ARCHIVED -  Transcript / Transcription - Kitchener, Ontario - 2002-10-30

Multiple broadcasting applications /

Demandes de radiodiffusion multiples

HELD AT: TENUE À:

Four Points Hotel Hôtel Four Points

105 King Street East 105, rue King Est

Kitchener, Ontario Kitchener (Ontario)

October 30, 2002 le 30 octobre 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 applications /

Demandes de radiodiffusion multiples

BEFORE / DEVANT:

Joan Pennefather Chairperson / Présidente

Stuart Langford Commissioner / Conseiller

Barbara Cram Commissioner / Conseillère

Jean-Marc Demers Commissioner / Conseiller

Ron Williams Commissioner / Conseiller

ALSO PRESENT / AUSSI PRÉSENTS:

Peter Foster Hearing Manager / Gérant

de l'audience

Pierre LeBel Secretary / Secrétaire

James Wilson Legal Counsel /

Conseiller juridique

HELD AT: TENUE À:

Four Points Hotel Hôtel Four Points

105 King Street East 105, rue King Est

Kitchener, Ontario Kitchener (Ontario)

October 30, 2002 le 30 octobre 2002

PAGE / PARA NO.

PHASE I (Cont'd)

PRESENTATION BY / PRÉSENTATION PAR

Edward F. Bauman and Rae Roe 560 / 3716

Larche Communications Incorporated 617 / 4037

CKMV Radio 701 / 4548

Anthony Schleifer 782 / 4957

PHASE II

INTERVENTION BY / INTERVENTION PAR

Rogers Broadcasting Limited 785 / 4980

Douglas E. Kirk 785 / 4988

Trust Communications Ministries 788 / 5006

Edward Bauman and Ray Roe 788 / 5012

CKMW Radio 790 / 5021

Kitchen, Ontario / Kitchener (Ontario)

--- Upon resuming on Wednesday, October 30, 2002

at 0835 / L'audience reprend le mercredi

30 octobre 2002 à 0835

3710 THE CHAIRPERSON: Order, please. Good morning.

3711 Mr. Secretary, please.

3712 MR. LEBEL: Thank you, Madam Chair.

3713 Item 8 on the Agenda is an application by Edward F. Bauman and Rae Roe on behalf of a corporation to be incorporated for a licence to operate an English-language commercial FM radio station in Kitchener-Waterloo.

3714 The new station would operate on frequency 99.5 megahertz, Channel 258A, which an effective radiated power of 518 watts.

3715 The applicant proposes a country music format. You have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

3716 MR. ACKHURST: Madam Chairperson and Members of the Commission, good morning.

3717 My name is Doug Ackhurst and I am pleased to be part of the team supporting the application by two regional area businessmen, Ed Bauman and Rae Roe to license a new FM station that will bring a local, community country music radio station back to Kitchener-Waterloo.

3718 We welcome this opportunity to present our request for the only truly local country application at this hearing.

3719 This area lost its radio station, its country station, in 1994. At that time Maclean Hunter flipped its contemporary AM station, known as CHYM, to FM band, and moved its successful country FM station, CKGL, to the AM band.

3720 The BBM numbers for the country FM station at the time showed CKGL-FM country as the number one station in hours tuned in the full coverage area and number two centrally in hours tuned. They also held nearly an 11 per cent share of hours tuned.

3721 After the station was moved to the AM dial, listenership declined and eventually, in 1997, the station was changed to its present day format of News/Talk.

3722 Over the years, in discussions with local residents, advertisers and country music performers from the region, Rae Roe recognized the need and the opportunity for a new community country radio station. This started back as far as the summer of 1998 when Rae and our engineer, Mario Pratola, identified a frequency that would serve the market. The application was filed with the CRTC back in July 2001.

3723 I would like you to meet our team. Sitting next to me is the architect of our presentation, our application, Rae Roe.

3724 Rae has many years of experience in radio operations, primarily in Electrohome's CFCA-FM and CKKW Kitchener stations. He has been involved in operations, CJOE London, promotions in CHML in Hamilton, as well as sales and marketing in Hamilton.

3725 Rae has also been involved in the real estate and insurance industries in the Kitchener-Waterloo area.

3726 Rae was involved with the team that launched CFCA-FM in Kitchener-Waterloo over 35 years ago.

3727 He helped Keith Sterling and Murray Portious in the start-up of CKGL, the first full time country FM station in Canada, and it was the first automated station in Canada.

3728 Ray was instrumental in many aspects of the CIWV Hamilton station launch. This included locating the drop-in frequency, building and launching CIWV, the first smooth jazz station in Canada. Rae was initially a shareholder there, but has since divested his interests and is no longer involved in the station.

3729 Ray grew up in Kitchener-Waterloo and has worked here for 40 years.

3730 Mario Pratola has been a broadcast engineer for the past 30 years, as well as a consultant in the broadcast and computer fields for the past 10.

3731 Mario brings a wealth of technical knowledge to the team and will be key to implementing the various technologies required to run the modern radio station. Mario as well has resided in the region in the past 35 years.

3732 Finally, Ed Bauman. He heads up our applicant company. Ed has lived all his life in K-W.

3733 He is a successful owner of many companies, manufacturers and a major development builder in the Waterloo region for the last 35 years. He has had a personal association with management in the broadcasting industry in the K-W area and is fully aware of the business issues involved in running a successful business.

3734 As a successful and respected businessman in the area, he has the expertise to guide this station to a very healthy financial position in a short period of time.

3735 His management style includes hiring quality people with the knowledge and experience in the required fields. The building that will house the station is owned by the shareholders and produces extra income that will be attributed to the operation. Rent, heat, hydro and taxes have been provided for and the remaining space in the building will be rented at $12 a square foot.

3736 It is my pleasure to introduce Ed Bauman.

3737 MR. BAUMAN: This is something very new to me, Madam Chair, Members of the Commission.

3738 My name is Ed Bauman, as you are aware, and it is my pleasure to welcome you to our city. It is a great city. It has a lot of pluses. It is better than any city in the world.

3739 I was born and raised in the Kitchener-Waterloo area and lived here all of my life. I build houses, do everything.

3740 As a three year hiatus I was on loan to the American Airforce during the heights of the Cold War. I was on a radar line up in the North and I learned a little bit about radio, not the new stuff but the old stuff. It was an experience. I was working at the Bell Telephone at the time.

3741 But we have a dynamic area in here and I'm just happy to be part of this program.

3742 Thank you very much.

3743 MR. ACKHURST: So we would like to present a tape at this time, a video.

--- Video presentation / Présentation vidéo

3744 MR. ACKHURST: Well, there hasn't been a new station in K-W in over 35 years. The community has seen its population almost double and it has demonstrated unprecedented economic growth. Well, it has been without country music radio on FM for nearly a decade and we know it is time for a new licence.

3745 Another of our key team members is Jim Craig, a 40-year veteran of Canadian radio. Jim was born and raised in the area, began his career down the road in Guelph, and spent nearly eight years in the 1970s on the K-W airwaves, including five years as the region's most listened to morning personality at CHYM.

3746 Currently Jim consults to a number of southern Ontario broadcasters and businesses, programs the new CBC/Galaxie music channel, and is a professor on Communication Arts at two broadcast faculties of two Community Colleges, Fanshawe in London and Seneca at York in Toronto, teaching broadcast management, advanced radio sales, marketing, promotion, programming and industry affairs to budding broadcasters.

3747 Jim.

3748 MR. CRAIG: Good morning, Madam Chairman and Panel Members.

3749 We are a new independent broadcaster. We currently hold no licences, but we believe we have a team of professionals with the knowledge, the background, the creativity, the connections to the Kitchener-Waterloo business and social recreation community and the experience to operate a radio station that the area will be proud of.

3750 The K-W region is under-allocated for FM frequencies due to the proximity of signals from Toronto, Hamilton, London and the U.S., which all have signals which overlap our community. As a result, as you know, over 55 per cent of the tuning in our area goes to out-of-market signals. According to figures provided by the CRTC staff, Kitchener-Waterloo generates $17.4 million in radio revenues.

3751 We think it is time to reclaim some of the out-of-market tuning and some of the revenues which are lost to outside stations by providing a new station that serves our community, a new country radio station.

3752 Currently the Rogers group and the CHUM group each operate two stations in Kitchener-Waterloo. There are also three additional stations with primary coverage in our CMA coming from the neighbouring cities of Cambridge and Guelph. These are both owned by Corus. Again, no local ownership.

3753 Bell Globemedia, Toronto, owns the local TV station, CKCO. Also, the other local TV signal is a repeater of a Toronto signal owned by Global, and the Toronto Star owns the local newspaper.

3754 The local cable TV is owned by Rogers and Rogers-owned properties take up 25 per cent of the basic cable band from Channels 2 through 22 with speciality channels including OMNI 1 and OMNI 2 included and its local cable channel along with its other specialty channels.

3755 So as we see it, there is room and it is time for a locally owned media outlet.

3756 MR. ACKHURST: Now it is time to meet the architect of our operation, Rae Roe.

3757 MR. ROE: Let's talk about country music.

3758 It is a pleasure to introduce Bill Harman. Joining the team is a consultant by the name of Bill Harman who has been in business for 35 years consulting various broadcasters in Canada and the U.S. Mr. Harman agreed to help the management team by providing his services in getting this station off the ground.

3759 His credentials included consultation of the application with initial launch of CIWV, recent work in the Ottawa area hearing for an application for smooth jazz, and other consultations in various stations operating in southern Ontario and Manitoba.

3760 He has been a program director and operations manager and he is also a research analyst for Radio and Records.

3761 Mr. Harman has been nominated by Gavin Radio and Records as Program Director of the Year several times and is an avid supporter of Canadian talent.

3762 A well-respected broadcaster who has consulted with many U.S. stations, he will be consulting with the initial start-up of the new venture.

3763 Bill.

0850

3764 MR. HARMAN: Good morning, everybody.

3765 Country 99.5 CFGQ, will be a modern country radio station with a more aggressive sound and wider playlist than most of the stations on the air today.

3766 Our "More Music, More Variety" slogan will mean that we will play today's best country and a large selection of yesterday's favourites. Country 99.5 will be the champion -- the champion of Canadian country artists, delivering a Cancon level of 40 per cent.

3767 We will feel its part of our mission to find and present the best country music that Canada has to offer. Artists like Emerson Drive, Lisa Brokop, Paul Brandt, Adam Gregory, Carolyn Dawn Johnson, Terri Clark, Michelle Wright, Doc Walker and the Wilkinsons, among many, will lead the way.

3768 CFGQ will also play an infusion of country rock from the Allman Brothers Band, the Eagles, Poco, the Outlaws and Marshall Tucker, to name a few.

3769 Many of these groups were pioneers in setting the foundation for today's country music. They will add an exciting and comfortable element to the sound of Kitchener-Waterloo's new country home.

3770 CFGQ will work in music from some of the all-time legends of country, the Bellamy Brothers, Anne Murray, Hank Williams Jr., Willie Nelson, Roy Orbison and Patsy Cline will be frequent visitors to the airwaves of Country 99.5.

3771 CFGQ will also play selected cuts from artists who don't fit a standard label and are looking for a home to call their own. The music of Mary Chapin-Carpenter, Bruce Cockburn, Lee Roy Parnell, The Band and Steve Earle will always be welcomed at Country 99.5.

3772 CFGQ will be a modern country radio station with the right blend of music that will showcase the artists of today and remember the songs that got us to this point.

3773 Country 99.5 will strive to reach a wide demographic of listeners between 25 and 64 years of age, with a 50-50 split between males and females.

3774 This will be a radio station unlike anything else the region has ever heard before.

3775 CFGQ will be local, exciting, informative, with strong support for the community and interaction throughout the area. Add a music direction that is innovative, diverse and entertaining and Kitchener-Waterloo will be proud to call Country 99.5 its own radio station.

3776 MR. ROE: Our Canadian Talent Development projects will make a difference. Our proposal will be one with few dollars attached to it, but it can make a difference locally and nationally.

3777 Locally, we will have the area talent search. We will ask for music from the format-acceptable participants, currently unsigned, on a small independent label and we will make the music available for airplay for a 30-day period. Listeners will be asked to vote for their favourite songs by either e-mail, phone or through a participating sponsors, or all of them.

3778 After each 90-day period the winner with the most votes will be eligible to join a live concert with the other winners. We will sponsor these concerts with the eventual overall winner being given a own showcase at either the CRS, the CMA in the United States, or the CCMA in Calgary in September.

3779 Our project will be unique. We don't proclaim to have the experts when it comes to launching radio careers with other than by providing airplay, but we have made arrangements with award-winning producer Rick Hutt of Cedar Tree Studios to work with us on this project.

3780 We will have with us today several performers who would like to speak to the Commission at the end of this presentation.

3781 If time would allow, their comments and questions are readily available.

3782 Nationally, our commitment to produce a Canadian top 20 countdown hosted by country singer and CCMA Award winner Jamie Warren who resides in the Waterloo region.

3783 MR. ACKHURST: This show will be syndicated through Sound Source Productions and made available free-of-charge to all country stations in Canada.

3784 Now, local news is very, very, very, important to our operation. It is with great pride that I present a 30-year news veteran as part of our team, Mr. Rob Williamson.

3785 More than 20 years of his career is focused on local radio news, public affairs, with half that time spent here in Kitchener.

3786 He is a veteran of three years service with United Nations Radio. Currently he is a producer of live national television.

3787 Rob.

3788 MR. WILLIAMSON: Thank you, Doug.

3789 God morning Members of the Commission and welcome to Kitchener-Waterloo.

3790 Our plan for providing news and information to the people in this town is, we believe, quite comprehensive. We are going to do a big old-fashioned way with lots of local news, every hour on the hour. Sadly, in this era of downsizing a lot of stations aren't doing this any more, so we hope to bring it back.

3791 Anyway, specifically, from day number one hourly newscasts all day, 6:00 in the morning to 11:00 in the evening every weekday, Monday to Friday. The prime periods will also be supplemented by a half hour -- pardon me, the standard 90-second half hourly updates.

3792 Another thing, and I see at as the centrepiece of our programming plan in terms of news, is a midday almost magazine style program, 30-minutes long, starting every day at 12 o'clock noon.

3793 As for staff, we are starting with a couple of veterans who are pretty well familiar with the area. I am one of them and collectively my partner and I have more than 20 years combined experience in local radio news right here in Kitchener-Waterloo.

3794 We are also going to hire a third person right off the bat and this person will be as local as we can find.

3795 Now to supplement the staff -- and this is not enough of a staff to do what we are promising -- we have worked out what I think is a very innovative arrangement with Conestoga College here in Kitchener-Waterloo.

3796 What we are going to be doing is bringing in a group of their best and brightest broadcast journalism students. Third years only, nobody from the entry level. We are going to hire them, a paid part-time basis, on-call basis, and keep them. We will have them working with us on a daily basis.

3797 This will help supplement our product and, more to the point, it will also help them. A little extra cash indeed, but it will also give them some real-world experience. Again, with all the downsizing it is a pretty tough industry to get into these days and we are going to do our bit to help.

3798 This, in a nutshell, is what we are going to do. Again, everything I have outlined for you we are going to do from day one, the day we sign, on the air.

3799 That is essentially it.

3800 MR. ACKHURST: Thanks, Rob.

3801 Well, now you have met our team and you have heard some of our ideas.

3802 I personally have been in the radio business for 35 years. I worked with the late Gord Sinclair Jr. in Montreal in the 1960s, I worked with the Schoone/Zucker group in northern Ontario in the 1970s as Vice-President General Manager. For the past 20 years I have worked with Telemedia Communications as Regional Vice President of small market stations throughout Ontario from Timmins to Stratford.

3803 I have lived and worked in North Bay, Sudbury, Montreal, Toronto, and when I lived in Orillia I was responsible for the flipping of the two stations to FM and the launch of country music in Orillia and Midland.

3804 Recently, after 6 years as General Manager of the FAN in Toronto, I retired when Rogers bought the station last year. I think I have seen it all.

3805 I recently got involved with this group because I was impressed with their creativity and their dedication to the community and to their cause. I don't expect that this will be the most expensive or the fanciest presentation that you will see at this hearing, but I know that the project will be a success for the following reasons.

3806 Number one, the market is economically healthy. A small example of this is the 1999 Canada's Technology Triangle exports. This region exported $8.2 billion worth of goods.

3807 Number two, the underserved niche is clearly country.

3808 Number three, we have the experienced team to make this happen.

3809 Number four, we have a workable business plan which is totally funded by the shareholders which allows the project to be debt-free.

3810 Number five, we will be very involved community.

3811 Number six, we will contribute to the local and national Canadian country talent scene.

3812 Number seven, we will provide diversity in ownership, news, music, community involvement, with minimal effect upon the licences.

3813 Thank you, Madam Chairman and Commissioners. We look forward to your questions.

3814 THE CHAIRPERSON: Thank you very much.

3815 Commissioner Williams, please.

3816 COMMISSIONER WILLIAMS: Good morning, applicant. You are responsible, I guess, for this hearing, being the first ones that applied which resulted in the call.

3817 You have presented a very, very complete application but there are a few areas that I want to work our way through just to finish flushing out the file so to speak.

3818 I am going to begin in the area of Canadian Talent Development.

3819 You are proposing to spend $25,000 each year for a talent search in the form of a contest. When requested to provide more details about direct expenditures related to this initiative, you indicated a list of costs that must be addressed.

3820 Could you please address the cost associated with the following items on your list, as well as explain how these items are direct contributions, i.e., out-of-pocket expenses to the third party?

3821 Would you be willing to redirect contributions that are not deemed acceptable as direct expenditures into acceptable direct expenses?

3822 MR. ROE: Yes, we would. I have a list here somewhere of the costs.

3823 Talent search we figure is going to be about $3,000 spent, just on places to host it, equipment necessary for recording purposes, because we proposed on Saturdays to play the winners of the talent search on-the-air. Some of these people won't have any CDs, so this is where we are going to get some of the material to play over a-30 day period that they are in the contest to do this.

3824 The quarterly concerts, we figure about $2,500 would be initial out-of-station expenses for promoting and advertising of the concert when we do this and we will have the same expenses, recording and advertising outside, for the $5,000 for the annual concert.

3825 Now, the recording sessions we are going to do with Cedar Tree will be in the amount of around $10,000 and showcase the winners, to take them to Nashville to the CRS. This is where all the program directors and radio people for the recording companies all come down. They get a chance to hear the artist, meet them, and it is a good opportunity for an artist to get somebody underneath them to say, "Hey, we want you and now we are going to build your career". That will cost in the neighbourhood of about $10,000.

3826 We have also committed personally that we don't stop at the $30,000. If it takes more to do than $30,000 a year, we will put it in and we will do it. Right now this is the estimated cost that figure it is going to be.

3827 Part of our talent search we would bring into the top 20 Canadian countdown.

3828 Now, this will be in cooperation with some national sponsors where we hope to get this right across Canada to all Canadian radio stations. It will be on a basis of you have to be Canadian, so we are not going to discount Michelle Wright and the Shania Twains that are successful on their own, they will be on the countdown along with Megan Morrison, who is brand new, has no airplay across this country. Everybody is treated equal. There will be no U.S. artists. It has to be you are from Canada, you get a chance at the chart.

3829 This is different from every countdown that exists in this country because they always feature the American artists mixed in with the Cancon. Sound Source has offered to try to help us to put this right across Canada, promote it to all the stations.

3830 We will record it here with Jamie Warren at Cedar Tree as well. That will be a personal expense that is in our budget, not part of the Canadian Talent budget really, but it will cost us about $1,500 to $2,000 per week to do this show, and we will ask for sponsors to help cover that cost. What the sponsors don't cover, we are going to be covering on our own.

3831 That is basically what our Canadian Talent --

3832 MR. ACKHURST: If I may, because I had an oversight from the earlier part. I would like to introduce four of the artists that we have with us today who are struggling artists. If you ever have some comments, you are certainly welcome to address them to the people sitting behind me.

3833 Marty Clayton, Keith Thompson, Andrea Hartwick and Megan Morrison.

3834 COMMISSIONER WILLIAMS: Thank you, Mr. Roe and Mr. Ackhurst.

3835 MS HARTWICK: Hi. I am currently right now striving to get through the music business. I am 17. I have found that there is not enough opportunity for young artists because you can't get enough airplay. It is a shame because there is so much amazing talent in Canada, but nearly enough ways to get exposure, especially if you are starting out, such as myself and Megan Morrison.

3836 The radio station would help in so many ways like that, especially with Canadian artists.

3837 My management company right have decided that they are taking me right to the States because they feel I can get more opportunities there.

3838 MS MORRISON: My name is Megan Morrison, I am a 14-year-old independent country music artist and I am in the process of releasing my third single, "The Radio".

3839 This past spring, I was nominated as the Future Star of the Year by the Ontario Country Performers Fan Association, and just recently I showcased during the Canadian Country Music Week in Calgary, Alberta. In spite of all these accomplishments, it is still very hard for me as an independent artist to be played on a BDS radio station.

3840 BDS stations tend to favour the signed artists because of the majority of them coming from the United States. The rural route areas of Canada still make radio their every day format and Kitchener-Waterloo needs one to fill the country and community void that is lacking in the K-W area.

3841 This city is set in the middle of a large agricultural cultural area and it is still both a striving livestock sales arena and farmers market. Its feet are still firmly planted in country soil.

3842 There needs a station to help support its country and community roots, a radio station like many other community radio stations that supports the Canadian independent country music artists. It is only through stations such as is being proposed here that our Canadian rural and community heritage can be preserved.

3843 Thank you for your time.

0905

3844 COMMISSIONER WILLIAMS: Please proceed. We will hear the other two as well.

3845 MR. THOMPSON: Great. I'm happy to be here. It is not very often we get a chance to voice our opinions to CRTC directly.

3846 I am Keith Thompson, I live in Guelph, Ontario. I was fortunate enough to be involved with CKGL and CHYM years back before they did the switchover and I actually won a contest on both stations. That is one of the things that is missing in this region, local support, local news.

3847 Anyone that knows me knows that I don't give my support lightly. When I heard this station coming into this area I was behind it 110 per cent and will continue to do so.

3848 Thanks for your time.

3849 MS CLAYTON: Hi. My name is Marty Clayton and I am not an artist. I have a country Web site that is one of the largest country music Web sites in Canada, "thatscountry.com". I own and I operate it.

3850 In my experience the last three year in doing "thatscountry", I come across independent artists every day that phone me and ask me, "Well, I have showcased, I have my album, I think it is a good product and where do I go from here? Nobody wants to play it. I have sent it to all the radio stations, I have done everything that I possibly can to showcase myself. Where do I go from here?"

3851 There is no quick answer to give them because there really isn't that much support for independent Canadian artists in Canada. This station is trying to go 110 per cent to support the independent Canadian artists, as well as the Canadian artists that are signed, and I find that this is a very good thing for Canadian country music.

3852 COMMISSIONER WILLIAMS: Thank you. Thank you all.

3853 Okay, Mr. Roe I am going to move into the area of clarifying some aspects of your business plan.

3854 Three of the competing applicants at this hearing propose a country or new country format station for Kitchener. The three applicants propose a CHR or urban top 40 format station.

3855 Could you please explain why you believe that a new country format is a better format for the Kitchener market than the CHR format?

3856 MR. ROE: My history goes back to 1965. There was a gentleman here in the community that had a country show that ran five nights a week and five hours on Saturday. That was the only country outlet. The gentleman that ran that show was immensely popular and I learned at that time that country mucic was just absolutely awesome in this area. Before I started working at CKKW, I hardly ever heard of country.

3857 Well, they had talent searches out of the outlying hotels. They would go to these pubs on Thursday nights every couple of weeks and hold the talent searches and people were coming from every which direction. That popularity has been here, it is part of its roots.

3858 Stars like Garry Buck had a local TV show with CKCO that was successful nationally. There is many -- Mersey Brothers. They had a recording studio up in Elmira for a good number of years. They brought country acts even from the U.S. to come up here and record with Canadian artists.

3859 The community has always been behind country music. Both the major radio stations, CKKW and CHYM, they would play the popular music of the day, but they seemed to always meld country music into their format all day long. It was that way up through until mid 1970's. CKGL went off the air on FM in the early 1990's and it was number one in the full coverage area and number two in the central market area continually, solid as a rock, and it had a real support to country music.

3860 This void has been here in this area. There was no country stations getting in here. CHAM would come in in the daytime to a point, with a little bit of noise and whistle, but at night when they changed pattern it was gone and that was it. That was the only country music that has been here for the last five years.

3861 When I looked at this market, I knew that country was certainly the way to go. It is just one of the gut feelings that you have talking to people and they say, "We haven't got a country radio station". There are not a lot of communities that they turn around and say, "Well we need this".

3862 The people do CHR, it amounts to about 5 per cent of the population under 25 in this area. It swells a little bit when the universities are here, but when you get into it, you look at it, you don't see the cry or the quiet rumbling from the community that country music sort of fits. It blends in, it works for everybody, 25-64, if you do it right. You don't just sit there and say, "Oh, that's rock n' roll, that is CHR, I don't listen to that, I listen to this."

3863 Country music seems to gather everybody at one time or another. It is not a format that is just one type of person. Everybody at this table probably listens to a little bit of country once in a while when they are tuning around the dial. Kitchener-Waterloo is typical of that, as any other market in the areas of Canada.

3864 COMMISSIONER WILLIAMS: You maintain that your proposed new country format station would repatriate a portion of the out-of-market tuning by Kitchener listeners who currently listen to out-of-market country and rock stations.

