ARCHIVED -  Transcript

TRANSCRIPT OF PROCEEDINGS

FOR THE CANADIAN RADIO-TELEVISION AND

TELECOMMUNICATIONS COMMISSION

TRANSCRIPTION DES AUDIENCES DU

CONSEIL DE LA RADIODIFFUSION

ET DES TÉLÉCOMMUNICATIONS CANADIENNES

SUBJECT / SUJET:

VARIOUS BROADCASTING APPLICATIONS FOR BROADCASTING LICENCES TO CARRY ON RADIO PROGRAMMING UNDERTAKINGS TO SERVE EDMONTON, ALBERTA, PUBLIC NOTICE CRTC 2002-29 AND RED DEER, ALBERTA, PUBLIC NOTICE CRTC 2002-75

PLUSIEURS DEMANDES EN RADIODIFFUSION VISANT L'EXPLOITATION D'ENTREPRISES DE PROGRAMMATION DE RADIO POUR DESSERVIR EDMONTON (ALBERTA), AVIS PUBLIC CRTC 2003-29 ET RED DEER (ALBERTA), AVIS PUBLIC CRTC 2003-75

HELD AT: TENUE À:

Shaw Conference Centre Shaw Conference Centre

Salon 8 Salon 8

9797 Jasper Avenue 9797, avenue Jasper

Edmonton, Alberta Edmonton (Alberta)

Volume 1

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.

Canadian Radio-television and

Telecommunications Commission

Conseil de la radiodiffusion et des

télécommunications canadiennes

Transcript / Transcription

VARIOUS BROADCASTING APPLICATIONS /

PLUSIEURS DEMANDES EN RADIODIFFUSION

BEFORE / DEVANT:

Andrée Wylie Chairperson / Présidente

Andrew Cardozo Commissioner / Conseiller

Stuart Langford Commissioner / Conseiller

ALSO PRESENT / AUSSI PRÉSENTS:

Peter McCallum Legal Counsel /

Conseiller juridique

Steve Parker Hearing Coordinator /

Coordonnateur de l'audience

Pierre LeBel Secretary / Secrétaire

HELD AT: TENUE À:

Shaw Conference Centre Shaw Conference Centre

Salon 8 Salon 8

9797 Jasper Avenue 9797, avenue Jasper

Edmonton, Alberta Edmonton (Alberta)

June 18, 2003 Le 18 juin 2003

Volume 1

TABLE OF CONTENTS / TABLE DES MATIÈRES

PAGE / PARA

PHASE I

PRESENTATION BY / PRÉSENTATION PAR:

Rogers Broadcasting Limited 7 / 33

Newcap Incorporated 72 / 431

Jim Pattison Industries Limited 136 / 818

Canadian Broadcasting Corporation (CBC) 245 / 1373

PHASE II

PHASE III

INTERVENTION BY / INTERVENTION PAR:

Friends of CBC2 in Red Deer 278 / 1574

Edmonton, Alberta / Edmonton (Alberta)

--- Upon commencing on Wednesday, June 18, 2003

at 0900 / L'audience débute le mercredi 18 juin

2003 à 0900

1 THE CHAIRPERSON: Good morning, and welcome to this hearing..

2 Bonjour à tout le monde et bienvenue à cette audience.

3 I am Andrée Wylie and I am the Vice-Chairperson, Broadcasting, of the CRTC. I will be chairing this hearing.

4 I have been joined on this Panel by my colleagues, Ronald Williams, to my right, Regional Commissioner for Alberta and Northwest Territories Regions; Barbara Cram, on my left, Regional Commissioner for Manitoba and Saskatchewan Regions; and to her left, Commissioners Stuart Langford; and to Mr. Williams' right, Commissioner Andrew Cardozo.

5 The Commission team accompanying us is composed of Steve Parker, who is the Hearing Team Leader; Peter McCallum, Legal Counsel; and Pierre LeBel, our Hearing Secretary. Please do not hesitate to speak with any of them if you have any questions with regard to hearing procedures.

6 The main purpose of this hearing is to consider three applications for licences to operate FM radio programming undertakings and one application for a new CBC transmitter to serve Red Deer, Alberta, and nine other competing applications to operate FM programming undertakings to serve Edmonton.

7 During this hearing, we will also consider a renewal application for CFCR-FM in Saskatoon.

8 We will begin by hearing the three applications for new English-language FM commercial radio stations in Red Deer.

9 We will then hear an application by the Canadian Broadcasting Corporation to amend the licence of CBR-FM Radio Two in Calgary by adding an FM re-transmitter at Red Deer.

10 Next we will hear an application by the Community Radio Society of Saskatoon for renewal of the licence of radio station CFCR-FM.

11 At this hearing, the Commission expects the licensee, CFCR-FM, to show cause why a mandatory order requiring the licensee to comply with subsections 8(5) and 8(6) of the Radio Regulations should not be issued and why the Commission should not suspend or fail to renew its licence for non-compliance with conditions of licence or regulations.

12 We will then hear eight applications for new, English-language commercial FM radio stations here in Edmonton.

13 We will also hear an application by Aboriginal Voices Radio Inc. for a new English-language FM Native Type B radio station in Edmonton. This station would operate as part of the Aboriginal Voices Radio Network and originate nine hours of local programming per week.

14 We expect to complete this hearing by the end of next week. Each day will begin at 9:00 a.m. and end at approximately 6:00 p.m. We will let you know as soon as possible of any change in the schedule.

15 You must turn off your cellphones and beepers when you are in the hearing room. They are an unwelcome distraction for participants and panel members. We would appreciate your cooperation in this regard at all times.

16 I now invite the Secretary, Mr. Pierre LeBel, to explain the hearing procedures to you.

17 Monsieur LeBel.

18 MR. LeBEL: Thank you, Madam Chair.

19 Before we begin, just a few housekeeping matters. First, I would like to indicate that the Commission's examination room is located in Salon 5, down the hall from the hearing room. Public files of the applications being considered at this hearing can be examined there.

20 Secondly, there is a verbatim transcript of this hearing being taken by the court reporter at the table to my left in the centre. If you have any questions about how to obtain all or parts of this transcript, please approach the court reporter during a break for information.

21 If you want to have messages taken, we will be happy to post them outside the public examination room. The phone number in the examination room is (780) 828-7656 and if you have any further questions, don't hesitate to contact me or the examination room officer. We will be more than pleased to assist you where we can.

22 Next, Madam Chair, I would like to indicate for the record that some additional information was added on the file of three applications being considered at this hearing.

23 First, on the Rawlco (Edmonton) application, a letter from Rawlco dated 25 April 2003 was added to the public file. This letter provided additional information concerning supplementary response to question 16 contained in Rawlco's 3 March 2003 deficiency response concerning alternate frequencies.

24 Secondly, on the CHUM/Milestone application, a letter dated 2 June 2003 was added to the public file. This letter provided additional information concerning supplementary response to question 5 contained in a CHUM 4 March 2003 deficiency response concerning the members of the Management Committee of the Partnership.

25 Finally, on the Jim Pattison application, a letter date 2 June 2003 was added to the public file. In this letter the application notified the Commission that an alternate frequency was identified that would resolve the mutually exclusive technical issue with the CBC.

26 Now, Madam Chair, we will proceed with items 1 through to 4 on the agenda. These applications are competing and we will proceed as follows:

27 First, we will hear each applicant in the agenda order and each applicant will be granted 20 minutes to make his presentation. Questions from the Commission will follow each presentation.

28 In Phase II, the applicants reappear in the same order as they presented their application to intervene against the other applicants. Ten minutes are allowed for this purpose. Questions from the Commission may follow each intervention.

29 In Phase III, other parties will appear in the order set out in the agenda to present their intervention. Again, questions from the Commission may follow.

30 Phase IV provides an opportunity for each applicant to reply to all interventions submitted to t heir respective application. Applicants appear in reverse order. Ten minutes are allowed for this reply, and again questions may follow.

31 Now, Madam Chair, we will proceed with item 1 on the agenda which is an application by Rogers Broadcasting Limited for a licence to operate an English-language FM commercial radio station in Red Deer. The new station would operate on frequency 104.5 MHz (channel 283C) with an effective radiated power of 95,000 watts.

32 Appearing for the applicant, Mr. Gary Miles. I will ask him to introduce his colleagues. Mr. Miles, you have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

33 MR. MILES: Thank you.

34 Madam Chair, Members of the Commission, good morning, I am Gary Miles, CEO Radio, Rogers Broadcasting Limited.

35 With me today, to my left, Gayle Zarbatany, Program Director and Sandy Sanderson, Executive Vice-President, National Program Director. To my right, Kevin McKanna, General Manager and Vice-President of the Rogers Calgary Radio Stations, and Sandra Stasiuk, Vice-President, Finance.

36 At the next table, we have, starting from my left, Steve Edwards, Vice-President, Corporate Engineering & Technology; Alain Strati, Director, Business and Regulatory Affairs; and Rael Merson, President, Rogers Broadcasting Limited.

37 We are pleased to appear before you today to present our application for JACKfm in Red Deer.

38 With its popular music format, its commitment to local reflection and its unique station personality, we believe JACKfm will satisfy the needs and demands of underserved adult radio listeners in Red Deer.

39 Since the release of the Commercial Radio Policy in 1998, the Commission has consistently applied a detailed matrix in its evaluation of new station applications. The Commission has identified four main factors or bases of comparison:

40 Examining each of these four factors, we believe the Commission's approval of our JACKfm application would be in the public interest.

41 First, the quality of our application demonstrates our commitment to serve the Red Deer market. With its innovative music format and its emphasis on local news and community events, JACKfm will prove to be a very popular new station option for Red Deer radio listeners.

42 Our proposed initiatives for Canadian talent development are significant and are almost three times that of any other applicant.

43 Second, JACKfm will enhance competition and diversity in the Red Deer market by introducing a strong, service-oriented radio company to provide a new service.

44 Third, JACKfm will provide another voice for news and information, increasing the diversity of news and editorial opinion available in Red Deer.

45 Finally, as one of the fastest growing markets in Canada, Red Deer is easily big enough to absorb JACKfm, without undue impact on existing stations.

46 In applying its competitive applications matrix, the Commission has also recognized that the relative importance of each of the four factors will vary, depending on the specific circumstances of each market.

47 Smaller, regional markets like Red Deer are often served by a smaller number of radio stations, offering only a few, broad-based music

programming formats. Markets like Red Deer are also served by a smaller number of radio operators or other media outlets, limiting the diversity of news voices.

48 That is why we believe that, in the Commission's analysis of the Red Deer radio applicants, they should give relatively more weight to three factors:

49 Sandy?

50 MR. SANDERSON: Thank you, Gary.

51 According to the 2001 Census, almost 46 per cent of Red Deer's total population consists of adults between the ages of 25 and 54.

52 However, the Red Deer market does not have a station whose format is of specific interest to adult men and women.

53 JACKfm is a new and innovative programming format that will respond to the particular interests and demands of men and women over the age of 25.

54 JACK's format is a blend of adult pop and rock music. The predominant focus of our station will be hit music from the 80s, although selections will also include music from the 70s, 90s and

today.

55 Now, this short description of JACKfm does make it appear to be some form of a Classic Hits format station. In fact, in our application, we classify JACKfm as a Classic Hits station. However, the Classics Hits classification doesn't do it justice. JACKfm is really a totally new and exciting programming format.

56 The uniqueness of JACK lies in its variety. JACKfm plays more songs, from different formats, and plays each song less often.

57 JACKfm listeners will hear songs that they have not heard in a long time -- songs they would never hear on other radio stations, including many selections from Canadian artists who would otherwise receive very little or no airplay. In effect, music programming on JACKfm will reflect the varied and diverse tastes of our listeners.

58 Although mostly from the pop and rock genre, the songs are not limited to any particular format. They are instead chosen simply on the basis of their appeal. JACK will even play songs back-to-back from entirely different formats. As a result, JACKfm listeners are never really sure what song is coming next.

59 The JACKfm format can perhaps best be described as the average person's CD or record collection. Personal favourites will include music from a variety of music formats and a number of different eras.

60 However, given the target demographic of adult men and women over the age 25, a majority of the songs on JACKfm will consist of hit music from the 80s.

61 We are particularly proud of the launch of JACKfm in the Canadian market. JACKfm is an original, a genuine made-in-Canada radio programming format.

62 JACKfm was first launched in Vancouver last December. Before doing so, we conducted extensive consumer research to get a really good sense of what adult radio listeners wanted and were not getting from existing radio stations. Almost immediately, JACKfm in Vancouver jumped to the number one spot in that market.

63 Although our initial success reflects our efforts to develop this format, it also demonstrates the level of pent-up demand for this kind of a radio station. Many adult listeners had evidently given up on radio. They believed that radio stations had forgotten about them and were instead focusing on younger listeners.

64 JACKfm is bringing these people back to radio as interested and enthusiastic listeners. JACKfm listeners in Vancouver have even told us that they continue to listen to other stations. While they really like JACK's format and attitude, they still tune to other stations whose formats more specifically match their particular taste in music.

65 JACKfm is completely different from any format provided by existing Red Deer radio stations and is very different from the formats proposed by other applicants. Adult radio listeners in other markets have embraced JACKfm as a station that finally speaks to them. With its broad-based and popular appeal, JACKfm could certainly be an exciting new addition to the Red Deer radio market.

66 Kevin?

67 MR. McKANNA: Thank you, Sandy.

68 Spoken word programming on JACKfm will provide us with the opportunity to reflect the interests, views and opinions of the people of Red Deer.

69 Establishing a new editorial voice in the market, JACKfm will provide our listeners with comprehensive coverage of local news, weather and community information.

70 During the weekday morning drive periods of 6:00 to 9:00 a.m., JACKfm will carry five-minute newscasts at the top and bottom of each hour, as well as an additional in-depth, two-minute weather report every hour, produced by one of our very own staff meteorologists.

71 The weekday afternoon drive periods of 4:00 to 6:00 p.m. will also include three-minute newscasts at the top of each hour. In total, JACKfm will provide at least three and a half hours of scheduled newscasts per week.

72 The morning and afternoon drive periods will also include a number of specific weather and community information updates. Although not scheduled like our newscasts, these updates will allow us to provide additional news and information content to JACKfm listeners.

73 In response to a tornado that struck the Edmonton area, our stations in Calgary and Lethbridge have worked with the provincial government to establish an Emergency Public Warning System to broadcast community advisories for weather warnings and other catastrophes such as chemical spills or floods.

74 It has even recently been further expanded to also include the "Amber Alert" system, to combat child abductions in this province and other participating provinces. The Emergency Public Warning System will, of course, be implemented by JACKfm in Red Deer.

75 JACKfm will also staff a meteorologist to provide in-depth weather information and road alerts for our Red Deer listeners. With on-the-road coverage and additional listener input through toll-free information lines, the community of Red Deer will be well served by JACKfm.

76 Our efforts in Red Deer will also be supplemented by the news and weather staff at our Calgary stations. Being located in Central Alberta, in the middle of the Calgary-Edmonton corridor, JACKfm will become an important resource for news, weather and traffic information.

77 News segments are not the only means of engaging our listeners in topical news and information. That kind of community dialogue can also occur within the overall programming flow of the station.

78 As residents of the community, all of our live-to-air JACKfm program hosts will provide a particular perspective and opinion on the issues that affect the people of Red Deer. Topical talk patterns throughout the day will permit our announcers to interact with station listeners and discuss the important news and events of the day.

