanish and Vietnamese and Korean communities to get them to listen to these special talk shows. So we can bring more attention to these issues where they may not have known where to find information on it before.

5131 If it is not available within that program and if that associate producer doesn't have the access or the time slot to allow for somebody from Public Works or from Health Canada to visit during that program block, those listeners can still tune in to a regularly scheduled programming on FM 101.3 and still get the same information. Possibly here their associate producer would be the co-host and introduce that topic.

5132 So there are lots and lots of opportunities of synergies of programs that we can offer.

5133 MS LOMBARDI-HARTIG: May I add something to that?

5134 COMMISSIONER COLVILLE: Sure.

5135 MS LOMBARDI-HARTIG: Another very unique aspect of talk radio, our style of cross-cultural talk programming, is that on many conventional radio stations someone who has a very thick accent or who speaks very broken English would be unlikely to call in or unlikely to make it through a screener.

5136 The relationship that we have as a radio station -- I'm sure you have heard a few of our accents and whatnot -- we certainly respect each other very much and endeavour to understand each other to the best of our abilities. That is encouraged on the radio as well. So we afford more access to the public to our radio programs.

5137 COMMISSIONER COLVILLE: Yes, but accent is always an interesting thing when I travel somewhere else and people say that I have an accent: What do you mean? I don't have an accent, you do.

--- Laughter / Rires

5138 COMMISSIONER COLVILLE: Given all the groups we are targeting here, would the kinds of themes or topics here sort of transcend the various groups or would it tend to be targeted to one or a small segment of the groups, this cross-cultural talk show?

5139 MR. LOMBARDI: No. I think the two talk show formats identified in our South Asian programming would be very specifically targeted to South Asian members of the community in those languages.

5140 The cross-cultural will include the issues I think that are relevant to the South Asian community as we feel that those are issues that are relevant right across the board. So Russian, Dutch, Vietnamese, Korean, Arabic, Armenian, all of those programs will get the kind of representation through topics that we believe are of importance to those communities within those program formats.

5141 So everybody on our programming format will be included, because we will run promotions and we will have public service announcements, if you will, within each of those programs promoting CHIN 101.3's cross-cultural talk show on a daily basis. So we will bring a lot of attention to those issues.

5142 COMMISSIONER COLVILLE: Okay. Switching to news, what is your approach going to be in terms of dealing with the news in terms of languages and in terms of your synergies, if I can use that term, with the existing stations?

5143 MR. LOMBARDI: I would be happy to.

5144 We have a fully staffed newsroom. We have international feeds available to us at our CHIN Centre. We have the capabilities of extending and expanding on those services for all of our selected language groups.

5145 The news will be twofold really. CHIN Radio will produce and provide a three to five-minute newscap hourly for all of our programs right across the board. We will do that locally in-house through BN wire services and provide news services, scripted news services for translation for associate producers. So what they can do as well is take an English newscast produced by CHIN and then complement that with their own local translated news of local issues or current affairs, as well as international news feeds that will be made available to them for the program if they so wish. That will be the kind of combination.

5146 COMMISSIONER COLVILLE: So it will be a combination of your own staff and these associate program producers, and in the various languages.

5147 MR. LOMBARDI: That's correct. There would be a five-minute newscast on a the Russian program, followed by let's say the Korean program. An updated newscast would follow, as well.

5148 So you have the continuity of news services going right through our entire program.

5149 COMMISSIONER COLVILLE: Do you see each of the major language groups that we have here having their own five-minute newscast?

5150 MR. LOMBARDI: I think all of the programs as produced by associate producers will always complement their programs, as we have seen with our current programs on CHIN AM and FM; a healthy complement of current affairs, news, international segments that are relevant to the local community.

5151 I think news is very important to most of our producers.

5152 What we want to also provide them with is quality newscast produced and provided by CHIN. We want to establish the continuity of that sound for the entire radio station. We want there to be a nice flow of that type of identification with regards to the news.

5153 COMMISSIONER COLVILLE: In your presentation this morning you refer to this associate producer model that your dad invented, established. I wonder if you might take us through that a bit.

5154 Describe the concept. How do you identify it? What is the working relationship with the producers? What sort of formal agreement do you have with them? What kind of training do you provide for them, and so on?

5155 Perhaps you could take us through that.

5156 MR. LOMBARDI: Let me take you back to, I guess, 1966. My father was a broker. That's how he started. He started as a musician and a grocer. Then he wanted to promote his supermarket, so he bought time on CHUM radio.

5157 Senator Keith Davey was working as a general sales manager, I think, at the time and wanted to sell him some advertising. He said: "I'm not interested in advertising, but I will buy some air time."

5158 So his career in broadcasting began, and his experience as a broker began.

5159 He kind of bounced around from station to station until he was successful in getting his own licence in 1966.

5160 What he found was that he was happy to introduce and bring on board people who were as committed to ethnic broadcasting as he was. So he started with gentlemen like Jai, for example, and John Loncaric, Mike Milicevic and Stan Yuchtman.

5161 These guys were small cottage industries. They were just starting out, and they couldn't afford to pay for air time. So they struck a bargain. They said: Okay, I'll get the studios up and running, and I will make sure the microphones are working and I will have an operator for you. Just come and let's do the show. Let's just get the show on the air. Then whatever we generate in sales we will share.

5162 That's a model that we stuck with from day one. That basically in the principle of our approach to ethnic broadcasting.

5163 The most recent example of how we cultivate associate producers is what we are doing right now in Ottawa. We were fortunate enough to have been licensed for a multicultural station in Ottawa in October, and we immediately went into the marketplace and into the communities and, with all of the various contacts that we had established in that process, reached out to every specific culture that we proposed to serve and through our advisory board promoted the fact that we were looking for associate producers who were looking for a career in broadcasting.

5164 That resulted in hundreds of applications and countless encounters with individuals who wanted to know about broadcasting. That led to the natural discussion with those individuals on a face-to-face basis.

5165 Along with myself, Dario Amaral and Bob Culliton spent the weekend in Ottawa. From a hundred applications we narrowed it down to about 40, and for two or three days we sat and talked to these individuals to get an idea of what their interests were, what their intent was, how well connected they were to the community, how active they were, what endorsements they had from the community which they proposed to serve.

5166 We gleaned from that a select list. Then I asked my advisory board, who were very familiar with the Ottawa community, to advise me as to who we thought were good choices.

5167 From that process we came up with who we believed would be the best associate producers.

5168 Under that model the associate producers risk no outlay of cash to purchase the air time to produce the program. We assume those risks. We are there to help them produce quality programming to serve the communities. The scenario is the same.

5169 We share in the joint revenues that we produce within those shows. They are at no risk or out of pocket of any cash.

5170 That model is exactly the same model that we would use right here in Toronto for this new station.

5171 COMMISSIONER COLVILLE: I hope this is not a pejorative term, but is there sort of a profile of what makes a good associate producer?

5172 Given that you have had to go through this exercise of, you said, literally getting hundreds of applications and then narrowing it down, taking it to the advisory board, getting their advice and then finally deciding on who is it, how do you identify what characteristics, what traits, make a good associate producer?

5173 MR. LOMBARDI: I rely on my own history and experience, having had the pleasure of working with over 30 associate producers for the last 36 years.

5174 COMMISSIONER COLVILLE: We have to be careful not to insult anybody in the room here.

5175 MR. LOMBARDI: So I have a fairly good sense. They are easy to identify, because they are individuals who can't control their enthusiasm and excitement for broadcasting.

5176 They are usually workaholics who are involved in every aspect of the community that they come from, that have a distinct and unique passion in getting that message out beyond their own community and constantly looking for ways in which to include mainstream society within their own communities.

5177 They are people that have a real passion for show business. They are entrepreneurial. They have a keen business sense. They understand that through hard work, you can achieve. They are high achievers, and they are articulate. They are energetic. They are happy people. They are people that are very engaging.

5178 All those are the qualities that you need to be a successful associate producer, because you are wearing so many hats. You are selling yourself. You are convincing advertisers to buy you, so you really have to know how to take rejection and keep smiling and go on to the next one.

5179 You have to have insight and a view of the community on where that community can go. You have to be supported by the community.

5180 Every one of our associate producers is firmly entrenched in the community that they serve. They are completely supported by the community leaders and associations with which they work. That's what you need. You need that kind of unity to be successful.

5181 That is what we found so far in Ottawa.

1100

5182 COMMISSIONER COLVILLE: Generally speaking, there seems to be three different models here for doing this sort of ethnic programming. You either do it all in-house, or broker some part most of the time, or this sort of model that you have.

5183 How would you characterize the benefits of the associate producer model as opposed to straight out brokering time: I'll sell you a block of time and you go get the advertising, and we may or may not split the revenue from the advertising.

5184 MR. LOMBARDI: Straight out brokering is, in my opinion, a very narrow view of what quality programming could be produced. I am not at all slamming the broker because he is a producer as well, and I think he is very good.

5185 What he lacks, though, what that individual lacks is the support of the radio station to take it the next step. A broker is basically just renting a room, as has often been described. You know, you put your money down and the room is yours. If you don't pay for it, the door is locked.

5186 The contribution of the radio station and its upper management and the association and the development and the ideas and the connection are not there. Some producers don't even show up to the studios or they provide a feed. They are easy to spot.

5187 When you look at CHIN, our example of what we do in our model as associate producers, look at what we can produce. We can produce a CHIN International Picnic after 36 years. This is an event that I am not doing alone and is not Italian. It is a combined effort through the efforts of 20 or 30 different associate producers who produce south Asian, Chinese, Portuguese, Greek, Caribbean. We have been doing it for 36 years.

5188 We never would have been able to do it if we didn't have the associate producer model. If I didn't, if I was brokering the time, I would not even have met them. I wouldn't have met my producers. They would have just come in, done their program, paid their money and left. The only time I would meet them is when their cheque bounced.

5189 That's pretty much the scenario of the broker model. It is not a bad one. It gets the job done. Programming gets produced. Communities get served. But that is where it will stay.

5190 The associate model gives us an opportunity to take it up one notch. The picnic is one example. We do five or six cultural shows at Canada's Wonderland.

5191 A great associate producer for many, many years, Darshan Sahota, produces with CHIN Radio two South Asian events at Canada's Wonderland.

5192 Our Chinese programming department produces a very successful Chinese event there.

5193 If we didn't have that relationship, those events would not happen. They would not be created.

5194 Unless I am wrong, CHIN radio is one of the very few ethnic broadcasters that is doing stuff like that.

5195 COMMISSIONER COLVILLE: So do you have --

5196 MS LOMBARDI-HARTIG: Excuse may, may I add to that?

5197 COMMISSIONER COLVILLE: Certainly.

5198 MS LOMBARDI-HARTIG: Another benefit of the associate producer model with regard to our commitment to social issues and charities and philanthropy is the associate producer model also allows us to have that relationship with the producers, whereby if a family is looking for a bone marrow donor, for example, for a South American child, we are able to access our Spanish programming, access our Portuguese programming, because they are speaking to the Brazilian community, looking for matches for bone marrow, to educate people as to what the meaning of that is.

5199 When there was an earthquake in the Gujarat State of Indian one and a half years ago, we were able to run spots on all of our programs and get all of our producers involved in understanding what the disaster was, the scope of the disaster and how they could make a contribution.

5200 Similarly, when the Canadian Blood Services asked us to help them, we were able to get that message out in all different languages.

5201 I could go on.

5202 We do a great campaign for Sick Kids Hospital. Actually, they will be here next week as an intervenor to explain that.

5203 So the associate producer model allows us to be involved with each other so that we can go to them to ask that a particular message is shared in their programming. In turn, they come to us and their fellow producers to share a message that needs to be expressed in other languages, as well.

5204 MR. CHANDRASEKAR: Sir, if I could add a little more historically, to talk a little bit about it.

5205 The growth and development of the ethnic broadcast industry, whether it is television, radio or the electronic media, including the print media at the present time, there are certain common similarities and synergies in terms of its evolution.

5206 You have to understand that none of them were born with a silver spoon in their mouth. They all had to work from scratch. It was absolutely grassroots level development in both radio and television.

5207 In addition to the staff, the part-time staff and fulltime staff that you have, the volunteers play an extraordinarily important role in the development of especially multicultural programming, whether it is radio or television.

5208 There are people who have gone beyond the call of duty in terms of providing their service. Frankly, we cannot even afford to pay them if they asked to be paid. They are not looking for money. They are really doing it because they are committed to the community. There are a lot of people who have done that.

5209 If you are a part-time worker or even if you are working in a certain corporate set-up -- I have been through it many years ago in my life. There was a stage where somebody would say: If you don't want to come into work on Saturday, don't bother coming back on Sunday. It is that tough in terms of requirement sometimes.