3865 Would you be able to estimate the percentage of your proposed station's advertising revenues that would be attributable to this repatriated listening audience?

3866 MR. ROE: I will ask Jim Craig to take that question.

3867 MR. CRAIG: Right now the out-of-town tuning is roughly 57 per cent.

3868 I think it has been certainly explained prior and there is no doubt that with the ground swell of support to country music through listenership in this area and that proven support in the past, that certainly if a new country station was licensed for this market that an awful lot of people who, number one, don't have really any country station to listen to these days would finally have something that they can tune into, and those who do listen elsewhere would certainly want to listen locally, because, as it has been said before, local wins.

3869 That impacts very heavily on the advertisers. There are a lot of advertisers in and around this market. This is an interesting city. It is an industrial centre, it is a centre of -- has been of insurance and auto industry manufacturing, the tire industry, et cetera, et cetera, over a good many years and also a centre of education. There are a lot of educational institutions in this market. But it is right smack dab in the middle of a very vital rural area of Ontario and there are a lot of businesses in Kitchener-Waterloo and in the surrounding area that would like to reach this audience which hasn't necessarily been reachable for some time now through a country radio station.

3870 So the impact, there is no doubt that there would be good impact financially in terms of revenue given to this station and good revenues provided to this station as a result of a country format.

3871 MR. ROE: One part of the question you asked, listeners. Last we looked, CHAM had a 4.4 share in the Kitchener area. Their signal is not the best. We think we will get that 4.4 right off the top, no problem.

3872 There was a reason to add on 95.3 in Hamilton under the country. That, the best of our calculations, they are playing 200 tunes continually over and over and people are now complaining that they hear the same thing every day, the same music. It is geared to Toronto. They sell -- their advertising rates are to the Toronto market and they talk Toronto, it "Toronto this, Toronto that". It is a Hamilton station and it has a good signal here, but they don't service this area, look at this area, or they don't even look at the Hamilton area.

3873 Kitchener-Waterloo is kind of a clannish little type community. They do get behind a local business in this town, and we feel we will be in the same situation here, that once we get up and running they will get in and support us and we will get that 4.4 share with no problem.

3874 MR. CRAIG: As a local country radio station, that 4.4 share will certainly be augmented and we expect that we would run somewhere between an 8 and 10 share within a very, very short period of going on the air, if not when we go on the air.

3875 COMMISSIONER WILLIAMS: Thank you both for that.

3876 A review of your projected operating expenses as compared to the other commercial applications for Kitchener indicates that you have the lowest expense structure overall, particularly in regard to programming. Your expense levels are also much lower than the incumbent FMs in Kitchener.

3877 How did you arrive at your operating expense projections and are you confident you can compete at that expense level?

3878 MR. ROE: I will just get that section out here. We put everything --

--- Pause

3879 MR. ROE: The revenue we looked at, but we have the sales advertising promotion and our administration, we pulled that together.

3880 Our set up, the way we have it, is a little unique from any other applicant here at the table in this hearing. We have no heat, hydro, rent, taxes, none of the sundry items that everybody has to bear as part of their business plan.

3881 COMMISSIONER WILLIAMS: You have them, just they are just being paid for by others.

3882 MR. ROE: Well, okay. We are gaining extra income out of this deal. Ed is a generous man.

--- Laughter / Rires

3883 MR. ROE: The way we have set it up we have got roughly $200,000-$250,000 coming to us right off the top just from rents in the building we are in. So we put that money right into people. The money, if you total the two together, is $550,000. That is going straight into the talent for the radio station and the sundry items we will take it from there. That figure is just actual bodies working in the radio station to make everything happen.

3884 Our equipment, through Mario Pratola is done, finished, bought and paid for. We have no expenses in that, not even the transmitter or in the antenna, everything is looked after. So we have no debt. We are not borrowing any money and we have got an income to start day one coming in from the building.

3885 So all we have to do is get out and sell some advertising. The money is there if we want it, you know, but we think that within a couple of weeks, we will be in a cash-free positive position just on the advertising dollars you can get in this community.

3886 We didn't go overboard with our advertising dollars. To ask for a big buck. We were very low key, small amount of dollar per ad and I think that will bring in a lot of revenue anyhow just from advertisers that can't get on the local radio stations because of the rates they ask for.

3887 COMMISSIONER WILLIAMS: What is your rate in comparison to some of the market leaders?

3888 MR. ROE: Oh, we have here a quote that we had done. We asked for three quotes here from Guelph, the two Kitchener stations, and they have advertising rates as high as $200 for a 30-second commercial.

3889 We are coming in on an average of about $40. So we are certainly underpriced, but again, when they ask for that, they probably don't get it. You buy a lot of advertising and you will probably get it for half of that.

3890 So I think we are very competitive as far as rate-wise goes. We don't have the overhead to have to be looking at a higher rate.

3891 MR. CRAIG: Rae, if I can just add to that. In taking a look at the revenue picture and the rates of the other stations in the market and in the region, we settled on what we thought was a very realistic figure coming into the market as a new station, a station that won't have a track record which we need to make sure that we can attract those advertisers with proper rate structure in their advertising.

3892 So we based it on a $40 per minute average revenue coming into the station, which would translate into somewhere between a $20 and $25 30-second spot, and we projected our revenues based upon a 50 per cent sold-out position, which I think is very, very realistic based against a properly programmed clock on the radio station.

3893 Our weekly per-minute -- or our weekly count off the top that we projected was somewhere in the neighbourhood of 500 to 550 minutes of advertising a week if you extrapolate that. It makes it, I think, a realistic goal to obtain on one hand, but on the other hand it still provides for the revenues which will cover off the expenses and the lower expenses that we will enjoy.

3894 COMMISSIONER WILLIAMS: Okay. Thank you.

3895 Mr. Bauman, you are a successful businessman.

3896 MR. BAUMAN: Some people say that.

0920

3897 COMMISSIONER WILLIAMS: A patient man. At what point will you want to begin enjoying a return on investment?

3898 MR. BAUMAN: Well, everyone goes in with the expectation they are going to be successful from square one. That doesn't always happen, but I have been successful. It has happened sometimes and we just have to be optimistic in starting a new venture. That's basically it. You have to keep funding it until it can happen, but it will happen I think.

3899 COMMISSIONER WILLIAMS: So you will wait until it happens I guess.

3900 MR. BAUMAN: Well, I mean, I have other -- I am a land developer. We have other sources coming in. I guess you would class me like a person that has five radio stations, one isn't successful and it is subsidized by the other four. I guess you would look at it that way with me only I am in a different field.

3901 That was one of the reasons that attracted me into the radio industry was not only because of being involved back in the 1950s and knowing a little bit about radio then when I was on the radar, at the new lines and stuff, but I would like to diversify my portfolio because I am a landlord, I am a construction builder, I build commercial buildings, I do banks.

3902 That is the type of field I am in and I think I should get in and diversify my portfolio, like they say in the media. So that's why I am here.

3903 COMMISSIONER LANGFORD: Be careful, he will try to sell you his boat if he finds out you are trying to diversify.

--- Laughter / Rires

3904 COMMISSIONER WILLIAMS: Mr. Roe, in your opinion, would the Kitchener radio market be able to support both a new CHR station and a new country station? Other members of the Panel can contribute as well.

3905 MR. ROE: Not that I would like to see it that way, but I think it could.

3906 Kitchener-Waterloo has been a unique market. In 1958 CKKW went on the air and prior to that the only station here was CKCR. Ever since that day this market is like a teeter-totter. If CKCR -- now CHYM -- would sell out in a particular week, CKKW, I know that they would almost sell out the same week as well, because if you can't get on here you just go over here. You always took second choice. It went back and forth, CKKW would --

3907 There was always people waiting to advertise on the radio. A lot of times people were turned down and, being competitive, CHR has a demographic that is appealing to a younger audience. We are going for a broader 25,-64 and with the advertisers there is our advertisers and there is young advertisers. I think it would work out. We are not going to be going after the same animal for advertising dollars as what a CHR is.

3908 THE CRAIG: I would say that the key to all of this is the fact that we would be presenting a new service which is unique against the other radio stations in the market, filling a void that is there, so we would not necessarily be touching, in terms of our revenue base, a large portion of the advertising dollars that the current radio stations glean. We would be kind of an add-on to the market with very minimal impact on the revenues of the other stations.

3909 A CHR station, there is room for a top 40/CHR station too in the mix, although they will probably impact much more severely, as you have heard before here, on the existing radio stations in the market.

3910 The same thing with a Christian license, a low-powered Christian licence. If that was let in this market, they would be very much in the same position that we would be in, that they would not be competing directly with the other radio station on a heavy overlap for both their audience and their revenues.

3911 COMMISSIONER WILLIAMS: Thank you.

3912 We are now moving into the area of best use of frequency.

3913 As you know, your application for the use of FM frequency 99.5 is competitive and technically mutually exclusive with four other applications at this hearing. Under this scenario, the Commission seeks the competitors views to assist it in deciding which applicant has proposed the best use of frequency.

3914 What, in your view, are the compelling reasons to grant you the requested frequency and in what ways does your proposal constitute the best use of frequency spectrum?

3915 MR. ACKHURST: I will talk about the programming and the essence and the spirit of the radio station and I will let Ed talk about the technical.

3916 MR. ROE: Me.

3917 MR. ACKHURST: I'm sorry, Rae.

3918 We will be so different from any of the other radio stations in this market. We are going to be a full-service radio station. We are not sitting there with the stopwatch in our hand over top of the announcers saying "You have ten seconds to talk". We are looking at a full-service radio station where the announcers -- the live announcers will be talking and interrelating to the audience in the K-W market.

3919 We have more extensive spoken word programming than the other applicants.

3920 Our music will be very different from the other applicants.

3921 Finally, we know the market because these people live here.

3922 Rae, do you want to talk about the technical?

3923 MR. ROE: On the technical, as you know we put this in July of 2001 and I think I drove the CRTC absolutely nuts with changing frequencies left, right and centre, but you run into a brick wall you just turn around and go another direction.,

3924 We initially went on 93.9. It was a very good frequency and it does work out very well, but when you are dealing with the 800 pound gorilla, the CBC, right next to you and you have to get their permission, they just weren't going to give an inch on their ground and so we had to move on to 99.5 as the best use of frequency we could find.

3925 It is a nice 6,000 watt full "A" pattern. We are at 581 watts, but we are 520 feet too in the air, so we don't have to have a big transmitter and a lot of power to get a full-service FM.

3926 We have identified an omnidirectional signal, with co-operational of another broadcaster. We suggested a new frequency for them and it seemed to resolve a lot of problems for them.

3927 We were hoping at this point to be able to say, "Well, our second choice is going to be, there it is, but Mr. Sawyer is down with pneumonia, he has been down for about three weeks now and we are at the point of, it is now ready to go to Industry Canada for the other broadcaster. Should that happen, should everything go through and be approved -- and we kind of think it will because it fixes a technical problem that this other broadcaster has -- there is an omnidirectional signal for up to 10,000 watts available in the Kitchener-Waterloo area.

3928 We found that by just playing around with it. We had lots of time on our hands. We have been sitting around for 15 months waiting to get to this point, so we are always looking to improve everything that we could do.

3929 Same thing we worked with Ed. Initially we were going to go in one building and we found that it was better to go to another building. We have done the same thing frequencies.

3930 Of all the ones I see here, I think 99.5 I would say is the number one frequency that anybody could go for. This would be the prime frequency. There are four of us fighting for it and I can see why.

3931 COMMISSIONER WILLIAMS: Why you, I guess is my question.

3932 MR. ROE: Why us?

3933 COMMISSIONER WILLIAMS: Yes. Why are you the best use of it?

3934 MR. ROE: Well, we are going to do a -- we are totally local. There is no hairs on this application as far as living in Toronto and operating the station down in Kitchener-Waterloo, and we are not way up north and have to travel half the day to get here. We will open that door. We stand out on the sidewalk and anybody can get to us, "Hey, there is the owner of the station." That is exactly what we put together.

3935 We are accountable to our listeners, to our advertisers. We are here, we live here, we are here every day. As Ed is busy in other businesses and everything else, you know, he will be in there every day, whether it is 10 minutes one day and three hours the next day, everybody else will be there. We are going to be here. We are from the community.

3936 That was some of the joys that when Electrohome owned CFCA or CKKW, you knew you could phone up Bill McGregor and say, "I didn't like that show" or "I don't like that" and he would listen to you and talk to you. You can't phone up the big boys and get through to the head guy and say, "Hey, I didn't like that". You have to fight a cast of thousands to get there.

3937 That is what makes us different from everybody else, we are local. We are behind Canadian talent because it is here. It lives in this community. It is all around us. We have a wealth of Canadian talent that we put on the air and 40 per cent is easy to meet. There is not a problem with that, because we are talking people we live with that we are going to be putting on the air, plus other people across Canada.

3938 I think we are the only ones who are really going in that direction. Country we know is the format that Kitchener misses. It was successful, it was here, we are going to bring it back.

3939 COMMISSIONER WILLIAMS: Maybe just one other question on your building.

3940 Has the balance of the space been rented?

3941 MR. BAUMAN: No. We don't know what we need yet. We have tenants that are there, there are churches and stuff that are renting to a degree, but they wouldn't probably be staying in there if the radio station got it. They are using the space that -- some of the spaces are being used where the station could go and they are either going to have to move to a different section or maybe move out.

3942 Right now there is some tenants that are not paying the rent. That guy upstairs has been good to me so I have to be good to him.

--- Laughter / Rires

3943 COMMISSIONER WILLIAMS: Your next guys aren't paying the rent either.

3944 MR. BAUMAN: I'm sorry.

0935

3945 COMMISSIONER WILLIAMS: The radio station doesn't intend to pay the rent either.

3946 MR. BAUMAN: They will pay. They will pay.

--- Laughter / Rires

3947 MR. ROE: The other thing too, is the rent that is going to be going with this building is $12 a square foot, way under market value. Average is about $18 to $20 a square foot.

3948 We have enquiries now. They know that we are possibly going to have a radio station and they are saying, "That is a good place to be", you know. They are asking for space and "Can we get in"? We are saying, "Well, just wait and see. We will talk later".

3949 We are building a list. It will be rented very shortly as soon as we move in.

3950 COMMISSIONER WILLIAMS: Okay. Thank you very much.

3951 I know some of the other Members and our Chair have a couple of questions on part of your plan and I will turn you back to our Chair.

3952 Madam Chair?

3953 THE CHAIRPERSON: Thank you, gentlemen.

3954 I have a question regarding your Canadian content.

3955 You stated in your presentation today that the Canadian content would be 40 per cent.

3956 MR. ROE: That's correct.

3957 THE CHAIRPERSON: Can you help me out, point us to where in your application you refer to 40 per cent Canadian content?

3958 MR. ROE: When we did the application I went to file it and I phoned up and I said "Could you send me the package down for an application?" They said "Yes, no problem." I got a call back a day or so later and they said, "I think maybe we have our computer thing up, will you file electronically?" I said "Yes, I guess we could do that". So we filed electronically.

3959 I don't think that we mentioned the Canadian talent in it. There was nothing specific in the application form that said Canadian talent, what the percentage is.

3960 THE CHAIRPERSON: Not talent, Canadian Content --

3961 MR. ROE: Content.

3962 THE CHAIRPERSON:  -- of 40 per cent.

3963 MR. ROE: Yes. There was nothing in there and I don't think we did mention it in our supplementary brief. We assumed that that would be just like, "Well, they are going with what the regulation is more or less."

3964 As we looked at this -- and Bill, you know, said, "Let me help you guys, get involved, and he started working on this. He talked to broadcasters all over this country in country radio and record companies and the whole bit. Bill came back to us and he says, "What are you doing for Canadian talent? I said, "Well, the regulation is 35 per cent". He said "Well, I have a problem there. It is working out to 40 per cent. Does that matter?" I said "Oh, heck, no. Do it."

3965 Bill can explain how he put it all together as far as 40 per cent, but he has recommended to us 2, 4, 7, keep it all the same.

3966 THE CHAIRPERSON: Well, thank you. I think we have had enough discussion on the actual country music content and the 40 per cent viability. My question is really procedural --

3967 MR. ROE: Okay.

3968 THE CHAIRPERSON: -- in the sense that for the public record what we have on record is the 35 per cent, assumed to be the minimum requirement, and you have tabled new information today.

3969 So I just wanted to alert you to the fact that it is new information and as such other applicants should have the opportunity to comment on it as such, as new information, and counsel may have some further comment.

3970 MR. ROE: Okay.

3971 THE CHAIRPERSON: But you should be aware that the Commission has the option of looking at your application as originally filed or taking into consideration your proposal for 40 per cent today.

3972 MR. ROE: Okay.

3973 THE CHAIRPERSON: So just so that you are aware, there is a procedural point that we have to take into consideration here.

3974 MR. ROE: Okay.

3975 THE CHAIRPERSON: I have another question on cultural diversity.

3976 As you know, the commercial radio policy encourages broadcasters to reflect cultural diversity of Canada in their programming and employment practices, especially with regard to news, music and promotion of Canadian artists.

3977 Can you tell the Panel what measures you would take to incorporate and reflect the reality of Canada's cultural, ethnic, racial and aboriginal diversity in the following areas: Employment practices, news, music and promotion of Canadian artists?

3978 MR. ACKHURST: We see a radio station as very similar to being a mirror. If we hold up a big mirror to the residents of the community, the successful radio station will totally reflect that vista of the community in that mirror.

3979 That is how the station can be extremely successful in all aspects of the operation.

3980 That is the philosophical opening and then I will ask Jim to comment further.

3981 MR. CRAIG: Well, of course we would obviously comply with the policies of the Commission. Of course documentation has been filed regarding employment equity, but just for the record, male-female gender-related employment practices, I can't see any reason why there would be anything but an appropriate split in male-female, the gender side of it, dependant of course upon talent and skills required.

3982 Race, ethnicity and cultural factors in our hiring, it goes without saying that I think like anyone else across the country these days, if I can use the expression, we are all colour blind. We don't take into consideration any bias or tolerate any bias when it comes to race, ethnicity and cultural factors in our hiring practices.

3983 As someone who teaches within the educational community new broadcasters coming up, it is a very diverse group of young people who are coming into the business and those who are in the business now, younger people who are in the business, certainly they reflect the diversity that we enjoy across the country.

3984 In terms of aboriginal hiring and music, et cetera, there is a very rich and growing tradition in country music on the aboriginal side. Of course we have the Aboriginal Television Network which is in place. You folks have been grappling with the Aboriginal Voices Radio side of things over the past few years, and there is a very large proportion of country music artists who fall within the aboriginal categorization culturally and racially.

3985 I can speak for myself. My father was a fiddler in this market many years ago and I pounded the piano until my thumbs bled in bands that he had, which included at that time aboriginal artists who were performing along with us. From those beginnings, that area of music, Canadian country music has certainly grown by leaps and bounds.

3986 I am also fortunate to have some very close direct connection with that community through my sons partner who is, she is the co -- I'm sorry, the Associate Director of the Canadian Aboriginal Awards, the 10th Anniversary awards coming up on the CBC in the spring, and she and I have talked about the advent of the aboriginal population within the music industry.

3987 She is an opera singer and recently sang for the Queen at the Roy Thomson Hall. She was the person who sang the National Anthem.

3988 So I don't think that we would have any difficulty whatsoever reflecting the realities and the spirit of what you are looking for.

3989 THE CHAIRPERSON: Thank you very much.

3990 You understand the importance of the area. You did mention your employment equity program --

3991 THE CHAIRPERSON: Absolutely.

3992 THE CHAIRPERSON:  -- and also in the area of music and promotion.

3993 Clearly what we are looking for is a specific business approach that would assure that that diversity was reflected, not only in music but in on-air personality.

3994 MR. CRAIG: There is no question that we would -- we can certainly assure you of that.

3995 THE CHAIRPERSON: Thank you very much.

3996 Counsel?

3997 MR. WILSON: Thank you Madam Chair. I have a couple of questions.

3998 In your presentation this morning, you referred to playing some music that came from the roots of country music. As I'm sure you are aware, a number of country formatted stations across Canada complement their regular music programming with specialty music programming, often consisting of either traditional bluegrass, old-time country or some combination of both.

3999 Are you contemplating offering any of this type of specialty music programming on your proposed station?

4000 MR. CRAIG: Absolutely.

4001 If I can just take the lead on this, because of what we have outlined here from a music programming standpoint, this will not be a new country radio station. This will be a contemporary radio station with a mix of, let's call it, some classic country that will come into the picture, which certainly makes us a lot different from the one applicant that you have heard already, and I would suspect from the other applicant.

4002 Because of that, I am not certainly going to sit here and say it is not appropriate for us to have that kind of programming in our mix. Absolutely it is appropriate, because of the type of radio station that this will be.

4003 Bill?

4004 MR. HARMAN: We have had the privilege of looking at a circle the country music has taken in the last 20 years. Yesterday it was noted that country music started to peak in the late 1980s and it has also been noted that country music, as it is presented today, had some trouble in the mid to latter part of the 1990s.

4005 As these cycles come around, and every cycle does come around, they do for a reason. Most of the reason is that the modern country radio station has squeezed itself out of its soul and its passion. It has become a lifeless entity. Most radio stations do that. They start out with something very good, something live, something that lives and breathes and they research it down to the low common denominator.

4006 I had a privilege to look at this particular situation with a lot of other people, including some people in Nashville, some people at CMT hierarchy in the United States and we are watching country start to fragment itself. There are the new country radio stations that don't play a song much more than three years old. There are mainstream country radio stations coming out now that will play a wider mix of music. We are starting to get some classic country radio stations come out.

4007 One of the things that we want to propose is -- and this goes back, I think, to the Chairman's question a couple of moments ago about diversity in our music.

4008 We will probably be the best applicant to fit a wider range of music. We watched country cross over into AC. Why can't some of the AC stuff that started country come back to our radio station? Why can't we play a legend every now and then? You can't tell me that there is not an Elvis or a Bellamy Brothers tune that cannot be on the air and put into the mix properly of doing that.

4009 We also propose playing some people who have no radio home, a Mary Chapin-Carpenter, a Steve Earle, somebody who has country roots, has a large audience, but they don't get played on radio. We propose that we can fit all these in comfortably and do it quite well.

4010 So I think our diversity is hands and feet above anybody else who has applied for this kind of format.

4011 MR. CRAIG: I think also we should be specific on some of the Category 3 considerations. Absolutely we would be examining a country gospel show, we would be examining the potential of a bluegrass show, et cetera, and we feel, again because of the diversity of the country music spectrum that we are looking at on this radio station, those types of specialty programs will fit on our radio station.

4012 MR. WILSON: As you correctly pointed out, traditional bluegrass and old-time country do qualify as Category 3 music under the Commission's current music definitions as set out in Public Notice 2002-14.

4013 The current minimum weekly regulatory requirement for Canadian content in Category 3 music is 10 per cent. What do you see as being your minimum weekly Canadian content commitment for Category 3 music?

4014 MR. CRAIG: We would have no difficulty fitting 10 per cent into the picture, but as we have talked about 40 per cent being our Canadian content, which is higher than the standard that is set by the CRTC, as we have talked about a 40 per cent, I'm not so sure. I think we would have to examine what is available out there in bluegrass and other forms of specialty country that fall under Category 3. We would certainly have to examine it.

4015 But I would suggest that certainly it would be much higher than 10 per cent. To quantify that, very difficult without taking a look at what is available out there. I know that Bill is working on certainly the gospel aspect and I believe the bluegrass too.

4016 MR. HARMAN: We are also looking at a mainstream country show and it really comes down to a matter of what Jim said, it is a matter of finding somebody who has the knowledge and the material to carry that kind of show. It is not something we want to do half-hearted.

4017 So to find those particular people with that particular material is prudent on making that kind of show successful.

4018 MR. WILSON: I have one final question.

4019 In your discussion with Commissioner Williams with respect to your business plan a great deal of discussion involved out-of-market turning. We have heard some previous applicants discuss with us in terms of out-of-market tuning the format change of CING to country from its previous CHR format. Do you foresee that that format change has any impact on your proposed business plan?

4020 MR. ROE: No. Again one statement is, Kitchener-Waterloo is a very close-knit town. CHYM here is number one in the market. At the same time they have CHFI out of Toronto, CLIT out of Hamilton, they have Guelph and CKVC coming out of Brantford, all essentially doing the same format, but they hold their number one spot. They have a 20 share.

4021 The Hamilton station, it has changed format so many times in the last four or five years that I don't even think they know what format it is going to be next year.

--- Laughter / Rires

4022 MR. ROE: They haven't even changed the call letters on the building. They still call it Energy 95.3 and the little decal that is on the front door, that you can peel off in about five seconds and put another one up, still says "Energy 95.3". So I think they are going to go back to CHR eventually. I predict that.

4023 But as far as this market here goes, a local station will do all right here. When 95.3 was a classic rock and KOOL-FM up here was doing classic rock, they tried to get in here with advertising and listenership and they -- there was out-of-market tuning, yes, but they didn't get any advertising dollars out of the area and they eventually gave up on it and headed towards the Toronto direction with their focus.

4024 They kind of leave us alone and as soon as you leave a community alone they look for the local guy to fill in.

4025 MR. ACKHURST: Yes, the comment was made yesterday that local wins. I would suggest to you that excellent local programming wins and we certainly intend to be such an intrinsic local radio station that there is no reason that anybody would want to be tuning to the Toronto/Hamilton radio station.

4026 MR. WILSON: I have no further questions, Madam Chair.

4027 THE CHAIRPERSON: Thank you, counsel.

4028 Thank you, ladies and thank you, gentlemen, for your presentations.

4029 I have 10 to 10:00, so we will reconvene at five after 10:00, taking a 15-minute break, and then hear the presentation by Larche Communications Incorporated.