79 While newscasts may highlight big story items, it is these non-newscast talk segments that provide an opportunity to discuss a really broad range of local issues. For example, on Monday of this week, spoken word segments on the morning show from our Lethbridge station, The River 107.7, discussed the possibility of a proposal by the Lethbridge city council to remove parking meters in the downtown retail district and the plight of local-area cattle producers forced to sell beef literally from the back of their trucks.

80 We intend to bring that same focus to JACKfm in Red Deer. Taken together, our produced newscasts, weather reports, community information bulletins and program host talk segments will provide the foundation for JACKfm as a new editorial voice for Red Deer.

81 However, our commitment does not simply end with radio programming. It also requires a strong sense of community interaction and community involvement. From local public service announcements to local fundraisers, JACKfm will be plugged in and responsive to the needs and demands of the people of Red Deer.

82 For example, two weeks ago in Lethbridge, our stations, Rock 106 and 107.7 The River, worked with local government and the Alberta Economic Development Authority to respond to serious concerns about the effects of the mad cow disease crisis on local-area ranchers and farmers. The "Support Alberta Beef Campaign" was born. Through our station's organizing and promotional efforts, along with city officials, residents and advertisers, over 2,000 people attended a rally at the Yates Centre in downtown Lethbridge.

83 JACKfm will establish the same kind of spirit and dedication to the betterment of the Red Deer community.

84 As with all of our radio stations, JACKfm will establish a Red Deer Local Advisory Board. The Advisory Board provides us with a unique opportunity to consult with community representatives about local issues, concerns and events. Members of the Advisory Board will provide valuable advice and insight to the management of JACKfm.

85 With responsive news and spoken word programming, and a commitment to community interaction and involvement, JACKfm will establish a strong, responsive station in Red Deer.

86 Gayle?

87 MS ZARBATANY: Thank you, Kevin.

88 JACKfm will provide extensive promotional support and on-air exposure for musical events, live concerts and other local cultural events and activities going on in Red Deer.

89 If our application for JACKfm is approved, we also committed to spending a total of $700,000 over the seven-year term of our licence to support other specific local and regional Canadian talent development initiatives.

90 $350.000 in Additional support for FACTOR. Our contribution would support FACTOR's efforts in the production, distribution and marketing of recordings by Canadian artists. FACTOR has agreed that a substantial portion of our contribution could be reserved for the development of artists in Central Alberta.

91 $280.000 for the Annual "JACK in the Park" Concert. Given its proximity to Calgary and Edmonton, Red Deer is often passed over as a tour destination for concert schedules. JACKfm would work to change that, by presenting an annual music concert showcasing well-known Canadian artists as well as up-and-coming local artists to draw residents of Red Deer and the surrounding areas to the event.

92 To support this concert initiative, JACKfm will make an annual commitment of $40,000 to cover artist appearance fees and other minor incidental expenses.

93 $70.000 for the Red Deer Symphony Orchestra. Given JACKfm's focus on music variety, we also considered it important to recognize contributions made by other existing music organizations and have proposed to make an annual contribution of $10,000 to the Red Deer Symphony Orchestra.

94 Our proposed Canadian talent development initiatives are considerable for a market like Red Deer. In fact, our proposal is almost three times that of the next largest proposal from either of the other applicants in this proceeding. We believe our Canadian talent development proposal reflects our commitment to the local community and our investment in the success of JACKfm for Red Deer.

95 Steve?

96 MR. EDWARDS: We propose to broadcast JACKfm on channel 283, 104.5 MHz, from an existing transmitter site in Red Deer. Should the Commission decide to licence JACKfm, other frequency alternatives will remain available for other licensees either in this proceeding or in future licensing proceedings.

97 There are two other unused FM frequencies allotted to Red Deer:

98 The Pattison application has identified Channel 294 (106.7 MHz) as an alternative for Channel 292.

99 It would also be possible to relocate the vacant Channel 207 (89.3 MHz) allotment from Leduc to Red Deer.

100 Gary?

101 MR. MILES: The City of Red Deer and the communities surrounding it are amongst the fastest growing areas in Canada. According to the latest 2001 Census, population in this market has increased by about 14.6 per cent over the last five years, well above the Alberta average of 10.3 per cent, and more than three and a half times the Canadian average of 4 per cent.

102 With a growing, diversified local economy, Red Deer bills itself as "opportunity central". By virtually any standard, be it jobs, building permits or business costs, the City of Red Deer is a growth and development leader. Given its central location and competitive advantages, Red Deer has become a fast growing and dynamic market, and will continue to experience strong growth in the years ahead.

103 The Red Deer market is currently served by three well-established stations, owned and operated by two large and well-financed radio groups.

104 Together, these three stations attract all of the in-market share in Red Deer, or almost 70 per cent of the total 12+ audience share.

105 Although the Commission does favour increased competition and diversity, it also seeks to assure itself that the competitive impact of a new entrant will not unduly impinge on the ability of existing stations to meet their programming responsibilities.

106 A strong and innovative format like JACKfm will create increased awareness for radio as a local advertising medium. The increased presence of radio in the market will cause many local advertisers to either consider radio for the first time, or as a preferable option to other advertising media available in Red Deer.

107 The introduction of JACKfm will grow the advertising pie, to the benefit of ali stations in the market.

108 We are committed to Alberta. We have operated stations here, both in large markets like Calgary and in smaller markets like Canmore and Lethbridge for close to 15 years. Although the news teams at each of our Alberta stations do focus on the news and information demands of their particular listeners, the combined news resources of these groups also provide an important regional editorial perspective for all of our stations.

109 The JACKfm news team in Red Deer will consist of four full-time employees:

110 Being a Rogers Broadcasting station, the JACKfm news team will have to access the resources and expertise the regional news facilities we have already established here in Alberta and the expertise of our all-news stations in Toronto and in Vancouver.

111 Rogers does not operate any local radio or television stations, nor any other media outlets, in Red Deer.

112 We believe the approval of our JACKfm application will increase the diversity of news and editorial opinion available in this market. Our news and editorial experience will become evident not only through a unique point of view on stories of the day, but also through a particular focus on local events and happenings.

113 By addressing the issues and concerns of our listeners, JACKfm has the opportunity to establish a new editorial voice for the community of Red Deer.

114 In conclusion, Madam Chair, Members of the Commission, we believe the approval of our application for JACKfm in Red Deer would best serve local listeners and would directly contribute to the achievement of the objectives of the commercial radio policy.

115 One, our application demonstrates our commitment to serve the Red Deer community. With its innovative music format and its emphasis on local news and community events, JACKfm will prove to be a very popular new station option for Red Deer listeners.

116 Two, our proposed initiatives for Canadian talent development are significant and are almost three times as much as that of any other applicant.

117 Three, JACKfm will enhance competition and diversity in Red Deer by introducing a strong, service-oriented radio company to provide a new service.

118 Four, the introduction of JACKfm will provide a fresh and unique perspective on local news and information, increasing the diversity of news and editorial opinion available in Red Deer.

119 Finally, Red Deer is one of the fastest growing markets in Canada and is easily big enough to absorb JACKfm. The introduction of JACKfm will not unduly impact existing stations, and will indeed stimulate growth in the market.

120 For all of these reasons, we believe that the approval of our application for JACKfm would be in the public interest. We look forward to your questions.

121 Thank you.

122 THE CHAIRPERSON: Good morning, Mr. Miles and your colleagues and welcome.

123 Commissioner Williams has questions for you.

124 COMMISSIONER WILLIAMS: Good morning, Mr. Miles and Rogers' Panel.

125 I am going to take the next hour or so to learn a bit more about JACKfm and your plans for the Red Deer marketplace.

126 The objective of this first set of questions will be to examine your claims that your offering will be unique and will be a complement to existing stations.

127 My first question is: You propose to offer a new FM station with the Classic Hits format. Newcap is also proposing to offer a Classic Hits format, while Jim Pattison Industries is seeking a licence to operate a Classic Rock format. The three of you are proposing to serve the same general audience.

128 So considering that both the Classic Hits format and the Classic Rock format would offer music drawn primarily from the 60s, 70s, 80s and 90s, would you please explain how you perceive the difference between your Classic Hits format and the Classic Hits format proposed by Newcap and Classic Rock format proposed by Pattison Industries?

129 MR. MILES: Thank you.

130 I will give a general answer to that one, and then I will turn to Sandy and then to Gayle.

131 We operate Classic Rock formats in three different markets and we have found that primarily it is a male-based format that speaks particularly to 35 to 54-year-old males.

132 While I am not familiar with the exact programming of Newcap's Classic Hits, they are proposing a station that appeals to 70s, 80s and 90s, and we have actually operated in markets where this kind of broad-based Classic Hits format does exist.

133 What we do know is our Classic Hits, or as Sandy will describe it, a different approach to the whole radio programming, tends to be broad-based in its appeal as compared with the Classic Hits stations that we operate against in other markets which are more narrow. They have a far narrower base of record selections.

134 We have the experience with JACKfm. We have the station operating in three markets. We are very excited about it. It brings a whole new perspective to adult radio listeners of 25 to 54.

135 Sandy?

136 MR. SANDERSON: Thanks, Gary.

137 First of all, I think if you put JACK's format against the Classic Rock format -- and I just did this this morning -- the shared songs are 12 per cent. So there is a big difference between JACK and a Classic Rock station. Classic Rock is more 60s and 70s music. JACK is predominantly 80s.

138 I think the big difference that JACK provides is the huge playlist that it has, up to 1,200 titles, and the variety within that 1,200 titles is also huge. These are song that have not been heard for a long time. They are songs that were hits in the 80s, but perhaps only for a couple of minutes, even though, by virtue of the fact that people paid good money to make them hits -- they are known, they are familiar, they were sung along to -- but when you have more of a niche format, you don't have room for them because normal radio station formats consist of 700 or 800 records and we have 1,200.

139 We have all different types of music. Mostly it is, as I said, 50 per cent 80s; 25 per cent from the 90s; 15 per cent from the 70s; and 10 per cent from 2000 and up to the present day.

140 The editing of the music, that is what song plays after what song, is done meticulously every day by hand. So we really try to promote a variety.

141 Outside of the music, the other unique factor is the presentation of the station. We try to be fun, playful, self-deprecating. We don't take ourselves too seriously. "Playing what we want" is our slogan and it's meant to emphasize the fun aspect as well as the variety.

142 We play such a wide variety that you never know what you are going to get next, which era or which style. We don't say "45 minutes commercial free of today's top songs". We don't say "ten in a row mega marathon". We say "a bunch of songs in a row". We have no request weekends.

143 So it's a whole different kind of attitude and I think it's refreshing and that is what makes it unique.

144 Gayle?

145 MS ZARBATANY: Thank you, Sandy.

146 Just to expand a little bit further on Sandy. Classic Rock, as he intimated, is much more 70s entrenched. It's the rock that was on the active rock charts in the 60s, 70s and 80s, and Classic Rock predominantly focuses as our Classic Rock stations do in Ottawa and in Winnipeg mostly on the 70s, with a little spice from the late 80s, but mostly early 80s and 60s.

147 JACK is an 80s-based station, music that was on the pop and adult contemporary charts, if you will, that kind of maybe spilled over to the rock charts because they just had that mass appeal cross-over feel, and Sandy talked about in the 80s when they recorded these songs because at the time they were a flash in the pan, but really when you think about it JACK is made up of a lot of those one-hit wonders that were great, that were high on the charts, people loved them, and then they disappeared because there was just no room on these programming.

148 So basically it's from the 80s and those great one-hit wonders sing-along songs.

149 MR. MILES: Just to conclude on that. JACKfm is a unique made-in-Canada format. This kind of format is not down in the United States. It's Canadian, made for Canada. We started in Vancouver, as Sandy had mentioned. We have rolled it out to Calgary and just launched one week ago, if I may be permitted a small editorial comment, in Toronto.

150 What we have found is that every time we go and do our research in the marketplace, the songs that are induplicated are never more than about 30 or 40 per cent. So the 60 to 70 per cent of the songs induplicated, even in markets like Vancouver, Toronto and Calgary which have a wide variety of musical tastes and experience going, if we sound excited about it it's because we are.

151 COMMISSIONER WILLIAMS: Thank you.

152 Just maybe to go a little deeper into your format. You estimate it would consist of approximately of 50 per cent of music drawn from the 80s; 50 per cent from the 70s and 90s.

153 Could you provide us with a more specific percentage for music drawn from the 70s and 90s to the present day? And will you draw on some music from the 60s? I am thinking of groups like say the Stampeders out of Calgary, or The Beatles or the Rolling Stones.

154 I guess I am a little bit interested in how far back you are going into the 60s. You say "the JACKfm format can perhaps best be described as the average person's CD or record collection". Are there going to be any eight-tracks in your programming?

--- Laughter / Rires

155 MR. MILES: Only from mine, I am afraid.

156 Sandy?

157 MR. SANDERSON: It's predominantly 80s. The 70s is mostly 1975 and upwards. There are very few 60s tracks and actually very few early 70s tracks. So it's 1975 to 1989 is where the focus is.

158 COMMISSIONER WILLIAMS: Thank you.

159 How do you propose to blend your various decade music to present-day music during various parts of the day? Like you just don't know what is coming up next? Is that we are to understand?

160 MR. SANDERSON: We plan not to blend it. Essentially, it's to catch the listener offguard and just following along the train of thought that you never know what you are going to get next. It's intentionally unblended.

161 COMMISSIONER WILLIAMS: See I ask that mainly because I guess we see a potential for the station to be programmed in such a way that during peak listening periods on weekdays it could reflect more of a contemporary AC sound that is not dissimilar to the Pattison and Corus stations that are already in existence.

162 Can you elaborate on your plans in this area?

163 MR. MILES: I think that the beauty about this format is that it does not intrude at all upon those other three radio stations. The Corus station is a rock station. The other one is top 40 Hot AC, and the third one is country.

164 Sandy, we would never duplicate or very few of those playlists.

165 MR. SANDERSON: Yes, just because of the huge unplayed library, the duplication is very low.

166 Getting back to your other point, Commissioner Williams, we don't depart and we don't make changes for during the day or make it lighter. It is what it is.

167 COMMISSIONER WILLIAMS: It is what it is. Okay.

168 You talked about your experience in programming stations, Vancouver and in other marketplaces.

169 Do you have any additional comments concerning this experience and what this experience has provided you with, maybe new insight into programming for the Red Deer marketplace? How, in your opinion, would the Classic Hits format provide the greatest degree of diversity and best serve the radio marketplace when compared to formats proposed by other applicants?

170 MR. SANDERSON: Well, it would be serve the radio market because it would be totally different than anything that is on the air now or is proposed just because it is such a unique format.

171 Our experience in Vancouver was surprising even to me. The success that the station experienced going from increases of 150 to 300 per cent in ratings in one book. Now, I don't know if this is going to continue to be the case. There is a lot of excitement about it, a lot of talk about it. So the bloom will come off the rose eventually, but we hope not too much.

172 Obviously, our Vancouver experience is what led us to try it in Calgary and then in Toronto.

173 MR. McKANNA: Also, if I may add, in Calgary we launched JACKfm on April 1st and in the middle of May we went in and did focus groups in the market and what people told us was a lot of them had come back to radio. They had given up on it. They described it as a welcome relief anywhere from CJ, which in Calgary is a rock-based format, to our station Light 96 which is an AC. They found it right in the middle and it was a great alternative to their listening. They knew exactly what each of the stations did and they thanked us for that.