5210 You get to a stage, where sometimes we feel we have reached a stage where our popularity has surpassed our growth. So what would end up happening is to balance this, there are three criteria: one, in any job is job satisfaction. Another one is money. And the third is opportunity for growth.

5211 All three are relatively available at different levels. There is a lot of job satisfaction; that is no problem. But definitely money has been very tight because of lack of capital in a lot of these industries. And opportunities for growth are only opening up now and because of the good policies set by a commission like yourselves, because you have shown leadership.

5212 You have licensed the world's first multicultural television station in this country 23 years ago, which was CFMT. You licensed the first ever Chinese television network outside of China. You licensed the first Italian network, the Spanish network, the South Asian network and now the Greek and the Portuguese and many other regional languages and niche markets. This is tremendous leadership.

5213 As more and more of this happens, definitely this associate producer model is going to get more and more vibrant. There is going to be a lot of movement within this industry. Otherwise, there are bottlenecks.

5214 There are people with extraordinary talent in my team, but unfortunately he cannot move to CBC because he is an extraordinarily well-versed Woodrow scholar, Ashfaq Hussein, who was here, one of the best in the world.

5215 When we launch our Urdu channel, there is going to be a tremendous opportunity for him to flourish and shine, but in the meantime I don't think he is going to sit and read the news on CBC at six o'clock in the evening.

5216 So there are a lot of skills that are available within the community that we feel that by licensing stations like FM 101.3 to the kind of venture that we are talking about, we will recognize and be sensitive to those skills, help people move on.

5217 Some would stay on with us for a long time. Some would go on to the other places.

5218 COMMISSIONER COLVILLE: Is there a formal agreement with the associate producers, like a contractual arrangement, and in particular, given this revenue split in terms of advertising, is that consistent across or does that vary depending on the producer?

5219 MR. LOMBARDI: The revenue split is an agreement that may vary, but generally it's pretty standard across the board.

5220 Commissioner Colville, we have associate producers who has been with us for a very long time, and we have newer associate producers with us. So those lengths of relationships also come into play. But generally all the associate producers agreements are identical with adherence to the codes, responsible broadcasting ethics, fair and balanced programming. So we do have a formal agreement that each one of our associate producer enters into.

5221 On an annual basis, we review it every year.

5222 COMMISSIONER COLVILLE: And you said the revenue split tends to be fairly similar. Typically what is it?

5223 MR. LOMBARDI: It is usually captured anywhere between 30 to 50 per cent.

5224 COMMISSIONER COLVILLE: Goes to who? The 30 per cent would be...?

5225 MR. LOMBARDI: Thirty to 50 per cent of the producer, associate producer.

5226 COMMISSIONER COLVILLE: Thirty to 50 to the producer and the balance to you.

5227 MR. LOMBARDI: That's right.

5228 COMMISSIONER COLVILLE: And who is responsible for selling the time then?

5229 MR. LOMBARDI: It varies. For the most part, the associate producer carries most of the responsibility for that because of the nature of the programming. It's very retail. It's very personally sold in the sense that the associate producer is often selling his own or her own contributions and celebrity, if you will. It's also language based, and often those advertisers need to communicate in their first language and they feel more comfortable with negotiating in that respect. It's a little difficult for our CHIN staff to do that.

5230 Where we can help is maximize the opportunities for revenues and sales and marketing through other events such as the CHIN International Picnic and bringing on major sponsors and supporters who want to participate in major ethnic events.

5231 COMMISSIONER COLVILLE: Does the split go up in favour of the producer as their responsibility for selling advertising goes up? So if they are more responsible then they get a bigger share of the split? Is that the way it works?

5232 MR. LOMBARDI: Yes, it does.

5233 COMMISSIONER COLVILLE: What about training? How do you handle the training? Do you have a training program for these associate producers just in terms of (a), I suppose, the particular skills? You go through presumably in the interview process, but you might identify, as you said, somebody with lots of enthusiasm, but perhaps not the skills to operate in that radio environment and also I suppose the awareness of our rules and regulations.

5234 What sort of training do you provide?

5235 MR. LOMBARDI: Well, primarily we rely on the expertise that the CHIN upper management has developed over the years, and certainly the expertise with regards to Shan's operations in pursuing associate producers for the South Asian programming.

5236 Basically our training program consists of the interview process, the analysis and the support. Once we have identified the associate producer, our training program is assisted by our associate producers within CHIN Radio right now. So they actually act as mentors for new groups coming on line, or we are introducing co-associate producers in cases where we have had associate producers who have chosen to retire or giving up a portion of their programming time for whatever reasons, they introduce new associate producers and provide the training in a practical sense.

5237 The CHIN organization prides itself though in providing all of the resources that are necessary and available to training associate producers with regards to news and all of the technical requirements. None of our associate producers operate for themselves, for example. We employ operating staff to provide all the technical support and we don't burden them with that.

5238 That is twofold. One, I think it guarantees the quality of programming, and it also guarantees the fact that CHIN's programming logs and our programming initiatives we are assured are going to be initiated correctly, as indicated not only through meetings with the associate producer in developing a programming format, as it appears on the log as well because we have a full-time CHIN engineering operator there to ensure that all this happens. So there is your other checkpoint.

5239 If the associate producer is having difficulties with the development of the program, there are trials and checks. Our programming director, Dario Amaral, meets with them on a regular basis. Our producers are very familiar and frequent the station often because, as an associate producer when they sell advertising they are required to bring in the broadcast order to our Accounting and Traffic Department. So we see them all the time.

5240 So there are opportunities for us to get together. So they are not paying for the time and then selling it out and sending us a list by fax of what commercials are running. That's not the way we do it.

5241 So there is tremendous opportunity for us to work with and nurture the associate producers and overcome these problems and getting to the level that they are comfortable and effective as broadcasters.

5242 COMMISSIONER COLVILLE: Do you have a regular way to just sort of monitor what is going on to make sure that they are keeping up their end of the bargain, so to speak?

5243 MR. LOMBARDI: In-house we rely at this point with our management team. We work very closely, as I said, with them. Our Programming Director, Dario Amaral, meets with them on a regular basis. We monitor the program and our audio engineers provide us with a lot of information with regards to the structure of the program, and we review the logs. So there is an opportunity for us to revisit the show and, finally, we have an opportunity to discuss the whole relationship every year with the associate producer at the contract signing stage.

5244 COMMISSIONER COLVILLE: At renewal time, so that it's renewed each year.

5245 MR. LOMBARDI: That's right. It's renewed each year.

5246 COMMISSIONER COLVILLE: Now, in the case of the New FM, what language groups or programs are going to be produced by station staff, and which ones will be done with associate producers, and how do you decide which one is going to be done in-house and which one is going to be done by associate producers?

5247 MR. LOMBARDI: Our expertise would lie in the in-house production of our community affairs, cross-cultural talks, and virtually all the programs, save for our South Asian programming block, would be associate producers.

5248 COMMISSIONER COLVILLE: So it's virtually all done through associate producers.

5249 MR. LOMBARDI: It will virtually all be done through associate producers, not unlike the Ottawa model. The Ottawa model is exactly the same.

5250 COMMISSIONER COLVILLE: So again, you said the cross-cultural talks and the news. What else is done in-house then?

5251 MR. LOMBARDI: We will produce a thing called "Cultural Corner" as well which is a little five-minute short vignette, I call it, to basically describe different cultural nuances of communities, how to demystify cultural customs and religious ceremonies that we all know about but don't quite understand. We would run those through our entire schedule.

5252 So we would produce those types of programs. The associate producer, in all of the languages that we are proposing to serve, would be the producer of that programming content, except, of course, the ATN and Shan would oversee all of the South Asian block.

5253 COMMISSIONER COLVILLE: Well then, will that relationship differ then if Mr. Chandrasekar, as you say, will oversee? Will there still be an associate producer -- what is the associate producer relationship then? Is it with Mr. Chandrasekar or is it with individual producers within that block?

5254 MR. LOMBARDI: It could very well be. Shan and ATN have a complement of over 30 full-time staff members. Shan is currently producing programming in two or three languages, currently. Shan and ATN is our South Asian expert with regards to the production of that quality block of programming, but I think within Shan's mandate, he may also be utilizing the associate producer model as well.

5255 I will ask Shan maybe to illustrate.

1115

5256 COMMISSIONER COLVILLE: Yes, because the South Asian block is quite a big block. So I guess it's a question then of whether it's your people or whether you would in turn be having sort of outside, if you will, associate producers.

5257 MR. CHANDRASEKAR: Now, I would like to clarify a point. Lenny keeps referring to me as an expert. I get more nervous because the South Asian community is such a complex community, I don't want to sound presumptions by calling myself an expert at all. But I think I have a formidable team. So it's not me who really is going to be the person looking after South Asian programming. It's the team from ATN. It's a core group of extremely dedicated people who are already involved with ATN in developing programming for the past several years, who are going to be involved in developing radio programming as well. The majority of them are Toronto based.

5258 Our community is a very complex community. It's a multilingual, multireligious, multinational community, and the reason why I am going to take a minute to just explain a little bit about programming for this community is that we have to take all the sensitivities into account when we are conceptualizing a framework for programming.

5259 We are a community that comes from -- it's a community that speaks Hindi, Urdu, Punjabi, Gujurati, Tamil, Telugu, Malayalam, Kannada, Bengali, Sinhalese and many other languages. It's a community that is multireligious which comprises of people who are Hindus, Moslems, Christians, Zoroastrians, Buddhists, Jains and Jews.

5260 It's a community that has people of Indian origin, but from India, Pakistan, Bangladesh, Sri Lanka, East Africa, South Africa, West Indies, Guyana and the Caribbean, including the Fiji Islands. So there is a lot of commonalities in the community, but there are also very subtle differences within the community.

5261 So we are going to keep in mind the linguistic needs, the cultural needs and the social and the educational needs of the community when we conceptualize these programs.

5262 Having said that, we feel that when we look at the schedules and we look at the different radio stations already serving the Toronto market from licensed radio stations in the local market. We felt that there are certain programs that they were doing adequate service to certain communities, and so we came across program outlines in consultation with people like Mr. Ragubir Singh Samach who is an authority in the Punjabi community for the past 25 years in this country, having produced Punjabi programming for not only television, but across the country in terms of religious and cultural needs, and people like Mrs. Kanta Arora, who is a very popular name and a familiar face in the Canadian community in the Hindi language. She is an authority in the Hindi language.

5263 People like Pradeep Mehta, who is one of the finest announcers, a very original announcer of CJMR when they first started a radio program many, many years ago. Pradeep pioneered that as well.

5264 Then we have people along that calibre in various languages and various groups. So we consulted with them all as a team and then developed the type of programming that we thought was needed for the South Asian community.

5265 No matter what we do, this community is not going to be easily satisfied because we have now come to the conclusion, having been in the business, that we made some minor mistakes in the past, but we never make the same mistake twice.

5266 So we believe that if we can please approximately 60 to 65 per cent of the community, maybe about 50 to 60 per cent of the time, I think we are winners.

5267 So we are not really setting very unreasonable targets for ourselves. We are setting up very reasonable targets, we think, which are really accomplishable. But the idea is to come up with complementary programming. Some of it is already available. It's not totally innovative, but some innovative programming, which is currently not available in the market, which is badly needed in the community.

5268 So we will be discussing those issues.

5269 There are some common issues, for that matter, that we will be discussing. Just to give you an example: dating in the South Asian community among teenagers, for that matter. First generation parents, with respect to some of the anxieties that they have. They have double standards with respect to their daughters and their sons, for that matter, but that might not be only for the South Asian community. As we began to explore it, we found out that every parent feels the same way in this country. But specifically to address some of those issues, we will have thought-provoking programs that could be educative, informative, and quite compelling.

5270 COMMISSIONER COLVILLE: Thank you very much.

5271 Just for the benefit of the interpreters, when you rhyme off a list of languages or groups, you might just slow down a little bit.

5272 I couldn't even get it, let alone trying --

5273 MR. CHANDRASEKAR: You see, in the early days when I started doing television programs, I only had a half an hour and I had to satisfy all these people. So I had to learn to speak fast.

--- Laughter / Rires

5274 COMMISSIONER COLVILLE: I'm not sure. I mean, I heard all of your answers, but frankly I'm not sure whether you answered my question.

5275 Will you and your people be producing all of the programming for the South Asian block -- maybe you said this and I missed it, I'm sorry -- or will you be having some outside folks as well?

5276 MR. CHANDRASEKAR: We will have outside hosts, but we will have no brokers. We are not going to be brokering any time at all. The entire responsibility will be ours. But delegation of responsibility and accountability goes side-by-side so that we will certainly have -- especially certain minority programs we will have freelance producers who will be working with us as the associate producer model that Lenny had described before.