4030 Thank you.

--- Upon recessing at 0950 / Suspension à 0950

--- Upon resuming at 1012 / Reprise à 1012

4031 THE CHAIRPERSON: Order, please. Thank you.

4032 Mr. Secretary.

4033 MR. LEBEL: Thank you, Madam Chair.

4034 Item 9 on the Agenda is an application by Larche Communications Incorporated on behalf of a corporation to be incorporated for a licence to operate an English-language commercial FM radio station in Kitchener.

4035 The new station would operate on frequency 99.5 megahertz, Channel 258B, with an effective radiated power of 3,900 watts. The applicant proposes a country music format.

4036 You have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

4037 MR. LARCHE: Thank you.

4038 Good morning, Madam Chair and good morning Commissioners, good morning CRTC staff. My name is Paul Larche. I am President of Larche Communications Inc., or "LCI" for short. It is my honour and privileged to be here before you today presenting an application for a new FM radio station here in Kitchener.

4039 I would like to introduce my panel. Joining me, to my immediate left, is our station manager from Midland, Mora Austin. Mora has worked with CICZ for 15 years.

4040 Next to Mora Derm Carnduff. We are very proud of Derm. Derm has won the CCMA's Music Director of the Year Award for secondary market for three of the past four years.

4041 Next to Derm is our General Sales Manager, Ron Funnell, who hails originally from this area.

4042 Sitting behind us, I am very proud to introduce Jason McCoy -- he is the one with the short hair. Jason McCoy is at the top of his field in country music in Canada. Last year he won the Canadian Country Music Association's Male Vocalist of the Year Award. This year he won the CCMA's Songwriter of the Year Award.

4043 Sitting next to Jason is Mr. Bob Templeton. Mr. Templeton is President of Newcap, and Newcap is a minority partner in our application.

4044 Madam Chair and Commissioners, our goal was clear when we decided to apply for this licence:

4045 We wanted to exceed and surpass the objectives of the Broadcast Act;

4046 We wanted to exceed and surpass the Commission's expectations and criteria;

4047 We wanted to exceed and surpass what Kitchener residents expect and deserve from their airwaves.

4048 Before we start I think it is very important that we create perspective, perspective on what the Commission has made clear it wants to see in competing applications.

4049 First, a perspective on the quality of the application, the business plan. You have made it abundantly clear that you will assess the overall business plan, including the choice of format and the programming proposals and benefits that the applicant will bring to the community.

4050 Second, a perspective on Canadian talent initiatives, the means by which the applicant will promote the development of Canadian talent, including local and regional talent; the financial contributions to CTD commensurate with the market size; and the quality and ingenuity of the initiatives.

4051 And third, a perspective on building the Canadian broadcast system, including a diversity of news voices, the capacity of the market to support a new station, the likely financial impact of the new station upon existing broadcasters, the issue of competitive balance in a market, and, finally, the Commission's desire to ensure small, independent broadcasters can survive and thrive in a world of constant consolidation.

4052 I believe we have interpreted these perspectives correctly, and I believe we have the deliverables to meet your criteria in spades.

4053 So let's start with our business plan and I will turn it over to Derm.

4054 MR. CARNDUFF: Thank you, Paul.

4055 Good morning, Commissioners. We are applying for a country music station right here in Kitchener. I want to make it clear that we applied for a country music station based on detailed research and analysis of the needs of the market. We entered into this project with eyes wide open. In fact, we commissioned not one, but two research studies. These studies didn't merely test the interest in country music, but started with a look at all the formats possible.

4056 Mark Kassoff & Company Research Group questioned 400 residents regarding the full range of formats. Research-Director.com Ltd. closely analyzed BBM results to look for holes, underserved groups and out-of-market tuning. Both research companies recommended a country music station, which we felt very good about because we do know the format intimately.

4057 The Kassoff study made it clear that country was, by far, the most underserved format in Kitchener-Waterloo.

4058 The RDC BBM study indicated that country music's target demographic 35 to 64 was the most underserved in the market. BBM analysis also revealed that CHAM-AM from Hamilton was the third most listened to country station -- or the third most listened to station in the market by persons 18 and over. This of course meant that a new local country station would repatriate the most out-of-market tuning.

4059 The new station we are applying for will be called KICX 99.5 FM, branded in the same way as our Midland operation CICZ, which we call KICX 104 FM. But KICX 99.5 won't be a rebroadcaster of our Midland operation. Far from it. The larger market size of Kitchener will permit us to build on the knowledge of the format that we already have and to exceed the high standard of excellence that our current station provides.

4060 KICX 99.5 FM will feature the best in country music from the 198Os, the 1990s and from today. Core artists will include Shania Twain, Garth Brooks, Paul Brandt, Allan Jackson, Terri Clark and, of course, Jason McCoy. Approximately 50 per cent of our selection will be current. However, heritage country artists like Patsy Cline and Anne Murray will definitely find a home on our station.

4061 We will place a special emphasis on Canadian country music. That is why we have proposed as a condition of license a minimum 40 per cent Canadian content.

4062 We will also feature Canadian artists in a number of very special ways. For example, each week we will broadcast 28 vignettes on the Canadian artists that we have added to our playlist. We will also broadcast a weekly Canadian country countdown show.

4063 Our non-music programming, in a nutshell, will be local, local and more local. This is what has made us successful in central Ontario, and this is what will make us successful here in the Kitchener-Waterloo market.

4064 For example, we will program six times per day special local vignettes called "Focus on Kitchener". They will feature a wide range of local topics and aim to reflect the cultural diversity of the region. We will also offer comprehensive recreation and tourism reports throughout the year and our community cruisers will be present at many community events for live broadcasts.

4065 In addition, the station will make available space on its Web site for community organizations, as well as providing a sophisticated voice-mail system which will also direct callers to local events.

4066 KICX 99.5 FM will offer a new and diverse news voice to the Kitchener-Waterloo market. With six new journalists, we will provide a comprehensive news service, broadcasting over four hours of news per week. The news will be supplemented by local sports, local weather and traffic throughout the broadcast day.

4067 And as an added benefit, we will cross-promote news, public events and tourist attractions between our Midland and Kitchener operations.

4068 Thank you.

4069 MS AUSTIN: Madam Chair and Commissioners, I have worked at CICZ 104 FM, which originally was CKMP-AM for 15 years. Prior to Paul's purchase of the station and an increase in power in 1997, I can honestly tell you we were in bad shape. We only had a staff of six, we were losing revenue and money, let alone morale.

4070 These past six years have seen a tremendous turnaround under Paul's leadership. First and foremost, we are profitable. Our staff has increased to over 20. Our revenues have more than tripled. Our Station has gone from last place to first place in hours tuned in the Barrie extended market adults 18-plus. That includes Midland, Orillia and Barrie.

4071 We have done this through a combination of high quality programming, aggressive marketing and strong community involvement.

4072 In 1999, our station was chosen as the Ontario Association of Broadcaster's Station of the Year, and this past September our station won the Canadian Country Music Association's Station of the Year for Secondary Market. This was the first time in over 10 years that the award has come to Ontario and I can tell you, it was the proudest day of my career.

4073 So at the risk that I am sounding like I am trying to secure my future, you should know a little bit more about Paul Larche.

4074 Although he is still in his early 40s he has over 27 years experience in radio throughout many markets in Ontario, including Timmins, Sudbury, Orillia and Toronto. He is the current President of the Ontario Association of Broadcasters and he is also on the CAB's Radio Board. Paul is a true broadcaster in every sense of the word. His staff and peers respect and admire him. He believes in rewarding his people both promotionally and financially and our profit sharing programs exhibit his generous character.

4075 I speak on behalf of the entire staff when I say that Paul has taught us all so very much, so much about running a profitable business, so much about managing and coaching, so much about serving our communities with the same dedication and passion we all have for the sometimes zany business we call radio.

4076 Paul wants our company to grow. He wants to give his employees an opportunity to grow as well, that is why we are here today.

4077 We are ready. We have shown ourselves and this industry that despite being an independent with only one station, we can be one of the best in the country.

4078 MR. LARCHE: Thanks, Mora. Your job is quite secure after that.

--- Laughter / Rires

4079 MR. LARCHE: To ensure LCI had all the resources needed to compete in a large market against two of Canada's biggest and best broadcast companies, I decided to take on a minority partner that would best fit this strategy. I have a lot of respect for Newcap. They have extensive experience at running successful country stations, therefore bringing a lot of programming and marketing expertise to our application. I also believe that the alliance will provide a wider window for some of our proposed CTD initiatives, allowing southwestern and central Ontario artists exposure in Atlantic Canada and in Alberta.

4080 But make no mistake, I am clearly the controlling shareholder of this application. Newcap is involved as an investor in what they believe to be a good business opportunity.

4081 I would now like to ask Jason McCoy, who is a good friend of ours, to say a few words about our company and our station.

4082 Jason?

4083 MR. McCOY: Thank you, Paul.

4084 Madam Chair and Commissioners, it is my pleasure to be here today to support LCI's application for a country music station in Kitchener.

4085 I hail from the local broadcast area of KICX 104 FM and they have been extremely supportive of my career from the beginning. In fact, their support of Canadian talent in general is exceptional. For example, they have had myself and several other Canadian artists, including Beverly Mahood, Jamie Warren and Farmer's Daughter, perform songs at the Barrie Colts hockey games between periods. This provides an excellent opportunity to expose Canadian country music to a captive audience.

4086 They constantly have artists, both established and new, in their studios for live interviews and performances. They also put there money where their mouth is and take the financial risk of putting on their own Canadian country concerts in the region.

4087 They promote upcoming talent through their StarQuest talent search, the best contest I have seen in the province.

4088 In case you are wondering about my hair, or lack of it, the story behind this is an excellent example of the work LCI does to promote Canadian artists and help the community.

4089 I approached KICX a couple of months ago and I offered to have my head shaved to raise funds for the Grieving Children at Seasons Centre and the Royal Victoria Hospital Cancer Centre in Barrie. KICX ran with the idea. In fact, it held a one-day radiothon to take pledges for the event.

4090 Derm Carnduff, who is sitting on this panel, also agreed to have his legs waxed for the cause -- not shaved, but waxed. Very painful.

--- Laughter / Rires

4091 MR. McCOY: We held the shaving and waxing event in front of a sold-out crowd on October 11th, and I am very happy to report that we raised over $33,000 for the Seasons Centre. This was overwhelming, as our original goal was $10,000.

4092 This is typical of the work KICX does in central Ontario and will undoubtedly do here in the Kitchener-Waterloo area.

4093 Mr. LARCHE: Thanks, Jason. Glad to see the hair is coming back.

--- Laughter / Rires

4094 MR. LARCHE: When we started putting this application together we wanted to make absolutely sure that our initiatives would be meaningful, especially to the stakeholders, so we approached a cross-section of people in the country music industry, including established and non-established artists. We approached associations, producers and recording professionals. This blue ribbon group became our Canadian Talent Development Advisory Board.

4095 I do want to make it clear that the Board was put together for input and not necessarily as an exclusive endorsement of our application.

4096 This consultation resulted in a comprehensive and ambitious series of CTD initiatives.

4097 A total of over $1 million over the seven years will be spent on arms' length third party CTD initiatives, and a further $175,000 will be spent on other initiatives.

4098 In the spirit of the Commission's CTD plan, these funds will support country artists nationally, provincially and locally.

4099 Nationally, we will provide funding to the Canadian Country Music Association for two initiatives, including $140,000 for their new artist development program and $70,000 to develop and maintain a Canadian country music artist's merchandising section on the CCMA Web site.

4100 We will also contribute $280,000 to the CAB's successful Starmaker Fund.

4101 Provincially, FACTOR will receive $315,000, and they have agreed to earmark these funds exclusively for Ontario country artists.

4102 Locally, the Ontario Country Music Performers and Fans Association will receive $210,000 to conduct four one-day music industry seminars per year at Conestoga College right here in Kitchener. These seminars will be made available at no charge to aspiring artists, songwriters and musicians. The curriculum will cover all facets of the music industry.

4103 Our initiatives are not limited to these activities alone. We will also spend money using internal resources to supplement our contribution.

4104 To assist in the development of aboriginal broadcasting talent, we have earmarked $70,000 for an aboriginal apprenticeship initiative which will provide a young aboriginal broadcaster a summer internship at our station.

4105 We will also spend $70,000 to conduct StarQuest, modeled after the same award-winning talent contest in Midland.

4106 Again borrowing a good idea from our home market, we will devote a minimum of $35,000 on hiring Canadian country music artists to perform at Kitchener Rangers Junior "A" hockey games.

4107 Finally, in conjunction with Cedar Tree Studios in Kitchener, the station will produce a live-to-tape studio performance by a Canadian country artist in front of a studio audience on a minimum quarterly basis. The recorded performance will be aired by our own stations, the Newcap country stations, and will be made available to other country music stations. We believe that this is good use of local producers and production facilities.

4108 We believe that these are truly outstanding CTD initiatives that exceed and surpass the Commission's CTD plan.

4109 Now let's turn to strengthening our broadcast system.

4110 To discuss the market and the impact our proposed station would have, I would like to turn it over to Ron Funnell.

1030

4111 MR. FUNNELL: Thank you, Paul.

4112 Good day, Madam Chair and Commissioners.

4113 As every applicant at this hearing has pointed out, the market, made up of Kitchener, Waterloo and Cambridge, and also known as the Technology Triangle, is one of Canada's strongest economic performers. The statistics that the Commission put on file demonstrate that the radio market is also amongst the most profitable in Canada at an aggregate level.

4114 We believe our financial projections are realistic and proportionate to the market's size and dynamics. They are based on our experience and solid research. There is ample opportunity for a new station to grow with minimal impact on what are already quite profitable stations.

4115 As we outlined in Schedule 13 of our application, even with the introduction of KICX 99.5 the existing stations will continue to enjoy above average revenue and profit growth in coming years.

4116 Introduction of our proposed station will also have minimal impact on the audience numbers of the current stations. As a niche format, our application and research clearly demonstrates that most of our listening will be through the repatriation of out-of-market tuning.

4117 It is also noteworthy to point out that our application will introduce a new competitor to the marketplace, as well as a new editorial voice.

4118 Thank you.

4119 MR. LARCHE: Thanks, Ron.

4120 In this time of constant consolidation, radio station ownership is changing very quickly. Independent broadcasters are becoming rare, which is really no surprise. The larger companies, with their considerable financial and human resources, can make it very difficult for an independent to survive, especially if they decide to go head-on in a competitive market.

4121 Some can afford to lose money for years, as you have seen. Independent broadcasters cannot, particularly if you only have one station as I do.

4122 LCI is being proactive with this application. We are positioning ourselves for long-term growth. The considerable financial commitment that we have proposed for the product, and in particular programming, will greatly benefit both operations. Economies will be realized in areas such as management and accounting. Since both stations have the same format, several promotions could involve both entities. This will make LCI a stronger company. It will give us a more solid footing in this industry. It will help us survive in good and bad times, no matter how big the competitors are.

4123 In conclusion, I put forward that objective analysis of the facts will clearly demonstrate that we have, in fact, done our homework.

4124 This application exceeds and surpasses the Commission's criteria for the licensing of new radio stations.

4125 Approval of this application will fill the largest underserved format in the market, which is country, by a young group of broadcasters who are considered by their peers as the best in Canada when it comes to this format.

4126 Approval of this application will introduce a new editorial voice to the city and one that will offer extensive news and other information programming, as well as a number of additional community initiatives that will expand and the make-up and culture of this great city.

4127 Approval of this application will result in 40 per cent Canadian content and a comprehensive series of expenditures on Canadian talent totalling close to $1.2 million.

4128 Approval of this application will introduce a new competitor to the market without creating havoc on the incumbent stations, both from an audience and financial point of view. The market won't be thrown out of balance.

4129 Finally, approval of this application will allow a small radio company to get stronger, stronger to hold its own against much bigger companies, stronger to weather economic downturns, and stronger to contribute and to enhance the goals and aspirations of the Canadian Broadcast Act.

4130 Thank you.

4131 THE CHAIRPERSON: Thank you very much for your presentation.

4132 Commissioner Cram, please.

4133 COMMISSIONER CRAM: Thank you.

4134 I read your application and decided from the questions that I will be asking next I had one burning question by way of starting off.

4135 I think you may all notice eventually that Commissioner Demers is wearing a tie with dogs on it. So there are some of us who like dogs on this Panel and I want to know how dogs do laundry.

4136 You were talking in your application about this "Kiwi Group" and how the dog was doing these helping things and I really want to know how a dog does laundry.

4137 COMMISSIONER LANGFORD: Badly I would think.

--- Laughter / Rires

4138 MR. LARCHE: Wow, nice lead off question, Commissioner Cram.

--- Laughter / Rires

4139 MR. LARCHE: I honestly can't answer that because I have no idea. That is a good question.

4140 However, I would like to mention that the Kiwi Foundation is an organization that we are really proud to be involved with and support in our area. You are absolutely right, it involves the training of dogs to do some amazing things. In fact, we have had a few people from the Kiwi Foundation that have shown up at some of our live broadcasts with the dog -- one of these dogs, it was a Lab -- and as a way of demonstration they have a telephone set up, they have a cupboard set up, they have all these things that you would see in a typical kitchen set up, and they do demonstrations of how this dog can open the cupboard, can lift up the handle of the telephone, can do all of these things, but they didn't have a washing machine there so --

--- Laughter / Rires

4141 COMMISSIONER CRAM: Your brief talked about it, that is why. It was a burning question and will remain one for the rest of my life I guess.

--- Laughter / Rires

4142 COMMISSIONER LANGFORD: We have to get her some hobbies. Whoa, Barb, there is a whole side of you we didn't know about here.

--- Laughter / Rires

4143 COMMISSIONER CRAM: I would like to start with the CTD.

4144 You mentioned first with the FACTOR, the $45,000 a year. There were some discrepancies in your application. Today you talked about it being exclusively for Ontario country artists. Somewhere in your brief you talked about central Ontario artists.

4145 The commitment is just Ontario country artists, is it?

4146 MR. LARCHE: That is correct. I am just kind of leafing through our supplementary brief here while I'm answering this question.

4147 When we contacted FACTOR actually we had wanted them to see if they could commit it to local country artists in this area. FACTOR made it clear to us in their letter to us when they responded that they could only apportion it to provinces because of the administration of it. They could not apportionate to a specific region.

4148 I have my supplementary brief, page 31, FACTOR, we say that:

"FACTOR has agreed to channel these funds to country music artists in Ontario." (As read)

4149 COMMISSIONER CRAM: You have a letter that you could file?

4150 MR. LARCHE: Yes, we do. I could have that to you in 20 minutes.

4151 COMMISSIONER CRAM: By the end of the hearing.

4152 MR. LARCHE: It's up in my room.

4153 COMMISSIONER CRAM: I'm sure counsel will want it by the end of the hearing.

4154 Then there is $30,000 a year to the Ontario Country Music Performers and Fan Association.

4155 First, what is this?

4156 MR. LARCHE: I will let Derm talk a little bit about the association.

4157 MR. CARNDUFF: Thanks, Paul.

4158 The Ontario Country Music Performers and Fan Association is a provincial country music association. Whereas the Canadian Country Music Association is national, each province does have their own provincial country music association. The OCPFA, we have met with them, the president, to kind of initiate the OCPFA part of our CTD initiatives.

4159 COMMISSIONER CRAM: How big an association? How many people are there in the association? How long has it been around?

4160 MR. CARNDUFF: Prior to it being called the OCPFA it was, I believe, just called the Ontario Country Music Association.

4161 I don't know if Jason can confirm that because I'm sure he was involved with that throughout his career, Jason McCoy.

4162 I believe they have about 300 to 400 members in the province, if not more than that. It is a very active provincial Country Music Association to benefit and promote provincial country music artists.

4163 COMMISSIONER CRAM: The monies that you are giving to them are for four one-day seminars. Have they given seminars before?

4164 MR. LARCHE: No, they have not. When we said to you earlier that we put our advisory board together we, of course, had the president of this association on that advisory board. We said, "What would be meaningful to your members?" He went back to his executive and membership and they came back and said, "You know what, we have a lot of young people who are wanting to get into the business and a lot of them just aren't sure what to do."

4165 In particular with country music, through in some of my involvement with the OAB, we are also affiliated with Canadian Music Week in Toronto in March and that is a good convention for training people wanting to get into the music industry, but there is very, very little for a country performer.

4166 So what we wanted to do is, in conjunction with this group because they have the contacts and the expertise, is to allow them to pull together a cross-section of professionals in conjunction with Conestoga College to put these seminars on, like I said, on a quarterly basis. We thought it was a terrific idea and it really reflected what Canadian Talent Development is all about.

4167 COMMISSIONER CRAM: You had the breakdown of what it was going to be used for and there are 4,000 for materials.

4168 What would these materials be? Do you know?

4169 MR. LARCHE: That would be primarily things like binders and paper and workbooks that we would want them to have and to take back with them.

4170 COMMISSIONER CRAM: They would all be produced by a third party?

4171 MR. LARCHE: They will all be produced by that association in Conestoga College.

4172 COMMISSIONER CRAM: Okay.

4173 Then you are giving money to the CCMA. Please forgive me -- I repeat, I am not anti-country -- but I need some help with how long the CCMA has been around, the size, what they do.

4174 MR. LARCHE: Again I think I will pass that off to Derm.

4175 MR. CARNDUFF: The Canadian Country Music Association has been around for 25 years. They have their yearly convention, the last couple of years out in Calgary, where it a gathers all the people involved in Canadian country music, in the record company industry, the artist industry, songwriting, production, producers and radio. It is a huge organization. They have their big show on CBC every year, every September, the last couple of years from the Saddle Dome in Calgary.

4176 Membership-wise, there are thousands and thousands of people that are members, fans, artists, radio, record companies. It involves the whole industry of entertainment in country music, all aspects of it.

4177 COMMISSIONER CRAM: Again, Mr. Larche, it looks like you had the president of the CCMA on your advisory committee, along with Mr. McCoy?

4178 MR. LARCHE: That is correct.

4179 COMMISSIONER CRAM: Their suggestions, which I gather you have accepted, would be the $20,000 for the new artist initiative?

4180 MR. LARCHE: Yes.

4181 COMMISSIONER CRAM: Now, initially my impression from reading the application was that this was to start a new artist initiative, but when you were talking today it is for new artist development.

4182 Do they have something ongoing or is this a new initiative?

1045

4183 MR. LARCHE: To my understanding this is an ongoing initiative that the CCMA has. It goes to a few areas. One is artist touring grants, to subsidise Canadian artists who are touring. It also goes to showcase new artists at Canadian Music Week, as Derm said, which was just in Calgary this past September.

4184 COMMISSIONER CRAM: So the money, then, goes to the CCMA. Do they take an administrative fee off that or does that all go to new artists? Do you know?

4185 MR. LARCHE: To my understanding -- first to answer your question, we would give them all the money and, to my understanding, it would all go to their new talent fund.

4186 COMMISSIONER CRAM: Then there was another $10,000 a year for the artist merchandising site. Maybe you can explain what is happening now and what this would do.

4187 MR. LARCHE: Absolutely. Again this is something that came from the advisory board, especially from the artists and especially from the independent artists.

4188 Maybe Jason can talk to this. Mind you, Jason isn't an independent artist right now, he is with Universal, but when you are starting out in Canada, even if you are getting some level of success with radio play, it is still hard to make a living, frankly.

4189 Often these artists told us that one of the problems they have is actually generating CD sales and merchandising sales. Sometimes they will do it when they are on tour, some of them have individual Web sites done up that they can do it, but you really have to go look for it.

4190 What they suggested is, if there was a central area where people who liked country music and understand country music go to on a consistent basis to find out was is happening in country music, such as the CCMA Web site, if there was a merchandising section on that site that was put together that would allow an independent artist to sell their CD's, or whatever else that they might decide to sell, it could be a great way to supplement their income to allow them to continue to grow and to build their business,

4191 The CCMA liked this idea. We would again give the money to them. They would in turn administer this project. We would stay at arms' length. But one of the CCMA has said that they would do with this, if we did this, is they would ask all of their radio stations, member stations to promote this on their radio stations, which would be, again, just a great way to help out some of these artists who are independent but still having a little trouble making ends meet.

4192 COMMISSIONER CRAM: So they would be essentially setting it up for e-commerce on their site. Is that right?

4193 MR. LARCHE: Correct.

4194 COMMISSIONER CRAM: So as opposed to essentially providing links to individual independent artists, they would all be able to sell through this e-commerce link.

4195 MR. LARCHE: Correct.

4196 COMMISSIONER CRAM: Is $70,000 total going to pay for it?

4197 MR. LARCHE: We got an estimate of -- they already have a Web site that is set up. We wouldn't be creating a new Web site, this would just be a section of that Web site.

4198 COMMISSIONER CRAM: The e-commerce part, yes.

4199 MR. LARCHE: But we believe that that is enough, as well as them believing it is enough.

4200 Actually, we do e-commerce on our Web site at the radio station.

4201 MR. McCOY: If I may just interrupt Paul for a moment.

4202 COMMISSIONER CRAM: Sure.

4203 MR. McCOY: As a domestic signing with Universal Music in Canada I find that major labels here in Canada don't necessarily appropriate proper administration or funding to actually have e-commerce sites, or e-commerce set up for their artists, for their domestic signings. You will see that with a lot of the national-based artists.