174 COMMISSIONER WILLIAMS: If I could just follow up on that for a second? When you went out to these focus groups -- like your target audience is 25 to 54 -- were the comments similar throughout the age group?

175 MR. McKANNA: Yes, they were.

176 COMMISSIONER WILLIAMS: Thank you.

177 MR. MILES: Just to conclude, JACKfm actually does fit into the current patterns of the existing radio stations quite well. The AC top 40 one is sort of songs from the 90s and more of that contemporary current thing that you were describing earlier. The Classic Rock radio station has a very well identified and loyal group of listeners. They love their Classic Rock. We think that's a great format to be in. We are in it in a number of markets in Canada. The AOR format does exceedingly well, against us, unfortunately in some markets, and it's a good one, but this one sets itself differently by being adult 25-54 both male and female.

178 COMMISSIONER WILLIAMS: Thank you.

179 Let's talk about Canadian talent development for the next few minutes.

180 You have indicated your total seven-year direct cost commitment to support Canadian talent development would be $700,000.

181 For the purpose of crafting a complete condition of licence regarding CTD funding, can you tell us what your total annual commitment would be?

182 MR. MILES: It would be spread out over the seven-year period of time.

183 COMMISSIONER WILLIAMS: So an equal --

184 MR. MILES: Proportionately --

185 COMMISSIONER WILLIAMS: One hundred thousand per year.

186 MR. MILES: Correct, yes, and proportionately against the ratios that we established for the overall funding.

187 COMMISSIONER WILLIAMS: Regarding the FACTOR portion of your funding, you state that you would allocate $350,000 over the licence term.

188 Would that also be equal contributions of each year?

189 MR. MILES: Correct, with half identified for Alberta recording artists.

190 COMMISSIONER WILLIAMS: I note in your application that FACTOR indicated that it could reserve most of this funding to support Central Alberta talent.

191 Can you clarify whether an agreement has been reached with FACTOR to reserve most of this funding to support Central Alberta artists?

192 MS ZARBATANY: Yes, I spoke with President Heather Ostertag and she commented and committed to reserving the majority of it. I don't have the exact figure at this point, but the majority of it for Central Alberta.

193 MR. MILES: We will file a letter showing that support with the Commission.

194 COMMISSIONER WILLIAMS: Would that letter include a specific dollar amount?

195 MR. MILES: Yes.

196 COMMISSIONER WILLIAMS: Regarding your annual concert, I understand that most of this funding would be used to underwrite staging and payment of performance fees to the concert headliner. However, I understand that local talent will also be featured as part of this concert.

197 Can you tell us approximately how much of the funding will be allocated to cover the performance fees paid to the local artists?

198 MS ZARBATANY: The $40,000 encompasses the entire performance of mostly the established artists, and the local artists are going to be mostly coming from promotion from the radio station and in the community, almost like a talent search, if you will, where we go into the community working with local venues, getting local bands to send us their songs and then exposing them on the radio and then having them perform in local venues and narrowing it down to a few artists, bands, that can perform opening. So they get the exposure in front of a live audience; they get the promotion and the ability to perform before a live audience, a case that often is not offered to them.

199 COMMISSIONER WILLIAMS: So a new opportunity to showcase their talent.

200 Let's talk a bit about Rogers' spoken word content. You responded to a deficiency of March 24th and you indicated 17 per cent of any given week's programming would be devoted to spoken word.

201 Could you please give the Panel an idea how the 17 per cent spoken word figure would break out in terms of hours per week and how these hours per week would break out in terms of news and related surveillance programming and other types of spoken word?

202 MR. McKANNA: Yes. News is three and a half hours a week. Topical talk of 565 minutes, that would be what I was talking about in Lethbridge, for example, with the mad cow disease and the parking meters. Public service announcements of 75 minutes. Programming of 50 minutes of talk per hour. That could be everything from community information to the road reports, as well some specialty programming on the weekend, 60 minutes there, and countdown syndicated on weekends of 90 minutes.

203 COMMISSIONER WILLIAMS: Thank you.

204 You state that your produced news segments broadcast at specific times do not provide the primary means for engaging your listeners in topical news and information, that such content is more appropriately communicated within the overall programming flow.

205 Can you give us a feel for how JACKfm would be communicating?

206 MR. McKANNA: Once again, using the mad cow example down in Lethbridge, the on-air people have talked about what it meant to the community. The host, as of this past week, in listening to the station talked about how he is eating more beef than ever, that type of thing.

207 COMMISSIONER WILLIAMS: Where is the beef?

208 Now, you have indicated the possibility of broadcasting syndicated material if the opportunity presents itself.

209 Can you provide us some idea of the number of hours per week that you were talking about?

210 MR. McKANNA: That would be 90 minutes. An example would be "Retro Saturday Night" which we produce out of Calgary station Light 96.

211 COMMISSIONER WILLIAMS: Are there any plans to share programming between the other JACKfm stations in your proposed radio station?

212 MR. MILES: No. The answer is we do not share programming. We absolutely believe that radio is a unique situation in each one of the markets that we operate in. So while there are similarities between say our stations in Lethbridge and what the proposed one in Red Deer would be, and there are similarities between Vancouver and Calgary JACK and now Toronto JACK, all that we share is our programming expertise, our coaching and our mentoring, and the resources that we have as a large company to be able to bring and develop local talent in these small markets so they can contribute to the Canadian broadcasting system.

213 COMMISSIONER WILLIAMS: Thank you.

214 Can you tell us a bit about your live-to-air programming plans, and if you do have specific plans on live programming over the broadcast day and week?

215 MR. MILES: Yes, we will be live-to-air from 6:00 a.m. to midnight. We will probably voice track or prerecord the overnights, midnight to 6:00 a.m. as is the common practice across the country and we will operate this thing as a full-service radio station as we do in other markets of similar size.

216 COMMISSIONER WILLIAMS: Do you plan to devote any time of your programming day to automated programming?

217 MR. MILES: Look it, I guess automated programming is where you bring in programming from other places. Is that what you are referring to?

218 COMMISSIONER WILLIAMS: Voice track or full automation.

219 MR. MILES: No, not automation.

220 COMMISSIONER WILLIAMS: Tell us a bit about your plans from a staffing perspective. How many staff do you anticipate employing at the station do deliver your promise to provide this distinctive and entertaining live-to-air programming?

221 MR. McKANNA: We will have 17 total staff, not including sales reps. We will have eight dedicated to programming. One of them will be a meteorologist, a specialist, and primarily we will use that because -- I don't know if the Commission is aware of this, but this area has be prone to tornadoes in the past. Back in 1988, the first one hit Edmonton and then a couple of years ago Pine Lake, which is just outside of Red Deer, and we feel it's very important to provide that service to the people of Red Deer and we are going to do that in the application.

222 As well, this corridor, Highway 2, between Calgary and Edmonton, this is the fastest growing region in Canada. I have a son who plays junior hockey so I travel this road a lot, all the way up to Camrose and Sherwood Park over here and Drayton Valley and there is an area called Innisfail which is actually between Calgary and Red Deer and it can ice over on a moment's notice and we want to make sure that we do road reports for the listeners because we feel it's just going to keep getting bigger and bigger up and down that highway.

223 MR. MILES: I may add that this concept that we are proposing here is very exciting and we are enthused about it for the Red Deer market, but it's not foreign to how we operate radio stations, to how Rogers operates radio stations.

224 This has been the basis for our service from Vancouver up to Sea to Sky Highway through Squamish up into Whistler. It certainly is the basis for our service that we have been doing since we took over the radio station some 14 years ago in Canmore, where we go out to Canmore and Banff and up to Lake Louise.

225 The concept of a meteorologist while you would think that is just for big radio stations, and in fact we have two of them on 680 News in Toronto and one of them on News at 11:30, we also have a meteorologist in Lethbridge and we are very excited about this. We think it's a great opportunity to provide service to communities the size of this, the same kind of experience as in our Northern Ontario stations in Sudbury and North Bay.

226 COMMISSIONER WILLIAMS: So your meteorologist I guess will, in addition to tornadoes and black ice, focus a bit on these hot Central Alberta sunny days for the beach communities of Sylvan Lake and Gull Lake that are near Red Deer.

227 MR. MILES: Just like I recall from my days in Saskatchewan, yes.

228 COMMISSIONER WILLIAMS: Tell us a bit more about your proposed target demographic. You say it's underserved and you mentioned that the success of JACKfm format in Vancouver indicates that it would be successful in Red Deer.

229 Can you please extend a bit on that? Have you any other evidence it would support the existence of demand for the JACKfm format in Red Deer?

230 MR. MILES: Well, there are three measures that we do. We, first of all, take a look at are there any holes in the marketplace, and again I think we have gone over that with the kind of specific identified programming that has been going on AOR country and the more contemporary sound. This is a more adult sound, 25-54, and I think it actually has an opportunity to repatriate the other 30 per cent of the listeners that are tuned to out of market.

231 When we examined what those stations are, they are actually going out of market for news and talk, demographics that tend to be more 25-54 and more of an adult base.

232 While we are not saying that they are not going to go outside of market for news and talk information, certainly our full service aspects will help in that regard, but secondly once they have received the information that they need, here is finding a programming alternative that they will listen to. We believe what may have happened in the past is that they have come back and said that there is no adult kind of format on this particular one. So that is the first one.

233 The second one is the research that we did against the music being played, and I think Sandy has identified that and may have some additional comments to make on it.

234 The third part is just our excitement over JACKfm which is a new concept to Canada and a new kind of radio programming and we are anxious to roll it out.

235 COMMISSIONER WILLIAMS: Thank you, Mr. Miles.

236 I guess what I would like to talk about now is the best use of the frequency 104.5. Other applicants are interested in the same frequency and say, for example, your application is competitively and technically mutually exclusive with Newcap's application.

237 From a strictly technical perspective, in what way does your proposal constitute the best use of the frequency?

238 MR. MILES: I will turn that over to my technical expert, Steve Edwards.

239 MR. EDWARDS: Channel 260 99.9, channel 283, channel 282, they are all roughly equivalent as would be the second proposal, or the alternate proposal from the Pattison group. At this point in the market we are applying for basically technically equivalent stations or licences.

240 COMMISSIONER WILLIAMS: If the frequency 104.5 wasn't available, what would your preference be?

241 MR. EDWARDS: Either one of the other two would be acceptable.

242 COMMISSIONER WILLIAMS: So there is no either one.

243 MR. EDWARDS: No.

244 COMMISSIONER WILLIAMS: Okay.

245 Well, Madam Chair, when I came into this proposal it's not that I didn't know JACK, but I certainly know a lot more about JACK now.

--- Laughter / Rires

246 COMMISSIONER WILLIAMS: Thank you very much. I have no further questions.

247 THE CHAIRPERSON: Thank you, Commissioner Williams.

248 Commissioner Cram.

249 COMMISSIONER CRAM: Thank you.

250 I was driving through Saskatchewan and Alberta recently clearly and I was listening to 660 from Calgary and I am in your target demographic and I am not going to say where on this application.

251 I must say 660 appeals to, it would appear to me, that same demographic, or am I wrong or does science prove me wrong on that, because this is an oldies demographic, isn't it? It's the AM one.

252 MR. SANDERSON: Yes. It's CFR -- and Kevin would know this better, but a typical oldies station is 1963 to 1969 in era. That is the core of the format. They probably sneak on either side just for variety, but --

253 COMMISSIONER CRAM: I heard "Hair" at least twice.

--- Laughter / Rires

254 COMMISSIONER CRAM: Isn't that the 70s?

255 MR. SANDERSON: Kevin features that because he doesn't have much. So --

--- Laughter / Rires

256 MR. SANDERSON: Anyway, Kevin, you may want to comment on it.

257 MR. McKANNA: It goes in underneath of JACK, the oldies format, and it doesn't really cross over too much.

258 COMMISSIONER CRAM: So there wouldn't be any --

259 MR. McKANNA: We don't play "Hair" on JACK.

260 COMMISSIONER CRAM: There wouldn't be any cannibalization of that share.

261 MR. McKANNA: No.

262 COMMISSIONER CRAM: Because it's certainly loud and clear in Red Deer.

263 MR. McKANNA: Yes. That is the advantage of --

264 COMMISSIONER CRAM: What is its share in Red Deer?

265 MR. MILES: It's 2 per cent. I will check on that one.

266 COMMISSIONER CRAM: Two per cent?

267 MR. MILES: I think it was 2 per cent, yes. Sandy, could you identify --

268 The other thing too, of course, is the oldies stations are on AM radio stations and in the Prairies that signal just goes forever. One of the issues and the concerns and the stepping where angels fear to tread, these days you can't put oldies on FM as it were as the format that we are currently doing on AM radio stations. So I think there well be a place for both of them supplementary.

269 COMMISSIONER CRAM: And it also appeared to me that that station is voice tracking a heck of a lot during the day. 660, is it voice tracking?

270 MR. McKANNA: 660 has a live morning show from 6:00 until 10 a.m., and then it is voice tracking from 10:00 until 2:00 and then it's a live show from 2:00 until 6:00.

271 COMMISSIONER CRAM: You were talking about FACTOR and that a "substantial" portion -- and Ms Zarbatnany you emphasized that -- would be given to Central Alberta artists. Then I think, Mr. Miles, you said 50 per cent.

272 Do we know how much of the $350,000 is to be dedicated to Central Alberta?

273 MR. MILES: I will just answer and then Gayle can supplement it or contradict me as she sometimes does.

274 In our dealing with FACTOR, and we started this a considerable time ago, as the Commission may recall -- I think it was actually in our Victoria hearings -- where we wanted to go to FACTOR and say we needed to identify this.

275 On behalf of FACTOR, they are faced with sort of the cross-purposes of saying, "Well, if we put too much into this one we can't satisfy the bigger growth of FACTOR". We believe at this stage of the game that we have contributed well over $4 million to FACTOR. Rogers Broadcasting, we were initially in here.

276 Actually, we can insist upon at least of it going to that and I know that that will be at least a minimum contribution. If we can get more we will be pleased to do it, but I know that my discussions certainly with Heather was that 50 per cent would be, and I apologize for the confusion on that.

277 COMMISSIONER CRAM: And Central Alberta means not Calgary and not Edmonton, but anywhere in between.

278 MR. MILES: It means Central Alberta, yes.

279 COMMISSIONER CRAM: Are you aware that it appears that any monies that are dedicated to FACTOR in these kind of hearings are not, in fact, incremental to any monies that would otherwise be spent?

280 MR. MILES: Yes.

281 COMMISSIONER CRAM: So really at the end of the day, if I am looking at what would really benefit Red Deer from your CTD, the only part I can be sure of is $350,000.

282 MR. MILES: Yes.

283 COMMISSIONER CRAM: And the syndicated programming you talked about, 90 minutes, is any of that going to be from the U.S. or is it just going to be from other Rogers stations or what?

284 MR. MILES: We do very little syndicated programming as a matter of course. This particular syndicated program by definition is a Calgary-based radio station using Calgary talent. It's not a U.S. model.

285 Just to go back on that other one on the Canadian talent, I think we could also contribute $70,000 for the Red Deer Symphony to be dedicated to Red Deer musical as well I think.