5277 Frankly, the marketing of the programming is going to be done more through us and in collaboration in CHIN, because we have excellent full-time marketing staff already on board. There are four full-time staff that we have who are very, very good in marketing. In fact, you know, these guys are so enthusiastic that if I ever rebroadcast a part of this hearing they will say that "This is brought to you in part by Travelodge."

--- Laughter / Rires

5278 COMMISSIONER COLVILLE: When you say "marketing", what does that mean? Do you mean selling advertising?

5279 MR. CHANDRASEKAR: That is correct, sir. Not only advertising. We have a concept that some of the programming -- frankly, we are not planning on concentrating much on advertising, but very much on corporate sponsorship.

5280 COMMISSIONER COLVILLE: So I'm getting a little confused, I guess, about the relationship between you, Mr. Lombardi, or the New FM and Mr. Chandrasekar, because it is not clear to me whether his relationship to you is sort of as an associate producer and would fall under this umbrella where he would sell or do marketing, as he suggests, and that you would have some sort of a split. Or are you partners here where all he sells goes to the station. What is the relationship there?

5281 MR. LOMBARDI: The relationship is that of an associate producer. Shan and I are partners in the South Asian block, as I am partners with our Armenian associate producer, and our Spanish and our Caribbean and all of the others.

5282 What Shan and ATN bring is the -- I'm sorry, Shan -- the expertise and the ability and the synergies and the marketing opportunities and the social and community contacts to develop programming, cohesive and comprehensive programming for the South Asian community, 48 hours of that per week.

5283 Shan's arrangement with CHIN, ATN's arrangement with CHIN is that of an associate producer. So all sales to the program are on CHIN broadcast orders. CHIN Radio will conduct business with ATN in the same manner as we do with all of our associate producers. All those broadcast orders will be on CHIN broadcast order forms, will be delivered to our traffic and accounting department and will be processed. CHIN Radio will collect the revenues and CHIN Radio will share the percentage of those revenues with ATN. So there is no real opportunity for brokerage.

5284 Now, Shan will perhaps have the opportunity to develop relationships with associate producers of his own, but they fit the model.

5285 COMMISSIONER COLVILLE: Okay. Mr. Chandrasekar, you have been characterized as an expert and you somewhat immodestly rejected that. What is the particular expertise that ATN would have in radio?

5286 MR. CHANDRASEKAR: My hosts don't have to have make-up when they do the shows.

--- Laughter / Rires

5287 MR. CHANDRASEKAR: They have an incredible grass roots level connection in the community. We come to radio for the first time with a lot of enthusiasm, certainly not with enough radio broadcast experience. There is no doubt about that.

5288 But some of the individuals in our team have a tremendous amount of on-air experience with tremendous linguistic skills, as well as a lot of roots in the community. They are very sensitive to community needs, they are very sensitive to art and culture. They have been very closely involved with respect to the development of television programming for many, many years. They have been very much in touch with the community so we feel that there is a wealth of knowledge that is sitting there untapped that we feel that we are in a very good position to tap those resources.

5289 COMMISSIONER COLVILLE: Will any of the programming that you do for your television operations -- sometimes entertainment variety shows can be simulcast between television and radio. Do you see any simulcasting done between your operation and the New FM?

5290 MR. CHANDRASEKAR: Yes. Certainly it poses a very interesting scenario for us, but at this stage we have not really contemplated that because the program schedules are somewhat different in terms of some of the live entertainment programs that we may do which, frankly, take place in the community on a Friday night or a Saturday night. So we cannot foresee ourselves -- unless we preempt existing shows for a special. Other than that we are not planning.

5291 But there are certainly synergies that we are planning on doing with respect to the subject matter that could be of common interest. In other words, we would now probably be having a lot more local content that will come to our attention because of the fact that we have much more air time in terms of talk show format on radio or over-the-air free to provide greater community service and we will be able to cherry-pick subjects which could also be relevant on a national level for television audiences.

5292 But in terms of music, yes, we see a tremendous synergy. We are bringing the world's greatest sitarist, Emmy Award winner, none other than pundit Ravi Shankar to the Roy Thomson Hall. We have done these kinds of shows for the past 20 years. We are presenting him with Anoushka Shankar. Something like this would be a tremendous opportunity for us to get audio rights to simulcast if we have a high quality FM radio signal.

5293 So there could be some opportunities for television and radio together. In fact, there is an intervention there, a support letter from the Heart and Stroke Foundation of Canada.

5294 We would like to mention here that the South Asian community has been identified as the group that has the highest risk for heart disease in this country because of genetic factors and because of the food habits. I guess because our community eats a lot of gee, which is saturated butter. So there are various factors. Because of these reasons, there is a very high incidence of diabetes, hypertension and heart attacks in the community and throughout North America.

5295 We are taking this very seriously. In collaboration with the Heart and Stroke Foundation, we have now just announced North America's first telethon, 24 hours a day, that we are planning on doing next year on our channel, coast-to-coast on the ATN channel for the Heart and Stroke Foundation to raise funds, and not only to raise funds, but to raise awareness.

5296 An event like that would be ideal to simulcast on radio as well because it has enormous significance to the community. A majority of that is also going to be done in English, as well as other languages, so it will be of benefit even to other Canadian communities as well.

5297 MR. LOMBARDI: I would just like to add, Commissioner Colville, that ATN's current service brings a whole new dynamic to radio, if you will, because of the accessibility of guest celebrities, politicians, very, very interesting individuals who make it a point to visit the ATN studios now become available for radio broadcasts. So we would like to take advantage of those types of celebrity visits and build programming around them.

5298 But we never lose sight of the fact that 100 per cent of our programming is going to be locally directed, locally produced. We never lose sight of the fact that that is why we are there and who we are targeting. The new scope of individuals that would be available to us now on radio through ATN is very, very attractive.

1130

5299 COMMISSIONER COLVILLE: Will there then be any other synergies between ATN and the New FM in terms of management, back office operations, whatever else, or is this just a programming supply arrangement? Plus marketing. We have talked about that.

5300 MR. LOMBARDI: We certainly envision some very, very effective cross-promotional opportunities between ATN and CHIN, particularly with our South Asian programming block.

5301 Shan and ATN are equipped and anxious to provide all of the quality programming. CHIN's role will be to provide all of the back office support, as well as add to the relationship part of the marketing mix and promotion of those services. That is at this stage. Once our relationship develops, we will develop with it.

5302 COMMISSIONER COLVILLE: Mr. Chandrasekar, you mentioned, again rather humbly, that you are not an expert in this area. You mentioned a wide variety of South Asian groups and languages and religious backgrounds, and so on. There is obviously a huge range of diversity even within that group and quite a large population to be served in the Toronto area as well.

5303 I am wondering what you think -- Mr. Lombardi, you feel free to jump in here too -- about the possibility of licensing, setting aside any technical limitations there might be here, to licensing more than one service to serve the South Asian community.

5304 MR. CHANDRASEKAR: Sir, I think that is a very tricky question, but I will try to answer it as sincerely as possible.

5305 COMMISSIONER COLVILLE: We have been told in the past that people say that is a very good question or a very tricky question to give them time to think up an answer.

--- Laughter / Rires

5306 MR. CHANDRASEKAR: I'm doing the same.

5307 I think I always believe in more being merrier, but at the same time I think one has to look at the viability of development of programming because of the fact it is coming into a market where there has been a new licence issued for an over-the-air television station, which is CFMT-2. I think one needs time to really study what the market conditions will be in terms of advertising, whether one affects the other. We don't know at this stage and I don't have the knowledge to comment on that really.

5308 I think from a programming point of view, I would not see that as being detrimental really, even though we would prefer to have some time, at least lead time to develop the concepts before someone else gets the same concepts.

5309 So I don't know. I really can't give a very firm answer on that. I may need Lenny's help on it. He is more experienced in radio broadcasting.

5310 MR. LOMBARDI: Thanks, Shan.

5311 My view is that you would have to proceed with that with caution. I think that the marketplace is crowded now and the advent of another licensee is going to have an impact that I think we will all survive.

5312 One thing is clear to me, the majority of the applicants are targeting and bankrolling and supporting their radio station applications with South Asian programming as the driving financial component, and to introduce two licensees into that market -- and I am assuming that they would be broad service formats, I think it is going to bring undue competition, not only to the two new applicants but further exacerbate the difficulties for the existing ethnic broadcasters in the market.

5313 So I think there needs to be some caution and some care with regards to trying to make up your mind which two might work. I know there are more specific directions with some applicants who are more focused on Tamil, for example. But Tamil is a prime component of our format as well and I think it just, in the end, would make it difficult for both those stations to launch and more difficult for the other stations to cope with a new entrant.

5314 COMMISSIONER COLVILLE: Since you raise the issue of Tamil, what do you think the impact of licensing your service would have on existing Tamil programming in the marketplace?

5315 MR. LOMBARDI: I will throw to Shan, but as far as I know there is very little Tamil programming available during the regulated broadcast day. I think all of the Tamil programming, if not -- I think one hour is available between 6:00 a.m. and midnight. It is in the overnight.

5316 You know what, there is so little of it additional Tamil programming I think will be a complement to whatever is out there because there is certainly not going to be any overlap. I don't think there is going to be that great of an impact on that show. I think it is very specific, it is niche, it is in the overnight from midnight to 6:00, so I'm sure it has a very distinct following. Our proposal for Tamil programming will not bring it into the overnight, so I don't see there being any concern.

5317 COMMISSIONER COLVILLE: Switching to the advisory board, we have established that you don't have one with the existing CHIN operations but you do have one in Ottawa.

5318 You described how you used the advisory board in selecting your associate producers in Ottawa. I wonder if you might describe for us what the make-up of the advisory board would be here.

5319 You mentioned that the proposed chair of the advisory board will be here as an intervenor later on, but I would like to get a sense from you who will make up this board, what the relationship is going to be with you and the board, who you see as the role of the board. Is it going to represent all of the various groups that you are supposing to serve, and so on?

5320 Could you describe it with those kinds of issues in mind?

5321 MR. LOMBARDI: I will try. The advisory board -- I think the Ottawa model is certainly the one we intend to pursue.

5322 Primarily, the advisory board will be representative, will have representations that will reflect our program schedule. That is not to say that we are going to have 24 advisory board members. However, we will want to select advisory board members that have the greatest involvement in the ethnic communities. Certainly membership from the South Asian community on our advisory board is going to be tantamount. That is certainly something that Shan and I have discussed, and those individuals will have a place on our advisory board.

5323 Mario Calla is the Executive Director of Costi Immigrant Services. Within the umbrella of Costi, as I said before, are 60 immigrant placement services associations, all representing different ethnic groups. So Mario brings a real depth of experience and understanding to his role as an advisory board member.

5324 We have also reached out to the Hispanic Development Council and spoken to them and offered opportunities to sit on the board that they are very excited and interested in pursuing.

5325 What we want to do and what we want to accomplish is select a group of individuals who are actively involved in the betterment and enhancement of the multicultural communities that they are working with or involved with.

5326 Mario Calla speaks for himself. The Hispanic Development Council membership will certainly have a view to our Hispanic programming. Membership from the Caribbean community will be sought with respect to our key core language groups that we have identified. Then other individuals who have a great relationship with the ethnic communities, such as social service groups that have a wide view of the needs and concerns of the multicultural community, will have a place on our board.

5327 For example, in Ottawa the Ethnic Cultural Council is on. The Catholic Immigrant Aid Society Director is on our board. Those are the types of individuals that we will seek out in this community to give us their representation, not only for this format here, for this new 101.3, but also have a view to all of the programs that the CHIN radio organization is providing.

5328 COMMISSIONER COLVILLE: How big would the advisory board be? How many members do you propose to have?

5329 MR. LOMBARDI: In Ottawa we have a group of seven. That would be a minimum in Toronto. But I am of the opinion that it would probably be as much as ten.

5330 COMMISSIONER COLVILLE: Given the relationship that you have with the associate producers, what benefit do you see getting from the advisory board that is different from the advice about that particular community you would get from the associate producer?

5331 MR. LOMBARDI: I think the advisory board will be an impartial body that has a more objective view with respect to the mandate of the format and the goals of the radio station and their own goals as far as their board is concerned.

5332 They are there, and the benefits that the advisory board brings to management is a fair and objective assessment of the choices that the radio station has with respect to our associate producers.

5333 I am one that firmly believes in trying to accumulate as much information as we can and then, after having digested the information from all sources, sit down with a group of individuals that can be objective and have a goal.

5334 Their mandate is to help this radio station establish the best possible group of individuals that can produce the best possible quality programming. So that is their role.

5335 COMMISSIONER COLVILLE: Given that your board is probably going to be no more than half of the number of groups that you propose to serve, how would the views of the groups that are not represented on the advisory board get back to you and back to management in terms of an objective assessment about how best we are serving those communities, those groups.

5336 MR. LOMBARDI: That's when I would rely on individuals like Mario Calla, for example, whose responsibility as executive director of Costi, encompasses the needs of over 60 ethnic communities.