4204 So what we have done is, we have been very proactive in this and KICX has been -- Paul has been very supportive. What we did is, over a year ago, have Paul set up a page for us. So on our Web site, our record label, Universal Music, does the chat room, tour updates, all the essentials.

4205 However, as I said they don't have the infrastructure for e-commerce. So what Paul has done is posted a site -- a page for us where, since he is already set up in that capacity, people can buy our merchandise online and that is how we are able to do it.

4206 This has been great for us because it puts us into a whole new league and people from all over Canada and the Estevan, Saskatchewan, secondary markets, people who may not be able to get out to our shows, are able to purchase T-shirts, photos, anything of this nature, and CD's.

4207 COMMISSIONER CRAM: On this site, the CCMA site, who chooses who would go on it? I don't hit on it, I don't mean purchase on it, but I mean what artists?

4208 MR. LARCHE: Yes. I think -- well, the CCMA would administer the site, but our discussions with them, and of course the discussions had been at a point where we haven't put this thing up and running, but we want to make it available to everyone at no charge.

4209 So there would be obviously some type of application that an artist would have to fill out to make sure that they would be able to meet the demand of what is going to be required. I am sure we would set up a minimum level of expectation. But we want the more the merrier. It's like a store, the more merchandise you have, the more people will tend to shop. They might be there looking for something from Jason McCoy, but they may see something from Beverly Mahood and say "Hey, I want to get that as well."

4210 So that is why we are hoping that this is really going to create a synergy, you know, one-plus-one equals-three type situation.

4211 MR. CARNDUFF: If I could just add a little bit about this Web site too.

4212 What is really cool about it is that it is an online store. One of the major problems with many independent, if not all independent Canadian country music artists, is distribution. How do I get my song played on the radio? They get it played on the radio, someone hears it, they want to go buy it. They go to their local record store and it is just not there. We get a lot of phone calls at KICX in Midland of, "I heard this song, how can I get it?"

4213 So what this store will do is it will allow people to -- it's like a big record store. People from all across the country will be able to go there and buy this product.

4214 You have regional artists. In Midland we have a couple of artists that are only known in Midland that have put a CD out and it is very, very good. You probably have the same thing in different small markets across the country. So this allows people from right across the country to know about artists in the east coast to know about regional artists in the west coast. It is really good community of country music and it is a store that allows these artists to make some money and also get their product out there. It is good for the artists and it is great for the fans as well.

4215 COMMISSIONER CRAM: You say the CCMA is going to encourage everybody, all of their members, to publicize it and promote it?

4216 MR. CARNDUFF: It will be promoted, yes, absolutely. Commercials will be --

4217 COMMISSIONER CRAM: Clearly when you get questions on-the-air, I mean, that would be one very good way of doing it.

4218 MR. CARNDUFF: Yes. Commercials will be kept, they will go to all CCMA member radio stations, which is pretty much every Canadian country radio station in the country. They will promote it that way.

4219 COMMISSIONER CRAM: Are there any other -- well, I guess there are other radio stations who will be giving to the new artist initiative, right, aside from yourself?

4220 MR. CARNDUFF: Are other radio stations contributing to this fund?

4221 COMMISSIONER CRAM: Yes.

4222 MR. LARCHE: Yes. Yes. We actually contribute to the CCMA every year as part of our CTD package and I believe one of the other applicants has also put forward that they would contribute to this fund as well.

4223 COMMISSIONER CRAM: So you mean your Midland station does.

4224 MR. LARCHE: Our Midland station does.

4225 COMMISSIONER CRAM: Okay.

4226 The advisory group. What is their role now? Are they functus? Are they finished or are they going to supervise how the money is being used?

4227 MR. LARCHE: Their role is finished. We went to them and we wanted their input, we wanted some ideas from them, we had a couple of ideas ourselves that we wanted to bounce off them, and once we had that we put our plan together. But there wouldn't be any follow-up from this point on.

4228 COMMISSIONER CRAM: I want to move onto programming and the local news and the local programming.

4229 Three full-time, three part-time news people and you say, and I think you said again today, there will be four hours a week of a newscast.

4230 You are going to produce your own newscast here?

4231 MR. LARCHE: All of our programming will be produced by us 100 per cent. In that four hours, yes, it is four hours and five minutes actually, and that is all news and will be produced by our own newsroom here.

4232 COMMISSIONER CRAM: Can you tell me when it is going to be broadcast?

4233 MR. LARCHE: Derm?

4234 MR. CARNDUFF: We are going to be having newscasts obviously Monday to Friday every half hour on the morning show and then they will continue. The final one will be at 9:00 a.m., then we will have another noon news package, full news package, news, sports, whether and traffic, then we will continue with news in the afternoon from 3:00 p.m. up until 7:00 at night Monday to Friday. We will also have weekend news throughout the morning and into the afternoon both Saturday and Sunday.

4235 COMMISSIONER CRAM: Okay. So weekday in the drive and at noon and in the drive. How many minutes top of the hour, bottom of the hour?

4236 MR. CARNDUFF: Top of the hour newscasts will be considered major news packages, they will be about six minutes. Then our bottom of the hour minor newscast updates will be approximately three minutes.

4237 COMMISSIONER CRAM: Then weekends? I missed what you said.

4238 MR. CARNDUFF: Weekends will be 6:00 a.m., 7:00 a.m., 8:00 a.m., 9:00 a.m. up until noon time. Those will be all major -- six-minute packages.

4239 COMMISSIONER CRAM: Six minutes.

4240 MR. CARNDUFF: Yes.

4241 COMMISSIONER CRAM: When you talk six minutes, does that include weather?

4242 MR. CARNDUFF: It will be news -- yes, news, sports, weather.

4243 COMMISSIONER CRAM: Okay. And traffic, those kinds of things?

4244 MR. CARNDUFF: Yes.

4245 COMMISSIONER CRAM: Okay.

4246 MR. LARCHE: Commissioner, if I could just add a point to that though.

4247 COMMISSIONER CRAM: Yes.

4248 MR. LARCHE: That 245 minutes of news we are talking about is all news.

4249 COMMISSIONER CRAM: Okay. So the four hours and five minutes --

4250 MR. LARCHE: Is news.

4251 COMMISSIONER CRAM: -- is news.

4252 MR. LARCHE: Is news, yes. We have 245 minutes of news, 210 minutes of weather, sports traffic, and there are other features that we have in our application, that "Focus on Kitchener", and so on. So our total non-music programming is at about 11 hours and 37 minutes.

4253 COMMISSIONER CRAM: So that is what I wanted to get into.

4254 So when you are talking about in the major news at six minutes in the morning or six on the top of the hour, how much is news and how much is the rest of it, sports, weather, et cetera.

4255 MR. LARCHE: That six minutes -- sometimes they go longer of course and sometimes a little shorter, but the news itself would probably be about five minutes. Derm, please correct me if I'm wrong.

4256 MR. CARNDUFF: Yes. This is going to be based on the clocks that we work with in Midland. It is about three minutes of news, then you have commercials in there.

4257 When you asked me, I apologize, I just thought the news package. The news package in programming, what we call that, that is your news, your sports, your weather, your traffic and your commercials all in there.

4258 So it is about three, three and a half minutes of news, about a minute of sports, you have got an island of commercials in there and then traffic and then weather.

4259 COMMISSIONER CRAM: In those six minutes?

4260 MR. CARNDUFF: Correct.

4261 COMMISSIONER CRAM: Take out the commercial. How much is left?

4262 MR. CARNDUFF: Five minutes.

4263 COMMISSIONER CRAM: Okay. When you are talking top and bottom of the hour, that includes all the time, the weather and the sports at the same time?

4264 MR. CARNDUFF: Correct.

4265 COMMISSIONER CRAM: Okay.

4266 The other local programming, maybe we can go into that to get up to the 11 hours and 37 minutes.

4267 The other local programming is?

4268 MR. CARNDUFF: "Focus on Kitchener".

4269 COMMISSIONER CRAM: Yes.

4270 MR. CARNDUFF: It is going to be a local programming, and all spoken word will be local as well.

4271 COMMISSIONER CRAM: So what will "Focus on Kitchener" say and how often will it air and how long is it?

4272 MR. CARNDUFF: "Focus on Kitchener" is going to be a 60-second vignette that we will produce at the radio station. It is going to run six times per day and we will have them -- there will be two produced per day and then they will each repeat twice for a total of six so then we can hit all the day parts.

4273 What "Focus on Kitchener" is going to reflect is what is going on in the community, it is going to reflect the cultural diversity of the community, it is going to talk about events, it can be calendar of what is going to be coming up in the area, it can also talk about achievements that local people have done, have succeeded at. It is going to involve local entertainment, all those things. It is going to be a really neat 60-second hot programmed package that is going to run, as I say, six times per day.

4274 COMMISSIONER CRAM: Okay. And it is a minute long each time?

4275 MR. CARNDUFF: Correct.

4276 COMMISSIONER CRAM: Okay.

4277 Then you talked about something else. Was it the recreation reports that you were talking about?

4278 MR. CARNDUFF: Yes. We are going to have recreation reports as well that will be broadcast throughout the entire year. That will talk about things that people can get out and do. Country music is, as we have heard already from a few applicants, very much about family and families getting out and doing stuff, moms and dads and kids.

4279 What these are going to talk about is where we can go skiing, where we can go camping, where we can go swimming, what is going to be happening.

4280 Not only in the Kitchener-Waterloo but also throughout central Ontario, because we will be able to talk about what is happening in Midland and the Georgian Bay area which is huge for tourism and be able to bring that aspect to Kitchener-Waterloo as well. What is happening in the region and what people can do to get out and get active with their families.

1100

4281 COMMISSIONER CRAM: So how long and how many times will this be aired?

4282 MR. CARNDUFF: They would probably be -- depending on how much is going on, they would probably be 60-seconds. They would be -- and produced as well.

4283 Seasonally there would obviously -- they could be a little bit longer in the wintertime because of skiing, because of parades and things like that. Summertime they could be a little bit longer because of different events that are going on that has to do with summertime recreations.

4284 So I would say safely they are going to be 60-seconds. They are going to be produced as well and they would run -- I don't know if we have scheduled exactly how --

4285 MR. LARCHE: We do have it in our application and we say a minimum of four times per day during the week and six times per day on the weekends.

4286 COMMISSIONER CRAM: Okay. Then you have -- and I was just noticing it, well I won't say it -- in your application you have a cruiser that goes around. What does this do?

4287 MR. CARNDUFF: The community cruiser. We are very successful with the community cruiser program right now at KICX 104. It is a van, it is a 4 x 4, its logoed up. It is sponsored right now in Midland.

4288 What it does is it goes out to events, to charity fund-raisers, it is loaded up with prizes and it has got a host or hostess that drives it around. It has a cell phone and it is phoned back to the radio station. We put these reports live on the air. "Here we are at" -- McDonalds is our current sponsor in Midland -- "We are at McDonalds, we are holding a fund-raiser for the Marsh Wildlife Centre, come on and get some prizes" and that.

4289 It gets out there. It is like a fun -- like our promotional team is out there doing that. It goes to all kinds of different events, charity events, cultural events, things like that.

4290 MR. LARCHE: Yes, I was just going to add, it doesn't exclusively go to McDonalds, but Derm made that point.

--- Laughter / Rires

4291 MR. LARCHE: But we have two of these vehicles in Midland, because we cover quite a large territory, and we try to have somebody out on weekends in particular and during the week. It just really allows us to get in touch with the community and the listeners.

4292 COMMISSIONER CRAM: So do I have all of the 11 hours and 37 minutes based on that?

4293 MR. LARCHE: No.

4294 COMMISSIONER CRAM: No, okay.

--- Laughter / Rires

4295 MR. LARCHE: We also have proposed a feature to promote new artists. We say we will run 28 vignettes per week. The idea behind this is -- and these would be approximately 30-seconds each. When a new artist is being -- a new Canadian artist is being introduced on our station, what we would do is we would put together a little preamble on who this person is, where they are from, why we are excited about them coming into the business and why our listeners should pay particular attention to them.

4296 Often when people go to a show they will say, "Oh geez, I didn't that person did that song. I know that song". Sometimes we just don't have enough time to give it that background, so it is kind of taking these new artists, putting them up on a bit of a pedestal on the radio station to introduce them. So that runs during the week.

4297 We also have, of course, as part of our regular programming, our announcers are required, in our current manual and would be here, to talk about public service events. We have them devote a minute per hour to that every day that they are on the air.

4298 Of course we have morning show guests and call-ins, and so on. So when we add all of those up together, that is how we come up to our 11.5 hours.

4299 COMMISSIONER CRAM: So in the morning drive and in the afternoon drive they have to be a minute of PSAs essentially?

4300 MR. CARNDUFF: Actually all day long from 6:00 a.m. -- right now in Midland from 6:00 a.m. right up until midnight we have minimum hourly requirements. You have to have a local PSA, you have to have a station cross promotion, you have to have three times per hour artist information. So all of that is our model of we call it, "minimum show prep requirement" and that will come to the Kitchener-Waterloo station as well.

4301 COMMISSIONER CRAM: What is this little asset about artists?

4302 MR. CARNDUFF: I'm sorry, artist information. Background information about artists. Country music fans are passionate about their artists and they want to know all they can. On-air personalities have to not only say "That was this song and coming up is this song", they have to give artist information. The country music fans love that kind of stuff. They are very passionate about knowing all they can about their artists.

4303 COMMISSIONER CRAM: I wanted to get back to these vignettes. Thirty seconds, how many times? Did you say how many times they would be aired?

4304 MR. CARNDUFF: Twenty-eight times per week.

4305 COMMISSIONER CRAM: Okay. That is the week before you actually play that artist's song?

4306 MR. CARNDUFF: How we picture this as happening is it will play going into the song. It will be about a 30-second bio of the artist and a clip, if possible, of the artist speaking and then that would go right into the artist's song.

4307 COMMISSIONER CRAM: So you give a new artist a play of 28 that week.

4308 MR. CARNDUFF: It wouldn't just be on one artist. Depending on our ads for the week, we would probably have two new Canadian artists added per week in a music programming kind of way. So we would have two a week, they would play 14 times.

4309 COMMISSIONER CRAM: Okay. How many times a year will this -- because we have talked about one week. Is this going to happen every week?

4310 MR. CARNDUFF: All year.

4311 COMMISSIONER CRAM: The 28 vignettes are going to happen every week, every year?

4312 MR. CARNDUFF: Yes.

4313 MR. LARCHE: It will be an ongoing part of our programming.

4314 COMMISSIONER CRAM: Now, any of this that we have talked about, is there any of it in common with your Midland station?

4315 MR. LARCHE: There are a few. We do a show that is a little bit similar to "Focus on Kitchener". We don't air it as much as we are promising here. That is simply because we don't have the resources that we are proposing that we will have in this market.

4316 We do recreation reports up there. The artist vignettes we don't do, but we are hoping that if we are doing it here we will also do it on our Midland station. We will obviously have it produced anyway, so it would just make sense to do that.

4317 Obviously we do news, and so on, back in our home market.

4318 COMMISSIONER CRAM: You say you will, quote:

"...increase the unique news perspective." (As read)

4319 I'm sorry:

"...increase unique news perspectives." (As read)

4320 What do you mean by that?

4321 MR. LARCHE: We are not affiliated with any radio company, or media company for that matter, in the region. Our signal in Midland certainly doesn't reach here.

4322 So what we mean there is we will bring a unique perspective to the news in this market because we are going to be hiring our own news people, they are going to be putting the news together in a fashion that they believe is best suited for our audience, and that will be unique in the sense that it is coming directly from our newsroom and not being filtered through any other corporate entity. It is bringing a new voice to the market.

4323 MR. CARNDUFF: Also content-wise it will be very unique as well just because of our target demographic and the knowledge that we have of our listening audience. It is families, it is moms and dads and kids, it is worried about education, it is a prime focus, safety concerns for children, and things like that. So it is going to really, really focus on family-oriented topical news as well as headlines and other things.

4324 So it is going to really, really focus and target the news voice to the 25-54 -- or more focused on the 35-54 country music fan, which is not happening right now because there is no local country music station.

4325 COMMISSIONER CRAM: In terms of sort of building this link, the voice-mail system. Do I find out the weather on one and the community events on two?

4326 MR. LARCHE: I couldn't have said it better.

4327 We have something like this again in our home market. Our audience tends to skew a little bit older, they are not all as Web savvy as younger people, so although we will have all of this information available to our audience on the Web site we do know that some people still like to do it the old-fashion way and pick up the telephone and, yes, "Press one for weather, press two for sports scores, press three for traffic, for school closures", so on and so forth.

4328 MR. CARNDUFF: And lottery numbers. That's really, really big.

4329 MR. LARCHE: That's huge.

4330 MR. CARNDUFF: Yes.

4331 MR. LARCHE: Big time.

4332 COMMISSIONER CRAM: I want to move onto your business plan and talk about the most underserved demographic -- although I don't believe that -- 45 to 54. I mean, that is what RDC said in here. They say that they are the most underserved and that they primarily listen to CHYM-FM.

4333 Any evidence that CHYM -- CHYM that's right -- CHYM listeners would move to your station?

4334 MR. LARCHE: The Kassoff research that we did indicated that a very small portion would be -- I think one share point. I think they are over 20 share right now. One share point would come over to our radio station.

4335 But as the other Canada country applicants have said before you -- and I will deal with it in a couple of minutes -- but most of it will obviously come from out-of-market.

4336 We don't anticipate that we will get any from the rock station in town. You know, I think we may have put a half of a point in there, but primarily it is from out-of-market.

4337 MR. McCOY: If I may add just a personal perspective to this.

4338 I am first and foremost here as a fan of KICX and of LCI and I, as a resident of the broadcast area long time, my whole life, I am constantly amazed at KICX's presence within the Barrie community, Midland community, within businesses. I know there has been so many in the past.

4339 When growing up, you know, they would always play one of the local stations is Barrie' B101 and it was a CHR-type station. I am constantly amazed now at how many businesses I want into which I would not associate with country music but they have KICX on in their business. I think that is reflective of the community involvement that KICX has, the news broadcast, all these things.

4340 It is a very interactive station, I must say that, and one thing I continually tell people about the station is that it is very visible. I believe that all the businesses are picking up on this. It is very interactive so people relate to it.

4341 Canadian country music and country music in general is very contemporary these days, it is not -- I believe country music sometimes to someone outside of it can be very sceptical of it as a format, but it is so strong with the Faith Hills, the Shania Twains, that it is a very favoured format for those businesses.

4342 COMMISSIONER CRAM: I'm not at all sceptical, just for the record.

--- Laughter / Rires

4343 COMMISSIONER CRAM: What interests me about this whole hearing -- and I always have to ask a philosophical question -- is that we have sort of the CHR advocates, and they are looking at the younger demographic, and country which is looking at the somewhat older demographic, and I constantly ask myself if the older demographic is as interesting to advertisers?

4344 Because I have already decided that I will never buy a, you name it, Ford, GM, Toyota car, and any kind of advertising can't convince me one way or another that I would -- you know, can't change my mind, whereas a 20-year-old would buy something because their spending patterns aren't fixed.

4345 So if that is the case, if an advertiser had a choice between a country or a CHR, who would they go to and why, if at all, would they go to country?

4346 MR. LARCHE: I will pass it onto Ron in a second, our sales manager, but first of all you are not in the older demo.

4347 COMMISSIONER CRAM: Flattery will get you almost anywhere.

4348 MR. LARCHE: Thank you.

--- Laughter / Rires

4349 MR. LARCHE: I know Ron will talk about this a little bit more, but I can draw from my experience, not only owning a country station, but having worked with country stations in the past and having affiliation with broadcast companies through my CAB and OAB connections, country music for people who may not be familiar with it always has that perception that "Who wants to advertise on that station"?

4350 Well, I can tell you -- well, you can look at our financial figures, a lot of people want to advertise on our radio station.

4351 What is interesting when you break down the BBM demographic information, especially when you get into some of the information on purchasing patterns that BBM offers you, you will see not only on our country station but on several country stations, that they are buying the most cars, they are buying the clothes, they are going to the restaurants, they are buying the tickets and our advertisers are getting results. So somehow we are maybe getting through to them where you might be a bit of a tougher sell.

4352 Ron?

4353 MR. FUNNELL: Well, it is often a misconception that country radio stations merely only attract country bars and western bootwear and things of that nature, which is very unfortunate.

4354 But to elaborate on Paul's comment, one of the greatest tools that we now have is qualitative data.

4355 Within our home market KICX 104 ranks first with homeowners. We ranked first with people in the $80,000 to $100,000 income brackets. We have also been consistent with the rank of first with new auto purchasing.

4356 So it is a great tool for us because obviously there are a number of people of people out there that do have a misconception that we only attract a small advertising base, but when we can go out there and identify these key areas to a potential advertiser, then it is certainly an audience that they want to take a serious look at.

4357 These aren't fluke results for KICX 104, or for any country radio station for that matter. In fact, it has been consistent in our home market when it comes to some of these categories.

4358 Even beyond that, the radio station ranks first with new clothes purchasers, with people who have visited a shopping mall, with people who have visited a family restaurant. So it is a very valuable tool for us because, again, there is that misconception that we have a very small piece of the potential advertising pie.

1115

4359 MS AUSTIN: If I could just add something here.

4360 The bottom line when you take the country listener versus the CHR listener, the country listener has more cash, more disposable income. A 20-year-old versus a 50-year-old, obviously they have got the money to spend so it is an important audience.

4361 COMMISSIONER CRAM: On the other hand, it has been said that university students have their parents' disposable income --

--- Laughter / Rires

4362 COMMISSIONER CRAM:  -- and don't have housing costs.

4363 MR. LARCHE: My daughter is in university just down the street here in Guelph and with the disposable income I give her she is not buying cars. She might be buying a bag of chips, but that's about it.

4364 COMMISSIONER CRAM: You are --

4365 COMMISSIONER LANGFORD: Poor thing.

--- Laughter / Rires

4366 COMMISSIONER CRAM: We are not sure you are a great parent here.

--- Laughter / Rires

4367 COMMISSIONER LANGFORD: You are in trouble now, I will tell you.

--- Laughter / Rires

4368 COMMISSIONER CRAM: You are giving all your money to country music and not giving any to your kids?

4369 COMMISSIONER LANGFORD: Poor thing.

--- Laughter / Rires

4370 COMMISSIONER CRAM: There is a lot to be said about -- I suppose because the demographic -- and I understand. Personally I think, you know, the older demographic -- and I'm using that in a comparative sense -- has more money, has more disposable income.

4371 Frankly, it would seem to me that based on what we have been hearing about teenagers and young adults is the older demographic actually has an attention span that lasts longer than two minutes so it would seem that it will be a more desirable format. But, on the other hand, advertisers, because of the spending patterns --

4372 So would it be that the older demographic is a harder sell? You have to persuade more?

4373 MR. LARCHE: I think persuading any age group -- everything you said, by the way, is valid in the sense that the older you get the tougher you tend to be set in your ways. There are advertisers who are very attuned to that. Maybe a good example would be the beer industry. The beer companies don't spend too much money with country stations. They spend a little bit, believe it or not. It is primarily with younger skewed or rock stations. They are going after the younger male.

4374 But by and large the advertising community out of Toronto, the agencies, are still looking at the biggest demographic -- the biggest return on investment in advertising is actually female 25 to 54. That is where the most money is spent on advertising, and not only in radio but on television as well. That's the big money pie.

4375 I would just like to also mention, because we may get to this, I think that there is room for a CHR station in this market and I think there is room for CHR and a country station to both be able to sell advertising and I think that just taking it through to the point you are mentioning, I think a lot of the advertisers we would seek out would be different.

4376 That is actually one of the pluses here. If we were competing against an adult contemporary station, we would probably feel a little bit more concerned about that, but a CHR station has really no impact -- measurable impact on our business plan because they would be seeking out advertisers who will not be doing business with us anyway. Frankly, we will be seeking out advertisers that won't be doing business with them.

4377 COMMISSIONER CRAM: RDC did their work for you before CHYM went country. Do you think that CHYM going country is going to change your projections or your business plan?

4378 MR. LARCHE: No, to answer your question. Actually, we are quite excited that that station went country.

4379 Maybe Jason can talk to this, but the country music industry has not had a country station in its largest market, Toronto, for the last few years. That is not good for the country music industry. That is a big, large metropolitan area.

4380 With Corus going with their country station and with the signal they have, and from what we understand they are moving the station into Toronto to pair up with CMT, they are going to be focused primarily on that Toronto market.

4381 If anything, I think that this is a bonus for us. Some of our staff, when this first came out, said, "Is this going to affect us?" I said "No, this is great, because this is a warm-up act for us. People here have not had FM country in years. They have had AM country. So if there are people who are tuning to that station, that's great because when we come in with the amount of money we have put behind our launch and the product and, as has been said, local will sell, those people we believe will come right over to us, and moreso than it may have been just with an AM station." So we are actually excited about it.

4382 COMMISSIONER CRAM: Did you have anything to say, Mr. Funnell?

4383 MR. FUNNELL: Well, if I can add a comment to that, having previous experience in the market, in fact with the former Y95 which is now Country 95.3.

4384 At one point that radio station did derive a substantial piece of revenue from this market. At that time I wasn't privy to those figures. Nonetheless, when the Kitchener radio station KOOL-FM went on the air, essentially the same format, the presence of the Hamilton station diminished very quickly.

4385 COMMISSIONER CRAM: RDC said your share -- I'm sorry, the out-of-market tuning share for country is 8.5.

4386 Can you give us a list of the stations and the shares of each adding up to the 8.5? Just file it with us, or unless you have it memorized.

4387 MR. LARCHE: I believe it is attached to our application, but if it isn't we will get it filed for you, because we do have a list of all the stations.