286 COMMISSIONER CRAM: Yes, but out of $700,000, $350,000 is going to FACTOR. So isn't $350,000 half of $700,000?

287 MR. MILES: Yes.

288 COMMISSIONER CRAM: I just want to pin you down on this syndicated --

289 MR. MILES: Absolutely.

290 COMMISSIONER CRAM: Is it going to be from only other Rogers stations or what?

291 MR. MILES: Yes. Only other Rogers stations.

292 COMMISSIONER CRAM: And I love the term that, I think it was you, Mr. Sanderson, used about picking the music "by hand", "meticulously each day by hand". Was it you that was saying that?

293 MR. SANDERSON: Yes, it was me.

294 COMMISSIONER CRAM: I have visions with somebody with their vinyl picking it out, which I am sure is not the way that is done.

295 So then from midnight to 6:00, if it's voice tracking it's not then picked by hand. Is that it?

296 MR. SANDERSON: I misled you. I didn't mean to say that they actually picked the records out.

297 COMMISSIONER CRAM: It's all right. It was a good vision.

298 MR. SANDERSON: Yes. It's even better. I should maybe put that on the air.

299 The music is all in a computer, but the selections have to be edited -- edited is probably the wrong term, but that is the term we use. We select which song goes after which song. So it's done on a keyboard, but it is done every day and everything is checked to make sure that the songs flow or not flow in the way we want.

300 MS ZARBATANY: If I may add to that? Basically, just to kind of run you through a day, we have a system where all the songs are put into a computer and then we tell the computer what we want -- we characterize and we put our songs in different categories and then tell the computer to pick accordingly. Then it spits that out. Just because it's such a large inventory, it's really, as you said, picking by hand, going through your records.

301 So after that is all said and done, then you sit down, the Program Director and the Music Director, and that is where the meticulous part comes in where you sit down and go through the whole day's log, the evening's log, and look at each song to see if it fulfils the criteria which, in this case, isn't any, looking for that unpredictability to make sure it fulfils that criteria.

302 COMMISSIONER CRAM: So you have it in categories like one would be funky; another would be one-hit wonders; another would be... is that what --

303 MS ZARBATANY: Pretty much, yes. Alternative, pop, rock, funky, one-hit wonders, girl groups, boy groups, girls with yellow hair. It really comes down to that because there are so many different -- it's not a niche format, as we keep saying. It's so many different formats and, of course, over the years the formats keep expanding and as they expand they become more focused. So it's just to kind of have a handle on it.

304 COMMISSIONER CRAM: And then the Program Director picks them before you to go air, not based on the programmer on air.

305 MS ZARBATANY: Yes. We review it. We don't actually pick it. It's done with the Music Director and the system, and then the Program Director with the Music Director will go over to massage it, is the word we use, to make sure that every single song is reflecting exactly what it is we are attempting to do.

306 COMMISSIONER CRAM: Okay.

307 Then between midnight and 6:00, what is the difference in terms of -- the Program Director doesn't care what is on then and sort of let's it rip or...?

308 MS ZARBATANY: A Program Director never sleeps.

309 COMMISSIONER CRAM: Yes, that's what I thought.

310 MS ZARBATANY: At three o'clock in the morning -- no, absolutely. Of course, we care. We go over that, but the focus is usually on 6:00 to midnight and we just ensure that the best music continues to evolve throughout the all-night show. It's not like it's secondary or third tracks. It's the same music that we play during the day.

311 MR. MILES: And that process is at all of our radio stations. So it's not a computerized programming spitting this stuff out as a jukebox operation, if that was the intent of your question.

312 COMMISSIONER CRAM: No, no. Thank you.

313 Thank you, Madam Chair.

314 THE CHAIRPERSON: Commissioner Cardozo, please.

315 COMMISSIONER CARDOZO: Thank you, Madam Chair.

316 I just had a few more questions to understand your application a bit more. First on the issue of catching the listeners off guard. Mr. Sanderson, I was intrigued by that concept.

317 Why do you feel that is so magical?

318 MR. SANDERSON: Because it speaks to and emphasizes the variety that we espouse. A lot of stations say they are going to have variety, but I think we have more variety, but if you play one AC leaning song and put it up against a 80s rock-type song, then the audience will say, "Well, yes, that's different. They are going from this to this and now we are going back to this".

319 COMMISSIONER CARDOZO: You skipping genres in a sense.

320 MR. SANDERSON: Yes.

321 COMMISSIONER CARDOZO: More than another station would. You don't know the next song coming up, but it would fit a package on another station.

322 MR. SANDERSON: You don't know it's coming up whereas on most niche stations we have a lot too. There is nothing wrong with them, but you know generally the feel of what is going to come next. Here you don't know the feel or the texture or the tempo or anything. People quite like that, according to the focus groups we researched.

323 MR. McKANNA: Something else that was added in our focus groups that they really enjoy was they might not like a certain song, but they know the next three they will like. So they hang in there. They like that, that it's so different. Hence it will appeal to them eventually, even if they don't like that particular song that is on.

324 MR. MILES: I think what we are finding, in all of our research anyway, is that with so much information and different avenues for getting music over the Internet, on the digital licences, on the specialty channels, and things like that, that people are quite prepared now, as compared with the past where they just settled on a radio station and they stayed tuned to that radio station for all of their needs. To Commissioner's Cram point of view, listen to one station for a certain period of time, listen to another for a different kind of mood, listen to news and information, and once I figure out whether the wind is going to blow in Lethbridge or whether the roads are going to ice up in Red Deer, then I can go and listen to some music some place else to get more into my mood of the thing, but it's not as if people now settle just on one radio station.

325 So there is room for stations that are narrowly formatted so that I know that when I want nice, relaxing music I can go to this station and I will get that. I know that when I want news and information I will go to this station and I can get that. Then I guess, when I want variety, and never knowing what the next song is, I will go to a JACKfm kind of format. They are not mutually exclusive.

326 COMMISSIONER CARDOZO: Okay.

327 Is this format somewhat like the BOB FM that -- I guess it's CHUM that is doing Bob FM?

328 MR. MILES: Yes, it's a variation of it.

329 COMMISSIONER CARDOZO: In terms of your spoken word, what is the relation between JACK and jock, because there is jock talk and shock jock talk. There have been some concerns about some of the shock jock programming. How does JACK fit in with that?

330 MR. McKANNA: We specifically stay away from that.

331 COMMISSIONER CARDOZO: How shocking do you get?

332 MR. McKANNA: Not at all. I will give you an example of a bit that was on the air this past week, last Friday actually, was our morning show in Calgary. They were talking about people getting on the air and apologizing to them for something that they did wrong. A 12-year-old girl phoned in and she hadn't seen her mother in two months. So the jocks hooked her up with her mother and the Mom apologized and they gave them tickets to a show. It was magical.

333 The next caller in was a guy who was pretty gruff sounding and he said, "I am about as hard as they come", he said, "and you brought me to tears". So that is the kind of programming it is versus shock. It's more leaning that way.

334 COMMISSIONER CARDOZO: It's shocking in a nice way, I guess.

335 MR. McKANNA: Yes.

336 MR. SANDERSON: We had without prompting in four separate focus groups, in each group someone said, "I can listen to the station with my kids in the car. I don't have to turn it off quickly. Even worse, I don't have to explain what just happened". Making it family friendly without being wimpy is a very important part of this.

337 COMMISSIONER CARDOZO: On the matter of format, we discussed format quite a bit this morning. We will be talking about it all week, but in the end we don't regulate format. So we are obviously looking at it in the context of the quality of the application, the competitiveness of the market.

338 There was an article a couple of weeks ago in the Globe and Mail which suggested that formats of this kind in the States were sort of a big thing a couple of years ago and then flamed out.

339 What if you found in say five years that the format was flaming out, that people enjoyed the unexpectedness and everything you had for a while, but they have gone back or gone off to something else? How would you plan a change of format, or would you?

340 MR. MILES: I am going to ask Sandy just to answer that as well, but here is what we believe. We believe that the formats from the musical point of view are the basis for service, but they are not the entire need for service. So you build that around the community aspects. You build that around a strong morning show with local personalities who are embedded in the community.

341 This is the kind of approach that we take in all of our radio stations so that the radio station itself takes on the persona of the community. Within that context, you would adjust perhaps some of the music back and forth, but at the end of the day you are serving adults 25-54, or indeed you may be serving a younger demographic or a country music demographic.

342 Country music radio stations that we have on our AM are different today than they were five years ago, ten years ago, but they are still true to the aspect of it.

343 MR. SANDERSON: I know Rael Merson wanted to say something, but I can't add a lot to what Gary said. Five years is a long time in something as dynamic and fluid as radio formats. There could be new ones invented.

344 As I mentioned before, the glow will come off the rose. We need to find ways to instill loyalty to the station aside from just the music, and that is personalities and community involvement, and all that kind of stuff.

345 Rael?

346 MR. MERSON: Commissioner Cardozo, only because I have had to try to explain JACK to Boards of Directors and newspaper reporters.

347 I try to explain it in the terms of an attempt to program to a demographic rather than a music genre, and the genesis of the format for us was a search that we did of the Vancouver marketplace and the available formats concluded that there really were no particular answer of niches in the Vancouver marketplace.

348 We decided to do something a little bit different which is to try to get into the heads of adults 25 to 54 and really program to what it is we thought they might be interested in.

349 So it's a long way, I think, of answering your question which is: How would you evolve? I think that philosophically we would evolve and we would evolve essentially wherever they chose to go.

350 Does that help at all?

351 COMMISSIONER CARDOZO: Yes. I guess I am just looking at the principles one looks for and obviously you have done this a couple of times where you have changed to JACK.

352 I am trying to get a sense of when we are licensing somebody, what are the principles that they would look at for the long-term of the station in terms of serving that market.

353 MR. MILES: And I think that is some of the issues that we try to get at without trying to interpret how the Commission is ever going to act. I mean that sincerely because it's just not about whether you have a format. What are the other stations going to do in the marketplace and where is that dynamic going to change around? We don't know that.

354 COMMISSIONER CARDOZO: Sure.

355 MR. MILES: What we do know is that we have a commitment to Alberta. We have Alberta people. We know that we are prepared to support the community of Red Deer. We know that we have a format right now that is very complementary to the existing formats and it will appeal to a demographic that is not being over-served at the particular time.

356 Our experience over the past number of years indicates that we are responsive and react to changes within it while still being true to those commitments in terms of our promises, not only to the Commission, but frankly to the radio listeners --

357 COMMISSIONER CARDOZO: So the complementary to the rest of the market is a key factor in deciding --

358 MR. MILES: We believe that in non-metro markets such as Red Deer that is an important issue, yes. It's tougher, of course, in the bigger markets, but maybe that is for a later day.

359 COMMISSIONER CARDOZO: Thank you very much.

360 Thank you, Madam Chair.

361 THE CHAIRPERSON: You mentioned that you will have some contact with your audience in your application I believe, but you did say this morning you would have no requests for music, et cetera. So you will have what is commonly referred to as open-line programming, some audience feedback?

362 MR. McKANNA: Yes. It will be on the issues of the day mostly. It will be using the mad cow example or Dar Hetherington in Lethbridge. We will invite people to call in and talk about it.

363 THE CHAIRPERSON: So you will have particular slices of the day devoted to this.

364 MR. McKANNA: Yes.

365 THE CHAIRPERSON: And how often and how much?

366 MR. McKANNA: Probably, depending on how hot the topic is, but it could be every hour throughout the morning and afternoon drive periods, for example, peak listening times.

367 THE CHAIRPERSON: You said "it could be", but a listener will know when he or she may be able to call in.

368 MR. McKANNA: Sorry?

369 THE CHAIRPERSON: The listener will know who is using your station or listening to your station. They will know when it is that there will be some open line.

370 MR. McKANNA: The on-air person will just invite them to call in and talk about it.

371 THE CHAIRPERSON: And I understand from your answer to Commissioner Cardozo that JACK will be irreverent, but not jockish.

372 MR. McKANNA: Correct.

373 THE CHAIRPERSON: This programming, sometimes it looks to me like disorganized planning, or planned disorganization. Is that what it is, to give the impression that it's not programmed? I don't know why -- I don't know if any of you have seen the movie "O Brother Where Art Thou?". Remember the scene at the radio station? Is it an attempt to go back to the past when you had the impression that the radio station was kind of your neighbour or on the next street, or whatever, because it didn't seem slick or organized? Is that what it is you are trying to put across?

374 MR. McKANNA: "JACK is your friend".

375 THE CHAIRPERSON: Yes, but as time goes by, won't the disorganization become organized and the tendency will be to also have a programmed JACK? How do you prevent that? How do you keep that feeling that it is disorganized, planning as opposed to --

376 COMMISSIONER WILLIAMS: How do you prevent your programming from being "hijacked", I think is what she is looking for?

--- Laughter / Rires

377 MR. McKANNA: I think a lot of it is actually --

378 THE CHAIRPERSON: That was funny, but not on point.

--- Laughter / Rires

379 MR. McKANNA: A lot of it is actually in the writing. We have people that write and contribute from all areas on staff and all over. They have a funny line, or whatever, and it will be used on the air. So a lot of it is like writing a comedy show in a way.

380 THE CHAIRPERSON: But the attempt is to try to get the music to have that feel as well. Just like you don't know when JACK is going to make a comment, you don't know what the next piece may be.

--- Laughter / Rires

381 MR. MILES: And, in fact, the base of the music that we have for it is such broad-based that you are going to actually platoon songs so this has a refreshing and ongoing --

382 THE CHAIRPERSON: Yes. Is it a reaction to the overly planned and slick radio that we hear, the apparent appeal of this?

383 MR. MILES: That's a great question, and we have talked about that ourselves.

384 THE CHAIRPERSON: Of course.

--- Laughter / Rires

385 MR. MILES: I believe it comes back to what I tried to explain to Commissioner Cardozo, is that with the advent of so many new and different opportunities -- I keep coming back to Internet radio which is a serious concern of ours -- certainly the specialty channels, and when you get into the digital licensing channels, there is "loud", and there is "loud loud" and then "louder louder louder", and all those kinds of things, not to say, the least of which, people having the ability to decide that they have their own music library pulled off of places that are illegal, to say the least.

386 In this whole mix, people have now started to say, "I want to go some place for a certain mood. I want to go to another place for a certain bunch of variety. I need my information from here. I need my sports from here. The Blue Jays are winning again. I need my information from here". That is what I think we are seeing now more than anything else, and hence the advent of the ability for this kind of format to exist and, in fact, flourish.

387 THE CHAIRPERSON: I gather if BOB FM is similar, that the attempt is to have JACK or BOB be a bit maybe your friend but not know who. The ads in Ottawa for BOB FM show a person but no head. Did you notice?

388 MR. MILES: No, they have just launched and I haven't seen that particular advertising.

389 THE CHAIRPERSON: It gives you the impression they are trying to put across the idea that it will be varied, and so on, and BOB will be your uncle BOB, your friend BOB, whatever.

390 Thank you.

391 Counsel?

392 MR. McCALLUM: Three things. First, you propose to file a letter showing the FACTOR support for Alberta stations.

393 Can you indicate when that will be filed?

394 MR. MILES: Yes, we will.

395 MR. McCALLUM: When?

396 MR. MILES: Oh, I am sorry. It will be filed by the end of the week.

397 MR. McCALLUM: So by Friday the 20th.

398 MR. MILES: Yes.

399 MR. McCALLUM: Thank you.

400 Second, can you provide a further breakout of the staff? You mentioned there would be 17 staff, including eight programming staff, and at page 18 of your presentation this morning you provided a breakout of four of the eight programming staff. Could you break out the rest of the programming staff and the other nine I guess non-programming staff?