5337 There is an individual, and an individual that he could also recommend have a distinct view and bring a certain dynamic to the advisory board that in my opinion is unparalleled.

5338 So individuals like that who can bring a very objective viewpoint to the role of the advisory board ensures that, even though there is no Somalian representative on the advisory board, because we are offering four hours of programming time, he can still speak with authority and interest and concern specifically to that community. That is his fulltime job. That is what he does.

5339 That is the kind of help and effort and contribution he can make to our organization.

5340 COMMISSIONER COLVILLE: Mr. Chandrasekar, did you wish to make a comment? I thought you were reaching for the microphone a minute ago.

5341 MR. CHANDRASEKAR: No. I think Lenny has covered it.

5342 All I want to do is just complement a sentence about the experience with advisory boards.

5343 We find that our own expectation of advisory has somewhat changed. In the original days when we came in, this concept of advisory board never happened in mainstream television or radio. It only came up suddenly, to the best of our knowledge, in the multicultural milieu.

5344 We really don't expect the advisory board to make programming decisions, but we expect them to be a resource body, a sounding body basically to give us feedback in terms of what is really happening and what are the vibes out in the community. The advisory board members truly become ambassadors in a nice way for the station to be in various community functions, and they will come back and say this is what is really needed and this is the kind of feedback we have had about the quality of certain programming, the content.

5345 I think it is more along those lines, but it is really not that we would go to the advisory board and take day-to-day decisions, by any means. We would certainly look to them for policy decisions.

5346 In the recent past in our own case, the advisory board has become much more sophisticated actually, because they have actually gotten involved in broadcast issues in the last few years, especially when our network in television was licensed and we had some difficulties with respect to access, which frankly we were able to resolve very nicely with the help of the advisory board as well in terms of getting objective input.

5347 So I think they have begun to play a much more significant role.

5348 I'm sorry, that is all I wanted to add.

5349 COMMISSIONER COLVILLE: Thank you.

5350 We had a brief chat about WTOR at the outset of our discussion, in talking about the broad overview of all the applications here.

5351 Is there anything that you want to add?

5352 Is this particular application for the New FM, in your view, going to have -- I mentioned earlier that I read the intervention where at least one person is proposing to move programming from WTOR to your operation.

5353 Is there anything you wish to add?

5354 We have heard, it seems to me, somewhat conflicting comments about WTOR: one, that it is a relatively significant operation and there is potential here to repatriate a considerable amount of programming and perhaps a considerable amount of revenue; to others, I would characterize that it is a relatively significant impact in the marketplace.

5355 What is your sense of that, and what is your sense of what this FM licence would do in terms of programming and/or advertising revenue?

1145

5356 MR. LOMBARDI: I will start off the answer, and I am sure Shan would like to comment.

5357 First of all, let me explain that the WTOR component is not a significant factor of our application. We placed the mention of TOR in our deficiencies and made mention of it, of course, in our application more to express and illustrate the demand for additional South Asian programming as opposed to the revenue.

5358 We felt that we needed to address the revenue issues, as well, as we felt that had relevance to this discussion.

5359 However, our business plan was predicated on not necessarily targeting the TOR revenue base or depending on it for the success of our particular format of a 48-hour block of programs.

5360 In our view, I think the advent of a new licence in Toronto that is targeting and primarily serving in large blocks the South Asian community will certainly have an effect on WTOR. But whether or not that is a final blow or a serious detriment to their operation remains to be seen.

5361 I think a lot of the producers out in WTOR are Torontonians, or within the GTA, in any case. They are all basically running little cottage industries. These guys are independent brokers, and they are trying to get something going.

5362 As long as there is something like that available, you are always going to attract -- if that is the goal of that radio station, you are always going to attract those types of broadcasters who want to try, maybe use that as a stepping stone to the Toronto market.

5363 What they are going to do is continue to drive prices down. They are going to get very competitive in the marketplace. They are going to slash their costs and take a loss to try to survive.

5364 A lot of them are independent business people and are proud. They want to stay on the air. They like the attention. Sometimes they will even finance it themselves just so they can have that vehicle of exposure on radio.

5365 So I don't think they are going to go away. I think they are always going to be there. If that is the mandate of the radio station, to target Toronto, they are going to be around.

5366 I think any new applicant has to be prepared to compete effectively, and the only way to do that is with quality programming and a sound business plan that they can maintain. That is my view.

5367 COMMISSIONER COLVILLE: I will give you a second to add, but I want to ask: If you are not able to reclaim one cent of revenue that is going to WTOR, would it change your business plan in any way?

5368 MR. LOMBARDI: No. We have estimated that the number of dollars that we anticipate to repatriate from WTOR is about $80,000.

5369 We can take the hit. If we didn't get it, we can take the hit.

5370 COMMISSIONER COLVILLE: Okay.

5371 MR. CHANDRASEKAR: No, sir, I don't have anything more to add. Lenny has covered it. Thank you.

5372 COMMISSIONER COLVILLE: Just a bit about advertising, then.

5373 In your application you have noted that the amount of national advertising revenue captured by ethnic radio stations declined from $872,000 in 1997 to $442,000 in 2001.

5374 We are wondering how we reconcile this trend with the finding by Strategic Inc.

5375 Again, it is referred to in the application that many advertisers are waking up to the idea that the ethnic market is untapped.

5376 MR. LOMBARDI: I will begin the answer, and I would like Debra McLaughlin to add her comments.

5377 Traditionally, national advertisers have always eluded ethnic broadcasters. We don't play the numbers game, and we continue to have tremendous difficulty in attracting national advertisers to our programming format. Even those who demonstrate a willingness to do so often ultimately fail to step to the table.

5378 The only way that we have been successful in the past is by creating events like the CHIN International Picnic that is undeniable to supporting advertisers. We are happy to say that we have been able to attract brewers like Labatt and Molson and Pepsi, and others like that, who see an opportunity for marketing and retailing and sampling for their products.

5379 Other than that, it has been extremely difficult, because at the end of the day if you don't have the numbers, they are not going to buy. That has been the case up until now.

5380 It is further exacerbated now, for reasons that I would like Debra to illustrate.

5381 MS McLAUGHLIN: The comment you are referring to I believe was on page 22 of the document. It refers to a consultant, John Williams, who is spending a large portion of his time facilitating education amongst advertisers in terms of the wealth and the potential of this market.

5382 He spends a great deal of time with retailers as opposed to national advertisers. National advertisers still tend to look at the world as one homogeneous group as opposed to these niche markets. They look at them in age breaks. They look at them in gender. But rarely do they look beyond that.

5383 Having said that, some of the digital services that have come on have awakened them to the opportunities.

5384 One of the examples that I believe was used in a response to a deficiency question was the idea of Canadian Tire and their campaign that normally for the gardening season would include some general buys but in fact has increasingly over the years been concentrating on services like home and garden.

5385 The potential for recognizing and going beyond the standard look at markets, that being age and gender, is certainly being uncovered as the advertisers and the business world evolve.

5386 In reference to this application, it was noted that retailers are waking up to it but the emphasis is on "waking up"; they are not there yet.

5387 The national dollars have declined because, frankly, the paradigm that people look at in assessing whether their advertising has worked still relies heavily on audience figures. Those audience figures are not available.

5388 They are neither affordable to collect on an individual basis, and in the case of an organization like CHIN, where there are so many communities and so many language groups, it's impossible to create the audience numbers that would be required. It's unaffordable. The timelines involved are year out which isn't effective in the advertising world.

5389 And so while they grapple with the fact that these markets exist and these markets are emerging or have already been there, they don't have the paradigm, the neat way of measuring it to actually insert it into a buy.

5390 So to Lenny's point, the way that they get involved is through the type of promotional opportunities that an organization like CHIN and CFMT, ATN to a certain extent, have been able to orchestrate which creates a huge amount of attention in a short span time and allows the advertiser to get there to sample, to be present, to see.

5391 But the traditional spots, which the revenue that the CRTC sees and reports, and were used as the foundation of this report, have been based on 30-second spots, and have not been there.

5392 Over the course of the licence I would hope, and in fact have advised them that this will come around, but not to the levels that would make them comparable to a mainstream radio station in Toronto.

5393 COMMISSIONER COLVILLE: So you don't see that changing, notwithstanding what we have heard all this week about Toronto is probably one of the most multicultural, multi-ethnic cities in the world and how the various groups are growing quite dramatically in size. What I hear you saying is that's not likely to change much for the foreseeable future.

5394 MS McLAUGHLIN: I want to clarify my response in that your question, if I remember it correctly, was based on national advertising as opposed to retail.

5395 COMMISSIONER COLVILLE: That's correct. I want to get to retail, but I'm just focusing on national right now.

5396 MS McLAUGHLIN: Right. On national, I think that the confusion will exist for some time. I do see it changing over the course of the licence, hopefully within the next five years, but because you have to span a period of time, in the short term I don't think that is the case. We are not going to see returns to that level.

5397 The national advertising market is more or less flat. I believe the CRTC figures for radio in Toronto was about 2 per cent. I don't have the figures in front of me, so I am not sure.

5398 So national advertising generally is flat in radio for the reasons that advertising is a bit soft this year all the way around. It will take some time to recover from that.

5399 Putting a lot of money into ethnic markets still represents, in some cases, an unsubstantiated risk because you don't have that traditional paradigm to measure what you have invested in.

5400 Having said that, you cannot ignore the population changes. Retailers know who are coming in and they report back to their agencies that that's how they need to get to. How to get to it is still unclear.

5401 MR. MULVIHILL: Commissioner Colville?

5402 COMMISSIONER COLVILLE: Yes?

5403 MR. MULVIHILL: Maybe I can offer further clarification. I just joined the CHIN management team six months ago. Prior to this I spent 22 years in the national radio and TV sales marketing game and ran my own company, and most recently was the President of Standard Broadcasting's national rep. firm. So I have extensive background in trying to attract national advertisers.

5404 Lenny Lombardi and Johnny and I had talked extensively four years ago when we formed a relationship through Integrated Media Sales Standards company to try and attract national advertisers.

5405 To what Debra is talking about, the agency people live, and the national advertisers live in a qualitative society and they want numerical evaluations.

5406 What we have done -- and we have since tried to take that data and use it in the local marketplace -- is to create in-house third-party surveys with qualitative data. We did it with the Italian community and we did it with the Chinese community four years ago and we have used that data. We have had minimal success doing that. They still want to know what a quarter of our average is, what the cost per thousand is. That's what they live within.

5407 The success that Lenny alluded to earlier, where we have had the most success in national advertising sales, at the ethnic level in any market in Canada, has been the direct market.

5408 So when we sit down and we talk to Labbatt's or we talk to General Motors, and we can do on-site displays in marketing and sampling things like the CHIN Picnic where we can put up a -- this year we had a foosball competition with Labbatt's and they had this massive inflatable soccer game that they played, and they measured their case allotment of beer in the beer in the beer garden. That's what they want to see from us, but do they want to see us for the direct advertising? CHIN has had Labbatt's for the last five years. Can we get them to do a regular media buy? We are still not part of that, and I don't see that changing.

5409 We are going to have to continue to do direct marketing. That's the growth area. I think, quite frankly, one of the reasons why the Lombardis wanted me on side was because of my knowledge in that area, to try and grow, but I have said to them repeatedly it has to be at the direct marketing level. We are not going to do it trying to do the traditional in our advertising. That confirms what Debra said.

5410 COMMISSIONER COLVILLE: So it's more event-driven then, around things like the picnic.

5411 MR. MULVIHILL: Direct community marketing involvement at the grassroots level, and that's the strength of ethnic radio and that's certainly the strength of CHIN and what we bring to the table for those advertisers.

5412 COMMISSIONER COLVILLE: So given the pessimism around the national, what is your sense then of the local because you have interviewed some of the associations, 15 or so, I think, and what is your sense of the potential for increased advertising within the ethnic community here? I mean, we often go to these hearings, whether it's at conventional commercial stations, or whatever, and "Trust us, the pie is going to grow".

5413 So I guess I would like to get a sense to what extent, based on the work you have done on this application, what the potential is, and presumably Mr. Mulvihill, that's one of the reasons why you are working here too, especially given the negative prospect around national, to grow the pie for local.

5414 So what is the potential here then?

5415 MR. MULVIHILL: Well, I will start off by saying that we think the potential for local is good. We do recognize that it's competitive markets and we have proposed an optimistic, but cautiously optimistic business plan for the success of this radio station, and we feel that we have every reason to believe that we can be successful, primarily for one reason. This is a service that is proposing 24 distinct linguistic and cultural programs to largely unserved or underserved communities, and we think we have integrated our South Asian block to be very complementary to, and integrate well within the current services, and believe that, according to our business plan, that we can generate the revenues needed for not only the South Asian program, but for all of the ethnic programs that we are proposing to offer because there is so little of that programming available today.