4388 COMMISSIONER CRAM: Okay. Can you give us an estimate of the revenue attributed to repatriated listening?

4389 MR. LARCHE: Again I will pass this over to Ron in a second, but this market is, as you have heard and I know you are aware, is a very buoyant and very robust market. When we bring in listeners from outside into inside it doesn't always necessarily translate that all these dollars will be coming in from the outside to inside. Anybody who says that, you know, it is just not going to happen.

4390 The market has a certain amount of revenue that is within it. As the total share of local stations combined together increases that market revenue will continue to increase, but it is not like if you bring over 70 per cent of your audience from out-of-market that 70 per cent of your revenue is going to come from out-of-market. That is just not the way it works.

4391 Ron, I don't know if you want to --

4392 MR. FUNNELL: Just as KICX 99.5 anticipates repatriating those out-of-market listeners, with that you will also repatriate local advertisers who, for one reason or another, have been forced to promote or advertise their products or services or special events through out-of-market advertising vehicles.

4393 A great example of that would be the Alabama concert that took place just last week in the market at The Aud. There would not be a local radio station that would fit the promotion of that event and i have to make an assumption that that would have been promoted through an out-of-market radio station as a presenting station.

4394 As Paul mentioned, you know, if you are bringing back all of the listeners, you are not necessarily going to bring back all of that revenue. There are other areas that that revenue will derive from, whether that be television, from print, whether it be from existing market advertisers that will add to the pie and expand their budget.

4395 COMMISSIONER CRAM: So I have asked -- or you have answered without me asking if this market can have a CHR and a country, so I will move right along.

4396 MR. LARCHE: Trying to keep it brisk.

4397 COMMISSIONER CRAM: Yes. Yes.

--- Off microphone / Sans microphone

4398 MR. LARCHE: Don't say it.

4399 COMMISSIONER CRAM: Actually, I just wanted to touch on, have you talked to the Kitchener Rangers to see if they want country music artists. It would seem -- I don't know whether the two add up or not, whether there is a commonality of interests.

4400 MR. LARCHE: The Junior "A" hockey league in Ontario is relatively tight. We started doing it with the Barrie Colts -- I guess it is five years now -- it has turned out to be very successful. The Barrie Colts have shared this promotion with some of their counterparts in these other markets.

4401 We do not have, at this point, a written agreement with the Kitchener hockey team to air it, but we do know that the Barrie Colts have talked to them about it, have told them what a great idea it is, and they seem very, very open to the concept.

4402 MR. McCOY: I must add that approximately four years ago, five years ago perhaps, at the request of the Kitchener Rangers I was brought down to sing a National Anthem and perform a couple songs acoustically and to sign autographs, due to many of the Kitchener Rangers being country music fans.

4403 Even without a station here at the time, I know that from my live shows -- I kind of bring a unique perspective to this panel because I have done many shows in this area and all across this country and I just know for a fact that the country music market here is extremely vibrant, very strong. I also know that other country music artists have also gone to the country -- or to the Kitchener Rangers games and sang National Anthems and acoustic performances.

4404 COMMISSIONER CRAM: What they are proposing here -- well, we really don't have much to do with it because it is indirect -- is a minimum of $35,000. Would that cover the whole, what's the word --

4405 MR. LARCHE: The money goes directly to the artist. It is just to the artist for their time, and so on.

4406 COMMISSIONER CRAM: Would that cover the whole season?

4407 MR. LARCHE: Yes, absolutely.

4408 COMMISSIONER CRAM: The whole hockey season?

4409 MR. LARCHE: We have had several artists who have done it or offered to do it at no charge because it is good exposure for them, but we believe that if we are using their time and promoting them that we should compensate them for that.

4410 MR. McCOY: It is usually a very low -- we don't encourage --

4411 COMMISSIONER CRAM: Yes. They don't pay much, do they? It is probably just cheap --

4412 MR. McCOY: No, no. The fact is that we don't really need much. As Paul said, it is great exposure for us. Like I said in the initial proposal, the captive audience that we have is very valuable. You usually come away from those games, if you do a couple of songs acoustically, I hear so many comments of, "You know, I don't normally like country music" or "My wife likes country music and I don't, but I really enjoyed your performance and I am blown away when someone can out with an acoustic guitar and perform."

4413 That is indicative of country music. It is very positive for us to do those type of events where it is not a core country audience.

4414 COMMISSIONER CRAM: The next question was about synergies.

4415 You mentioned at page 7 in your presentation that:

"Economies will be realized in areas such as management and accounting. (As read)

4416 That's pretty well it though?

4417 MS. AUSTIN: If I could answer that.

4418 I am very excited about the synergies that we will be able to have between the two properties.

4419 The first being, we have worked really hard to get the KICX brand established and I think having another station in Ontario will only add to that.

4420 Some of the areas where we would have synergies, traffic and accounting.

4421 As far as sales go, I mean the sales teams would be separate but I think there could be regional sales opportunities which we would certainly look into and share ideas.

4422 As far as programming goes, two separate entities, except for possibly having a Canadian country countdown show that would run on both stations and, as we previously talked about, the Cedar Tree sessions would be aired at both stations.

4423 As far as news goes, that would be separate unless there was some regional story that broke that would affect both communities and then of course we would share stories there.

4424 Of course promotions again where it makes sense, the Barrie Colts, Kitchener Rangers thing that we just talked about, the StarQuest talent search. Although both areas would have separate winners, I think that we could really make it big across the province that way.

4425 The other thing is, we are going to steal a lot of our good promotional ideas from the Midland stations because we, frankly, have a lot of good ones. One of them would also be our KICX country club, and that is developing a loyal listener club here in Kitchener.

4426 COMMISSIONER CRAM: Do you have a second choice of frequency?

1130

4427 MR. LARCHE: Well, we were asked -- I believe all the applicants were asked if they had a second choice and our technical advisors made it clear to us, and in our response to the CRTC I think we have said that 99.5 is definitely by far our preferred frequency. But I believe it was 91.5 could represent an acceptable second choice, but that would only be if it was that or nothing.

4428 You have heard talk about the frequencies and how congested they are in this area, how tight they are. We believe that of the applicants who are going for 99.5 we certainly believe that we are bringing the most to the party and we would make the best use to that frequency.

4429 That answers your question.

4430 COMMISSIONER CRAM: Now the cultural diversity question.

4431 What measures would you take to incorporate and reflect the reality of Canada's cultural, ethnic, racial and aboriginal diversity in the following areas: employment, news, music, promotion of Canadian artists?

4432 MS AUSTIN: First I will speak to employment practices. I can only really speak of our station at CICX 104 FM in Midland.

4433 Currently 45 per cent of the staff are female, including key management positions of General Manager and Promotions Director. We have excellent representation with females as announcers and new anchors as well.

4434 Our company policy is to give consideration to the four designated groups during every new employment opportunity within our company. When we hire, we reach out to a variety of sources to find talented employees, including CWC or Canadian Women in Communications impressive job bank. We also look to our local community college. Anita Santorini, our Promotions Director, is on the Georgian College Advertising Program Board.

4435 We are especially interested in reaching out to aboriginal employees. KICX has previously enjoyed having an aboriginal on our staff. We have a great relationship with the radio station on Christian Island and have supplied them with equipment and music, in fact mostly country music.

4436 As previously mentioned, we are committed to create a summer employment opportunity for an aboriginal person pursuing a broadcast career.

4437 We are proud of our employment practices in Midland, and with 20 new jobs this station will bring to the Kitchener-Waterloo area we look forward to reflecting this great city through the make up of our new staff.

4438 In regard to news, with over four hours of news minutes and 11 hours of spoken word programming per week, we will have ample opportunity to reflect the cultural diversity of Kitchener-Waterloo. "Focus on Kitchener", airing six times daily, will cover and promote all the key cultural activities in the region, including Oktoberfest, the Waterloo Busker Festival, the local Greek Festival, and several activities put on by numerous Mennonite groups in the area.

4439 Our community cruiser, outlined in our application, will cover several of these events live. We are very proud of our community cruiser program in Midland, and although our area isn't quite as diverse as Kitchener-Waterloo, we strive to reflect the different cultural make up and heritage of the area, including special focus on Francophone issues and events.

4440 Recreation reports will cover skiing, golfing, dancing and other recreational activities, including cultural ones.

4441 As far as the music goes, country music is the music of the people. It has a rich heritage in Canada from coast to coast to coast and it is currently not available to the residents of the Trough-city area on a local station.

4442 Finally, promotion of Canadian artists. Firstly, 40 per cent Cancon and our Canadian Talent Development initiatives add up to almost $1.2 million. Kitchener is a hotbed for country artists, including Thomas Wade, John Landry, Laura Rhodes, Jason Barry, Mike Lynch, Gizelle, Stacey Lee and, of course, Jamie Warren and Beverly Mahood, who all live here in the area.

4443 Cedar Tree Studios, on of the best in Canada, also finds its home here. We will reflect this great music within the community to the community.

4444 COMMISSIONER CRAM: About this trainee. I notice on your Schedule 20 -- is there a page number? Yes, 36.

4445 You talk about being:

"...disillusioned by the fact that applications by aboriginal people are non-existent."

4446 How are you going to find this trainee?

4447 MR. LARCHE: We are going to it a couple of ways. We are going to work with Conestoga College locally. As Mora mentioned, we have a relationship with the radio station on Christian Island. We have also talked to the Anishnawbic Outreach program here in Kitchener and we believe that by actively going to these people and posting these types of positions that our problem will be cutting it down to who we get.

4448 We also will have access, through our minority partner Newcap, to post this type of position through their system. They have a very good relationship with AVR, as you may be aware. So we feel very confident that we will find some. We are hoping to find people that eventually will become full-time employees, that is what we are hoping. But we know that you have to get into a station, you have to work in a station, you want to make sure they are paid for the work that they are doing and they are learning and will integrate into our operation or move on to another radio station. On-the-job training is always the best.

4449 COMMISSIONER CRAM: All right. Here is your time to shine.

4450 Two questions: Why should you get the licence and why is your proposal the best use of the frequency?

4451 MR. LARCHE: No pressure there.

4452 COMMISSIONER CRAM: Or, how do dogs do laundry?

--- Laughter / Rires

4453 MR. LARCHE: I guess we can just about answer two in one.

4454 If we talk about the licence first, the 99.5 as a frequency, there are three -- there are four applicants, one of them is a Christian station and three country. We have a lot of respect for all of the applicants and we know Scott Jackson very well from the Barrie market, he does a great job there, but we think that the best use of this frequency will be for the station that is going to best reflect what is in the Broadcast Act and what the Commission expects.

4455 We think that what we are bringing here is the best application.

4456 Our CTD is 85 per cent higher than the second applicant for that frequency, which amounts to over half a million -- or just under half a million dollars over the license term that will be going to develop Canadian country music and artists.

4457 Our programming expenses are 55 per cent higher than the second applicant. We know what it takes to compete in a market like this. We know that we are committed to spending the money on the product so that we can do it and do it right.

4458 We believe that we are presenting, if not the largest, a large newsroom.

4459 We are obviously bringing 40 per cent Cancon, which was a condition -- we said we would make it a condition of our licence.

4460 We think that we are bringing the best features in terms of spoken word that will best reflect the community and the use of that 99.5 frequency with programs such as "Focus on Kitchener".

4461 I also think that we have demonstrated that we can do it and do it well with the track record that we have established in our home market and some of the awards that we have won by our peers.

4462 So the compelling reasons for us to get it in general, I think we have a very realistic quality business plan. I think it is well thought out. It is very well researched.

4463 Again, we have talked about the news, our Canadian Talent Development. I think we are bringing diversity of news and opinions to this market that is unique for us in the sense that we have no affiliation with anyone in the area.

4464 I think that we are bringing -- we are not going to change the competitive balance of the market in any material way because country is not currently available. We won't hurt these other broadcasters, both financially and from a ratings point of view.

4465 Finally, I think this will help strengthen the broadcast system. It will allow our company to move to the next level, to have two stations, allow us to get stronger, allow us to not have to worry about having all our eggs in one basket, and we think that that is good for -- obviously our company, but we think it is also good for the broadcast system because we are very committed to broadcasting.

4466 This is my life. I love it. I have never had so much fun in my life as I have had over the last seven years owning a radio station. I am committed to the industry. I spend a lot of time giving up my time on associations such as the OAB and the CAB. I want to be here for a long time. I want to grow.

4467 I try to learn by my mistakes. We have been up in front of you before and we haven't been successful, but we try to do our homework, we try to look at what we believe you guys are looking for, that perspective that we talked about, and I really think that we have delivered here. I think that we have really come through in spades.

4468 I think that for that 99.5 frequency we will best reflect what you have said you are looking for in new licences and I think we will best reflect the Canadian Broadcast Act.

4469 COMMISSIONER CRAM: Thank you, Mr. Larch and panel.

4470 I'm sorry, Mr. Templeton, no questions for you.

4471 Madam Chair.

4472 THE CHAIRPERSON: Thank you.

4473 Commissioner Langford.

4474 COMMISSIONER LANGFORD: Yes, thank you.

4475 Just a couple of pretty narrowly focused questions because you have certainly jumped through all the hoops.

4476 An easy one first. This sophisticated voice-mail service when you push one to get the weather and push two, can you push a button to get a person?

4477 MR. LARCHE: No. I will be honest with you. You can call our radio station and get through to a person any time of course during the day, but this is set up as an info line. It is an automated system where the newsroom looks after it. They keep it current, they keep on adding things to it, and so on and so forth.

4478 But what we do do on it, though, is we do give them -- this is our current system and maybe it is not as sophisticated as some new system, but we do say "If you want to get through to our newsroom, please call 835-NEWS. If you want to get through to our sales department, please call 526" -- but the system we have doesn't allow it to link.

4479 MR. CARNDUFF: It is a different phone number, Commissioner. We promote it as the KICX 104 FM information line, call it for sports scores, for weather forecasts, bus cancellations, lottery numbers, and things like that.

4480 So it is a completely different promoted phone number as the information line. It is not the business line, it is not the link to live people at the radio station.

4481 COMMISSIONER LANGFORD: If I pick up the phone book and I'm mad as hell for some reason and I can't take it any more, I can get through to a person as well?

4482 MR. CARNDUFF: Absolutely.

4483 COMMISSIONER LANGFORD: Good to know.

4484 This question, you may have covered this. We have a lot of applications in front of us and it must be very obvious to you that we divide up the work and I may have missed this. If I have, I apologize in advance.

4485 I understand your ownership situation, it is clear and it is set out in the application, and I understand who manages and runs Midland because you are all here, but what I'm not clear on is: Who is going to run this station, assuming you are successful of course?

4486 MR. LARCHE: Assuming we are successful, I will be running this radio station. When I bought the station Mora was working there. She had done an excellent job and gone through the ranks of general sales manager. A while back I gave her the position of general manager to run the day-to-day operation, although I'm still there on a constant basis.

4487 I do devote a lot of my time to other industry functions, but I'm anxious to get my teeth into something and I don't like to step on Mora's toes because she is doing such a great job. So if we get this licence, my intention is to move to Kitchener with my family -- that is what I have done every time I have gotten involved with a radio operation -- and I will personally manage the station to make sure that we do it to the best of our abilities.

4488 Derm will also have some responsibilities for overseeing the overall programming of both operations, although each station will have its own assistant program director and they will reflect what is going on within their communities. He is one of the best in the country and we want to make sure that we are going to use him well.

4489 Ron is from this area and we would be moving Ron down here as well, to Mora's chagrin, but Ron has, again, done an excellent job for us, but he would bring a perspective of being from the area, being local and having a lot of contacts within the area.

4490 So if you do grant us the licence, that is our current plan.

4491 COMMISSIONER LANGFORD: That is good to know and that helps me.

4492 Then how long does it take to build a team from there, to sort of duplicate, in a sense, what you have in Midland but build it here. You have the basis, you are moving, Ron is here, we are going to move this poor gentleman -- no, I'm sorry. Derm is here and then Ron we are moving half way and getting him a fast car, but what about the rest of the team? How long does it take, from your experience, to put together the kind of team you need?

4493 MR. LARCHE: It would certainly take a few months. If we were given the licence I understand we have a year to get it up and running. We would want to make sure that we get the right people. It is very, very important to us that we get the right people, that we go through the employment practices that we have talked about. We would certainly want to make sure that we are hiring a lot of local people who have, you know, a good understanding of the market.

4494 With consolidation over the last few years there are a lot of really, really good broadcasters who are, frankly, out of work. It is a sad thing to say, but I mean we have way more applications that we can ever -- or jobs than we can ever support, and it's a shame because some of these names I remember hearing when I was kid, some of the older broadcasters, and some of them are more current.

4495 I met Jeremy Smith here a couple of days ago who I worked with in Timmins over 20 years ago. He has worked in Hamilton, all over the place, and I just ran into by coincidence. We haven't seen each other in 20 years. "How are you doing?" "I'm out of work". A great, great voice.

4496 So we would try to reflect what is happening. We would try to make sure that we look at people within the community, but we would also be very, very diligent in who we are hiring to make sure that we can put the team together that will make this happen and make it happen right.

1145

4497 COMMISSIONER LANGFORD: How long does it take to get to know the local stars? The local up-and-coming stars I suppose is the way to put it, the stars you would know. But is it so local -- I mean here we have sitting beside you -- I'm sorry, I have forgotten your name, but we have a 14-year-old superstar of the future. Would she be known in Midland or is that the kind of thing you have to take time as well to find out so that when you are going to the local Rangers games you know who to bring with you?

4498 MR. CARNDUFF: As far as artists are concerned it is no problem for local artists here in the area. Kitchener has often been called the Nashville of the North with an award-winning and very successful studio with Cedar Tree Studios and the producer Richard Hutt, a CCMA Award winner, many times as the head of that studio, and the artists that we know are in this area that live right here in Kitchener, Jamie Warren, Beverly Mahood, Gizelle and Stacey Lee from the group Lace, Thomas Wade, John Landry and many, many more. Those are artists that have kind of taken the next step from just being a struggling independent trying to get their first song on the radio. They have successfully done that and had videos put on a national scale as well.

4499 So those are just artists with national recognition. People like Megan Morrison, who you were talking about, and a lot of other artists who haven't quite made that next step yet but are on the verge and are ready to do it, there is a wealth of them in this area.

4500 Luckily I know, just my involvement as program director and music director and being in country music for 10 years, I know all these people and they send us their product and I talk to their people and you get to know the names. It is very close and tight-knit industry as far as music -- radio-wise and music-wise as well.

4501 COMMISSIONER LANGFORD: Thank you very much.

4502 Those are my questions, Madam Chair.

4503 THE CHAIRPERSON: Thank you.

4504 Commissioner Williams.

4505 COMMISSIONER WILLIAMS: Good afternoon. I just have a couple of quick questions.

4506 Can you tell me a bit more about your indirect talent initiatives, specifically the aboriginal broadcasting apprenticeship initiative. Is the pay you propose equal to what you would pay other employees in a similar role? During a four-month program what duties are intended? Like what will the person receive in the form of training over that period of time?

4507 MR. LARCHE: The pay would be the same as we would pay anyone in that type of position.

4508 What we would hope for is finding people who want to become broadcasters, who get on the air and be on the air. So I certainly think that we would have them working and doing some on-air work.

4509 We would have them training, they will be paid but they will paid off in sitting in the control room and working with one of the announcers there and learned how the job is done, and so on.

4510 Then when they get to a level of competence where they feel they understand that system, then we may have them move to promotions and go out with our community cruiser, for example. They would go out and do some of these reports for us on-air.

4511 Ideally that is what we would like to see. But if they decided that they were going to show an interest in creative writing then, you know what, we will have them sit in our creative department and we will teach them how to write radio scripts and then have them to the point where they can do that.

4512 Like I said at the outset, I really want to be able to be in a position that after the four months we want to hold onto this person. This person is great, let's keep them on staff and let's keep on going.

4513 COMMISSIONER WILLIAMS: Okay. My other question involves Newcap.

4514 Can you discuss what Newcap is bringing to the table in a little more detail and then maybe finish up by discussing the Newcap option to increase their shareholding in this proposed radio station to 49 per cent?

4515 MR. LARCHE: Absolutely. Like I said in our oral presentation, I did approach Newcap. I wanted to make sure I did this thing right. Like I said, I did my homework. I have seen other decisions, I know this is a big market, I wanted to ensure the Commission felt comfortable that I would have the resources to pull this thing off and do it right because only have the one radio asset.

4516 I went to Bob -- Bob and I have worked together for a long time and I will let him comment on this as well -- and asked him if he would be interested in coming in as a minority partner.

4517 He expressed interest immediately but Bob, of course, if the President of a company that is owned by a family. They want to make sure that it is a good business investment for them as well. So we worked out a shareholders agreement where I gave them some concessions to increase their shares, some opinions if they decided to, to a level of 49 per cent, but of course with the understanding that it requires CRTC approval.

4518 The options expire after five years so they don't exist any more. So 49 per cent or 29 per cent, I still have complete control of the operation.

4519 I think it is a benefit, a huge benefit, that is why I did it. I also thought what they could bring with their country operations would just add to what we are doing. It would give Derm some additional resources, some people to talk to, it would allow some of our CTD initiatives to get to the next level.

4520 So I am very excited about it and I am happy to be working with him on it.

4521 Bob, do you have any --

4522 MR. TEMPLETON: Commissioner, I could add to that.

4523 Paul mentioned, we have worked together as friends and employer-employee for over 20 years. Paul, in my opinion, is one of the sharpest broadcasters in the country and I was disappointed when he wanted to go the entrepreneurial route seven or eight years ago because I had great plans for him, but once he had committed to that I supported him wholeheartedly and continue to encourage and advise when I am asked to.

4524 There is no doubt whatsoever in my mind that Paul Larche and his group can produce and perform and deliver everything they have said in this application. There is not one shred of doubt. So when Paul proposed this to me, it just made good business sense.

4525 It is a great opportunity, a great market. I grew up very close to here myself and I know Paul and his team will deliver. So it was a pretty easy decision to make.

4526 COMMISSIONER WILLIAMS: Okay. Thank you. Thank you very much.

4527 Those are all my questions, Madam Chair.

4528 THE CHAIRPERSON: Thank you.

4529 Counsel.

4530 MR. WILSON; Thank you, Madam Chair. I just have one question.

4531 In your presentation you mentioned that you would be looking to play heritage country artists. Can I take from that, does that mean that you are contemplating broadcasting some specialty Category 3 country music, the tradition bluegrass old-time country?

4532 MR. CARNDUFF: No.

4533 MR. WILSON: Thank you.

4534 I have no further questions, Madam Chair.

4535 THE CHAIRPERSON: Thank you.

4536 Thank you very much, Mr. Larche and your team.

4537 MR. LARCHE: Thank you very much, Chair, Commissioners and staff. Thank you.

4538 THE CHAIRPERSON: We will now take our lunch break and return at 1:30 with CKMW Radio Limited presentation.

4539 Thank you.

--- Upon recessing at 1153 / Suspension à 1153

--- Upon resuming at 1335 / Reprise à 1335

4540 THE CHAIRPERSON: Order, please.

4541 Mr. Secretary.

4542 MR. LEBEL: Thank you, Madam Chair.

4543 Before I call Item 10 on the Agenda, I just want to put all parties on notice that we intend to get to Phase II this afternoon.

4544 Now I will ask Item 10 on the Agenda, which is an application by CKMV Radio for a licence to operate an English-language commercial FM radio station in Kitchener-Waterloo.

4545 The new station would operate on frequency 93.9 megahertz, Channel 230A, with an effective radiated power of 436 watts.

4546 The applicant proposes an urban top 40 music format.

4547 You have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

4548 MR. BILL EVANOV: Thank you.

4549 Good afternoon, Chairperson Pennefather, Members of the Commission and staff.

4550 My name is Bill Evanov and I am the principal owner of CKMW Radio Ltd. Once again we are pleased to appear before you and I would like to introduce my panel.

4551 For the majority of our panel it will be their first appearance before the Commission and, for the most part, they represent the Kitchener-Waterloo or K-W management team we have assembled whose enthusiasm, expertise, talent and street experience will make JAMZ-FM a success, just as our other management groups are doing with their respective stations.

4552 To my left is Carmela Laurignano, Vice-President, Radio Group Manager. To her left, Paul Evanov, Group Program Director. To my right, Ky Joseph, Group Vice-President, Sales.

4553 In the second row, far left is DJ Spence Diamonds, Director of DJ Spinners and an artist in his own right. Next to him is Gary Gamble, a native of this area who will be Director of News and Operations for JAMZ. Beside him is Joe Scully, a graduate of the local Conestoga College who is our Retail Sales Manager. On the extreme right is Tony Busseri, our Business Manager.

4554 At the side table, from your far right is Stuart Robertson, our legal counsel and Debra McLaughlin, the author of our demand study. Next is, and also from the K-W region, is Scott Chapman, On-Air host and Internet Manager. Sandy Faddoul is our Intern Program Coordinator. Chris Voisin is our Music Director.

4555 Established in 1984, CKMW Radio Ltd. operates three stations in the Toronto CMA which, before we acquired them, were not viable, CIAO-AM 530 serving the ethnic community of Brampton, CIDC-FM 103.5 serving Orangeville, and CKDX FM 88.5 serving Newmarket. We have turned each of these properties into successful, self-sustaining businesses.

4556 MS LAURIGNANO: In the CRTC Kitchener-Waterloo call we recognized a rare circumstance. Here is a market with a clear need for service and we are a company that is particularly well suited to meet it. Specifically, while there is an opportunity here in K-W, it should be looked at on a modest scale given the size of the market. CKMW Radio Ltd. excels at making successes out of smaller operations.