401 MR. MILES: Yes, and we will file that by Friday as well.

--- Pause

402 MR. MILES: Yes. We will file it by Friday as well.

403 MR. McCALLUM: In other words, it's not easily available to respond to right now.

404 MR. McKANNA: I have it right in front of me.

405 MR. McCALLUM: Go ahead.

406 MR. MCKANNA: Okay. We will have a station manager/program director. We will have a sales manager. We will have a reception sales assistant; a traffic manager; an office clerk and an engineer; a creative director; a writer and a promotion director. On the programming, we will have a morning show host, we will have a news community person; we will have a meteorologist; afternoon host, afternoon news; evening host; weekend host and traffic community reporter.

407 MR. McCALLUM: Thank you.

408 Thirdly, in the presentation there was a discussion at page 15 this morning of the alternate frequencies and I think Mr. Edwards responded to a question about the availability of the frequencies.

409 I just wanted to have a sense of if the frequency you have applied for is not available, for whatever reason, what is the impact on the business plan of being required to go to one of the other frequencies? Are you indifferent among them or are some more expensive to implement? Will some cause any delay?

410 MR. MILES: No, it's transparent.

411 MR. McCALLUM: So you are equally indifferent to all of the different frequencies and they could all be implemented within the same period of time?

412 MR. MILES: Thank you, yes.

413 MR. McCALLUM: Thank you, Madam Chair.

414 THE CHAIRPERSON: Thank you.

415 Mr. Miles, this is a competitive process so we will give you a few minutes more to tell us why you are the one who should get the Red Deer licence. So tell us more about your JACK.

416 MR. MILES: I think the Commission always has to evaluate all of the competitive applications based on each particular marketplace and the benefits that they bring, and I think at the same time balancing between new competitive entrants and fresh voices into the radio marketplace, as well as older, more established players with the resources to back it up.

417 In this particular case, the entrants who are applying as well are well-established radio broadcasters, financially well off, and have good programming resources.

418 We believe that we are going to bring three things to the marketplace:

419 A format that is absolutely uniquely different.

420 Two, we bring Canadian talent development proposals that are extensive and more than the other players;

421 And third, I think our experience in operating in markets of this size, not only in Alberta, but in other markets throughout Canada shows that we have a commitment to providing the kind of infrastructure within the community that speaks to making sure that the community is representative on the air through our voices which is different and new from what is being proposed and what is currently in the marketplace.

422 THE CHAIRPERSON: Thank you, Mr. Miles and your colleagues for your cooperation. We will see you no doubt at the next phase.

423 MR. MILES: Thank you.

424 THE CHAIRPERSON: We will now take a 15-minute break to give an opportunity to the next applicant to get organized.

--- Upon recessing at 1022 / Suspension à 1022

--- Upon resuming at 1040 / Reprise à 1040

425 THE CHAIRPERSON: Welcome back.

426 Mr. Secretary, please.

427 MR. LeBEL: Thank you, Madam Chair.

428 The second item on the agenda is an application by Newcap Inc. for a licence to operate an English-language FM commercial radio station in Red Deer.

429 The new station would operate on frequency 104.3 MHz (channel 2082C1) with an effective radiated power of 100,000 watts.

430 Appearing for the applicant, Mr. Rob Steele, and he will introduce his colleagues. You have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

431 MR. STEELE: Good morning, Madam Chair, Members of the Commission and Commission staff. I am Rob Steele, President and Chief Executive Officer of Newfoundland Capital Corporation.

432 Before we begin our presentation, I would like to present our team.

433 In the front row to your far right is Michelle Askew who is the Sales Manager of our Calgary radio station, CIQX-FM, the Breeze. Michelle has 12 years in radio sales and sales management in Alberta, both in Lethbridge and Calgary.

434 Beside Michelle is Bob Templeton, President of Newcap Broadcasting. Bob has over 35 years in radio and is well known in the industry.

435 Next to me, to my right, is Steve Jones, VP Programming of Newcap Broadcasting. Steve has been in radio for 20 years, including the last five years here in Edmonton. He was responsible for developing our programming plans for Classic Hits 104 Red Deer.

436 Next to Steve is Jackie-Rae Greening. Jackie is the morning host and Program Director at CFCW-AM Camrose, which bas been part of our group since 1989. Jackie has been in radio for over 20 years. In addition to her commitment to community activities, she is well known throughout Alberta for her curling prowess, and has, in fact, represented the province on three occasions. The next Scott Tournament of Hearts actually takes place here in Red Deer and we would love to be covering Jackie's progress from a local station there.

437 Behind Michelle is Dean Thorpe. As News Director, Dean is responsible for the day-to-day operations of our Alberta News Network. Dean has been in radio news since 1986 and has worked with the Alberta News Network since 1995.

438 Beside Dean is Mike Fawcett, manager of our Alberta Radio Group which serves the small rural communities you see on the map. Mike has been in broadcasting for 33 years and with the Alberta Radio Group for five years.

439 Next to Mike is Dave Murray, Newcap Broadcasting's Vice President Operations, who was responsible for developing our business plan. Dave is also responsible for Human Resource Management in our company and as such has developed our plans to ensure that our work force reflects Canada's diverse profile.

440 Next to Dave is Mark Kassof, who conducted our research for this application. Mark has been researching Canadian radio since the mid-80s. He also conducted the pre-launch research which played a pivotal role in Hot 89.9's success in Ottawa.

441 Also I would like to acknowledge in the audience my brother, Peter Steele, who has been an executive of Newfoundland Capital for 18 years.

442 Madam Chair, we would now like to begin our presentation.

443 It is an honour to appear before you with an application for a new FM station for Red Deer. Our presentation today will demonstrate how our new FM station meets your licensing criteria and benefits the Canadian Broadcast System in Alberta.

444 First, Red Deer has a vibrant and growing economy, and second, we will be a new radio competitor to the two existing broadcasters. Third, we bring a new editorial voice along with our experience in radio news in Alberta and elsewhere.

445 With our Alberta News Network, we will bring Alberta to Red Deer and Red Deer to the rest of the Province.

446 Fourth, we have a high-quality application with a strong business plan. The format we have selected will add musical diversity. Our local programming plans will thoroughly reflect Red Deer's community life. We will fully meet the Canadian Content requirements and propose substantial commitments to the development of Canadian Talent.

447 In addition, from day one our workforce will reflect the representation of the four designated groups in the Red Deer population.

448 We are well rooted here in this province. Our first foray into Alberta was in 1988 when my father purchased CFCW in Camrose and CKRA in Edmonton from Hal Yerxa. I was there in Mr. Yerxa's living room when he agreed to sell those stations to us. Today 45 per cent of Newcap's revenue comes from Alberta.

449 The map that you see shows our Alberta radio stations. They are outlined in black. You can see that we provide local service to many small communities in Southern and Central Alberta. Although these rural stations represent 18 licences, they account for just 6 per cent of provincial radio revenue.

450 We have expanded the Alberta News Network, which provides newsgathering and regional newscasts to our smaller stations. This allows local news staff to focus on their own markets. Everywhere we operate, whether in my home town of Gander or Cold Lake, Alberta, our policy is that each station has its own newsroom with its own editorial voice.

451 Since acquiring the Alberta stations, we have invested and propose to invest $4 million in upgrading the facilities and service in these small markets.

452 MR. FAWCETT: Red Deer is a perfect fit for our company. It is a thriving city at the heart of the Highway 2 corridor which links Calgary's head offices with Edmonton's role as the jumping off point for billions in proposed or ongoing resource developments.

453 In a report released in late April, the TD Bank Financial Group said that this corridor has the strongest regional economy in Canada. The total value of goods and services produced per capita in the corridor is 40 per cent higher than the average Canadian city.

454 With a trading area of almost 200,000 people, the market is underserved compared to other cities of its size across the country. For example, Kingston, Ontario and Moncton, New Brunswick with similar populations each have five local commercial stations with three different owners serving their populations.

455 Red Deer's economy is growing with the rest of the corridor. The Financial Post Survey of Markets projects retail sales of $1.6 Billion for Red Deer in 2003 and projects this to grow by 11 per cent by 2005 and 27 per cent by 2008.

456 The city is also the heart of a developing regional economy with towns in the area showing double-digit population growth over the past few years. For example, Sylvan Lake, ten minutes west of Red Deer, is one of the fastest growing communities in Canada while Blackfalds, five minutes north of the city, saw its population grow by more than 50 per cent between 1996 and 2001.

457 In fact, while the region around Red Deer is home to some 200,000 people, there is a potential market of two million people within a 160-kilometre radius. The region's economy is diversified with strengths in agriculture, petrochemical refining, manufacturing and the service industries to mention a few.

458 In our experience in Alberta and across Canada, we have found all markets to be unique. Even in rural Alberta markets like Brooks, Drumheller, Wainwright and Cold Lake, all with similar demographic and economic profiles, our research has indicated audience demand for formats as diverse as rock, country and classic hits.

459 Researching the audience makes solid business sense; it bas been our practice every time we apply for a new station. We commissioned Mark Kassof & Company to find out what Red Deer residents feel is missing from their radio menu.

460 MR. KASSOF: We completed 200 telephone interviews with 25-54 radio listeners in Red Deer.

461 We conducted our interviewing from January 18 through 22, 2003. Respondents were weighted to precisely replicate the distribution of 25-54 age/gender groups in the Red Deer market.

462 First, we studied listening behaviour. Then, we probed listeners' interests in seven different music formats, and whether they could identify a present station as delivering that format.

463 One of the most important calculations we did with the data is what I call "percent of format void." This is the percentage of the entire audience that both has a significant interest in a format and who presently can't associate any local station with the format.

464 The biggest format void percentage belongs to classic hits: 19 per cent of all 25-54s in the market are interested in this kind of station and don't know of one!

465 Just to better explain how this works, let's look at the other extreme, country. It generates close to as much positive interest as classic hits. The difference is that the vast majority of those who are interested know that there is at least one country station. As a result, the format void percentage for country is only 2 per cent.

466 Now, aside from classic hits, we identified another format possibility for a new FM: gold-based AC. This format would be much like classic hits except it would include music from the softer pop genre including two to four current or recent songs per hour.

467 Gold-based AC would serve a need in the market. We presented Newcap with two format options and they choose classic hits. I would note that classic hits will serve more listeners based on our research. In addition, classic hits is more balanced demographically.

468 The audience for Classic Hits 104 will be evenly split between men and women. The vast majority -- 80 per cent -- of its 25-54s will be 35-54. Conservatively, we project that the station will reach 32 per cent of 25-54 adults in the market which works out to 17 per cent of all persons 12+ at maturity. And we project a 16 per cent share of hours tuned 25-54 or 9 per cent of all hours tuned 12+.

469 MR. JONES: When Mr. Kassof presented us with two viable format options -- gold-based AC and classic hits -- we looked at the choices, bearing in mind the two hot AC-based stations in the market and the success of out-of-market stations in the classic rock and oldies format. We concluded that the most desirable and most unique format was classic hits.

470 The classic hits format is relatively new in Canada. It is focused on the softer hit music of the era, from the late 60s through the early 1990s. Classic hits is a format which avoids the harsher musical edges of classic rock. On a classic hits station, listeners will hear artists like The Guess Who, Fleetwood Mac, The Steve Miller Band, Neil Young, the Eagles, the Doobie Brothers, Elton John, Rod Stewart, and Bachman Turner Overdrive.

471 How does classic hits differ from oldies and classic rock? First, oldies stations generally focus on songs from 1964 to the late 1970s. On an oldies station, a listener will typically hear songs by artists like The Beatles, The Righteous Brothers, Elvis Presley, The Dave Clark Five, and the Beach Boys.

472 On the other hand, classic rock stations focus on harder and heavier music from the late-60s onward. On classic rock formatted stations, listeners often hear artists like Led Zeppelin, AC/DC, Pink Floyd, Ozzy Osbourne, Deep Purple, and The Who.

473 One of the keys to classic hits in the case of Red Deer is providing a softer and lighter alternative to the existing stations. Our proposed classic hits format does this, while other proposals before you do not.

474 Pattison Broadcasting's proposal is for a classic rock station, not unlike Newcap's CIRK-FM in Edmonton which draws approximately 5 per cent of Red Deer listeners. This format is based on harder-edged rock, aggressive market positioning and content that appeals primarily to a male listener.

475 Rogers' proposal is for JACKfm, a format they have created and implemented in Vancouver, Calgary and Toronto. While based on music from the past, this format is quite heavily centred in the 80s and even the 90s and some new music from today. The JACKfm format reaches a younger generation, removed from the format that Newcap is proposing.

476 We will provide a number of specialty music shows to provide greater service to all segments of the audience. Flashback will run several times a day, focusing in on a particular year via the music and the events that marked the time, including Red Deer and other Alberta events.

477 For example, one day's Flashback would focus on 1972, the year the Alberta Oilers, eventual five time Stanley Cup Champions, played their first hockey game, and the year that Neil Young hit number one with "Heart of Gold".

478 Then and Now will focus on the evolution of various artists, featuring the music that they played then and how they have changed now. For example, when Bryan Adams releases a new CD, our Then and Now program would feature selections from his early work played back to back with his most recent CD, putting the artist's career in perspective.

479 Classic hits, JACKfm and classic rock are not formats that typically break new artists. Classic Hits 104 will appeal to their audience with familiarity, the songs they grew up with, loved as young adults and now hum along with while driving their kids to school, hockey practice or ballet lessons.

480 But there should be no doubt that Classic Hits 104 will support Canadian artists to the fullest extent that we can. We will meet and exceed the requirements for Canadian music and will provide exposure for Canadian artists in every day part and they will feature prominently in our special music shows.

481 However, this is not as strong a format for exposing new and emerging artists as our Ottawa urban/dance station is. For this reason, we believe that the best contribution that we can make is to support FACTOR. We will contribute $125,000 over the seven years to FACTOR and they have agreed that the money will be directed to Red Deer musicians.

482 But, Classic Hits 104 will be much more than a music station. Our experience shows us that our target audience wants relevant local, regional, national and international news and other information and we intend to provide them with a high- quality news and public affairs service.

483 MS GREENING: Good morning, Madam Chair and Commissioners.

484 Our three additional news reporters will be supported by the 26 reporters in our stations across the province, including two full-time agricultural specialists stationed in Edmonton and Drumheller. Our Red Deer reporters will help expand our provincial coverage of agriculture news and information since their jobs will include a focus on agricultural news given the city's importance as a centre for farmers.

485 All of this attention to what is going on around the province will not detract from the primary focus of Classic Hits 104's newsroom, local news. Rather it will enrich and supplement it. We will provide 51 news packages each week. In addition, we will provide five public affairs reports per day or 35 per week, as well as the same number of community billboards of local events throughout the week.

486 On the weekend, our newsroom will compile a one-hour public affairs program, giving depth and perspective to the issues of the week in Red Deer and Alberta. On a weekly basis, we intend to offer a total of 5.5 hours of news and public affairs programming.

487 Newcap has a history of community involvement in all of its stations, whether in Atlantic Canada, Ontario or across Alberta. Our stations see themselves as integral parts of the community and when we are needed we can be counted on. Here are some examples:

488 This past winter, when the residents of Badger, Newfoundland were displaced from their homes, we set up a pledge centre at our radio station CKCM and dedicated our programming to raising money on air. Our Newfoundland network of stations raised over a half million dollars.