5416 For example, Spanish. There are only ten hours of regulated hours of Spanish programming in the marketplace. We certainly believe that the marketplace can absorb and certainly use 14 additional hours. As well as with the Caribbean programming, we think that there is a sad lacking of available Caribbean programming in the marketplace and we are very, very confident, as Jai will attest. If only the opportunity for prime time programming were available, could we make that a success? We think we can.

5417 Debra has another comment she would like to make.

5418 MS McLAUGHLIN: Our report did forecast positive growth for ethnic broadcasters in the Toronto market. So having said all I said about national clearly that leaves us with the retail to depend upon in terms of those revenues. We do see it as very positive, particularly given the fact that the ethnic broadcasters collectively, and certainly represented in the application that you have seen today, are recognizing some of the emerging markets.

5419 The Italian market has matured, and they have moved on. Some of the businesses have moved on to spending part of their budget with mainstream radio and television stations, frankly, to expand their markets. They already captured the larger share they feel within their own communities.

5420 That happens as you move through the years and, as these communities evolve and develop and they reach maturity, they move on. Because there is a recognition of the new and emerging markets like Spanish, some expansion into the Russian language, we believe that there is room to grow those because those communities, for the most part, have been underserved. They haven't been able to get the advertising that they need, and the development of the community works hand in hand with the development of programming so the programming itself and the availability will allow these businesses to expand their interests and in turn invite more businesses in, attract more businesses. So there will be a larger revenue base overall.

5421 So we do forecast positive growth, and we do think it will come mainly from the retail side.

5422 COMMISSIONER COLVILLE: Recognizing we are talking different groups here, but assuming you continued with the existing 1540 and with or without a fill in repeater, and a New FM, to what extent would the New FM cannibalize the advertising revenues on 1540?

5423 MR. LOMBARDI: I would like to ask Bob Culliton, our Financial Officer, to comment on that.

5424 MR. CULLITON: The effect on radio 1540 would be none at all. If you looked at our business plan for 101.3, most of the languages are new to 101.3.

5425 COMMISSIONER COLVILLE: Right.

5426 MR. CULLITON: We have gone through and done an analysis on a language-by-language basis and spot-by-spot and a sale-out rate, and in budgeting the 900 and somewhat thousand dollars, I don't think that any of that money would ever flow from Radio 1540.

5427 COMMISSIONER COLVILLE: Would you propose to sell packages to some advertisers who may want to target several communities to be advertising on both 1540 and 101.3?

5428 MR. CULLITON: We do that now between 1540 and 100.7. Yes, we would accept something like that, but 101.3 would get their portion of the revenues because, of course, it would probably be going to an associate or producer and Radio 1540 would keep track of theirs.

5429 COMMISSIONER COLVILLE: Okay.

5430 MR. LOMBARDI: Absolutely. We would be very happy to be able to accommodate advertisers who wanted to reach out. It has not been our experience, other than direct marketing, to see that kind of crossover, but that's certainly something that we would encourage because, quite frankly, in order to remain competitive in this marketplace those types of business synergies are essential.

5431 Once again though, we are offering very distinct unique services, and if those unique services to the South Asian community and the Spanish, Portuguese and Mandarin communities tickles the fancy of a national advertiser, well that's wonderful. But it's not often the case.

5432 COMMISSIONER COLVILLE: I think those are pretty well all the questions I had for the New FM. I just have one question really regarding the technical amendment. I am sure there are going to be perhaps a few other questions from my colleagues and counsel on the New FM.

5433 Just on the case of the technical amendment from 101.3 to 91.9, I guess I would just like to get a sense of what the impact would be there on advertising revenues. Do you expect any impact? We may have discussed this at the outset, but --

5434 MR. LOMBARDI: Actually, Commissioner Colville, we hadn't.

5435 No, we don't anticipate any impact on advertisers from the amendment from 101.3 to 91.9.

5436 COMMISSIONER COLVILLE: As the fill in for 1540.

5437 MR. LOMBARDI: No. Wayne Stacey, our consulting engineer, has indicated that that particular frequency in the location that we would put the antenna would basically replicate our existing low-power 101.3 frequency. So we do not anticipate any reductions in either the listenership or revenues, outside of the fact that when we engage our audience to flip to another frequency we might lose some of our listeners for a little while, but hopefully we will be able to eventually win them back.

5438 COMMISSIONER COLVILLE: Now, I had understood that you were estimating about a 21 per cent reduction in the total listening hours of CHIN-AM if you made the switch. Is that correct?

5439 MR. LOMBARDI: We estimated a 21 per cent reduction in listening hours under the scenario of losing the repeater.

5440 COMMISSIONER COLVILLE: Losing the repeater altogether.

5441 MR. LOMBARDI: Altogether.

5442 COMMISSIONER COLVILLE: Okay. So that would have a corresponding reduction in the advertising revenues. In this case, are we talking about roughly a direct correlation?

5443 MR. LOMBARDI: Well, we have used it in that manner. We have used that in that manner because we were able to estimate the listenership lost and then we applied that calculation to revenues for 1540 and made the reduction.

5444 Actually, Debra McLaughlin could kick you through those steps as to how we arrived at that number, if you would like, but that is basically what we did.

5445 Would you like that?

5446 MS McLAUGHLIN: Oh, wow! I only say that because it took literally days to do this.

5447 In fact, what we did -- and there is a chart that was submitted in response to deficiencies -- We looked at the population during the day, we looked at the population during the night and what 101.3 would add and we calculated the percent that the 101.3 contributed in terms of total population and then figured out what the total hours tuned were on average for each person. We used that for BBM.

5448 We went through that long calculation by language group and adjusted it by the number of hours of actual tuning to add it up as an entire total hours lost and express it as a percent of the overall hours to the station and we come to that figure that you see, if you have the deficiency before you, on what I believe is the second page.

5449 COMMISSIONER COLVILLE: Earlier when you talked about the AM to FM flip we talked that there wasn't a direct correlation between the audience and the advertiser. Here you are assuming there is largely.

5450 MS McLAUGHLIN: I believe the comment about a direct correlation was from me and it was in reference to share, that it didn't naturally flow because of the competition and the fact that the advertising itself is not sold in the same manner as mainstream radio, that being on ratings or average core audience.

5451 In terms of estimating what the difference would be, there is no rationale for adjusting the percent. I couldn't give you a reason why it would be more or less than the total hours lost because of the way the coverage map sort of cover up. So it seemed to be the most logical approach.

5452 My assessment is that there isn't the exact same direct correlation for hours of tuning as there is in mainstream to revenue, if that clarifies.

5453 COMMISSIONER COLVILLE: I assume that your second worst scenario would be: You don't get the New FM, you don't get the flip, but you get 91.9 to replace 101.3. All other things being equal -- and I appreciate in this proceeding they are not equal, but just setting that as the ground rule just for a second -- would I take it that that second worst case scenario would have virtually no impact on the existing CHIN 1540 operation, either in advertising revenues or in programming?

5454 I am setting aside for a second that having come to this we would probably license somebody else to serve 101.3 and that is probably going to have an impact on you, but just that piece of it alone, I take it that is a wash for 1540?

5455 MR. LOMBARDI: That is correct, Commissioner. If you were to licence us 91.9, although that is our least favourite solution --

5456 COMMISSIONER COLVILLE: Your least favourite is none of the above.

5457 MR. LOMBARDI: That's right. I'm sure I could think of one that is even worse than that, too.

--- Laughter / Rires

5458 MR. LOMBARDI: The licensing of 91.9 to CHIN Radio would be considered -- well, let me put it this way: It would be considered status quo provided that it was licensed in the manner that we have requested it, at 35 watts protected, because we wouldn't want to be here again, I'm sure, in the next few years undergoing the same proceeding.

5459 So, yes, it would be a wash, it would be status quo. We expect that contour to replicate 101.3.

5460 COMMISSIONER COLVILLE: Then maybe this is the time for the bullets, I don't know -- I mean the bullets on the page, not the lead ones.

5461 Your number one scenario, then, is: You license us for the New FM and you give us 91.9. I guess we would like to hear you tell us why you think that is the best use of 101.3, given all of the applications we have in front of us.

5462 MR. LOMBARDI: If you look at both applications on their merit, as we have done, we see a tremendous contribution to the Canadian public and the market that we propose to serve by being licensed for those two frequencies.

5463 On the first application for 101.3, we believe that it is the best application with the greatest number of languages, with the greatest commitment to broad service format, the greatest level of Canadian Talent Development, the highest commitment to third language programming. We offer the greatest potential for operating and promotional synergies through CHIN Radio and also our television programs on Citytv and the CHUM Group, our new licence in Ottawa and the prospect of regional programming that can be also fed to our stations in Toronto, the correlation with ATN and their tremendous success and contribution to programming in the South Asian community, we believe positions the 101.3 application on its own as a superior application that deserves merit.

5464 The other application for 91.9 is before you only because Industry Canada needed to reevaluate the rules with regards to spacing and discovered that the third adjacent signal that we had been occupying, 101.3 for the last three years, was the best and designated as so, to be optimized at a higher power and the Commission then was left really to no other conclusion but to issue the call for that particular frequency. As such, you have received six. Ours I think is the seventh.

5465 That is why we were really forced to come up with a solution, notwithstanding our own interest for a new service as demonstrated in 1999 with 740, but a solution to our repeater for the loss of 101.

1215

5466 So we really want (a) to maintain status quo and remain as competitive and be able to provide the quality services, that we have on 1540 for the last 36 years, with 91.19, and we also wanted to take the opportunity, as others have, in presenting the Commission with what we believe is an excellent application for an excellent service on 101.3.

5467 That, in a sense, is the reason why we are here.

5468 COMMISSIONER COLVILLE: I may have asked this question at the outset, but I don't think I asked it this way: If you got 101.3 for the New FM and you did not get a fill in for the nighttime for 1540, would you continue to operate 1540?

5469 MR. LOMBARDI: We have thought a lot about that one question and it is my opinion -- and I have really come to the conclusion that CHIN Radio would be well-served if we were to be licensed for 101.3 for the new service, that that would make -- it would help make 1540 whole and therefore we would not need the repeater for 91.9.

5470 The optimum situation is to have both, but if we were to get one of the two, our preference would be the 101.3 for the new service without the repeater and we would continue to operate 1540.

5471 COMMISSIONER COLVILLE: Just to complicate it even more, then.

5472 Thank you very much to you and your team.

5473 Those are all my questions. Thank you, Madam Chair.

5474 THE CHAIRPERSON: Commissioner Grauer.

5475 COMMISSIONER GRAUER: Thank you, Madam Chair.

5476 You may have answered this already and I just may have missed it, but during the discussion on the advertising revenues and the synergies with respect to the CHIN stations in total, I wondered, Mr. Chandrasekar, what opportunities do you see with respect to ATN in terms of potential for synergies in advertising and revenue increases?

5477 MR. CHANDRASEKAR: When we were first licensed with our first channel as a specialty ethnic television service across Canada, we tremendously suffered the concept of a barker channel. There were many successful companies which we tremendously admired such as Corus, Astral, Alliance Atlantis, CanWest Global, Bell Globemedia, Rogers. A lot of these people had great success in specialty channels, but they had great opportunity for cross-promotion because they had analog over-the-air services or over-the-air television services to cross-promote those services. We became more sensitive to the needs of that as time went by.

5478 One of the things that we are beginning to realize now is that if you want to be a successful player in the niche markets, especially on these specialty channels, we definitely need strategic alliances and cross-promotion.

5479 We have gone ahead and forged some of these alliances already. In fact, we have a small joint venture in which we have a minority stake in a Category 2 channel we were expecting to launch in collaboration with BCE and TSN as TSN International and it is going to carry a lot of cricket. That is very common. So we can now tier some of our services, but then we certainly have the muscle of tiers then with respect to cross-promotion.

5480 Similarly, we have a small joint venture in which we have a minority stake right now in a channel called Celebration in collaboration with Radio Nord, with Peers(ph) Company from Quebec and with VisionTV and ourselves, and we feel that this inspirational music channel is going to have some potential for us down the road, but again we have some opportunities for cross-promotion.

5481 So the further is going to be very much, I think, where possible, opportunities for cross-promotion.

5482 In the last three days I have learned a lot by just listening to some very good presentations that were going on. I was always aware of the SCMO services, but I learned more about what a wonderful job they have done amid such great difficulties.

5483 I have a lot in common with them, because what they are doing in SCMO Radio is the kind of thing that we are doing closer to television almost because of Category 2 licences that we have.

5484 I am even at a point where one of my advisory board members came up to me and said: Shan, you always used to complain about being sensitive, not having enough opportunity for cost promotion. This is where the advisory board is already helpful. He said: Well, you have been through it. Maybe it is good for us to become more sensitive as well.