4557 Radio is a local medium and CKMW Radio Ltd. has developed very local services even within the perimeters of the largest, most diverse market in Canada, the Toronto CMA.

4558 We have experience in K-W and our proposal builds on this firsthand knowledge. Finally, our past experience confirms that we know the youth market.

4559 MR. EVANOV: In the short time we have today to explain our application we want to convince you that we know the youth market in Kitchener-Waterloo and how to serve them with this radio station. Everything we propose has been designed carefully to suit our target demo.

4560 By seeing our approach to programming and its direct relationship to our CTD commitments, you will understand better the depth of our commitment to this service and our extensive experience in delivering such a plan.

4561 Our philosophy in this application is plain and simple: Local, youth and urban, all in the streets of Kitchener-Waterloo.

4562 MS LAURIGNANO: The market for youth radio is exploding. The baby-boomers have had children. There is a recognition that the youth market as a consumer group has changed. They are savvy consumers with more dispensable income than ever before. Traditional advertisers are waking up to the wealth of this consumer base and new products and services are increasingly targeting this lucrative group.

4563 K-W is no exception to this trend. Our research shows that the population of this market skews young, which is no surprise given the wealth of educational facilities and employment opportunities for young families. The hours of tuning for 12-24 has grown, but the tuning to local services has declined. Over 70 per cent of the hours tuned by this group, as reported by BBM in Spring 2002, is to stations outside the K-W area.

4564 MR. PAUL EVANOV: Our proposal is directed towards the youth of K-W which is disconnected and disenfranchised.

4565 An analysis of the population and BBM tuning trends directed us to the youth market. We then relied on a combination of our experience and research to develop our format. We reviewed the hours tuned to the recent licences, examined U.S. trends in 12-24 programming, and based on these findings commissioned a format find study. The conclusions were clear to us as programmers and were in line with what our other research sources suggested.

4566 The youth in K-W listen to a range of music on a variety of sources, but the artists they most want to hear are from the urban genre. The mix of music they request is not available on any K-W service. Our target demographic is currently forced to get their music from the Internet and by tuning to a variety of out-of-market radio stations.

4567 MR. VOISIN: To capture the imagination and interest of this group, we will give them what they have told us they want. We will focus on an urban sound, but we will expand our playlist to include top 40 hits to provide the variety they require.

4568 The "top 40" we speak of means that it is, on that day we play it, one of the 40 biggest hits as measured by the charts available to us. Although we will use the charts as a guide, we will respond to our audience's interest in new, fresh sounds by adding uncharted music to our playlist. We know that one of the brand values that attracts this group is being seen to lead a trend rather than follow it.

4569 To accomplish this, each night we will test a potential new addition to our playlist through a feature called "Slam It or Jam It". Through this interactive forum JAMZ-FM will turn over the programming decision on a new selection to the listeners and our audience will tell us what they want. Is it "jamming" on our playlist or is it "slamming"?

4570 MR. PAUL EVANOV: We will also highlight new artists and focus on Canadian talent. The Youth Culture Study told us that, while the youth of Canada are heavily influenced by North American pop culture, they are also fiercely proud of being Canadian and keenly interested in home-grown artists.

4571 One of our strategies will be to give real focus to the emerging artists and independent music that our audience can currently only access via the Internet. This will be accomplished through programs like "Canadian Spotlight".

4572 For two hours each week, our focus will be solely on the work of local, regional and national artists. We will showcase new music releases, profile emerging artists and discuss the Canadian music scene. Independent artists will have access to a receptive audience.

4573 One of the distinguishing sounds of JAMZ FM will be DJ spinning. Live DJs will be present daily, creating a new and vibrant diversity to the K-W market. Beyond the music itself, the DJ spinners creating the sound will be new to radio and this programming initiative will give support to a truly underrepresented artistic group, while providing our listeners with the cutting edge and the variety they so clearly desire.

4574 MR. GAMBLE: We will serve K-W and our audience through our locally focused approach in spoken word and news content. If you are currently between the ages of 12 and 24 and living in K-W, you do not have a K-W source of information and news that is relevant to your age. We will combine the music this group loves with the information that they need. Information on school events, concert listings, amateur sports, movie releases, places to hang-out and extreme sporting events are important to our audience. We will combine these interests with relevant information like social services available to youth, job fairs, health tips, fashion news and relationship insights.

4575 In the morning and afternoon drive there will be traditional newscasts. These will consist of national, regional and local news, as well as regular traffic and weather updates for the K-W area. Midday there will be surveillance and community calendars.

4576 Our news staff will be residents of the area and involved in the community. To complement that, we will create positions for full and part-time interns, ensuring that JAMZ-FM connects with our student and youth markets.

4577 Sandy can tell you more about those plans.

4578 MS FADDOUL: The value of the intern program is something I can personally attest to. I began my professional broadcast career at CIDC-FM working as an intern. The hands-on experience was invaluable at furthering both my understanding of the industry and my belief that I had made the right career choice.

4579 I am no longer a student and have been fortunate to obtain employment with the same station. I am particularly excited to be offered this challenge of coordinating the intern program at JAMZ-FM in Kitchener-Waterloo. The development of this program will constitute a very real contribution to the development of behind-the-scenes and on-air broadcast talents.

4580 We will mentor future broadcasters in two full-time intern positions in our newsroom and through at least 21 campus reporter positions that will rotate throughout the year.

4581 MR. CHAPMAN: The Internet is a natural part of the day for a majority of today's youth. They chat, they surf, they burn and they listen to music. We recognize that multi-tasking on line is a fact of life for 12 to 24s, so our strategy will be to build on the strength of the medium and offer the best of both the Internet and the broadcast worlds.

4582 Our Internet site will be a true youth portal and provide extensive content. Upon entering our site, users can view our playlist, check out the artists, sample new music, confirm upcoming events or promotions, meet our on-air personalities or research a Canadian artist or song.

4583 We will add depth to our on-air programming by profiling new artists, giving our audience a chance to contact them directly and cover the behind the scenes material from our "Canadian Spotlight" program.

4584 The Web gives our listeners a chance to talk directly to our programming department and participate in our interactive programs like "Slam It or Jam It" and contesting. The JAMZ Web site will offer what radio can't, a view of the action, including videos, pictures of the artists and venues as well as venue profiles.

4585 We will act as a resource centre for educational opportunities in the industry, provide links to community services for youth and provide up-to-date news, community information and event schedules. We expect that our streaming audio will be the backdrop to their nightly online life.

4586 MR. BILL EVANOV: Previously We have successfully launched two youth and young-targeted radio stations, CING-FM and CIDC-FM, and can confidently say we know how to reach the young market. This demographic is truly social and congregates in large numbers, thereby making word-of-mouth a very effective advertising tool.

4587 We will reach them at the malls, at the clubs, at the universities, colleges and high schools with the distribution of 60,000 club cards like the ones we have attached to your copy of our presentation. This club-type card is unique to this demographic, it is used everywhere in this culture and it is part of their culture. Our station's presence will be seen where our audience lives and plays.

4588 Our launch promotion will begin before we air, using a combination of live appearances, Internet and card distribution, and culminate with a live concert on launch date. The concert itself will be a huge event with three Canadian urban groups, two local Kitchener-Waterloo urban artists, and several DJ spinners, many from this area. Our plan will have the youth market talking, and ultimately listening to JAMZ-FM.

4589 MS LAURIGNANO: Our commitment to Canadian Talent Development represents a realistic, effective and thoughtful program of initiatives. It has two separate but equally important components. The first of these is the financial commitment that we have detailed in our application. Within this there are three key pillars: education, support for an emerging art form and augmenting of a music genre.

4590 However, our overall CTD commitment is not quantified in dollar terms. In fact, our second component may offer even more meaningful support of Canadian talent than strictly financial expenditures.

4591 Our second component of our talent development is simply stated as follows: We will develop Canadian talent on-air as part of our regularly scheduled programming and the costs of doing that are found in our programming budgets. Each and every week, JAMZ-FM will create programming that enhances, exposes and celebrates Canadian artists.

4592 The "Canadian Spotlight" program we described earlier will be two solid hours of Canadian music and artists 52 weeks of the year. Fresh and exciting, this program will open doors for both the artists and our listeners.

4593 Our celebration of DJ spinning in the midst of our regular programming will build on our competition initiative and provide a full exposure for these artists at peak listening times.

4594 MR. VOISIN: Ladies and gentlemen, I would like to ask you now to witness what we are talking about.

4595 To my right is DJ Spence Diamonds who is one of Canada's premier DJ spinners with performing credits such as MuchMusic, Mike Bullard, Canada AM, Mountain Dew skateboard tour, Telus World Snowboard Championship and clubs throughout North America. In the next three to four minutes, which is the traditional length of one song, DJ Spence will take six songs from artists Jennifer Lopez, Missie Elliott, Clips, Justin Timberlake from N'SYNC Michael Jackson and Prince. Spence will take these six songs and through blending, mixing, scratching and cutting, he will forge one new sound.

4596 Madam Chairperson, Commissioners and Commission staff, please sit back and enjoy a little sample of what JAMZ 94 will bring to K-W.

4597 Now.

--- Presentation / Présentation

1350

4598 MS LAURIGNANO: Well, I'm going to try to follow that.

--- Laughter / Rires

4599 MS LAURIGNANO: We feel the most meaningful support for Canadian talent is when the power of radio is used to excite, engage and encourage an appreciation of the talents that are abundant in Canada. Our mixture of specially developed features and the inclusion of new talent within our core programming, means that our commitment to support Canadian talent provides the most important element of the creative process, the end goal of being heard and appreciated.

4600 Our commitment means 14.5 hours each week of programming promoting exclusively Canadian talent. This is in combination with a Canadian Content commitment of 35 per cent, plus two hours each week with 100 per cent Canadian Content. While this does not qualify as a financial contribution in the standard CRTC terms, we feel it is incumbent upon us to illustrate in these hearings how a contribution to talent development can take several forms and not lose anything in terms of its value to the system as a whole.

4601 We do not treat investment in Canadian Talent Development merely as a cost of doing business. Instead, it is a fundamental approach to designing JAMZ-FM and we believe our approach underlines this philosophy.

4602 MR. BILL EVANOV: We believe that JAMZ-FM represents an opportunity to provide a much-needed service while not seriously undermining the existing balance and profitability of radio in the market.

4603 Our revenue projections are realistic and our ability to develop new revenues is proven. Our proposed format does not duplicate music found in the market and our spoken word will fill a void. Our CTD, as you have heard, encompasses both a financial and a programming commitment that will, in combination, go a long way to achieving the goals of the Broadcasting Act.

4604 So we respectfully submit that our proposal for JAMZ-FM makes the best use of the available frequency.

4605 Thank you, Chairperson, Commissioners and Commission staff.

4606 We would be happy to answer questions.

4607 THE CHAIRPERSON: Thank you very much, Mr. Evanov and everyone -- and DJ, thank you very much.

4608 Commissioner Demers, please.

4609 COMMISSIONER DEMERS: Thank you, Madam Chair.

4610 Good afternoon, Mr. Evanov, ladies and gentlemen. It is a difficult act to follow with my down to earth questions that many of you have heard the questions being asked before if you were in Hull, but not to you.

4611 So my questions will touch on the following topics: your formal proposal, the definition of the market, the musical genre, the news programming, the Canadian talent proposals, the rationale for your application, the number of new stations, the best use of the frequency, and our question on cultural diversity.

4612 I start on your format. The formal of your proposed station would be urban top 40 and would serve Kitchener's youth and young adult audience 15 to 34. You have identified this demographic as being currently underserved by local radio.

4613 Two other applicants are seeking to serve the same youth and young adult audience. One proposes a CHR format and the other a rhythmic CHR format. Could you please explain how your format differs from a CHR and from a rhythmic CHR?

4614 MR. BILL EVANOV: Okay. I will back up a little bit and then I will ask my music and programming people to get into the specifics.

4615 When the call came out for Kitchener, it is a market that we have known very well over many years. We have been involved in it, even with our AM ethnic station for years, and then with CING when we were there and with CIDC. So we have always been very familiar with the Kitchener market and even to some degree we are involved in it even as we speak today.

4616 But it twigged our interest and then we thought, okay, if we look at the market. We examined the BBM and we did an assessment and we noticed that the young demo was not being served by an in-town station, that more than 75 per cent of hours turned were to out-of-market stations, ours being one of them but many others as well.

4617 We noticed that the 25-54 demo was reasonably well-served, so we commissioned a market study. The market study came back and told us two key interesting factors.

4618 The first being that the young demo was very disconnected from the local scene in Kitchener and was missing local news, information, weather, other surveillance items, ski reports.

4619 The second important part of that survey was that it told us that the music preference of this demo was urban. With that in mind we put together this urban application for you to examine.

4620 We did our own survey in the market. We went around and we talked to various kids on the streets of Kitchener, we went to the various clubs, and what we found in Kitchener is that there are three clubs here that have urban nights and they are the most successful nights of the week at these particular clubs in the Kitchener market.

4621 Then we also were aware of the fact that the Commission had licensed three urban stations in Canada, FLOW in Toronto, also Calgary and Vancouver.

4622 What we propose is that the urban format -- and I will let our researcher also speak to this -- appeals basically to the 12-24 demo, and maybe beyond, where the CHR format might be more similar to what we are doing in Orangeville and has a much wider scope in terms of appeal and also the style of music.

4623 But I will go back to the urban and I will ask Paul Evanov and his staff to explain urban as it is.

4624 MR. PAUL EVANOV: Thank you.

4625 I will try to give you the clearest definition and give you as much understanding of what we are proposing in this format as possible. We are proposing urban top 40.

4626 First I will cover the urban, which is really a term that covers four genres of music, which include hip hop, rap, R&B and reggae. When we speak of urban we mean in those four terms, those four genres of music is what it really includes. So the majority of our playlist and the majority of our programming will focus on urban, which includes those four.

4627 But through our research we also found out that the youth in Kitchener also desire a little bit of variety as well. That is where we brought the top 40 format in.

4628 The top 40 specifically is the biggest hits of today. They are the 40 biggest hits of today. So we would like to include those in our programming and our playlist, hand-pick some of the 40 biggest hits and include it, because that is what we know the youth of Kitchener-Waterloo want. Along with the mass demand for the urban, they all like a little bit of variety, a little bit of cross appeal, which the top 40 will cover. So that is your top 40.

4629 As far as CHR, CHR really describes a contemporary song that has become a hit in an era. So it could be a hit today, it could have been a hit three years ago, five years ago, six years ago. So what we are proposing is an urban top 40, while the other applicants are proposing a CHR and a rhythmic CHR, and there is quite a difference.

4630 To expand on how big this format is, how big urban music is across Canada, across North America, how it is growing, and even this market, as we said, the busiest nights at the clubs are urban nights right now, where they get the most people and are most successful.

4631 Also, the local HMV in Kitchener-Waterloo, the highest sales come from artists from the urban genre doing hip hop, rap, R&B and reggae, and also our own personal experience walking the streets, going into pubs and bars, talking to different one -- even this week, we were at a restaurant on Monday night and I asked the waitress just out of the blue "What is your favourite type of music?" Immediately they said "hip hop". That same establishment was playing hip hop that night and their busiest night is Friday night when they play urban music.

4632 To expand and give you a bit more scope on how long urban has been around and exactly a bit more detail on it, I am going to ask our Music Director, Chris Voisin.

1405

4633 MR. VOISIN: Thank you, Paul.

4634 To help you guys understand maybe a little better what the feel of new urban music is, how it has, I guess, evolved to now and why it is so big now, it is beat-driven, rhythmic, up tempo, good feeling party music. The gangster rap that got all the attention maybe 15-20 years ago -- which is really when it hit the press, about 15 years ago -- is no longer the music that the youth are listening to.

4635 It is much more mainstream now, much more positive. It is about partying, it is about having a good time, they rap about love, life, relationships, all these topics are touched. For a music to explode as large as it has they had to do this. The urban and the -- the topics that were discussed in gangster rap only appealed to people who live that life, not to people in Europe, not to people -- so for the success of this music, which I'm going to get into in a second, to be this big, the topics had to range across the board.

4636 It has taken over the world. This is the biggest and fastest growing music in the world. Just to give you a couple of examples, Death Jam, which is a solely urban label, has an office in Germany. They produce German hip hop out of Germany. There are urban stations, sometimes two, in every U.S. market, in Europe, in Asia, in Africa. It is a staple in all CHR charts.

4637 Just to show you the crossover, the surviving pop artists now that are still successful today, Brittney Spears, Justin Timberlake from N'SYNC, Christina Aguilaro, those artists have all turned to urban sounds. Their music now are produced now by some of the urban industry's biggest producers. It is no longer the pop music, they are just singing pop hooks and pop vocals over top of urban beats.

4638 So urban just taken -- well, it is really, the music world. And it is not just music, it is a movement. Urban stars do movies, successful, huge blockbuster movies. They have television shows. Will Smith and LL Cool J had television shows. They have clothes lines. Jennifer Lopez has cologne and clothes and Puff Daddy Sean John clothing sells all over the world.

4639 This is a phenomenon and we are just really trying to get on it as it is peaking.

4640 Mr. DJ Spence Diamonds has witnessed it in all these different areas of the world and he can probably add a little more to this.

4641 MR. DIAMONDS: Thank you, Chris.

4642 Basically urban music is the pop music of the day. As Chris mentioned, the icons that have taken over the scene that have come from rap music and have moved on into film and television and clothing, I mean the clothing lines that Jennifer Lopez or that Sean Puff Daddy Combs has created you can find in The Bay and Sears and et cetera.

4643 I have travelled the world. France is the second biggest hip hop market in the world. It is the diversity of this music. It has crossed boundaries, it has crossed ethnic backgrounds and it influences the culture today.

4644 In addition, I have been in this market DJ-ing and touring with an artist by the name of Shaw Clair who is a gold artist out of Canada. I have been here four times in the last two years. The last show we did we performed at Kitchener City Hall right in the front of the City Hall. That is just to show you how people have embraced this music and it is now a part of common culture.

4645 As well, you know, like I said, it goes through all backgrounds. You have Portuguese artists that do rap music, you have groups like D'Amatique from Montreal who are a French Canadian rap group. You have War Party, which is an aboriginal rap group out of Saskatchewan. This is just an example of how big this music has really arrived to.

4646 MR. BILL EVANOV: Thank you, DJ.

4647 I think we are going to ask Debra McLaughlin just to comment on the research for CHR and urban.

4648 MS McLAUGHLIN: I have some findings that are specific to the Kitchener-Waterloo market to share with you.

4649 We were given the task of doing a format find as opposed to testing a specific format. The research summaries that were submitted in support of this application is actually a summary of just what happened with this specific format.

4650 But within these findings you will see -- I could refer you to page 12, but in summary you will see that CHR and top 40 were tested specifically in the context of the research and they scored lower, in the lower ends of the demographic 12 to 34, and scored higher in the upper ends.

4651 The number one format choice, both in terms of a format definition and the artist playlist that we supplied them with, were in the urban categories, hip hop, rhythm and blues, all of those, and those artists scored well above, indexing at 154. CHR indexed at 72. So it suggests that they either have enough of that type of music and are responding so positively to this format because it is missing, or it truly is their outstandingly preferred format.

4652 COMMISSIONER DEMERS: Thank you.

4653 It is quite an interesting format. It is quite comprehensive.

4654 Could you, from the programming of CIZN-GM 92.9, which currently has a hot AC format, could you from that point of view indicate how your proposed format is different?

4655 MR. BILL EVANOV: Yes. We did a comparison here and we have a chart here, we even have extra copies should the Commission want them later on.

4656 We did a chart -- and I think Paul will review it -- and we compared the music styles on this proposed station as well as three of the Kitchener area stations, including the station you mentioned.

4657 I will ask Paul to speak to that.

4658 MR. PAUL EVANOV: Thank you.

4659 We look currently at the Kitchener-Waterloo market and all the existing radio stations and the services that they were providing to Kitchener. Included in that was CIZN. We also looked at CSGA and CHYM.

4660 The format we are proposing for this are, Kitchener-Waterloo, is not represented at all whatsoever by any of these radio stations, not even close. This is a completely unique and different format to this area and catering to a demographic that has been completely ignored by the local radio stations.

4661 CIZN plays 0 per cent urban in looking at their playlist. They don't have any urban tracks whatsoever on their playlist. Their format, as you said, is a hot AC to AC, which includes some soft pop, soft rock. They also have some rock that maybe takes up about 10 per cent.

4662 So our format we are proposing, urban top 40, is completely different from CIZN has on right now.

4663 After going through CFCA 105.3 FM, we looked at them as well, again they are playing zero urban, no urban music at all. They are more, again, a hot AC, AC, some playing the soft rock, soft pop and also have a bit of a rockier edge.

4664 CHYM again, along with these other two stations, are really catering to a 25-plus demo, not only musically but with their information and content. CHYM again, 0 per cent when it comes to urban. They are not playing any urban at all. They are playing a little of more the hot AC, AC soft rock, soft pop, including a few top 40 hits skewed to the older demographic.

4665 So in looking at all those we see no real duplication and again are providing something unique and different than that which is provided by not just CIZN but the other radio stations.

4666 COMMISSIONER DEMERS: Would there be crossover, or could they put some of this music on without changing their format? Could some artists be in the same or pieces would be in the same -- possible in both formats?

4667 MR. PAUL EVANOV: The artists -- certain artists maybe from the top 40 genre could be, but unless they made a complete format switch there would be probably no urban music. Even to mix in some of what even you heard today into the format they are playing right now would not make sense for what they are programming at all.

4668 So in some sense some of the artists would duplicate, some of the top 40 artists that are big, there would be very, very little duplication, but again different top 40 artists have different types of songs. The top 40 artists that one week can put out a soft ballad, then the next release is more rockier, and then take a different approach for the next release. They have other singles.

4669 So as far as them incorporating urban into their format, it just really is impossible.

4670 MS LAURIGNANO: If I can just add to that. There may be occasionally or as time goes by some duplication in the CHR portion of our format, the top 40 portion of our format, which is really the spice of the programming as far as JAMZ is concerned. We did that with a specific purpose, and that was that there was sufficient evidence that a large number in the younger demo are not satisfied with just one choice, even though they have none right now, that they do tend to punch dials and look for things so that there is room to spice the programming with a component that would attract some of that potential listener.

4671 But as a format, there is no competition. We all know that a teen will not listen to an old geezer station, no matter what you program. That is what my nephew tells me, that I listen to an old geezer station.

4672 So we are quite confident that even when there is a presence in the slightest it would not affect the mass or the integrity of the format.

4673 COMMISSIONER DEMERS: Thank you.

4674 I will turn to the market questions.

4675 You direct your station to the youth market. Your application states that your target audience is 12 to 34, but that is a very diverse population. This group includes junior high school students as well as professionals. Your study also states that the largest group of listeners will be the 18-24. I think you have referred to that.

4676 However, much of your focus on advertising seems to be toward young members of the 12 to 34 group. So you could you explain how your station intends to cater to the diverse tastes of this age group?

4677 MR. BILL EVANOV: This music -- and I will let Chris speak to it in a moment, what is happening and what has changed.

4678 The core demo that we will target is 12-24, but the overall demo that will listen to this music is 12-34. That wasn't the case 10 years ago, but that is slowly changing. Where years ago the drop off might have been at the age of 25, the fact that this music has been around for 10, 15 years or longer, has built a heritage and it will carry forward listeners to an older age demo.

4679 Chris, maybe you can just speak to that for a moment.

4680 MR. VOISIN: Sure, thanks.

4681 Like Mr. Evanov said, this is not a new music. This is not a new format. The older age of our demo are very familiar with urban music. It has been a staple on CHR charts for quite a while. The format as a whole is new, but the music is not.

4682 My age, which I refuse to admit, but I am in the older end of that -- I'm 27 years old, so I am above the 12 to 24, but I grew up listening to urban music, I still listen to urban music and a lot of the people my age do. It has been cool for a long time, and that is a big deal with the younger.

4683 Now, to satisfy both ends, the older -- like I said, there is gold in this category now. There is even classic. There is classic urban music, which somebody my age appreciates and the younger end of the demo is not offended by it.

4684 Also, to satisfy the younger end of the demo, a big deal -- just a second. LL Cool J, another point, he has made 10 albums. This man, 10 albums and they have all sold over a million. They have all gone platinum in the U.S. Like I said, this is not new. The older end will not be offended by it and the top 40 also gives them a bit of the more popular stuff and the more familiar stuff to mix in with the mix.

4685 To satisfy the younger end, not only will the music do it but we are making a big push on new music. The reason some of the younger demo leave and go to the Internet is because radio, especially in this market, is not giving them anything new and anything fresh.

4686 They crave new music. They search for it. If they can't find it on the radio, they are going to go somewhere else.

4687 So we have the new feature, the "Slam It or Jam It", which will give them a new track every day, something new they can find and listen to. We are also using the interaction with them so they feel involved and they can feel like they are helping program the station, which they are.

4688 Also, the young demo always wants to be cooler. They always want to be older, they always want to -- until you are about 19, you want to be 19. So they look up to that.

4689 There is really not that big of a difference in this music. There are even young artists that they can relate to. Like L'il Bow Wow, he is 14 years old; Mario is 16 I believe. These are young artists that the younger end can relate to, but it doesn't offend the older end because they are not talking about kiddie stuff and not talking about race cars and video games. The topics are all over the board.

4690 So this is not a music any more that as soon as you turn 25 you change your program on your dial. It crosses all our demo is what I'm saying.