489 Last fall, CFCW and our Alberta network of stations created the Say Hay benefit concerts in support of drought stricken farmers in Alberta. With two sold out concerts in Edmonton and Calgary featuring Canadian artists, we raised $1.5 million for our farm families. More importantly, the awareness "Say Hay" brought to the crisis in the agricultural community through television, radio and newspaper coverage was invaluable.

490 We have also tackled the latest challenge on the family farm, mad cow disease. In addition to the extensive on-air coverage, we have held numerous free Alberta beef barbecues throughout the province to encourage the public to continue to support our local beef producers.

491 We have a particular interest in children's charities. The Little Miracles Trust Fund, the children's charity on CFCW and CKRA-FM, continues to help out kids in need throughout north/central Alberta. What is wonderful about this charity is that the raising of money is high profile, but when we go to help a family in need, it's done discreetly behind the scenes. We look forward to extending this to Red Deer.

492 MR. TEMPLETON: Newcap works hard to reflect the demographic of Canada in our workforce and in our programming. As we have done with every new FM application we have presented to you, we will ensure that the day Classic Hits 104 goes on air, it will reflect the demographic makeup of Red Deer, with particular emphasis on the four designated groups.

493 I am pleased to tell you that both of our newly launched FM stations, The Breeze in Calgary and Hot 89.9 in Ottawa, launched with culturally diverse work forces with representation of the designated groups consistent with their representation in the population.

494 We have also committed $125,000 to Aboriginal Voices Radio Network, and a significant portion of our contribution will be used to fund an Alberta news bureau for AVRN. We expect that this will help to enrich their national program offering as well as being a source of information for their Alberta station. The rest of our contribution will be directed to support for Aboriginal musicians and journalists throughout the country.

495 We have presented a comprehensive business plan and we propose a music format customized to the musical preferences of Red Deer residents rather than a feeling that what has worked elsewhere will work here. Our revenue projections are reasonable taking into account the time that it takes a new station to become established.

496 Our costs are reasonable, with significant synergies from our existing Alberta operations.

497 We win bring a new editorial voice to Red Deer. With our Alberta news network, we will bring Alberta to Red Deer and our three new reporters will bring Red Deer to Alberta.

498 We will bring a new competitive thrust to the market. We have launched stand-alone stations in a number of markets in Canada, most recently in Ottawa and Calgary, and have known success in each market. We believe that we can compete successfully against Corus and Pattison in Red Deer.

499 We believe that we can do so with minimal impact to the existing stations, given the significant share of out-of-market tuning.

500 With a growing population and a strong economy, each station in the market should be able to attract an audience and a reasonable share of revenues.

501 The addition of a new competitor will bring new revenues to the market and will sharpen the focus of the existing stations making them more efficient buys for national and local advertisers.

502 Newcap bas been in radio now for almost 20 years. We started with AM and FM stations in small and medium markets in Newfoundland and Labrador, the Maritimes and Ontario. We have grown through strong research, high-quality and diverse staff, an emphasis on programming and community service and having the patience to wait for our plans to come to fruition.

503 We would like to bring that dynamic approach to Red Deer, supplementing our Alberta group of stations. We believe that we have much to offer Red Deer and that a Red Deer station will strengthen our service across Southern and Central Alberta.

504 That concludes our presentation and we would welcome your questions at this time.

505 THE CHAIRPERSON: Good morning, Mr. Steele and your colleagues, and welcome.

506 Commissioner Cardozo has questions for you.

507 COMMISSIONER CARDOZO: Thank you, Mr. Steele and your colleagues.

508 I had a very long list of questions, but you have answered a number of them in the course of this presentation for which I thank you. I will just ask for a few more precisions as we go through.

509 I will conduct the questioning to cover four areas which you are probably familiar with.

510 First, we will talk a little bit about format. After format, a bit on Canadian talent development. Then some specific programming issues and lastly some technical issues. Of course, as we go through, feel free to answer the questions which I failed to ask as well.

511 When we talk about format, as you know, it's an issue that we spend a lot of time at hearings, but again we don't regulate format if it's of a specialty format. So we look at it in the context of the quality of the application, the business plan, and in the context of diversity in the market and what you would be bringing to the market.

512 I have a fairly good sense of the format that you have described here, and perhaps one of the terms you used in your oral presentation on page 7, if I get this right -- not 7, the top of page 8:

513 So is that a good way of characterizing the format you are suggesting which would be different to what exists and what the other applications are putting forward?

514 MR. TEMPLETON: I'm going to call on our Vice-President of Programming, Steve Jones, to comment further, but generally speaking, yes, we decided on a format where we saw a void in the market, there was very little overlap with existing stations.

515 Steve?

516 MR. JONES: The stations that exist now are both very broad-based which is certainly a smart strategy in a market where radio listening is underserved.

517 Our proposal is softer and lighter than both of the existing radio stations and is also, in our analysis, softer and lighter than the other two applicants in this hearing.

518 COMMISSIONER CARDOZO: And focused on which decade?

519 MR. JONES: Our music primarily would come from the 70s and it would spill over from the late 60s through the 80s, and we pretty much end at 1990.

520 COMMISSIONER CARDOZO: And the Rogers application we just heard was more 80s-based. Yours is more 70s-based.

521 MR. JONES: Definitely, yes.

522 COMMISSIONER CARDOZO: What percentage of them would you say would be from the 70s, your key decade, and what percentage from the other?

523 MR. JONES: We would estimate that approximately 50 per cent of our music would come from the 70s -- just under 50 per cent from the 70s and about 50 per cent from the 80s. The remainder would be just spill over into the late 60s.

524 COMMISSIONER CARDOZO: Okay.

525 Your discussion about the age groups is fascinating. It was one of my questions. At the top of page 7 you said:

526 How do you come to that figure? Is it by the decade that you are playing?

527 MR. JONES: It is. I will ask Mark Kassof, our researcher, to give you a statistical rundown of how he reached that number, but that does derive from the era in which people generally form their music tastes, which is their young teenaged years and the age that those people are presently.

528 But Mark can give you a better answer as to how 80 per cent came to be.

529 MR. KASSOF: Basically what we did is we asked listeners to evaluate each format on a 1 to 5 scale, where 1 meant they would never listen to the format and 5 meant they would listen to it all of the time that they listen to radio.

530 What we did is we isolated the 5s and then did an age breakout of the 5s and what we came out with was that around 80 per cent of those people who said, "I would listen to this station all the time" were 35 to 54. Eighty per cent of the total universe in our case is 25-50.

531 COMMISSIONER CARDOZO: Do you really believe that people would listen to that? I mean, we are not supposed to regulate on the basis of our tastes, but I will give you an example. "Benny and the Jets" from the 70s is one of my favourite songs from that era. I love this song. I can listen to it, but I couldn't listen to it every day. I would go nuts if I listened to it too often and I would stop listening to it ever again, and probably never listen to Elton John again if I did.

532 MR. JONES: We found that the songs that are from those formative musical years for people in this age group, the 70s, carry a great deal of passion and they become the songs that people carry with them throughout their life really. Those become the songs they listen to for a long time.

533 Understandably, there is a certain factor we in programming refer to as a burn or fatigue on the listener.

534 COMMISSIONER CARDOZO: Yes.

535 MR. JONES: One of the ways around that is proposing a format that carries some variety to it, that plays from a number of different years and decades.

536 MR. KASSOF: I have to say, I have been looking at this music for a long time, and when classic stations first came on the scene back in the later 80s, a lot of people said this is going to burn out, this is going to be a flash in the pan, and the fact is the music just lasts and goes and goes and goes.

537 I just wrote an article about it calling it the "energizer bunny of music" because music by artists like Elton John and especially Fleetwood Mac and the Eagles, seems to refuse to die. I assume at some point it will die, but where that point is we don't know. It's holding up great.

538 COMMISSIONER CARDOZO: I don't doubt that it will remain popular for a long time, but my question is more: How much of it can a person listen to and how much of the time will they want to move onto something else?

539 MR. KASSOF: It depends on who you are. I mean, there are folks that want it as a steady diet. There are folks out there, lots of them, who think that basically anything recorded in the past 20 years is garbage and they are not going to listen to it. Those are the folks who are the P-1s as we would say for this kind of formats --

540 COMMISSIONER CARDOZO: Well, they haven't heard Avril Lavigne obviously.

541 MR. KASSOF: There are lots of people like myself who are very tired of it, think it's great music, never want to listen to it. I am not one of those 5s or those 4s.

542 MR. JONES: We have experienced in several other markets operating classic-based formats as well and their experience has been that they continue to show great strength.

543 MR. TEMPLETON: Commissioner Cardozo, perhaps this might help. We rotate very scientifically a fairly large universe of music from that genre and also the average listener tends to listen somewhere in the 8 to 12-hour range per week. So you don't hear "Benny and the Jets" every time you put on the radio. If you are an average listener, you might hear that every couple of months. So it doesn't tend to burn.

544 The other comment I wanted to make is we are so committed to research and reflecting what the markets want, we continually test our music. We are constantly testing and retesting our music to make sure as tunes start to burn out they go in slower rotation or right out of rotation.

545 COMMISSIONER CARDOZO: And you do that through focus groups?

546 MR. TEMPLETON: Yes. Perhaps Mark could --

547 MR. KASSOF: We do music tests where we expose a selected group of listeners to a lot of different hooks of songs, little short bits just to jag their memory and then they fill out a questionnaire basically indicating how interested they are in hearing it, whether they are tired of it or not, and we use that data to say that if a song is, in fact, burned out then the station might either eliminate it from its playlist for a while or put in a slower rotation.

548 It is amazing that there are a lot of songs -- I will give you an example: "In the Air Tonight" by Phil Collins -- that just don't burn out. They just don't.

549 Those are the ones that the station would play the most of, those songs that don't burn out, but when research shows that they do, that's when they go to a slower rotation.

550 COMMISSIONER CARDOZO: Is that the song he did in Lion King, Phil Collins?

551 MR. KASSOF: Not that's like from 1980, 1981.

552 COMMISSIONER CARDOZO: "Can you Feel the Love Tonight", because you see when you get that then you really get longevity for a singer because kids and parents can listen to Phil Collins together. Anyhow, that is my thought for the day on longevity of musicians.

553 You talked about this format skewing equally to males and females. How do you know that?

554 MR. KASSOF: Again that analysis where we looked at the folks that were most passionate, who said that they would listen to it all the time, broke them out. We asked the demographics and we saw that it was a 50/50 split of males and females.

555 COMMISSIONER CARDOZO: A last question on format, and it's the issue I asked the previous applicant as well. People do change format and you are allowed to do that. We certainly hope that you stick with the format you apply for, at least for a certain amount of time, but what if you do find in five years that this format is burning out or is just not taking anymore? What are the principles that would guide you to choosing a different format?

556 MR. TEMPLETON: Diversity. In each of the markets we operate in we try to make sure that we are going for the most diverse format for the marketplace. It's obviously much easier to build an audience base where there is a void. So we would move or evolve to fill that void, but we are constantly, as I mentioned, checking and rechecking the pulse the market to see what they want. So it may evolve over the next number of years, but right now generally speaking that is the big void in the Red Deer market, 35 to 54-year-old adults who like this particular type of music.

557 COMMISSIONER CARDOZO: But if you are changing format and your format isn't working, why would you not go to the most popular format that is out there and is making good money?

558 MR. TEMPLETON: Usually there is somebody there, and when you start splitting the votes, especially the market size of Red Deer, there is usually not enough for say two rock stations or two oldies stations or two news talk stations or whichever format.

559 In the larger centres, sometimes you do that and you do have head-to-head battles, but you tend to find the grass is a little greener where the voids are in the market, and it offers more diversity in the marketplace.

560 COMMISSIONER CARDOZO: CTD. Regarding the AVRN benefit that you put forward, if you were to be licensed would you be willing to accept a similar condition of licence that you have for the Ottawa station?

561 MR. TEMPLETON: Yes, we would.

562 COMMISSIONER CARDOZO: If AVRN was not to launch here or the station here, you have offered an alternate Aboriginal artists fund. How would that fund work?

563 MR. TEMPLETON: Perhaps I should mention, Commissioner, too with the Calgary licence approval for AVRN those funds could also support the news bureau for Calgary and Alberta should they not be awarded a licence in Edmonton.

564 COMMISSIONER CARDOZO: That would be alternate.

565 MR. TEMPLETON: It would be an alternative and that would be at the discretion of the Commission to allocate those funds, whichever you saw fit.

566 COMMISSIONER CARDOZO: Okay.

567 On the FACTOR part of your -- donations is not the word, but the money that would go to FACTOR, are you looking at that being regional or genre-based?

568 MR. TEMPLETON: All of our commitment will be used and applied to Red Deer musicians and the development of Red Deer musical talent through FACTOR. If any of those funds aren't used in any given year, they will be reallocated to the Alberta region and again if they are still not, then it would go into the national pot, so to speak. But we have a letter of support from FACTOR from Heather, the President, stating that it will be allocated to Red Deer Canadian talent development.

569 COMMISSIONER CARDOZO: Okay.

570 A couple of specific questions on programming. You talked in some detail about the Alberta New Network. Is that the term? Yes.

571 How would you work between the Alberta News Network and the Red Deer station? How would you balance the news that comes from both sources and how would it be I suppose local and yet regional?

572 MR. TEMPLETON: I think Dean will address that for you.

573 MR. THORPE: Mr. Commissioner, if I could give you a bit of history on the Alberta News Network. It was the original name given to a group of rural stations in Alberta, and as the number of our stations grew from the original three or four in Northern Alberta, it encompassed the various stations that you see on the map before you this morning.

574 The Alberta News Network functions in two different ways. The Network newsroom in Edmonton provides a three-minute live top-hour newscast several times every weekday, two-hour rural network of stations. This cast focuses first and foremost on Alberta news, then national and finally international. Following this cast, each of our network stations then anchors a local newscast along with weather and sports.

575 The symbiotic relationship has evolved to the point where our rural reporters send stories and wraparounds to network for network to use on their broadcasts. The network as well supplements our stations in Edmonton and Calgary with news stories generated by our rural reports giving their casts a well-rounded look at the province.

576 You asked the question about how Red Deer would function. The newsroom in Red Deer, those three persons in that newsroom their prime role would be to cover local news. What they could supplement their daily news programming with are the stories, the wraparounds, the information generated by our rural reporters. They could include that how they see fit into their daily news programming.

577 MS GREENING: I could probably add to that a bit because at CFCW, which I am the Program Director of, we run our own newscasts. However, up in Cold Lake, for example, there is a huge military base up there, but we also have a huge military base in Edmonton. So stories there may affect our listeners in that region. So we will air that story. Or going down the wheat belt down the Wainwright region. We will just take stories that will be pertinent to listeners in the CFCW listening region. That will be, I am sure, the same way that Red Deer will do it, stories that will affect their listeners on a more regional basis.

578 COMMISSIONER CARDOZO: And then from the listeners' perspective, it is seamless or is there the three minute and then the two minute --

579 MR. THORPE: It is seamless, sir, in our rural stations.

580 COMMISSIONER CARDOZO: How many staff and how many reporters do you anticipate or do you commit to for Red Deer?

581 MR. THORPE: We anticipate hiring three staff members at our newsroom in Red Deer.

582 COMMISSIONER CARDOZO: Is that three reporters?

583 MR. THORPE: Three reporters/anchors. Their duties would include both.

584 COMMISSIONER CARDOZO: And how many other staff at the station?

585 MR. THORPE: I will pass that on to Mr. Mike Fawcett, my colleague.

586 MR. FAWCETT: Thank you.

587 Yes, we will have a total of 20 staff in Red Deer. We will have the manager/sales manager, receptionist, sales and admin. assistant, and traffic person, seven programming people, the program director who will handle the mornings, music director doing mid-days, drive announcer, evening announcer, weekend and two producer/writers, three news people, as Dean has said, and promotions, an engineer and four sales people.