5485 Commissioner Colville was asking earlier about the Tamil channels for that matter. We would be very happy and prepared, frankly, to volunteer, to cross-promote any of the existing licensed SCMO services, the three Tamil services which are currently operating Illayabarathi Service, Rajkumar Service, the Canadian Tamil Radio, Sahota Radio in Punjabi, any of the existing licensed services would be very glad to cross promote.

5486 I'm sure that I can make a recommendation -- Lenny would never mind that -- would have some kind of a formal undertaking even. We feel that we are not in any way conflicting with them at all. Frankly, the more they grow, the better for the whole community. They are doing a wonderful job in certain areas that we cannot really fulfil, even as an over-the-air station.

5487 Similarly, we hope that by this association CHIN, through its presence on Citytv, would be able to cross promote our services, which is badly needed.

5488 One of the problems for all of us in the industry is that we are all suffering from illegal DTH dishes coming from the United States in terms of availability and duplication of these services. This is affecting the whole industry.

5489 So there is some similarity between the DTH problem that we have in terms of unauthorized signal in Canada and the WTOR situation with respect to the signal dropping into Canada. The only difference is that the DTH signal has a greater impact on us because we own the right for a lot of programming that the U.S. guys have bought only for the United States and we have bought those rights for Canada, so we are suffering a lot more.

5490 I realize it is not a Commission issue, but it is a practical issue for us. Sometimes what is ideal in life is not practical. Similarly, that is one of the reasons why I am not obsessed with respect to WTOR's repatriation only, because of the fact that I have already been through this route in terms of there is no way we will be able to eradicate DTH piracy in Canada, but if we can minimize it with better quality local Canadian content and get the community convinced that we are already beginning to repatriate some of those DTH dishes back into Canada through our own effort.

5491 We are growing. There is no doubt our numbers are growing. We are very proud to say we are very grateful to the Commission for the licence that we received and we are definitely on a growth pattern right now, to the point where we are very happy to inform you this is a pride for us and for the Commission's confidence in us that it took us five and a half years, at last we just broke even last month. So it is a very important step in our own faith.

5492 Having done that with such great difficulty we feel that -- some shareholder must be here who wants to applaud.

--- Laughter / Rires

5493 MR. CHANDRASEKAR: So having done this with such great difficulty, we feel that this kind of synergy and sensitivity is now needed and hopefully CHIN would be able to cross promote all our specialty services and we, with this New FM licence, would be able to promote other SCMO services in Toronto. That would become an ideal situation.

5494 COMMISSIONER GRAUER: Do I take it, then, that you would expect the addition of this service to your package, if I can put it that way, the ATN, will enhance your attractiveness to advertisers and your ability to market yourself.

5495 MR. CHANDRASEKAR: I don't think we are very concerned about enhancing the advertising market because, frankly, the radio service is going to be very much locally oriented. Our television, as time goes by, I hope we will become national because right now we are very local.

5496 In fact, I was joking that the very first time our first service was launched -- you have to understand how the service was even built. We never had cable carriage. We were only on DTH the first few days.

5497 Those days when Bell ExpressVu just launched its service, the satellite dish was $1,000. We had to go and sell these thousand-dollar dishes to the community. In the first month I had something like 12 subscribers.

5498 My channel number was higher than my subscriber number.

5499 As time went by --

5500 COMMISSIONER GRAUER: And those were family.

5501 MR. CHANDRASEKAR: At the end of the second month, we were sitting and talking as we were doing our news coverage and my wife was joking and saying: "I think, Shan, it is cheaper for you to go to Mississauga home to home and read the news here at 6 o'clock and there at 6:15 rather than transferring via satellite."

5502 That's how niche it was when we first started.

5503 We were delighted when we got cable carriage on Rogers; we were absolutely thrilled. But when Rogers first launched us, they launched us on Rosedale, so we got all the seven South Asians in Rosedale. So that added more numbers to us.

5504 We had to wait for them to launch in Brampton, Bramalea and Mississauga where the majority of our population resides.

5505 That is how we have grown step at a time, to the point where right now we are delighted that we are now being carried by Bell ExpressVu, Star Choice for the first service across the country. We are across the country on Shaw Cable and various other systems. So it has really grown nicely.

5506 But the new services are still very much located in the local area.

5507 I hope that answers your question.

5508 COMMISSIONER GRAUER: Thank you.

5509 THE CHAIRPERSON: Commissioner Cardozo.

5510 COMMISSIONER CARDOZO: Thank you, Madam Chair.

5511 I have a couple of questions on 101.3 on the South Asian programming.

5512 I am looking at your existing two stations. From what our record has, you have approximately 26 hours of South Asian programming on your two existing stations.

5513 If you were to get 101.3 and you would be adding 48 new hours, can we assume that the 26 existing would not be reduced?

5514 MR. LOMBARDI: Absolutely, Commissioner Cardozo. Our proposed format on the new 101.3 is not meant to duplicate or change any of our commitments to our community groups on 1540 or 100.7. This new programming would be in a complement to our existing format.

5515 We, in fact, hope to enjoy greater synergies and co-operation between the two radio services in the future.

5516 COMMISSIONER CARDOZO: In the application you have listed ten specific languages under South Asian, for a total of 48. Which would be the top or three and how many hours would they be getting?

5517 MR. LOMBARDI: Actually, Shan has all that information available.

5518 MR. CHANDRASEKAR: Hindi and Tamil would be fairly large at the regulated broadcast time. We have 15 hours of Hindi programming, Monday to Friday, a three-hour block. There is also 15 hours of Tamil programming, which is a three-hour block.

5519 There is one hour every day of Punjabi, in the morning, and that is the only time that there is no other Punjabi radio programming present on existing licensed radio stations in Toronto.

5520 In this format, when we were composing this we didn't worry about WTOR because no matter where you go, they have a program.

5521 Urdu is one hour a day, five days a week.

5522 Then we have Gujarati on Saturday and Sunday, two hours. We have Marati, half an hour; Hindi, half an hour; Kannada, half an hour; Telugu, one hour; Mayalam, one hour; and Singalese, one hour.

5523 In addition to that, we have overnight programming, a substantial amount of programming, in Hindi, Urdu and Punjabi.

5524 COMMISSIONER CARDOZO: The overnight programming is not part of the 48.

5525 MR. CHANDRASEKAR: No. That is an additional 42 hours.

5526 COMMISSIONER CARDOZO: Would you mind filing the specific figures for the specific languages between now and Phase 4 to give us a better benchmark to compare to the other applications where they have been specific by language?

5527 MR. CHANDRASEKAR: Absolutely.

5528 COMMISSIONER CARDOZO: Thank you.

5529 I have one question on associate producers, and you might have covered this.

5530 The associate producers that you have currently and that you plan to have for the new station, are they paid or are they voluntary?

5531 MR. LOMBARDI: Associate producers are -- I don't know whether volunteer is the right word. They are not paid directly by CHIN for their services. It is a partnership, and we share the revenues of their sales initiatives.

5532 COMMISSIONER CARDOZO: So their program gets a certain amount of revenue, and then they decide what that revenue goes towards?

5533 MR. LOMBARDI: I'm sorry, Commissioner, I'm not sure that --

5534 COMMISSIONER CARDOZO: When you say you share the revenue, a part of the revenue -- is it the 40?

5535 MR. LOMBARDI: It ranges -- let's say 50 per cent for the sake of discussion.

5536 COMMISSIONER CARDOZO: So 50 per cent of the revenue goes to the associate producer.

5537 MR. LOMBARDI: Correct.

5538 COMMISSIONER CARDOZO: Then they figure out whether they have to pay the people on air.

5539 MR. LOMBARDI: That's right.

5540 COMMISSIONER CARDOZO: Or buy tapes, or whatever.

5541 MR. LOMBARDI: That's right.

5542 COMMISSIONER CARDOZO: I have one question on the third application for the 91.9.

5543 Have you looked at alternatives, either AM, an SCMO now that Mr. Chandrasekar has sound the virtues of SCMO, or the specialty audio that we have just released the framework on last week?

5544 Have you looked at any alternative if you did not get 91.9?

5545 MR. LOMBARDI: I will begin the answer, and then I would like our consulting engineer Wayne Stacey to comment as well.

5546 With respect to SCMO, no, we don't envision a broad service format that we propose to be effective on SCMO service.

5547 As well, with the specialty audio distribution, we don't believe that a broad service format such as we have proposed could succeed in that format.

5548 COMMISSIONER CARDOZO: I wouldn't be on its own. It would be a rebroad of your smaller AM, as a night-time broadcaster, for example.

5549 MR. LOMBARDI: Oh, as a replacement for --

5550 COMMISSIONER CARDOZO: In your application for 91.9 you would still keep AM 1540?

5551 MR. LOMBARDI: Yes.

5552 COMMISSIONER CARDOZO: Could you envision running AM 1540 at night with the reduced contour and one of the alternatives, SCMO or specialty audio?

5553 MR. LOMBARDI: No.

5554 COMMISSIONER CARDOZO: It still wouldn't work for you.

5555 MR. LOMBARDI: No, we don't believe that that would be effective at all. I don't think we would be able to blend an over-the-air product with a more narrowly niched format such as SCMO or specialty. I don't think that would work at all.

5556 In a sense, it has always been available to us through cable distribution, and that has failed miserably. We just cannot get people. It is just not mobile enough. It is not convenient enough. In the manner in which people normally listening to radio, if it is not in that format it is not going to be effective for us.

5557 COMMISSIONER CARDOZO: Once we get to digital radio -- do you have transitional digital radio licence?

5558 MR. LOMBARDI: Yes, we do.

5559 COMMISSIONER CARDOZO: For 1540. Once that becomes viable and more people have digital radios, perhaps in cars, that contour would be bigger than the 1540.

5560 MR. LOMBARDI: The contour of a digital format -- and perhaps Wayne Stacey would be able to comment more clearly on that.

5561 To my understanding, the digital format would be I guess a 45-kilometre contour, omni-directional from our antenna site.

5562 So yes, it will be far superior than our 1540 night-time pattern; perhaps not as large as our day-time pattern but will certainly be an answer.

5563 The discussion of digital broadcasting is so complex and there are so many differing opinions as to when it is going to come on-line and when it is going to be popular. When that transition will be available for broadcasters such as ours to rely on is anyone's guess.

5564 I have heard estimations ranging from five to twenty years, and these are qualified engineers.

5565 With respect to researching other AM signals and FM signals, I would like to ask our consulting engineer Wayne Stacey to comment on the research we did that brought us to these two frequencies.

5566 MR. STACEY: Commissioner, before I start on that, I would like to pick up on one point about the SCMO.

5567 If you were to use that as a replacement for the current repeater, that would mean that people that are now listening to that repeater using an ordinary FM radio would have to go out and buy and SCMO-capable radio.

5568 COMMISSIONER CARDOZO: That's right.

5569 MR. STACEY: There is a bit of expense involved in that, but it is not as commonly used, for instance, in vehicles. So there would be a net loss in the reach of that repeater if you were to use SCMO as a substitute.

5570 On the other question you asked about replacements, certainly with respect to FM there is really nothing other than the 91.9 frequency that would appear to be a suitable replacement for the 101.3 frequency that is currently used. Even with the rule changes, we could not find anything that would come close to providing a duplicate service.

5571 The question of AM has been explored for many years. In fact, originally before going to the FM repeater the preferred option was to find an AM frequency that could be used that would augment the night service of 1540. That became a very difficult problem, because when you search frequencies below 1600 particularly you find that you have a tremendous problem with night-time interference on most of those frequencies, just as you do with 1540.

5572 So it would become a fairly expensive proposition because of the land requirement. It would provide certainly a reduced quality of service to the people in the west part of Toronto that are listening to the repeater if it were on AM as opposed to FM.

5573 I think the other factor, of course, is that with the FM repeater there is the opportunity of transmitting in stereo which you don't have with AM.

5574 So there was a considerable amount of work done over a lot of years to try to find alternatives to backfill the service of 1540 on AM, and nothing that we did or several other consultants that have looked at it over the years have been able to achieve has actually produced anything that is as worthwhile as the FM repeater.

5575 COMMISSIONER CARDOZO: Thank you. Those are my questions.

5576 Thank you, Madam Chair.

5577 THE CHAIRPERSON: Commissioner Noël.

5578 COMMISSIONER NOËL: Just so that I have all the alternatives in my head clearly, Mr. Lombardi, your best scenario would be a new FM station on 101.3, keeping your 1540 AM and getting the 91.9 rebroadcaster on FM.