4691 Thank you.

4692 COMMISSIONER DEMERS: Okay. So I can deduct from what you say that you will have no problem successfully selling advertising to that demo?

4693 MR. BILL EVANOV: Well, okay. That upper end of the demo is building and we hope it will be there, but our entire focus has been on the 12-24 which is the real core demo for this music. Over the years, if we are around in Kitchener-Waterloo years from now, we will carry it to beyond 34 and there will be some 34 there. So there is an overall audience of 12-34, however our core demo, the demo that will really tune into this music, love it and make this radio station work, is 12-24.

1420

4694 MS LAURIGNANO: The other thing that we have done, we have taken this factor into consideration when we were programming the station and the day parting of a station is extremely important for reaching the entire demo, the 12 to 34.

4695 For example, if you look at the program schedule and description that we submitted, there are traditional newscasts in the peak hours of the morning drive and the afternoon drive. That takes into account that there is the older demo, that is perhaps on their way to or from work or who may with young children going about their business so there is relevance there.

4696 Whereas in the evening when the older demo tends to do other things and the younger ones are listening, even the musical selections will change. It is day parted so that it does take the lifestyle, the age demo, the musical preference and all that stuff into account.

4697 The programming features like a "Slam it or Jam it", which introduces a new track every day at 7:00 p.m., that was dropped at 7:00 with the specific knowledge that the younger kids will be listening at that time while they are doing their homework, whether it is over-the-air or through the Internet. So it would make sense that we would skew it towards that. So we as programmers have taken that into account.

4698 MR. BILL EVANOV: Commissioner, I'm not sure if your question was on sales-sales or sales as -- okay.

4699 COMMISSIONER DEMERS: Yes, advertising. Are advertisers waiting for your station to get on the air?

4700 MR. BILL EVANOV: Okay, I would like to answer that.

4701 I think we have the honour of having one of the lowest levels of revenue to come into the radio station and you would think we haven't been in radio before, but we have and we have successfully operated a few radio stations.

4702 We have two formulas in calculating revenue where most stations use one. But we sit down and we do two and I'm going to just walk you through them very quickly because they are both very good.

4703 The first formula is, we do specific calculations based on our street knowledge of the market and the commitments from advertisers in that market that relate to that particular demo that we want to serve. That is the first formula.

4704 The second formula is the market radio revenues and you do a share calculation and you project what your sales would be. We would never rely on that alone.

4705 The first formula consists of three elements or three factors.

4706 We determine the Kitchener-Waterloo retailers that should target the young market, or that probably have the product that would target the young market.

4707 We then have discussions with a cross section of these advertisers and then we do a detailed account-by-account listing with regards to the number of spots we will sell, the number of remotes we will sell throughout the year, the number of live-to-airs we will sell from the various clubs and also party control, the number of ski reports that will be sponsored, or snowboard reports, the number of newscasts that will be sponsored and traffic reports.

4708 We compiled this information and we came up with a total. In this particular case our total was $525,000.

4709 There is a second factor. Dollars spent on out-of-town stations. We spoke with all the client, or many of the clients that are spending money on out-of-town stations and we calculate that we will repatriate, based on our conversations with them, about $265,000.

4710 The third element is national advertisers at the present time do not allocate budgets at all to reach the youth market of Kitchener-Waterloo. The reason is very simple: They get it for free with 70 or 75 per cent of hours tuned to our-of-market stations, those stations in turn provide free spill into Kitchener and therefore national dollars don't have to buy anything.

4711 If a local station repatriates this market, national advertisers will have no choice but to allocate budget to Kitchener-Waterloo, and here we project $128,000 of national revenue.

4712 That is how we got to our total of $920,000.

4713 If we go to the second formula that most broadcasters are familiar with, it is the radio revenue. The radio revenue in Kitchener I think is around $18 million. Someone mentioned, I think yesterday or the day before, it has increased by $600,000. We based that on a share of -- our research told us we would receive a 4.2 share and that would give us $180,000 a share, for a total of $756,000. Not quite the $900,00.

4714 However, our radio stations have always, always outperformed the revenue to share formula anywhere from 40 per cent to 65 per cent. In this particular case, we will outperform the share formula by about 22 per cent. This is due to the heavy involvement of the entertainment industry in and around Kitchener, which includes your theatres, your nightclubs, your dance clubs, your concerts, et cetera.

4715 I will ask our Vice-President, Sales, Ky, to comment further.

4716 MS JOSEPH: Thank you.

4717 As Bill said, we took a three-tiered approach to calculating our revenue projection on the station in Year 1 through Year 7, and I am going to have our retail sales manager talk to you about the direct local community -- those communities.

4718 But I would like to speak to you about the repatriation dollars and the national dollars as well.

4719 In terms of national dollars, as it stands right now the majority of national buys include Kitchener as a market on those buys for the 25 to 54 and 18-49 buys, but only about 23 per cent of those buys include the younger demographic, 12 to 24 to be more specific. The reason for that is because we do work with -- we work with national buyers right now with our other radio stations and we have asked them: Why is that?

4720 The reason is because it is not cost-effective for them to target the market. It doesn't make sense for them to buy three stations and perhaps an out-of-town market station in order to reach the audience that they need to reach in order to get the results that they need. So they are just not spending the money on that.

4721 They have said to us that -- and actually I will quote one of the bigger advertising agencies in Toronto, OMD Canada, and I do quote:

"It would be an advantage to us and to our clients to reach this major demographic 18 to 34 in the Kitchener market. OMD has had a great difficulty in the past reaching younger radio listeners in this market. In recent buys for Pepsi, Famous Players, State Farm Insurance and Dairy Farmers of Ontario, we have attempted to cover the market with Hamilton's now defunct Energy Radio. Radio campaigns are often promotionally driven and require an end market presence in order to be successful." (As read)

4722 So for those reasons they are just not buying that.

4723 As well, buy buying the Toronto and perhaps Hamilton market in the past, they were able to get basically free spill into the Kitchener market, but with this new radio station we are proposing, we plan to repatriate the listeners back to Kitchener, thus it will dry up the spill and they will have no choice but to spend more money nationally in this market, and they have so confirmed that.

4724 As well, right now not only national but direct buyers are really paying a premium either way you look at it. They are playing a premium if they are buying local radio stations because they are paying for the local radio station's core demographic 25-54 or 18 to 49, in an attempt to reach the 12 to 24 market. So they are paying for the older demographic and getting the younger demographic.

4725 As well, if they buy out-of-town markets, which some of the bigger companies that have the budgets, some of the bigger nightclubs perhaps, some of the bigger clothing companies that have a bunch of retail chains, they are buying the out-of-town markets, they are paying a lot of money, they are paying the local Toronto rates -- or the regional Toronto rates, and it is just not cost-effective for them.

4726 In terms of repatriating the dollars, we have done the calculation. We know the market. We have worked this market for years and years and years. We have letters stating that these clients would -- and actually the number of dollars would be repatriated back to Toronto. We know what the dollars were spent on Hamilton, as a matter of fact we are fortunate enough to have hired a sales rep who used to work for the defunct Energy Radio. We know exactly the dollars that were spent out-of-market. This was formulated into our calculation.

4727 As well, the biggest part of our revenue will come from the local business community. We have done major research on that and I would like to ask Mr. Joe Scully to talk to that.

4728 MR. SCULLY: Thank you, Ms Joseph.

4729 Real quickly I would just like to expand on my background. I am not a researcher and I didn't really do research. What I actually did is, I followed your CKMW Radio group's philosophy of street level performance, not from the corporate tower down going through the books, it was street level.

4730 I went to college here in K-W for three years. I worked for one of the radio stations for a year and a half. I grew up in the Kitchener region and I have just about hit every Oktoberfest since I was legal drinking age. I know this market and I have done a little bit of marketing and sales for CIDC in the area.

4731 So like I said, what I actually did was street level and I went out and I pre-sold this radio station, not all $525,000, but I went out and I looked at all of our different programming features and I created some small packages. I went out door-to-door to new business that I hadn't approached before in the past and I basically said "This is JAMZ 94, this is what we offer", and I basically sold the station in advance.

4732 We know in the K-W region that there are approximately 800 businesses that could advertise, and of that 800 what we did is we targeted our priority one clients through our experience of CIDC-FM. Reaching the 12 to 34 demographic, we obviously know where our strengths are. That is of course, number one, as everyone going after similar demographics has mentioned, the nightclubs. Well, that is a no-brainer.

4733 But, however, what about the clothing stores? Our audience are fashion-focused and we have tons of clothing stores advertising on a station delivering this demographic.

4734 The restaurants, especially fast food, electronics, computer, Internet, those are our P1 categories.

4735 So of the 800 businesses in the Kitchen region, we identified that there are approximately 290 that fit a priority one advertiser for JAMZ 94.

4736 I went out and I approached 45 of those business, myself personally, and sat down. I actually got a third of those advertisers to actually commit to advertising with us in our first year of JAMZ 94.

4737 We took those 15 businesses, extrapolated it against the whole, which means 97 businesses are going to advertise with us Year 1. We can break it down and we did an account-by-account, as Bill said, to reach our $525,000 in local revenue. We did an account-by-account addition of those different businesses.

4738 We looked at, number one, the nightclubs. They are going to do live-to-air club broadcasts where we are broadcasting there live there on a Friday at one nightclub, on a Saturday at another nightclub. We know that those require a commitment for us to move our station out there, so we looked at 52 weeks a year, which is our standard with CIDC-FM.

4739 We looked at the beauty, the tanning industry. We know that their budgets are considerably lower and we looked at what we could get from them.

4740 In terms of the commitments and the packages, Paul Evanov mentioned HMV. We are not talking about HMV Canada or their ad agency. We are talking about the HMV across from the university up on University Avenue in Waterloo.

4741 He has submitted a letter and a commitment, and he has identified much of their sales, a majority of their sales, have come from the urban genre of music and the station would be an excellent way to reach existing and new customers. It would be a truly welcome additional to the local radio landscape.

4742 You heard Chris Voisin speak of one of our features "Slam It or Jam It" where we introduce one brand new song in our format every weekday night. Well, for a local music store what a perfect fit. The manager that we spoke to, very excited about that feature.

4743 We spoke to the restaurants and we got some commitment from them.

4744 Right up the road about a block north of here there is a tanning place called Bermuda Sun right on King Street. His quote is:

"A radio station catering to the 18 to 34 year olds in Kitchener, it is just what the market needs. It will allow my company to capture some new business from the age group." (As read)

4745 Commissioner, you mentioned getting the advertising specifically from the 12 to 34 and 12 to 24 demographics. There are two ski hills within the area, within an hour radius.

4746 The closest one to where we are sitting now is Chickapee Ski Hill just off Highway 8. We have a commitment from their manager and his quote -- I would like to read a majority of it -- is that they have identified the 12 to 34 year olds and 12 to 24 years olds specifically as their main area where they can expand their business. They already have people who have been skiing for years and they also have the local radio stations that are targeting the 25-54, as we have mentioned previously. Their room for growth is that 12 to 24 age groups.

His quote is:

"...and to date there hasn't been a station that properly delivers this target group..." (As read)

4747 Which our station would do for him.

4748 We looked at, obviously, his budget that we could work with on our radio station.

4749 I guess one other quick example before I pass it back to our V-P of Sales, Ky, to speak more on the repatriation, you heard -- well, you saw a demonstration of a mix show. We did four minutes. They are actually going to be about 20-25 minutes in total on our radio station.

4750 Well, we are going to talk -- we have talked -- that is part of our CTD initiative, but from a sales standpoint that is probably one of the best features our station is going to offer. Not only is it improving and developing new artists, this is going to be the hottest feature on JAMZ 94. We know it. We do a similar mixed show on CIDC, a different type of music, but that feature is constantly, constantly being sponsored by different sponsors.

4751 I already have two different businesses in mind that are a perfect fit for this. Number one is Sherwood Systems just on King Street in Kitchener -- actually a side street, Manitou I think it is. Who they want to target are DJs. They have no way to advertise to them unless they go out to nightclubs and talk to DJs. Obviously you saw from DJ Spence, he is not going to have time to speak to these people. So a station that is playing the hottest format and doing DJ tricks so they can pick up on the latest thing, it is a great way for them to advertise. Also, it is the most upbeat feature and people are going to tune into it a lot.

4752 Those are my thoughts on the local revenue, how I could get to the $525,000.

4753 I would like to pass it now back to Ky Joseph.

1435

4754 MR. BILL EVANOV: Actually I will take it over.

4755 I just want to say, we have a lot of enthusiastic young people on this panel.

4756 MS LAURIGNANO: You can tell he is a salesman.

4757 MR. BILL EVANOV: You can tell he is a salesman.

4758 What we were trying to show you, it doesn't matter what market went. We have done our homework. We know the dollars that are out there and our projections are very, very realistic.

4759 COMMISSIONER DEMERS: Thank you.

4760 Just to close on advertising and format, maybe this will be a short answer.

--- Laughter / Rires

4761 COMMISSIONER DEMERS: Rhythm and blues and hip hop, they are popular. This is a relatively recent phenomenon. You have indicated maybe not that recent. How much staying power do you think this genre has? Is there a chance that this is a passing fad?

4762 MR. BILL EVANOV: It is no a passing phase. It is here and it has been here for 15 years and it is growing. It's worldwide.

4763 Chris, if we can give a short answer?

4764 MR. VOISIN: I'm good at short answers.

4765 MR. BILL EVANOV: I won't pass it over to Spence again.

4766 MR. VOISIN: Your question has been asked of this music for 20 years and every year it gets bigger and bigger and bigger. Every year "It's just a fad, it's going to die. It's just a fad, it's going die", and the next year the record sales go up and more urban stations open and more clothing opens. I don't see this going anywhere. This is the rock 'n roll of the 50s and 60s and there is still lots of rock 'n roll out there.

4767 So I really honestly do not see -- I just see this getting bigger and I see more people accepting it and more people listening to it. I don't know if you can fit any more in.

4768 Spence, would you like to add anything?

4769 MR. DIAMONDS: Yes, definitely to say I think it is here to stay. If you look at all the multinational companies like Pepsi, pop tarts, they have all jumped onto this. It has been around for a long time, but now they have full ad campaigns based around this type of music.

4770 I went on a tour with Mountain Dew and we hit 10 cities, and they sponsored a hip hop skiboarding tour. This is where they are showing it is not just this urban thing, now it has gone into the skis who are skateboarding, snowboarding. It really crosses all boundaries. You have groups that appeal to certain demographics.

4771 So it is not something that is just like there is one urban stream, there are groups that appeal to the skateboard kids, the club kids. It goes right across the board. It doesn't matter the colour, doesn't matter age. It really has no boundaries.

4772 COMMISSIONER DEMERS: Thank you.

4773 The star power, as we see it in pop, country or jazz, does it exist in this case with Canadian artists, Canadian stars? Maybe you could comment on that.

4774 How will you play quality Canadian music in this genre that people will be listening to, the Canadian aspect to your application?

4775 MR. BILL EVANOV: Yes. We have a major Canadian talent undertaking as part of this format. As a matter of fact, our entire programming is geared to developing this.

4776 But I'm going to tel Carmela and Paul Evanov speak to this.

4777 MS LAURIGNANO: Okay. I think Paul will address first the question about the existing material to be on-air.

4778 MR. PAUL EVANOV: To coincide with how bit this format is and how it has been around for a long time, we don't have to go our and look and say "Okay, we want to launch an urban format. Where can we find urban Canadian artists". They have been out for a long, long time. They have been in the urban scene as well and it keeps on getting bigger and bigger.

4779 When we speak of Canada specifically, there have been urban Canadian artists for years and years, some of them on their third and fourth full CD release, many of them signed with major record companies. So it is not trying to find in the last six months where are urban artists, there are many, many out there, hundreds really. They are around and they are growing and growing. The scene is just exploding. As we said, it is really exploding and taking over, and that includes the Canadian talent, that includes the Canadian urban talent is getting bigger. There are more artists and there is more -- with the licensing of other urban stations across Canada it is exposing Canada, and that is what we want to know here at JAMZ, not only regionally and locally, but nationally across Canada.

4780 We believe also there is a new type of artist as well, as you saw before with Spence and the turntables, which I'm going to have Carmela go into a little bit more. But there is absolutely no shortage of urban Canadian talent at all, it is getting bigger and bigger.

4781 Like we said, the common theme of this format and everything, it represents true to Canada and the Canadian talent is just going to keep growing and growing and getting bigger.

4782 So I am going to have Carmela explain exactly what we mean by "DJ spinner" and how that is a real talent as well.

4783 MS LAURIGNANO: Thanks.

4784 As Paul said, we are confident, we know we have done our research and we will have no problem meeting the commitment to Canadian content.

4785 However, at the same time for Canada we recognize that it is a young -- it is at the beginning stages to some respect as far as that both the artists and the musical genre we are working with are at the beginning stages.

4786 It is for this reason that even if you look at our investment strategy for the CTD, we have allowed, or at least it made sense for us not to front-load our commitment because when it comes to urban music we know that it has many art forms which are not readily accessible right now and it is our expectation that as we grow, not just JAMZ 94 but other urban stations across the country get more entrenched and perhaps other licences are issued or other programming adjustments are made, then it is just going to make the platform and the playing field that much bigger for opportunity.

4787 What is interesting about the star system in this genre is that it is away, to a large degree, from the traditional path, and that is that it is not just the recording star who is the talent and who is the attraction, that what Spence did there is part of the culture. It is a huge part of the culture.

4788 What Spence did, he did three things there: he performed; he composed, because three -- six albums, six different artists, and I think if you listen and if you heard, he made it sound like it was one recording; and he product. He produced. He just on-the-spot, like live right here produced the thing.

4789 So what is important for this culture and for this format and for this genre, is to take that which up until now exists in its embryonic stage on the street and in some clubs and to elevate it, to nurture it, to develop it and to make sure that if finds its proper place. Because as somebody said before, it is not just the music, it's a whole culture.

4790 So the DJ spinner, performer, producer, artist, composer is a major, major part of this, which is why it is a huge component of our programming. Four times a day at peak times, DJs like Spence will be on the air, producing, composing and performing what he did here live.

4791 MR. BILL EVANOV: Mr. Commissioner, I just want to mention that we increased -- when we did our budgets, we increased our programming expenses considerably to accommodate a unique and different approach to CTD. That is why our programming expenses are as high as 55 per cent rather than an average of 35 or 40 per cent which might be our normal.

4792 The focus of our application is on developing Canadian talent. Because the urban format is so intensely grassroots, it is the programming of the station that would drive the CTD. What you saw today, there are examples, maybe not in Canada yet, but there are huge DJs that I could not afford to come to our concerts from New York City or L.A. that do just what Spence does. They want fees of anywhere from $20,000, $30,000, $40,000. But these DJs in New York City -- and we say "DJs", not an announcer -- DJ spinner producer like Spence was, the DJs attract anywhere from 20,000 and 30,000 people to a concert. This is not a band or a singing group of anything, this is DJs performing and they will sell 20,000 tickets.

4793 It is a new art form and, in our opinion, it is a form of developing Canadian talent, because there are many, many spinners here but there has never been an outlet for them before, other than the local clubs. But if you go to any club, any dance club in the country, you will find DJ spinners. But that's it. It's a dead-end. They can't go from there.

4794 MS LAURIGNANO: And it makes perfect use to utilize that, because the artists that are on the street have their own following and what happens is, when you take somebody like Spence who performs at a club where he gets maybe 1,000 people a night, and you put him on the air, what happens is the people who are in the clubs are going to tune in the radio to hear what is going on.

4795 It is just a beautiful relationship and it is a real grassroots kind of marketing that you reach the listeners one at a time by using the artist and the talent as a drawing card and just build that mass of audience.

4796 So it is win/win for everybody, as far as we are concerned.

4797 The other extremely important thing in this regard that we are doing is, we have an actual position dedicated to coordinating the DJ spinner component part of the programming. So whereas a traditional station will have a PD, a program director, music director, we also have a director of the DJ spinners. We feel it is that important that it has become an integral part of the programming.

4798 COMMISSIONER DEMERS: Okay. I turn now to your news proposal.

4799 You say that in a sense you would gear your newscasts to young people, so other than the community-oriented announcements, how do you intend your news to be more youth friendly?

4800 MR. BILL EVANOV: Okay. I will just ask our Director of Operations in a moment.

4801 I do want to say on the news that we are building a local, local standalone Kitchener radio station utilizing local staff, local reports and local interns from the college and universities. So basically we are going to have a young voice within the radio station to begin with.

4802 I will ask Gary Gamble to walk through the entire format.

1650

4803 MR. GAMBLE: Thanks, Bill.

4804 When we were putting together the programming for music and the entire sound of the station, we didn't just want to go and say "Wow, we have the music down pat now, we know it is top 40 urban that this demographic is looking for and this is what there is a need for". We said "Let's find out about news." We don't want to just say "Well, we have the format now and we will just throw a few newscasts in and we have a morning or an afternoon show.

4805 In the same study that was conducted by Polara, we asked the demographic, for example: How important is news and information in your city? The results that came back were very important. Thirty-four per cent of those found it very important. We also asked: New and info about your school? Twenty-five per cent of those surveyed came back and said it is very important. Forty-one per cent said traffic reports were very important. Weather updates, 48 per cent of those surveyed said that is important.

4806 So what we did from there was to say "We have to get information, lifestyle information out, information not only what is happening on a national, regional and international basis, but we have to get Kitchener information out. That is what is important to our demographic".

4807 So starting with the morning, we will be running two-minute newscasts for example, headline style, to alert people as to "Here is what is happening in the world". That is two minutes at the top of the hour and one minute at the bottom of the hour.

4808 Throughout the day, we have capsuled some information that they specifically want to hear. Club information, club and concert information.

4809 Our announcers throughout the day will continually be talking about what is going on that affects our demographic when it comes to topics like social issues, the environment, whatever concerns them. For example, the strike that is on right now in Wilfred Laurier University, our university students, they want to know what updates are going on there.

4810 The other end of the demographic wants to know in the morning what is going on with the scandal, for example, that is happening at the Waterloo Council.

4811 These things are important, not only to the upper end of the demographic, but our research shows that our total demographic want information and information in different ways, as we said, whether that be club and concert listings, information from high schools.

4812 Also in there we are constantly doing weather updates mornings. As you might know, the Kitchener area broke a record the other day for minus 4 degree temperature, the coldest it has been ever in Kitchener. So they want to know that sort of thing.

4813 When they are driving along in the car, driving their kids to school, their parents want to know what is going on in the world.

4814 Also, we want to know what is going on to be able to relate that to our listening audience, what is going on at high schools and universities and at Conestoga College and right in those areas, because that is what our target wants to hear about.

4815 So we put together what is called a campus reporter program where we are going to utilize one student within each school in the trough-cities area to provide us with reports on activities in the school, updates on dances, varsity scores, so that we can incorporate that into our news, weather and sportscasts.

4816 To tell us a little bit about that, Sandy, who came to our CIDC location as an intern, she worked her way up and is not on our news staff with that station. She is going to be coming to help us put together this intern program so that we can make use of the best available people at this schools who are possibly going to a broadcasting, are in a broadcasting course and want to further their education in that. We can help them.

4817 Sandy can explain a little bit about that.

4818 MS FADDOUL: Thank you, Gary.

4819 Basically that is just it. What Gary was saying about the campus reporter program is we want to find out what is newsworthy to our target demo and who better to tell us than themselves. That is why we will be working with the high schools, the universities, the colleges to find out what is happening, what is news for them. That is why we will be working with them. They will tell us what is going on in their sports, going on in entertainment, in news to them, whether it be strikes or other news-related topics.

4820 That is why the program is so beneficial, because I call it a win/win situation. Not only will we be getting the information right from the horse's mouth, so to speak, but we will also train these students in writing, editing and presenting news for radio.

4821 Because a lot of the students who are in the communications program or in broadcasting program can take courses forever -- and trust me, some of us have -- but until you enter the radio industry you really have no idea of what you are embarking on. That is why interning is so crucial, because you really can't pick up these skills at school, you have to be out there learning and hands-on training is really what it is all about.

4822 It is a very important step for any student looking to enter the broadcasting industry and it is very beneficial for us because we will find out what is relevant to our target demo and keep in tough with them and work with them.

4823 Any intern, like myself for example, who really finds that this is what exactly they want to do, we will obviously show some interest and work with them. This could lead to a career with our station and obviously advance from there.

4824 MR. GAMBLE: Thanks, Sandy.

4825 Also throughout the day our announces on the air will keep people updated as to what those major topics are that we are talking about in the news headlines, carry on with that. When they are talking to our listeners on the air when it comes to requests, contests, they are talking about things that are going on, what we call rolling talk, throughout the day.

4826 Also, we are providing a newscast at noon hour and in the afternoon at the top of the hour, two-minute newscasts also.

4827 One other thing we want to do is, we want to make the news understandable. I think of a lot of times when younger people hear the news, it is sort of just there and it just sort of passes off as just chatter. What we would like to do is have our announcers follow up on what they heard in the news.

4828 To give you an example of that, the Z-103.5, the morning man, Scott Chapman is here. The other day he had an experience with he came off the end of a newscast on the air -- maybe, Scott, you can tell us a little bit about that.

4829 MR. CHAPMAN: Well, exactly. Our newscast package at the top of the hour talked about controversy over the Kyoto Accord. I looked at the newspaper and it was the headline in three Toronto newspapers. I sat down and I said to myself: I don't think most people know what the Kyoto Accord is. So, very simply, I went on the air and I said that: I don't think most people know what the Kyoto Accord is.