588 COMMISSIONER CARDOZO: That wouldn't be 20 full time, would it?

589 MR. FAWCETT: I am sorry?

590 COMMISSIONER CARDOZO: Would that be 20 full-time people?

591 MR. FAWCETT: Correct.

592 COMMISSIONER CARDOZO: Which station of the ones you have here in Alberta would be closest in size to Red Deer?

593 MR. FAWCETT: None of the Alberta --

594 COMMISSIONER CARDOZO: They are all a lot smaller, are they?

595 MR. FAWCETT: Yes, that's correct. The small ones you see on the map, other than Edmonton and Calgary, are considerably smaller.

596 COMMISSIONER CARDOZO: How many staff do you have in say Edmonton or Calgary? Could you give me just a rough ballpark?

597 MR. MURRAY: In Edmonton, for just the two FMs, we have approximately 60 people.

598 COMMISSIONER CARDOZO: Okay.

599 MR. MURRAY: In Calgary, there is approximately 24, I believe.

600 COMMISSIONER CARDOZO: With regards to your one-hour public affairs program, that is the weekend program. Is that correct?

601 MR. THORPE: That's correct.

602 COMMISSIONER CARDOZO: And what will the orientation of that be? Local, regional, national, international or all of the above?

603 MR. THORPE: I think, Mr. Commissioner, it would be all of the above. Certainly that one-hour program would focus on major news events that have happened in the community in the past week. Again, using the resources of our rural stations, the newsroom in Red Deer, putting that program together, could draw on those stories and include those stories in that feature as well.

604 Certainly as an anchor of news every day, I do interviews with people and you sometimes get a 10 or 15-minute interview with a great deal of material in it. That's all good. In the confines of a newscast though, a three minute to five-minute newscast, you can't always fit all that good information in.

605 I think this feature would allow the broadcasters, the newsperson, to use some of that additional material from those interviews in this feature once a week.

606 COMMISSIONER CARDOZO: Okay.

607 So besides the news you have on-air personalities through the day.

608 MR. THORPE: That's correct. I might pass that over to my colleague, Steve Jones.

609 MR. JONES: We intend to have live-air announcers 18 hours a day from 6:00 a.m. to midnight daily.

610 COMMISSIONER CARDOZO: And what they are doing is announcing songs and a bit of banter?

611 MR. JONES: Yes, the general content would include announcing songs, banter, audience interaction where it would be required, public service announcements, the general entertainment of the audience throughout the day.

612 COMMISSIONER CARDOZO: And can I ask you about shock jocks, and whether you anticipate having schock jocks or...?

613 MR. JONES: No. Our experience with this type of format would lead us to believe that shock jocks wouldn't be appropriate at all.

614 COMMISSIONER CARDOZO: How does Newcap deal with offensive content when you have that? What is your experience?

615 MR. TEMPLETON: We do monitor very, very closely. Classic rock stations tend to lean towards some of this. It's a 35-54 primarily male demographic and it leans on the edgier side of things. There is no strict black and white rules. Quite often you have to up some parameters and make sure you don't really test the edges.

616 Quite often the Canadian Broadcast Standards Council is brought in to analyze and make decisions and we really try to stay within those, but just to reiterate Steve's point, in Red Deer any, any form of shock jock radio would not be appropriate at all.

617 COMMISSIONER CARDOZO: In terms of cultural diversity, you talked about the employment equity plans you have. How would you see reflecting the diversity of the Red Deer now going into the future? You have diversity that goes back a long time with the Ukrainian and German communities. You have a fast growing area, likely a high rate of immigration.

618 How do you anticipate reflecting that diversity in either your music or your spoken word segments?

619 MR. TEMPLETON: It starts with our workforce, Commissioner. We plan on day one to have a completely diverse staff contingent representing the designated groups. That certainly goes a long way in assisting in that.

620 The other is the care and attention we take to studying the markets. In some markets the size of Red Deer it's very difficult to get statistical data. You quite often get it provincially, or in large centres like Edmonton and Calgary, it's readily available, but we would make a concerted effort, as we do in most of our markets, where diversity is a significant issue, to make sure we know the demographic and the ethnic profiles of our communities.

621 COMMISSIONER CARDOZO: Do you see any spoken word programming giving people a voice or covering issues differently than you might have done otherwise?

622 MR. JONES: I would see our presence at events that reflect the cultural heritage. You bring up the example of the Ukrainian or German communities, and those ethnic festivals and cultural festivals that happen.

623 Do you mean specifically in the announcer talk?

624 COMMISSIONER CARDOZO: That type of thing.

625 MR. JONES: That's really where we see our reflection of the community coming through and our presence at those events, reporting from those events, and covering them.

626 COMMISSIONER CARDOZO: Okay.

627 You talked about that the bulk of the programming, and I guess that is between 6:00 a.m. and midnight, would be live-to-air. Can you give me a sense of when you will not be live-to-air during those hours?

628 MR. JONES: During those hours, we would be live-to-air at all times. The announcers who are behind the control board would be doing their voice parts live, would be answering the phones and executing the format live in the studio. After midnight, we would likely turn to voice tracking technology to take us through the overnight hours.

629 COMMISSIONER CARDOZO: And where is that voice tracking produced? Is that --

630 MR. JONES: Those would be voiced locally in Red Deer by our staff there.

631 COMMISSIONER CARDOZO: So it's not province-wide programming that you stick on all your stations across.

632 MR. JONES: No.

633 COMMISSIONER CARDOZO: So for the other existing stations, they each do their own voice tracking programming?

634 MR. JONES: Mike Fawcett from the Alberta Group would be best to answer that question.

635 MR. FAWCETT: That's correct. Each one of the small stations you see there has a local programming, at least one local programming person. We do live programming in the mornings. Other day parts are either voice tracking or programming delivered from the network in Edmonton.

636 COMMISSIONER CARDOZO: I guess one of the strengths you are presenting is that you are in the province. You have 22 other stations. I haven't heard a lot about the synergies between a new Red Deer station and the others.

637 Where are the synergies that will come? And I appreciate that you have highlighted what you would bring new to Red Deer, but are the synergies that would exist or sharing with other stations?

638 MR. TEMPLETON: The financial synergies would be primarily in administration, engineering, et cetera.

639 The synergies that we think are the biggest benefit is that we would bring a radio voice to Red Deer that is not available right now with our network of stations in the small communities, and then in turn, we could take Red Deer to the province because if there are significant stories happening in Red Deer, it could be on our network of radio properties. Certainly the rest of the province has newspaper and television coverage, but the radio coverage is what we think we bring and the benefit we bring to the table on this.

640 Commissioner, I just wanted to point out too that most of these communities are less than 10,000 in population. Red Deer is at 200,000. It's more like a Moncton or a Kingston. It's a very vibrant market and can certainly support full-time radio service. Some of these communities are less than 5,000 people and there are not a lot of communities across the country with populations that size that even have a radio station. So we have a very strong central hub to support all the spokes and provide local service, for the most part, most of the day, to those small communities.

641 COMMISSIONER CARDOZO: How many staff would you have in Cold Lake, for example, or any of the small --

642 MR. FAWCETT: In Cold Lake we have five local people.

643 COMMISSIONER CARDOZO: So they are relying on Edmonton for quite a bit of support in programming?

644 MR. FAWCETT: That's correct. The programming, administration, technical, correct.

645 MR. TEMPLETON: Commissioner, I also wanted to add. This isn't coming from our Edmonton FM stations. The small market group has a hub in Edmonton and it's separate programming from what we do in Calgary or what we do in the two FM stations in Edmonton. It's aimed at the smaller communities and has more of an agricultural and more of a smaller market needs delivery.

646 COMMISSIONER CARDOZO: Do you anticipate that some of the staff who would be hired in Red Deer may be people you pull in from other places, your existing staff?

647 MR. TEMPLETON: It has been our experience for two reasons: To hire local people wherever possible. One, they will better reflect the community, and number two, they tend to stay because it's their hometown and they enjoy it.

648 Quite often in smaller markets it's almost like a farm club or like a hockey team where they want to move up to the big time and end up in Edmonton or Calgary or Toronto or Montreal. But there are a number of broadcasters who do want to work and live in their own communities, their hometowns. Where we have been successful in attracting that type of staff members, especially in the news areas, it has been very, very successful. They know their community and they stay. We don't turn over staff very often.

649 COMMISSIONER CARDOZO: I am just thinking back to the synergies issue. Would you, Mr. Fawcett, spend some time with new staff, or would have other people who would spend time with new staff?

650 MR. FAWCETT: We would be looking for new staff. As Bob says, our best experiences are in obtaining local people. We don't move people around. We make opportunities available to them. When opportunities to arise at any of our stations, they are posted throughout the company and made available to anybody who has the qualifications and wants to relocate. We do give first preference to local people.

651 MR. MURRAY: If I could just add a comment on the cost synergies or efficiencies. As Mr. Templeton said, we look at efficiencies in engineering and accounting and information technology and human resources, and training, and such, perhaps $100,000 of savings per year, but we look more at the support of our network as an efficiency where the News Network could do a lot more with fewer people because of that support.

652 COMMISSIONER CARDOZO: Lastly on technical issues. You have applied for 104.3. One of the other applicants applied for 104.5. Tell us from a technical perspective why you really need this frequency? Is it particularly good for your genre of music?

653 MR. TEMPLETON: I will ask Mike to respond to that.

654 MR. FAWCETT: Thank you, Commissioner.

655 Yes, when we were first putting our application together for Red Deer, we asked our engineering consultant, DEML and Associates, to search for a channel for us that would meet our programming or our coverage needs.

656 They came back with 104.3 as being able to provide the coverage that we need without interfering with any of the existing allocated channels or any of the channels being applied for in Edmonton or existing elsewhere.

657 Once we saw that Rogers had, in fact, found and applied for a channel that was mutually exclusive with ourselves, we went back to our consultants and asked them to find another channel, an alternate, in preparation for your question. They did come back and stated that they have identified a further channel, a C channel, 94.1 MHz, that does meet all of our coverage requirements and does not interfere with any of the other applicants or any station existing or being applied for.

658 So in effect, with this 94.1 available to us, there are four completely distinct C channels available for licensing in Red Deer, all of which have a fully satisfactory and identical coverages.

659 COMMISSIONER CARDOZO: And just to be clear when you say it meets all your needs, if you were licensed and then subsequently applied for this particular frequency all your business plan and your commitments would be the same?

660 MR. FAWCETT: Yes.

661 COMMISSIONER CARDOZO: Thank you very much.

662 Those are my questions, Madam Chair.

663 THE CHAIRPERSON: Thank you.

664 Commissioner Cram, please.

665 COMMISSIONER CRAM: Thank you, Madam Chair.

666 I have a few questions, and I think I wanted to start with -- I think it was you, Mr. Jones, who was talking about the format being broad-based, especially when the market is underserved. Then there was other talk just now about the number of frequencies.

667 Is it your view that the Red Deer market could sustain more than one commercial station?

668 MR. JONES: Purely from a programming point of view, we see this as similar to Moncton prior to recent licensings there where the market was able to absorb the licensing of numerous new frequencies.

669 Prior to that the radio stations that existed in the market were very broad-based in their programming. In fact, we owned one of them.

670 Since that time, we remain a profitable operation, yet all the FM frequencies in the market are now much more streamlined and focused in their programming.

671 COMMISSIONER CRAM: So you are not answering financially. Is that your point?

672 MR. JONES: Strictly programming.

673 MR. STEELE: Our business plan was predicated on the assumption that it can support two licences.

674 COMMISSIONER CRAM: Two licences? Two commercial licences?

675 MR. STEELE: Two commercial licences, yes.

676 COMMISSIONER CRAM: I hear you on your CTD, $125,000 to FACTOR for Red Deer musicians. How did you, or how do you propose to define Red Deer musicians? In the trading area or within the postal code or...?

677 MR. TEMPLETON: It's a good question, Commissioner. That will be pinned down with FACTOR. Probably the immediate trading area would make sense, the people that live in the community and migrate into the community to do their shopping, go to school, et cetera. But the immediate trading area which is approximately 200,000 people and we have that assurance from FACTOR, as I mentioned.

678 COMMISSIONER CRAM: You heard me talking to Mr. Miles before that it appears that any monies that go through the CTD are not, in fact, incremental to monies that would have otherwise been spent. And so as a result, there is really no net benefit of these benefits to people from Red Deer, in that FACTOR will still spend the same amount. It will just take the money that you are proposing to give and use it as opposed to increasing it, using it incrementally.

679 So given the fact that the monies are not incremental, and given the fact that AVR even if you did get the licence and AVR got the money, the contours don't go into Red Deer. Can you tell me what benefit people from Red Deer will be seeing based on the fact that there doesn't appear to be any CTD monetary benefit going directly?

680 MR. TEMPLETON: If I understood you correctly, Commissioner, the $125,000 to FACTOR is all new money.

681 COMMISSIONER CRAM: No. It's not incremental. At least our past experience is that it has not been incremental to monies that would have otherwise been spent.

682 MR. TEMPLETON: Sorry, I don't understand. We have committed all of that money to Red Deer specifically and it's new additional funding. I am not understanding something.

683 COMMISSIONER CRAM: It simply means they will spend less of the money they had.

684 MR. TEMPLETON: I am sorry?

685 COMMISSIONER CRAM: They will spend less of their money.

686 MR. TEMPLETON: I see where you are coming from.

687 COMMISSIONER CRAM: So then I am asking you, it's a Red Deer frequency. What benefit is there to Red Deer from your CTD given that FACTOR is not incremental?

688 MR. TEMPLETON: I hadn't quite thought of it the way you put it, Commissioner, but I do believe that there is an opportunity when that money is earmarked for Red Deer that it's much more easily accessible to Red Deer residents than it would be if it was just in a big national pie because there is a commitment on the part of the station, on the management of the station, on the programming, to go and attract musicians who want to see FACTOR funding and to promote that and to deliver them to FACTOR so to speak, saying, " We have this money. Let's tap into it and let's see if we can develop some Red Deer talent".

689 So I don't want to challenge you, Commissioner, but we do think we will try our best effort to make that incremental.

690 COMMISSIONER CRAM: Thank you.

691 My next question was the issue of your spoken word programming and there were 51 news packages and I guess I don't understand when they are going to be available, how long they are going to be and where they are going to come from.

692 MR. THORPE: Madam Commissioner, I can certainly break that down for you.

693 We have proposed a Monday to Friday schedule, first of all, 6:00 a.m., a five-minute news package which would include weather, sports and traffic; 6:30, a one-minute news update. The seven o'clock hour and the eight o'clock hour, for that matter, five minutes news, weather, sports and traffic; 7:30 and 8:30, a one-minute news update. Our 12 noon cast would be a 10-minute news, weather, sports, ag, business and cultural info package; 5:00 p.m., five minutes of news, weather, sports and 6:00 p.m. ten minutes, again, of news, weather, sports, traffic, ag business and cultural information. That is a total of nine casts per weekday, 45 weekday casts per week.