5579 MR. LOMBARDI: That's correct.

5580 COMMISSIONER NOËL: The second best is again obtaining the FM 101.3, keeping 1540 but no rebroad.

5581 MR. LOMBARDI: That's correct.

5582 COMMISSIONER NOËL: And the status quo would be keeping 1540 with the rebroad 91.9.

5583 MR. LOMBARDI: You actually missed one option.

5584 COMMISSIONER NOËL: If we decide to give 101.3 to one of the other applicants.

5585 It would have an impact on your revenues, we understand that, but I am strictly talking on a technical point of view.

5586 MR. LOMBARDI: Yes.

5587 COMMISSIONER NOËL: I just wanted to have that clear in my mind.

5588 Perhaps my next question would be addressed to your engineer, Mr. Stacey.

5589 Are you aware if there is some mutual exclusivity -- and maybe I don't use the right words in my broken English here -- between 91.9 and 91.7 which has been applied for by another applicant?

5590 MR. STACEY: Yes, those two frequencies are mutually exclusive in Toronto. Being first adjacent, it would not be acceptable to license them both in the same market.

5591 The only thing I would add to that is that so far as I am aware, Industry Canada considers 91.9 technically acceptable and it does not consider 91.7 technically acceptable for other reasons.

5592 COMMISSIONER NOËL: Thank you. Those are my questions.

5593 THE CHAIRPERSON: Considering those answers, when you sat and discussed what the alternatives were, of course you looked at them from the top down. You get all three: 101.3, 1540 and 91.9. But if we look at it from the bottom up, considering Mr. Stacey's answer, what did you consider might be a Commission reason for not giving you 91.9?

5594 MR. LOMBARDI: The fact that there were other applicants before you that were presenting services for that frequency similar to the dilemma you have before you now, where you have applicants presenting an application for new services on 101.3.

5595 THE CHAIRPERSON: On 91.9, if one is to take Mr. Stacey's comment that 91.7 is not acceptable to Industry Canada, is there any other applicant on 91.9?

5596 MR. STACEY: Well, you have the Humber College applicant on 91.9.

5597 THE CHAIRPERSON: So that would be your reason.

5598 MR. STACEY: Yes.

5599 THE CHAIRPERSON: Not the concern with 91.7.

5600 Now, did I correctly understand that you said there would be just one hour of Punjabi weekly out of the South Asian block?

5601 MR. CHANDRASEKAR: During the broadcast regulated time.

5602 THE CHAIRPERSON: So that if I look at the program schedule that you filed, there is a huge block there of South Asian programming beginning at --

5603 MR. CHANDRASEKAR: Nine to ten.

5604 THE CHAIRPERSON: Nine, yes, and then there are some on the weekend, during regulated times.

5605 MR. CHANDRASEKAR: No, I'm sorry, no. That weekend schedule, no. There is no Punjabi on the weekend.

5606 THE CHAIRPERSON: Oh, because under the South Asian block I see Punjabi as well.

5607 MR. LOMBARDI: Madam Chair, we had filed the original program schedule after Shan and I had discussed what do we want to do? Who do we want to reach in the South Asian community? How many hours do we want to dedicate to them? Basically, what is the area and block of time during the day that we want to schedule this so that it has the impact that we desire? And we basically took those languages and distributed them on a program schedule that complemented what we believe is the size of the community and the amount of programming that we wanted to dedicate it.

5608 After further review and discussion, this is a project in work, he has developed a more comprehensive program schedule and, as such, not programmed Punjabi on the weekend.

5609 But I just want to reemphasize that program schedules -- if I may use, once again, Ottawa as an example, I filed an application with what I believed was an interesting program sched. After long deliberations and meetings and discussions with various associate producers, that program schedule has changed. Not my condition of licence, the number of hours I promised, or the number of language and community groups I propose to serve, but the way the program came together. I learned a few things after consulting with the community.

5610 As such I think that is what we are discussing here as well.

5611 THE CHAIRPERSON: Mr. Lombardi, in Ottawa you were the lone player, which is very different from Toronto, and you have heard our discussions as to whether in the Toronto context, looking at what is available and what people are offering, the extent to which we would find it appropriate to actually limit and not leave as much room as you have in Ottawa to change at will as you look at the market. Here there is a market.

5612 That's why I was asking because my understanding, if I recall, there are 85 some hours of Punjabi already on the market.

5613 MR. LOMBARDI: True, and therefore we would not have a great desire to provide even more.

5614 THE CHAIRPERSON: I think it's not in your text at page -- it's not in your text exactly. You talk about 48 hours of South Asian programming, but you don't -- it's not in the text, but I think you added that you wouldn't have any problem with it being a condition of licence.

5615 MR. LOMBARDI: That's correct. It's not in the application. It's in the in-chief.

5616 THE CHAIRPERSON: Well, I don't think it's the text either that it would be a condition of licence. I think you ad-lib that. It would be 48 hours, but you added that you would have no problem -- or is it in the text?

5617 MR. LOMBARDI: I will actually read it.

5618 THE CHAIRPERSON: At page 9, I am shown -- that you would not be adverse. I was looking at the former page where you mention 48 hours.

5619 MR. LOMBARDI: Right.

5620 THE CHAIRPERSON: Now, this 48 hour of South Asian programming that you would bind yourself as a condition of licence to produce, would that in any way be related to your relationship with ATN? The 48 hours of programming in conjunction with ATN.

5621 MR. LOMBARDI: The message that we want to convey is twofold. One, we believe that this application strongly relies on our ability to attract South Asian listeners and advertisers and I think this is the financial engine of this particular proposal. I think it's an important one.

5622 We are very committed to the number of hours that we propose. We think that this is ideal for the marketplace. And so we have no hesitation to make a commitment to that block of time. That's what we want to do.

5623 The other point that I think I want to make very clear to the Commission and to all of us here in this room is that I am very committed to this relationship with ATN and Shan. So we wanted to make the point that we are serious about this relationship. We are serious about combining our resources in two enterprises together in the pursuit of quality programming, and we are serious about our promises for diversity of voices.

5624 We think we meet that, and I want the Commission to recognize that we would not be opposed to a condition of licence that spells that out clearly with respect to ATN's involvement with CHIN Radio in this particular application.

5625 THE CHAIRPERSON: The reason I am pursuing that, although it's something that would probably be difficult for us to consider as a condition of licence, I think it would be fair to say that you come forward with a proposal where the largest number of hours, 48 hours, the South Asian -- the next most important is 14 hours -- it would be fair to say that that proposal, with a preponderance of South Asian programming, is put forward very much in the context of your relationship with Mr. Chandrasekar and ATN. Would it be fair that that is a very important plus you are putting forward to us?

5626 MR. LOMBARDI: It's a very important point for I think the community. I think it's an important point for the Commission to recognize the commitment between these two organizations.

5627 We have thought about this. We have an agreement that spans the length of the first term of --

5628 THE CHAIRPERSON: You do have an agreement.

5629 MR. LOMBARDI: Yes.

5630 THE CHAIRPERSON: Because I was going to say Mr. Chandrasekar is not an investor, but now that he is breaking even --

--- Laughter / Rires

1445

5631 MR. CHANDRASEKAR: From your mouth to God's ears.

--- Laughter / Rires

5632 THE CHAIRPERSON: And neither do we have adoption papers for Shani.

--- Laughter / Rires

5633 MR. LOMBARDI: Shani Lombardi.

--- Laughter / Rires

5634 THE CHAIRPERSON: And so would it be fair, or do you think reasonable for us to wonder about this if for the Commission we bought your proposal which includes this relationship without not very much in the application?

5635 It's interesting that Shani has often used the royal "we" and "our" producers, as if this is really a partnership that goes beyond a shake hands. Although you talk about your associate producer model, and both you and Ms Lombardi, I think, have told us how important that is, the relationship here would be almost indirect because the associate producers would be under ATN and it would be a delegation really.

5636 Do you think we should be concerned about the fact that all we have here is some understanding and nothing to show us, or at least give indices -- shareholders come in and out, I know that -- that this relationship is going to be a lasting one, and that the responsibility will remain with you, despite the fact that we will now have two layers and whether adoption is in the works.

5637 MR. LOMBARDI: Well, I can say that I don't think Shan and I have contemplated adoption, but I think what we --

5638 THE CHAIRPERSON: Well, he has already found himself a name, and it sounded very Italian to me.

--- Laughter / Rires

5639 MR. LOMBARDI: I think all we wanted to express was a commitment. Yes, Shan and I we do have an agreement and the reason we have the agreement is because of the kind of commitment that Shan and CHIN need to make. ATN and CHIN need to make a long-term agreement for the life of the first term of this application to succeed. And this isn't something that Shan and ATN wanted to get involved in unless it was long term, and it's certainly not something that we wanted to do on a short-term basis, more or less a "Let's try and see kind of attitude".

5640 We need commitments to one another and that's what we did. We came up with an agreement that we both --

5641 THE CHAIRPERSON: You have a written agreement to that effect?

5642 MR. LOMBARDI: Yes, we do.

5643 THE CHAIRPERSON: It's not in the application, is it?

5644 MR. LOMBARDI: Well --

5645 THE CHAIRPERSON: I don't know, at the moment --

5646 MR. LOMBARDI: If I may, Madam Commissioner --

5647 THE CHAIRPERSON: At the moment I can't say for sure whether that is still in the application form -- the staff can help -- but often we ask: Will there be delegation by contract to anyone? Is that still in the application form? No.

5648 MR. LOMBARDI: May I just illustrate --

5649 THE CHAIRPERSON: Because it is here a very important component. It's the largest component and you are before us saying, "One of the important things that you should consider in giving me 101.3 is that I have Shani at my side and ATN and they know what they are doing and they will do it for me".

5650 MR. LOMBARDI: I think that's pretty compelling, but let me just illustrate the lack of our agreement on file. It's because my agreement with Shan is not unlike all my agreements with the associate producers.

5651 THE CHAIRPERSON: They don't get 38 per cent, 48 hours of your programming, do they? How much would one --

5652 MR. LOMBARDI: Some do.

5653 THE CHAIRPERSON: As much as that?

5654 MR. LOMBARDI: Perhaps not 48 hours, but for example --

5655 THE CHAIRPERSON: In major programming.

5656 MR. LOMBARDI: Darshan Sahota, for example, one of my other South Asian associate producer, does a total of 26 hours of programming per week with CHIN Radio.

5657 THE CHAIRPERSON: But do you think in a very competitive process like this that it would be appropriate to think of some way that it's very obvious on the record that this is indeed part and parcel and integral, on the long-term basis, or at least on a medium-term basis.

5658 I find it difficult to think that the Commission would bind you with that. What I am asking is: What is the level of comfort you are prepared to give us that we should put back in the mix of what we use to decide and say, "We know this is going to happen and how it is going to happen".

5659 MR. LOMBARDI: Well, I made the statement in earnest, and I did so because before you, Madam Commissioner, applicants can say a lot of things.

5660 You are, at your own discretion, free to judge those words. We are saying them with conviction and letting you decide that if this is a component that is important to your decision to licence us for 101.3, if you recognize the same importance of the ATN contribution to this application as we do, and the fulfilment of diversity of voices and quality ethnic programming, then I was just letting you know that we are not opposed to that fact as a condition of licence.

5661 So that you have an understanding that if you do licence us this is for real.

5662 THE CHAIRPERSON: I believe I haven't thought it through, but it's something difficult for us to do. I was more asking you what are the indices that you are prepared to put forward. Where are they? We should consider this component as -- it's not a question of -- this is a competitive process, and you have put that forward as an important aspect.

5663 But I don't think that legally the Commission would be into demanding as a condition of licence relationship between --

5664 It just comes across how important this is in the context of there are a number of participants vying for that frequency for South Asian programming and for us we have to look at what is likely to be the best way to offer that service, if indeed that would be the type of service that we would allow 101.3 to --

5665 But anyway, I will leave it at that. You understand.

5666 MR. LOMBARDI: Sure, and I would like to finally say that I am very happy to file the agreement with the Commission and have no hesitation to do so.

5667 THE CHAIRPERSON: If it is a producer agreement, just like any other, I guess then there would be no reason to ask for a filing of that, I would suspect.

5668 Anyway, I will it to legal counsel. Legal counsel.

5669 Pardon, Commissioner Noël has one more thing.

5670 COMMISSIONER NOËL: It's just to complete my question. I forgot to come back to you.

5671 Your third scenario was actually the flip. Am I correct?

5672 MR. LOMBARDI: That's correct.

5673 COMMISSIONER NOËL: And the forth and worse case scenario is the status quo with 91.9 instead of 101.3.

5674 MR. LOMBARDI: That's correct.

5675 COMMISSIONER NOËL: Thank you.

5676 THE CHAIRPERSON: Commissioner Cardozo.

5677 COMMISSIONER CARDOZO: One more question too.

5678 Mr. Stacey, on the AM frequency, you said you had looked at frequencies below 1600. Could you tell us why you didn't consider frequencies above 1600 for which there are a few applications at this hearing?