4830 So I went into detail and I explained it and I took some calls from listeners. The feedback I got via e-mail and phone calls was 100 per cent positive. "Thank you so much because no, I didn't know what it meant, and since I didn't know what it meant I really didn't care."

4831 So we did get great response and we were able to include our listeners, and that is one of the things that we would like to do on a regular basis.

4832 MR. GAMBLE: Thanks, Scott.

4833 As Bill mentioned at the very top when we were getting into the news programming, it is our intention to do a totally local Kitchener-Waterloo newsroom and radio station. That will encompass a news director -- myself, for example. I live in the area, I was brought up here. Also there will be four news staff, four full-time staff, and that will include a news director who will also cover the morning news, afternoon news reader and two reporters, along with two full-time interns on a totally stand-alone basis.

4834 If it is going on in Kitchener-Waterloo, we are going to find out what is going on by being close in the community and working with city councils, working with the police force, in this case of course Waterloo Regional Police, the Mayor's office, and also be in touch with the MPP.

4835 So no matter if it is politics, if it is something going on in this local area, we want to find out about it and get it on the airwaves. If it has to do with the younger end of the demographic when it comes, once again, to fashion tips, lifestyles, environment, we want to have that information and pass it on that we get from our campus reports. Our reporters on staff in Kitchener-Waterloo will gather the basis of our local content.

4836 COMMISSIONER DEMERS: Thank you.

4837 Another question, and it may need a very short answer.

4838 We found that you would not accept call-ins from your listeners. Why not allow the youth to call in? From reading your application, your application states that you will not have live calls. Why not allow youth to do live call-ins, or maybe it is time to clear it up if it is a misunderstanding?

4839 MR. BILL EVANOV: Mr. Paul Evanov will answer that.

4840 MR. PAUL EVANOV: Just to put clarification on that, what we mean by live call-ins is that we want to be responsible when we are broadcasting so live call-ins, not just anybody. There is no doubt that we welcome news from anybody that sees anything from traffic reports to road accidents, for any listener to call in and give us news information.

4841 What we mean by that is, because they are calling and giving us news information, it might not be airworthy or to put them on the air live right there, saying "Okay, we have a quick news story, let's to go such and such who has called in with the story." We are more than welcome to take the information and pass it on to our news department who then can portray it, but we won't be taking live callers immediately.

4842 If we did, and we felt they were worthy to go on the air, we would obviously like to screen them first and make sure that they give proper information. Also, by screening it we will be able to determine if it is facts. Somebody could be calling in with a news tip but have a different angle on it or not have the whole story.

4843 We want to make sure it is factual and that we are delivering the proper news.

4844 COMMISSIONER DEMERS: Thank you.

4845 You intend to collect quotes and comments. This will be done maybe in the way you have just described?

4846 MR. PAUL EVANOV: Not just that way, through the phone calls and also the radio shift now is obviously e-mail to our Web site and through all the campus reporters. There is such a variation, there is such a large span to grab from. So phone calls through our phones line to our news department, via e-mail, via our Web site, and also all the students and interns that we have out in the schools.

4847 COMMISSIONER DEMERS: Thank you.

4848 On the Canadian Talent Development proposal, you have discussed this in some ways in your presentation, but just a few particular questions.

4849 You have indicated that there is some funds that are uncommitted. You say:

"We believe this will give us an opportunity to review other suitable recipients and initiatives very precisely." (As read)

4850 Could you explain how you will determine which development initiatives you will pursue and maybe what criteria you will use to determine where the rest of the CTD funds will go, briefly?

4851 MS LAURIGNANO: Yes, I can speak to that.

4852 I mentioned locally before, the urban music and talent pool is evolving right now. There is major changes going to happen as far as Canada is concerned. We, for example, would love nothing more than to get involved in a star system that would perhaps promote talent that you have seen with Spence and others.

4853 So, Commissioner, I think you will know that we have outlined the expenditure for the first few years and that is all, it is in the area of education, in the area of the DJ spinning and through the strategic and financial agreement that we have with Canadian Music Week to have a platform and a venue for this genre of music and performers at Canadian Music Week. For example a seminar and information will be available to DJ spinners in that and other related information on the industry, how to, for example, get a recording contract, that kind of stuff. There is actually a dedicated initiative from Canada Music Week directly associated with this.

4854 So for the first three years definitely the commitment is solid that way.

4855 The unallocated funds, we believe that by that time, if not sooner, we will be able to assess exactly what progress we were making where the funds should be directed, although we do anticipate that we will continue on the path that we have carved out. At that time, of course, we would make available to you exactly where the funds would be going.

4856 COMMISSIONER DEMERS: Thank you.

4857 You also stated while the majority of the 12-34 listeners will not have household incomes over $40,000, many of these listeners will have very high discretionary income spending because they live at home.

4858 Do you have any additional information about the amount of disposable income available to students?

4859 MR. BILL EVANOV: Yes, we do and I will ask Debra McLaughlin to speak to that.

4860 MS McLAUGHLIN: We submitted with this application a study by Youth Culture Inc., which is one of the leading companies in Canada in terms of researching the youth demographic. In that study it was estimated -- and that study was conducted last year -- that they had on average on a weekly basis $107 per student, which is a tremendous amount of money when you add it up over the year.

4861 We just got a release from Youth Culture which has released a portion of this years' current study and it indicates that in spending along on going back to school, the students spent $1.7 billion in funds on going back to school supplies, which covered a range of clothing, fashion, school supplies like paper, calculators, et cetera. They influence 62 per cent of that expenditure.

4862 Forty per cent of that expenditure came directly from their own pockets, which I guess is a bit of an oxymoron for anybody who is a parent. It took a route through their pockets I guess is what I'm trying to say, but that was their funds to spend.

4863 So that is a huge increase from the prior year. I believe the amount the prior year was $1.5 billion, so a .2 billion increase, and that is just going back to school.

4864 So the $107 per week we are expecting to come out at about $135 per week.

1505

4865 COMMISSIONER DEMERS: Thank you.

4866 Another point here. Three applicants propose a country or new country format for Kitchener; three applicants propose CHR, urban top 40 format, do you have something else to add to this question: Could you explain why you believe that the urban top 40 format is a better format for Kitchener than the country format?

4867 THE CHAIRPERSON: Can I just interrupt? I note the enthusiasm for the format, so if I could ask you just to focus your answer on the specific of the question, which was the comparison with the country format in this market. It is a marketing question. Just a reminder to try to focus the answer a little bit.

4868 Thank you, Mr. Evanov.

4869 MR. BILL EVANOV: Okay. If we look at the country formats, we feel that there is -- the 25-54 demo is served to whatever degree, perhaps not a country format, but there are a number of services for that demo. There is virtually no local service for the 12 to 24 demo.

4870 Our research shows that there is a big hole in the 12-24s. The music is missing and the demo is missing from radio, not just from out-of-market radio.

4871 Country artists. The country music industry is entrenched and established in terms of having Canadian development and whatever support system there may be, where we are just in the infancy of trying to build a similar entrenchment and to establish the development of Canadian talent for the urban artists, whether it be -- for the urban artists.

4872 Also, the impact. We have indicated that the impact would be least with our format in the market because there is no local station providing the service to the market.

4873 I think that is --

--- Pause

4874 MR. BILL EVANOV: I think that is basically our answer to that question.

4875 COMMISSIONER DEMERS: Thank you.

4876 Another precise question is: Your expense levels are among the lowest of the commercial applicants. For example, your technical expenses are projected at a level of $13,000-$16,000 per year, well below the industry norms and the levels projected by the other applicants. Would you have some explanations?

--- Pause

4877 MR. BILL EVANOV: You are just looking at the annual technical or the capital cost, or the capital expenditure?

4878 COMMISSIONER DEMERS: I was really concerned with the technical expenses.

4879 MR. BILL EVANOV: Okay. We would -- I guess in coming to these figures we looked at the dollars we were actually spending on our existing services. We had also looked at the fact that CIDC is a 50,000 watt station and the height of that. We also looked at this particular frequency, which is 400 watts and the size of transmitter and the amount of maintenance it would take. So I believe even in terms of power, we are not putting out the power that some of our competitors are putting out. We are restricted to around 400 watts.

4880 I don't have to buy the ultra expensive transmitters and all the equipment that goes along with it and the servicing costs would be much lower as well.

4881 We think we can live with this figure, which is why we calculated it and put it down.

4882 Also, there is a synergy here and one of the synergies we will share is engineering. We have an engineer that works with us on our other sites and we would extend that service to the Kitchener-Waterloo area.

4883 COMMISSIONER DEMERS: Thank you.

4884 Maybe the same type of question would be on -- maybe that is what you were referring to -- your administrative expenses going from $169,000 in Year 1 to $290,000 in Year 7 are also below industry norms and the other applicants. Do you have explanations there?

4885 MR. BILL EVANOV: Well again, we assessed the staff we would require. Many of our people are connected to the programming end of the expenses. We felt that in terms of general admin this amount of dollars would carry us through.

4886 Again, in terms of synergy we will have an accountant on staff in this market, but we have an overall controller that will oversee and work on various financial projections and other things with CKMW.

4887 COMMISSIONER DEMERS: Thank you.

4888 On a different topic, the Fall 2001 BBM results reveal that CIDC-FM was one of the top out-of-market stations in Kitchener. Will the format you propose be similar? No.

4889 Will the new station repatriate tuning from your already existing station?

4890 MR. BILL EVANOV: The quick answer is absolutely it will repatriate listeners that are listing in Kitchener to CIDC, perhaps not all. The two formats are distinct and different. Our format is CHR in Orangeville with CIDC, it is CHR with a strong Euro-dance component. The format here is urban with a top 40 chart mixed in with it. They are two different formats.

4891 Right now the young demo, the 12-24, is the main target of this particular urban format, whereas with CIDC we are targeting more and more 18-plus.

4892 COMMISSIONER DEMERS: Thank you.

4893 You have just referred to synergies. Did you make the whole review? Would you want to add? Do you have other synergies that you have not mentioned a few moments ago?

--- Pause

4894 MR. BILL EVANOV: I think we are looking at a little bit of accounting.

4895 Definitely in the early days expertise from some of my managers at the other group's stations, perhaps some voiceware for production to give commercials a different sound. And engineering or technical. Those would be the only synergies we could share.

4896 COMMISSIONER DEMERS: Thank you.

4897 And we get to the number of stations this Panel may license. What would be the effect on your business plan if the Commission licensed more than one station in the Kitchener market?

4898 MR. BILL EVANOV: If the Commission licensed a CHR station it would affect our business plan and I don't think that is in the best interests of the Commission or of the market, the K-W market.

4899 If it is a non-competing format we don't have a problem with anything else being licensed in the marketplace. We don't believe it is really going to affect us.

4900 If country is targeting the 25-54 demo, we are not targeting that demo. The stores they will go to will be different stores than the stores that Joey will be approaching for advertising.

4901 There may be some areas of conflicts and some areas of competition, but overall it would not affect our business plan at all.

4902 COMMISSIONER DEMERS: Thank you.

4903 The last few questions you have heard being asked to others.

4904 What are the compelling reasons to grant you the requested frequency?

4905 MR. BILL EVANOV: We are the best and only use of the 93.9 frequency.

--- Laughter / Rires

4906 MR. BILL EVANOV: We are bringing a very popular music style, urban music, to this market which our research and market study has shown it wants.

4907 Very importantly, we are introducing and will introduce with our programming, a new performing artists, the DJ spinner producer. This represents a new initiative for CTD and programming in Canada.

4908 We are devoted to building a local Kitchener-Waterloo radio station with local news and local staff.

4909 In terms of diversity, we will provide a new independent voice for Kitchener-Waterloo.

4910 We will fill a void in the market by serving the 12 to 24 demo, which in turn will, number one, repatriate young listeners back to Kitchener-Waterloo radio and, number two, bring back some of the young teens back to radio period.

4911 Also, this format provides the least impact in the market.

4912 COMMISSIONER DEMERS: Thank you.

4913 Our last question on cultural diversity, and I will read it so it is the same question to every one of you:

"What measures would you take to incorporate and reflect the reality of Canada's cultural, ethnic, racial and aboriginal diversity in the following areas: employment practices, news, music and the promotion of Canadian artists?" (As read)

4914 MS LAURIGNANO: Okay. I will do that one I will try to do it quickly.

4915 CKMW Radio Limited has filed and submitted an equity report, so it is on file with the Commission. I think it clearly reflects our excellent performance. We achieve this throughout our whole operation from my staff to the accounting department.

4916 We operate an ethnic station already, as you know, so through this we have really come to know and appreciate the varied cultures, as well as come to know some of the issues. This too has made us more sensitive and sensible in terms of putting safeguards and guidelines into place.

4917 Multiculturalism and multilingualism is a big factor in our professional and personal life. We really live it and celebrate it each day. This diversity is truly a cornerstone of our business plan.

4918 For example, CKMW Radio was the applicant for Rainbow Radio, which proposed a licence for Toronto's gay community. We didn't get that one.

4919 We state in our application, for example, that we would also use CIAO when appropriate, our ethnic station, to try to reach some ethnic or linguistic component there.

4920 When we began to assess K-W, one of the primary objectives in fact was to determine the demographic and ethnic composition of this market, including the use of language. The research came back, of course, that this society is diverse and that the ethnic component communicates in English.

4921 So the multicultural, multiethnic reality of K-W is an integral of JAMZ-FM. It has to be, because we believe that if you truly want to be local and relevant, and therefore successful, you have to do that.

4922 This is going to be done through our programming initiatives, i.e., in the content of news stories, through the talk portions, the events calendar feature. One of the reasons the events calendar feature was instituted -- and it runs twice a day, seven days a week on JAMZ -- is that it will be a container to put in important things that are relevant to the community, cultural events and that type of content.

4923 Club and concert listings of course is another feature that is on every day, and it doesn't have to be just M&M, you know, not making it across the border, but it can be, for example, a Portuguese rap artist who is coming into town, because we know that Portuguese is the second most often language spoken in the Kitchener-Waterloo area, aside from English.

4924 So again, through our EE initiatives, in the hiring practice for example we always encourage applications from the designated group. We state that in writing. That will also be in the recruitment drives that we will have to staff the station, as well as the applications for the initiatives that we plan to undertake.

4925 I think you have heard Spence quite eloquently before describe that the artists and the music is definitely that, because the artists are coming from all over the world. It has, right now, no border and no colour.

4926 The other body that we will rely on is a local advisory committee here that we expect, and we will ask them to keep us abreast of not just the standards but what is acceptable and not.

4927 We truly, truly believe that radio is an avenue for self-reflection. For example -- just very quickly and I'm almost finished -- this past summer we began to receive reports that the song that was in the clubs -- this is in the northwest part of the CMA, of Toronto -- that the crowd would just go nuts every time this song came on. So of course we quickly jumped on it and it turned out that it was to be a Eyeful 65 -- which is a DJ -- European remix of an Italian song, lyrics. So what we did is we put it on the air. Guess what, it became the most requested song of the summer.

4928 So I think you can rest assured that we truly program from the street up rather than from the corporate tower down.

4929 As far as diversity is concerned, we not only embrace it, we really celebrate and we say "Bring it on".

4930 COMMISSIONER DEMERS: Thank you, Mr. Evanov, thank you, ladies and gentlemen.

4931 Back to my Chair.

4932 THE CHAIRPERSON: Thank you very much.

4933 I think counsel has a question for you.

4934 MR. WILSON: Yes. Thank you, Madam Chair.

4935 I have one question and this relates to the issue of Canadian content.

4936 In your presentation and in your discussion with Commissioner Demers you discussed DJ spinning extensively. I just wanted to draw your attention to a policy statement that the Commission had made in Public Notice 2000-12 which was setting out its campus radio policy. But in that policy it also had occasion to deal with the issue of what in that policy the Commission referred to as "turntableism" and "radio art".

4937 In that policy the Commission stated that it had decided not to recognize turntablists or performers of radio art as artists for purposes of the Maple definition for Canadian selections.

4938 In light of that policy statement, does that have any impact on your ability to meet your commitment to Canadian content?

4939 MS LAURIGNANO: Absolutely not. Just to remind you that the application of course was submitted before the PN came along. We did read it. We reviewed it.

4940 No, it has no bearing whatsoever as that was not counted in the count.

4941 MR. WILSON: I have no further questions, Madam Chair.

4942 THE CHAIRPERSON: Thank you very much, counsel.

4943 Thank you very much and please understand that our comments were just to assure we got through all our questioning, but your answers are very complete and the public record certainly is not lacking in detail.

4944 So we thank you very much for your presence here and your presentation and your demonstration. Thank you.

4945 MR. BILL EVANOV: Thank you

4946 THE CHAIRPERSON: We will now take a short break, five minutes, to allow the next applicant to come to the table.

4947 Thank you.

--- Upon recessing at 1522 / Suspension à 1522

--- Upon resuming at 1528 / Reprise à 1528

4948 THE CHAIRPERSON: Order, please. Thank you.

4949 Mr. Secretary.

4950 MR. LEBEL: Thank you, Madam Chair.

4951 Before we begin, just for the record I would like to indicate that the agenda and my introduction of Item 9, Larche Communications Incorporated, indicated that the application was for frequency 99.5, Channel 258B, with an effective radiated power of 3,900 watts.

4952 In fact, this application is for frequency 99.5, Channel 258A, with an effective radiated power of 1,700 watts.

4953 Now, Madam Chair, we are at Item 11 on the Agenda, which is an application by Anthony Schleifer on behalf of 14863781 Ontario Limited to amend the licence of radio station CFWC-FM.

4954 The licensee proposed to increase the effective radiated power from 50 to 250 watts.

4955 I believe at this time that Mr. Brian Beattie has a short statement to make on behalf of the applicant.

4956 Mr. Beattie.

PRESENTATION / PRÉSENTATION

4957 MR. BEATTIE: Thank you, Madam Chair, Commission. My name is Brian Beattie, I am here on behalf of Anthony Schleifer, a CFWC-FM 99.5 in Brantford.

4958 After consideration and dialogue with the other applicants for the frequency 99.5 FM, we have chosen to withdraw our request and application for that frequency. We have spoken to the other 99.5 applicants and have worked out an amiable solution. Several of the engineers have recommended another workable frequency at this time.

4959 We respectfully request that the Commission would handle our new process as expeditiously as possible.

4960 Thank you.

4961 THE CHAIRPERSON: Thank you very much.

4962 Any questions?

4963 That's fine, we accept your withdrawal of the application.

4964 MR. BEATTIE: Thank you.

4965 THE CHAIRPERSON: Thank you.

4966 Counsel, any further comments?

4967 MR. WILSON: No, Madam Chair.

4968 THE CHAIRPERSON: Thank you very much.

4969 That ends this section. We will now take a real break, 15 minutes, and we will be back -- Mr. Secretary?

4970 MR. LEBEL: With the beginning of Phase II, whereby the applicants are given an opportunity to intervene to competing applications and a period of 10 minutes is provided to do so, in the same order as the applications were presented.

4971 Thank you, Madam Chair.

4972 THE CHAIRPERSON: Thank you very much.

4973 Fifteen minutes from now is quarter to 4:00. Thank you.

--- Upon recessing at 1530 / Suspension à 1530

--- Upon resuming at 1545 / Reprise à 1545

4974 THE CHAIRPERSON: Order, please.

4975 Mr. Secretary.

PHASE II

4976 MR. LEBEL: Thank you, Madam Chair.

4977 We have now reached Phase II of this public hearing in which applicants are provided with an opportunity to intervene on competing applications.

4978 The first applicant to appear is Rogers Broadcasting Limited.

4979 You have 10 minutes to make your presentation.

INTERVENTION

4980 MR. MILES: Madam Chair, Members of the Commission, we have no intervention.

4981 THE CHAIRPERSON: Thank you very much.

4982 Mr. Secretary.

4983 MR. LEBEL: Madam Chair, Global Communications Limited indicated that they would not be appearing in Phase II as well.

4984 So to the Telephone City Broadcasting Limited.

4985 I will ask now Aboriginal Voices Radio Inc. to appear at this time if they have a representative in the room.

--- Pause

4986 MR. LEBEL: Not seeing any, we will provide them tomorrow morning with an opportunity to intervene in Phase II if they are in attendance.

4987 We will now ask Douglas E. Kirk to intervene at this time.

INTERVENTION

4988 MR. KIRK: Thank you, Mr. Secretary.

4989 Madam Chair, Commissioners, Members of the Commission, the applicant, Douglas E. Kirk, OBCI, wishes to intervene against the Bauman Roe application.

4990 We believe the applicant has made a number of significant amendments to what now appears to be a work-in-progress application.

4991 In their appearance before you it appeared that the application had morphed in the following ways: What we heard this morning, Mr. Roe would have you believe that a clerical error resulted in a failure to commit to a Canadian content level of 40 per cent in his application. It appears that Mr. Roe was alerted to that opportunity to program 40 per cent by his Columbus, Ohio-based consultant, Mr. Bill Harman, yet he took no action to alert the Commission of the oversight and inform other applicants.

4992 There are other significant changes which apparently have been made and not filed so competing applicants could examine them, a commitment to produce and syndicate a weekly Canadian country music countdown show which, by Mr. Roe's own estimate, involved an annual expenditure of between $78,000 and $104,000 per year.

4993 And additional CTD commitments take winners of a contest to meet with recording executives in the U.S.A. were not, to our knowledge, in the application.

4994 Madam Chair, you invited competing applications for their views regarding the changes to the Bauman Roe application. Individuals who have appeared before the Commission are veteran broadcasters and their collective experience and service is in the multiple 10s of years and they should be well aware of the CRTC's procedures.

4995 We respectfully submit that the amendments to the application made at the hearing undermine the competitive hearing process and should not -- I repeat, not be accepted.

4996 I have a couple of more points.

4997 Also, contrary to what may have been inferred by the applicants this morning, I believe Mr. Roe is not a resident of Kitchener-Waterloo. He lives in Hamilton, Ontario.

4998 Finally, early in the hearing, Commissioner Cram, I believe you expressed concerns about woeful licensees being tempted to sell ownership interests. I just want to put on the record that within months of licensing CIWV in Hamilton, Mr. Roe was in discussion with other larger broadcast organizations and offered his shares for sale.

4999 My wife and I subsequently bought those shares.

5000 Thank you.

5001 THE CHAIRPERSON: Thank you very much.

5002 We have no questions. Thank you.

5003 Mr. Secretary.

5004 MR. LEBEL: Thank you, Madam Chair.

5005 Sound of Faith Broadcasting indicated that they would not appear in Phase II, so we will now ask Trust Communications Ministries to intervene at this time.

INTERVENTION

5006 MR. JACKSON: Good afternoon, Madam Chair, Commissioners. On behalf of Trust Communications, we do not have any interventions against the other applicants at this time.

5007 Thank you.

5008 THE CHAIRPERSON: Thank you.

5009 Mr. Secretary.

5010 MR. LEBEL: Thank you, Madam Chair.

5011 We will now ask Edward Bauman and Ray Roe to intervene at this time.

INTERVENTION

5012 MR. CRAIG: Madam Chair and Commissioners, I am Jim Craig and I am here representing Mr. Roe and Mr. Bauman and we would just like to say that the Bauman-Roe group would choose to take the high ground here.

5013 Of course it is very evident that all 10 applicants that have appeared before you over the past few days have worked very hard at submitting their applications and creating and making good presentations in support of their own quest to secure a new broadcast licence based in the Kitchener-Waterloo market, but of course we feel that this applicant has the most compelling case and we don't feel the need to take any shots at any of the applicants at this time, nor would we feel comfortable in doing so.

5014 So instead we will stand on the strength of our application and its presentation, plus the local nature of its group, and we won't be intervening against anyone else.

5015 THE CHAIRPERSON: Thank you very much.

5016 Mr. Secretary.

5017 MR. LEBEL: Thank you, Madam Chair.

5018 Larche Communications Inc. also indicated they would not intervene in Phase II, so we will now ask CKMW Radio to intervene at this time.

5019 COMMISSIONER LANGFORD: I would have thought Mr. Larche would have wanted to say something about the amount of spending money he is giving his daughter since we have heard that the national average is around $107 and she is scrambling around for potato chip money, but it's his call.

--- Laughter / Rires

5020 THE CHAIRPERSON: Go ahead, Mr. Evanov.

INTERVENTION

5021 MR. BILL EVANOV: Madam Chairperson and Commissioners, thank you for the time for listening to our application. We have no intervention against any of the applicants.

5022 Thank you.

5023 THE CHAIRPERSON: Thank you very much, Mr. Evanov.

5024 Mr. Secretary.

5025 MR. LEBEL: Madam Chair, this completes Phase II of this public hearing.

5026 Thank you.

5027 THE CHAIRPERSON: Thank you.

5028 That completes our work for today. Perhaps I could just ask the secretary to bring us up to speed on the next phase and alert intervenors to our timing tomorrow.

5029 MR. LEBEL: Thank you, Madam Chair.

5030 Tomorrow morning we will start Phase III, which is the phase in which other interested parties do intervene on the applications that were heard by the Commission in the past three days. They are provided with an opportunity of a period of 10 minutes to intervene, and I believe we will begin the public hearing at 8:30 tomorrow morning.

5031 THE CHAIRPERSON: That is correct, yes.

5032 MR. LEBEL: Thank you.

5033 THE CHAIRPERSON: So that is the end of today and we will see you in the morning at 8:30 a.m. right here in this room.

5034 Thank you all very much.

--- Whereupon the hearing adjourned at 1559, to resume

on Thursday, October 31, 2002 at 0830 / L'audience

est ajournée à 1559, pour reprendre le jeudi

31 octobre 2002 à 0830

Date modified:

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