5679 MR. STACEY: Yes, there are and when we looked at those, of course, some years back prior to the decision on FM, the problem was that those were relatively new frequencies. The receiver availability might have been all right on 1610, but once you got above that it was questionable whether people would have a sufficient number of receivers that would tune up to the upper part of the band.

5680 So at that point that, as well as the cost factor, was really what ruled it out. Now I would say the main thing that would rule it out would be several of the things that I mentioned previously.

5681 If you are going to get any reasonable coverage when you are that high up in the bands, you have to have a fairly substantial tower installation. It has to be a properly done installation which takes a fair amount of land and property. Where you would have to locate it in Toronto would be pretty expensive real estate.

5682 So when everybody started to look into possibilities of where you could actually locate one of these things, the costs just started to escalade dramatically.

5683 The other problem is that the top end of the AM band, the signals don't propagate all that well. So there were a number of trade offs, but basically we concluded that it got to be too costly for the benefits that would accrue if you were to implement above 1600.

5684 COMMISSIONER CARDOZO: And the towers would have to be along the lakeshore facing north, is that why it would be expensive?

5685 MR. STACEY: It would really depend on the size of the service that you were looking at, but you would have to be somewhat west of the current site which is on Toronto Island. So you would be getting into, as I say, the very expensive real estate along the lakeshore leading west from downtown.

5686 COMMISSIONER CARDOZO: Thank you.

5687 Thank you, Madam Chair.

5688 THE CHAIRPERSON: Counsel?

5689 M^e STEWART: Merci, madame la présidente.

5690 Just to pick up on what Madam Chair was speaking about. It will not be necessary to file your agreement with ATN.

5691 I would like you to turn to your application for the flip from AM and FM and specifically Schedule 16. You will see CTD initiatives and just seek confirmation from you on the record that you are satisfied that all these initiatives are consistent with the CAB plan in terms of eligibility. That is distinct from the Commission's policy with respect to CTD.

5692 MR. LOMBARDI: Sorry, could you just give me the tab number again, please?

5693 MR. STEWART: Yes. It's Schedule 16, just the list of your CTD initiatives, the breakdown of the $27,000 that you are proposing. I am here, of course, referring to the flip from AM to FM.

5694 MR. LOMBARDI: I'm sorry. I have the tab now. Could you just give me the question now? What is the question?

5695 MR. STEWART: The question is: Are you satisfied that all of these activities that you proposed are consistent with the CAB eligibility criteria which you have subscribed to, I believe, as distinct from the Commission's criteria, given that, as I understand the CAB criteria with respect to third party, and so forth, are somewhat more stringent.

5696 MR. LOMBARDI: I think -- wouldn't that affect us on the Folklore Competition. I believe that one may be a little debatable with respect to the CAB position, but I believe that the other contributions are within the CAB definition.

5697 MR. STEWART: Okay. Should the Commission decide that any of these projects do not qualify in terms of eligible third-party recipients, would you be prepared to redirect these costs to eligible categories consistent with the CAB/CTD plan?

5698 MR. LOMBARDI: Yes, I would.

5699 MR. STEWART: Thank you.

5700 Now, again with respect to the AM to FM flip application, would you agree to a condition of licence whereby 97 per cent of your programming would be ethnic, and at least 86 per cent would be third-language programming each week?

5701 MR. LOMBARDI: Yes, that would be consistent with our current COL on 1540. So, yes, I would.

5702 MR. STEWART: Thank you.

5703 Now, just to follow up on that, would you be prepared to accept a condition of licence that a minimum of 55 per cent of all your ethnic programming broadcast would be in the Italian and Cantonese languages?

5704 MR. LOMBARDI: The flip category? On the flip proposal?

5705 MR. STEWART: Yes.

5706 MR. LOMBARDI: Well, my concerns on a condition of licence for existing radio stations is different than my willingness to commit to condition of licences with respect to this new service.

5707 My proposal to flip from 1540 to 101.3 is a technical one. Those are the reasons for the requirement.

5708 So because of my past history with that particular frequency and that format, and what we have developed there, I would not want to constrict or restrict my ability on that particular format to those communities as a condition of licence with respect to those figures that you quote.

5709 MR. STEWART: I understand though that the percentage that I have given you fully reflects your current programming schedule, and even in those circumstances you would be unwilling to accept a condition of licence along the lines that I have described?

5710 MR. LOMBARDI: Because I currently have a condition of licence to serve 17 languages and 23 cultural groups on 1540 currently, I do not have a condition of licence to dedicate a percentage of my programming time to the language groups that I have demonstrated and I would not -- I do not see the effectiveness of putting a further restriction on that particular service because of the flip.

5711 This is not an introduction of new programming into the market. This is not a new service. In fact, in the flip scenario, 1540 remains on the market and can be licensed to another ethnic broadcaster.

5712 I am concerned about accepting a condition of licence that would restrict me in that regard.

1300

5713 MR. STEWART: Can I just get you confirmation that your revenues basically all are derived from advertising revenues based 100 per cent on associate producer programming? This is with respect to the projections and this would apply both to your flip and to the New FM application as well.

5714 MR. LOMBARDI: The flip application would not derive completely on associate producer revenues, because must of the programming on 1540 is Italian, which is in-house.

5715 MR. STEWART: Okay. Then in that case, as we have asked other applicants, would you accept an undertaking to provide for the Commission by midday on Monday of next week, a breakdown of your revenues as between in-house -- advertising revenues derived from in-house programming and revenues derived from non-in-house production programming?

5716 MR. LOMBARDI: Yes, we will.

5717 MR. STEWART: Thank you.

5718 MR. HYLTON: I would like to say, counsel, that of course would be filed on a confidential basis. It is an existing services, as you know, under the guidelines.

5719 MR. STEWART: Except these are with respect to projections.

5720 I'm sorry, I am informed that -- excuse me a minute, Madam Chairman.

--- Pause

5721 MR. STEWART: These are projections and hence should be filed on the public record. If you wish to make a claim for confidentiality, you can do so and the Commission will determine that matter.

5722 MR. HYLTON: What is the timeframe for that, because it is pretty clear to me that we would seek confidentiality. These are existing figures of an operating station and I just wondered what the timeframe was.

5723 MR. STEWART: So that there is no misunderstanding, these are your projected revenues over the course of the seven years of the licence term that I believe are on the public record. I simply just want a breakout of those revenues as between revenues derived from advertising connected with in-house production as distinct from revenues connected with non-in-house production.

5724 MR. HYLTON: That is understood.

5725 I wonder if those could be filed as of Wednesday next week. Is that convenient to the Commission?

5726 MR. STEWART: End of day Monday.

5727 MR. HYLTON: Tuesday.

5728 MR. STEWART: No. It is important that they be filed by end of day Monday.

5729 MR. HYLTON: That will be fine.

5730 MR. STEWART: Thank you.

5731 Just to seek your clarification, are you going to be filing a claim of confidentiality with respect of that breakout?

5732 MR. HYLTON: No, we are not.

5733 MR. STEWART: Thank you.

5734 Do you have an advisory board with respect to your existing Toronto stations?

5735 MR. LOMBARDI: No, we do not.

5736 MR. STEWART: Assuming your application for the New FM is denied, do you propose to establish an advisory board for your existing stations?

5737 MR. LOMBARDI: It is unclear at this time that we would proceed with an advisory board as envisioned for this new service, however it is a consideration because once the process begins and we begin the outreach process in looking for and investigating and discussing with potential advisory board members, you get to meet a lot of good people. That process has begun already.

5738 So even in the event that we are unsuccessful, I envision the formation of an advisory board in some capacity.

5739 MR. STEWART: Yet you would not be prepared to say a simple yes to that, given that, as I understand it, you do have one in Ottawa and many of the applicants here have proposed, and it is of course consistent with the encouragement of the Commission, to establish advisory boards or advisory councils with respect to ethnic programming.

5740 MR. LOMBARDI: I just come back to that question with the fact that CHIN Radio has been in this market for 36 years. Personally, I have been active in the company for 25 years. The management team that we have has, in great regard for a number of years, to be efficient with respect to our advisory boards and the ability of us to manage our company in what we think is a prudent manner, have taken over much of those responsibilities.

5741 The desire for us to provide an advisory board is on this new service. We think that was consistent with the call and, in fairness to the Commission and to the other applicants, it is something that deserves to be noted.

5742 With regard to our existing services, however, because we don't have a current advisory board at this point in time, we feel that we are quite capable of managing the affairs of the station, given its history, its length of involvement with the community groups that we are currently serving, the length of the term that associate producers have been on the air, we didn't, in good conscience, consider an advisory board for Radio 1540 and 100.7.

5743 We did consider, however, the inclusion of that responsibility to the advisory board once it was formed. That will be formed in a particular way because of the new formats that we are proposing.

5744 I'm not really opposed to an advisory board. I don't think it is a major issue for us. As I said to you, with the kind of people that I have meeting with respect to our advisory board, I would not be opposed to it, but for me to say at this point in time for the record that yes, we will form one for Radio 1540 and 100.7, I just need more time to make that consideration.

5745 MR. STEWART: Thank you.

5746 Now I would like to turn to the New FM application. I just have one or two questions relating to it.

5747 Will there be any foreign-produced programming broadcast on that station?

5748 MR. LOMBARDI: Very little. The only foreign-produced programming that we would carry would be in the form of international news services that we would get via satellite or ISTN, and those would be very, very short for the most part, considering that these would be encompassed within a five to 10-minute news break. That would be the only international or foreign product that we would be broadcasting.

5749 MR. STEWART: Would all the other programming be local, as distinct from regional or national?

5750 MR. LOMBARDI: Yes. We envision that all of the programs that we will be producing will be distinctly, distinctly local in nature. We do have a station in Ottawa and certainly Shan has more regional-based entities and there is a consideration to also include, in some capacity, perhaps in our talk show format, some regional component, but these will not be piped in programs. These will be programs that will have perhaps a regional nature where they may include people from outside the core, perhaps politicians from Ottawa or other associates from around the country, that can participate and provide interesting information for a local market and audience here in Toronto.

5751 MR. STEWART: Thank you.

5752 Just two quick questions.

5753 Would you accept a condition of licence whereby 100 per cent of your programming would be ethnic and at least 96 per cent would be third language programming?

5754 MR. LOMBARDI: Yes, we would.

5755 MR. STEWART: Thank you.

5756 My final question is a variation on the question that I have just posed, and that is: Would you be prepared to accept a condition of licence that a minimum of 60 per cent of all your ethnic programming broadcast would be in the languages -- and bear with me: Hindi, Gujarati, Urdu, Tamil, Punjabi, Malayalam, Bengali, Kannada, Telegu, Marati, Spanish and English for Caribbean?

5757 I would just like to say, this is consistent with your proposed programming.

5758 MR. LOMBARDI: Let me answer that question with a prompt yes, we would.

5759 However, the caution of condition of licences are concerning with respect to the inflexibility that they give a new broadcaster in the market when there are so many other services free to adjust and modify and change their format.

5760 I understand the reason for it and I understand why the Commission is looking for those type of conditions for this new service, but it doesn't take into consideration the impact of these new services if the market changes, because the market could change around us. Once a station goes on the air, something could happen in the market and all of those other stations are free to change and respond to it, yet the new service wouldn't.

5761 I suppose the opportunity would be to ask for a change of licence and appear before the Commission once again on that if the reasons were warranted, but I just thought I would throw that out.

5762 We would accept it as a condition of licence.

5763 MR. STEWART: Thank you.

5764 Just for the record, all the applicants have been asked the same question.

5765 Merci, Madame la présidente, ce sont toutes mes questions.

5766 THE CHAIRPERSON: Mr. Lombardi, one of the reasons was to explore and get the views of the incumbent broadcasters of the new entrants as to the wisdom of this, so we welcome your comments. That is what we are trying to get.

5767 Mr. Stacey, we all agree that 91.9 is mutually exclusive with the application of its use by Humber College. But with regard to 91.7, your answer was on the basis of not resolving -- I understood it to be not resolving the remaining question mark about getting technical accessibility for that frequency. But if they were to be resolved, would you consider that mutually exclusive with 91.9?

5768 MR. STACEY: Yes, it would be.

5769 THE CHAIRPERSON: Thank you.

5770 Thank you, Mr. Lombardi and the Lombardi family, including Shan and all your panel for your patience and cooperation. We will see you again.

5771 We hope everybody has a good weekend. We will adjourn until nine o'clock Monday morning, at which time we will hear Coopérative radiophonique.

5772 À 9 h 00 lundi matin.

5773 MR. LOMBARDI: Thank you, Madam Chair, Commissioners.

--- Whereupon the hearing adjourned at 1315, to resume

on Monday, September 23, 2002 at 0900 / L'audience

est ajournée à 1315, pour reprendre le lundi

23 septembre 2002 à 0900

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