694 Saturday and Sunday, we have a total of six weekend casts total -- 7:00 a.m., 8:00 a.m., and 9:00 a.m. on both Saturday and Sunday would be a three-minute package of news, weather and sports.

695 COMMISSIONER CRAM: And none of that is going to be the system that you use for your smaller systems where you have the three minutes coming from Edmonton.

696 MR. THORPE: That's correct, Madam Commissioner. All of the newscasts from Classic Hits 104 will be generated by their news department.

697 COMMISSIONER CRAM: And then the public affairs reports, how long will they be and where will they be during the day?

698 MR. THORPE: The public affairs reports would be a one-minute feature, five a day, seven days a week.

699 COMMISSIONER CRAM: Are they like sort of mini-editorials or are they PSA kinds of things or...?

700 MR. THORPE: We are looking more at a PSA feature, say a one-minute update on an important topic that is making news in Red Deer, say a school closing, city council proposing a tax hike perhaps, or an important meeting coming up that the public might be interested in.

701 COMMISSIONER CRAM: And then the one-hour public affairs program. When is that?

702 MR. THORPE: We are proposing ten to eleven o'clock Saturday morning for that program.

703 COMMISSIONER CRAM: All locally produced, all local --

704 MR. THORPE: Correct, by the newsroom staff there.

705 COMMISSIONER CRAM: Then 35 community events updates, and that is different from the public affairs reports.

706 MR. THORPE: Yes, it is, Madam Commissioner. I will pass it over to Jackie-Rae, my colleague.

707 MS GREENING: I find with the community reports, we said 35, but in our experience we are probably going to greatly exceed those reports. Those are basically going to cover any charity fundraising events that may be happening in Red Deer, curling --

--- Laughter / Rires

708 MS GREENING: I had to get that in. Red Deer Rebels, of course, very big in the WHL there. Just really community involved items is what those reports are going to be about.

709 COMMISSIONER CRAM: Is there, or are you proposing that there would be any exchange of programming with the other stations, or essentially any syndication around the whole 22 other stations?

710 MR. THORPE: No. There is plans for that in our proposal at all to have any syndicated programming.

711 COMMISSIONER CRAM: Thank you.

712 Thank you, Madam Chair.

713 THE CHAIRPERSON: Mr. Templeton, maybe before the end of this proceeding you would be able to clarify this. It is about FACTOR.

714 Is what you are saying that quite possibly from the pot that exists, there would have been nothing going to Red Deer and now there will be? So it's not incremental to that national pot, but it's incremental. I would like to understand that better. Maybe you can check with FACTOR what the situation is.

715 MR. TEMPLETON: Madam Chair, coincidentally I will be with Heather at the Annual General Meeting of the Board of Directors of FACTOR and I will pin that down on Friday, but my instincts tell me I doubt that $125,000 a year has been dedicated to Red Deer in the past. I could be wrong, but what I am saying is that fund will be there and that we locally will encourage and make announcements to attract people to tap into that fund for Red Deer.

716 THE CHAIRPERSON: Yes, and your position would be that format was there before, because it's important for us to know when we are looking at the addition of a station in the market, and looking at the Canadian talent development that may accrue to that market, to have a better understanding of exactly what happens to this money.

717 I understand the incremental part, but to what extent is it dedicated, et cetera? It would be nice for it to be clearer for us, if you can, before the end of the process.

718 One question that wasn't asked of Rogers, but maybe will be, or they will address it by the end. Considering the apparent availability of alternative frequencies, what is your view of whether these three applications are mutually exclusive on the basis of format because we are hearing again a lot about the fact that they are indeed different, et cetera, as proposed.

719 I am reminded by Commissioner Cardozo that it isn't a condition of licence, but as proposed, do you see them so different that we could license two, for example?

720 MR. TEMPLETON: We do believe the market could support two new additional commercial licences in the market.

721 THE CHAIRPERSON: Could they support two of these three proposals?

722 MR. TEMPLETON: Yes.

723 THE CHAIRPERSON: You think that the format is different enough as proposed.

724 MR. TEMPLETON: Very much so.

725 THE CHAIRPERSON: To support two. On an economic basis, you are also satisfied that you could launch at the same time as another station.

726 MR. TEMPLETON: That's correct.

727 THE CHAIRPERSON: Assuming that the frequency -- I gather that you are mutually exclusive because it's so close.

728 MR. TEMPLETON: Yes.

729 THE CHAIRPERSON: What is it? 104.3 and 104.4 --

730 MR. TEMPLETON: 104.3 and 104.5.

731 THE CHAIRPERSON: Right. Thank you.

732 Counsel, please.

733 MR. McCALLUM: Just on that point that madame Wylie asked you to clarify with respect to the FACTOR funding, the process on this competitive matter for Red Deer is likely to be over some time tomorrow. Is that enough time for you to be able to clarify that?

734 MR. TEMPLETON: I believe it is. I will contact FACTOR as soon as we conclude here, and I am sure they will be able to extract that data and get a report back to you by the end of the day, I hope.

735 MR. McCALLUM: By the end of tomorrow.

736 MR. TEMPLETON: Yes.

737 MR. McCALLUM: I'm trying to put a limit on it.

738 MR. TEMPLETON: Yes. Tomorrow would be fine.

739 MR. McCALLUM: And I guess related to that, at page 9 of your presentation this morning you said that FACTOR agreed that the money will be directed to Red Deer musicians.

740 Was that agreement like verbal or in writing?

741 MR. TEMPLETON: Are you referring to the $125,000 to Red Deer musicians for FACTOR?

742 MR. McCALLUM: Yes. I am just looking at page 9 of your presentation, yes.

743 MR. TEMPLETON: Yes. We have a signed letter from Heather, the President of FACTOR, that that is the case.

744 MR. McCALLUM: So you can produce that for the record?

745 MR. TEMPLETON: Submit it at the end of the hearing, yes. It is on the public file, I should point out.

746 MR. McCALLUM: Fine. If it's on the public file, that's fine.

747 You also spoke about out-of-market tuning in your presentation this morning. According to your calculations, how much out-of-town tuning is there in Red Deer right now?

748 MR. JONES: According to BBM's most recent numbers approximately 66 per cent of tuning is to existing Red Deer licensed radio stations. So the remainder of that would be out of market.

749 MR. McCALLUM: Thirty-four per cent is out of market?

750 MR. JONES: Approximately, yes.

751 MR. McCALLUM: And so you would hope to repatriate a good portion of that. Is that what I hear you saying?

752 MR. JONES: Yes. There is a good deal of tuning to stations out of Calgary and Edmonton that we could repatriate.

753 MR. McCALLUM: And that would underpin the response that you gave to madame Wylie why, in your view, the market could potentially support two of these commercial radio services. Is that correct?

754 MR. TEMPLETON: That's correct.

755 MR. McCALLUM: At page 11 of your presentation, in referring to the commitment of $125,000 to Aboriginal Voices Radio Network, you said a significant portion will be used to fund an Alberta news bureau and the rest would be directed to support Aboriginal musicians and journalists throughout the country.

756 Can you quantify how much you have in mind for each of those two?

757 MR. TEMPLETON: Based on the assumption if AVRN is successful in Edmonton, all of that money would be dedicated to support the news bureau. However, if they were not, at the wishes of the Commission it could either be allocated to the news bureau in Calgary, where they have been licensed, or it could be allocated to journalists and musicians throughout the country, Aboriginal journalists and musicians.

758 Does that answer your question?

759 MR. McCALLUM: I'm sorry. I still don't really know what "a significant portion of the $125,000" really means. Was that all of the $125,000?

760 MR. TEMPLETON: We think all of the $125,000, if a news bureau is established in Edmonton, that's over seven years. So that is not a lot of money on an annual basis really. So all of that would be probably allocated to the news bureau. But again, we would do it at the wishes of the Commission, however you would like us to allocate that funding. But that was the intention.

761 MR. McCALLUM: Now, if the Commission determined that the contribution to Aboriginal Voices Radio Network would not qualify as a Canadian talent development initiative, I believe you answered Commissioner Cardozo saying that a response similar to what happened in Ottawa would be satisfactory to you. But just one further detail on that.

762 Would you still want the $125,000 to be accounted to Canadian talent development in some manner? Are you quite content that the $125,000 be deducted from Canadian talent development?

763 MR. TEMPLETON: If I understood your question correctly, the $125,000 to FACTOR would be CTD and the $125,000 to AVRN would be a benefit but not Canadian talent development.

764 MR. McCALLUM: And you are satisfied with that.

765 MR. TEMPLETON: Yes.

766 MR. McCALLUM: Thank you.

767 One of the further questions -- I didn't hear you respond, and if you did, I apologize, but in dealing with the 6:00 a.m. to midnight, you had said that most of it would be live programming and I just wondered if you could state of the 6:00 a.m. to midnight day parts when would there be live-to-air programming?

768 MR. JONES: To clarify that, all of those 18 hours would be live-to-air programming. There would be no prerecorded or syndicated programming or voice tracking.

769 MR. McCALLUM: So in totality.

770 MR. JONES: Yes, sir.

771 MR. McCALLUM: And finally, I didn't hear you state -- and maybe you did, and if I didn't hear it then you can just reiterate -- if an alternative frequency had to be chosen rather than the one you selected such as 94.1, what would be the impact on your business plan?

772 MR. TEMPLETON: There would be no impact on our business plan. Any of the three class C frequencies would support our business plan.

773 MR. FAWCETT: That's correct. We would go forward exactly as we have applied.

774 MR. McCALLUM: So no additional cost and no additional delay.

775 MR. FAWCETT: Correct.

776 MR. McCALLUM: Except that I think you would have to probably apply for the alternative frequency and engage that process.

777 MR. FAWCETT: That's correct. The Industry Canada application.

778 MR. McCALLUM: Thank you, Madam Chair.

779 THE CHAIRPERSON: First I want to correct my error that it's 104.3 and 104.5, not point 4 on the frequency.

780 Did I hear you say, with a kind of surprise, that $125,000 would all be spent in Red Deer, that is only what? Less than $18,000 a year that would be spent in Red Deer from the FACTOR contribution. Why is that -- you appeared to be surprised that this amount of money would go to Red Deer. Why is that, or did I misread?

781 MR. TEMPLETON: Sitting on the Board, I haven't seen a request in two years go through for a Red Deer musician, and we approve all the grants --

782 THE CHAIRPERSON: All the more reason. They will all be there in the bushes.

--- Laughter / Rires

783 MR. TEMPLETON: Before that there could have been many. I don't know, but I will speak with Heather personally, and Mark this morning and find out for sure.

784 THE CHAIRPERSON: It would be interesting to find out because we hear this all the time that giving money to FACTOR and it will be earmarked, but there never seems to be a very clear explanation of how this may work.

785 I was surprised by your surprise at $125,000 going to Red Deer. So that would be the idea, to have a new station and some money in there and find the musicians. I am sure there are some.

786 MR. TEMPLETON: That's correct.

787 THE CHAIRPERSON: And $18,000 is not, at least in Alberta, a great big sum, is it?

788 MR. TEMPLETON: That's what we intend to do though, encourage local musicians to come forth.

789 THE CHAIRPERSON: And I certainly encourage any of the other applicants to illuminate us more on what they mean when money will be spent on helping the community through the FACTOR money.

790 I understand it's a big organization and there are -- you are on the board, you know better than I, but nevertheless, what is the meaning of what is put forward to us as benefits?

791 Commissioner Cardozo has another question.

792 COMMISSIONER CARDOZO: I just had one more question on that same line, on the FACTOR issue.

793 I wonder if you could explore whether it's possible that these monies to FACTOR would, in fact, be set up as incremental funds. So FACTOR would then have a mini fund that it would set separate from its existing, such that a musician from Red Deer could apply, but it wouldn't be limited to that $125,000 and they could apply -- how exactly that works is a secondary matter.

794 MR. TEMPLETON: The way it is now, Commissioner, is any resident of Canada can apply for a FACTOR grant, but I think the way it is stated right now in our letter is whatever is not used each year goes into the national fund.

795 I am going to ask Heather if we can just earmark that entire amount of money, whether it takes two or three or five or seven years, to dedicate that that to --

796 COMMISSIONER CARDOZO: Yes, and that Red Deer artists wouldn't then be excluded from the main fund as well. So it would genuinely be an incremental fund. Do you know what I mean?

797 MR. TEMPLETON: We could do it that way. I would hate to limit it because there may be a need for more $125,000.

798 COMMISSIONER CARDOZO: That's what I mean, yes, that they would be able to tap into the rest and not be limited to $125,000.

799 MR. TEMPLETON: Correct.

800 COMMISSIONER CARDOZO: Thanks.

--- Pause

801 COMMISSIONER CRAM: When you do talk to Ms Ostertag, you could ask her about the letter she sent to the Commission, to Mr. Ketchum, saying it was not incremental. I think it was a couple of months ago, or it could have been September of last year, in between September of last year and now. That was what brought this all about.

802 Thank you.

803 THE CHAIRPERSON: Well, we will now, Mr. Steele, give you an opportunity to tell us if we were to license just one new station in Red Deer why it should be yours.

804 MR. STEELE: Thank you. Thank you for hearing us today.

805 First of all, I hope we have demonstrated that we have a strong application, that we would add diversity to the market and that the format that we propose would not impact the other existing operators unduly.

806 What a licence in Red Deer will do for us, it will enhance -- Commissioner Cardozo had asked about synergies and I want to make an important point here, that really the financial synergies are negligible. The synergy we are referring to is the Red Deer licence would enhance the Alberta News Network and Alberta, the province as a whole. That is an important point I want to make.

807 Other than that, we are here for the long term and if we are fortunate to get this licence, be awarded this licence, we will certainly do a great job. So that is all I have to say.

808 Thank you.

809 THE CHAIRPERSON: Thank you, Mr. Steele and your colleagues for your cooperation.

810 We will see you again in the following phases.

811 We will hear the presentation by the Pattison Group before lunch and then adjourn for lunch and hear questions after.

812 So we will stop for five minutes to allow the panels to change.

813 Thank you.

--- Upon recessing at 1155 / Suspension à 1155

--- Upon resuming at 1200 / Reprise à 1200

814 THE CHAIRPERSON: Mr. Secretary, please.

815 MR. LeBEL: Thank you, Madam Chair.

816 Item 3 on the agenda is an application by Jim Pattison Industries Limited for a licence to operate an English-language FM commercial radio station in Red Deer. The new station would operate on frequency 99.9 MHz (channel 260C1) with an effective radiated power of 100,000 watts.

817 Appearing for the applicant, Mr. Rick Arnish. I will ask him to introduce his colleagues. You have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

818 MR. ARNISH: Thank you, Mr. Secretary.

819 Good morning, madame Chair, Members of the Commission and Commission staff. My name is Rick Arnish, President of The Jim Pattison Broadcast Group with headquarters in Kamloops, British Columbia.

820 We are very pleased to be here today to present our application for a new classic rock FM radio station to serve the city of Red Deer, Alberta and surrounding communities.

821 With me is our Red Deer, Alberta management team responsible for the day-to-day local management of our stand-alone radio station, CHUB-FM, including station General Manager to my right, Paul Mason, Retail Sales Manager, Bonnie Fraser, and Program Director, Jim Hall.

822 Directly behind me is Lamya Asiff, News Director for CHUB-FM and our proposed new station. To Lamya's right is Bill Dinicol, our Group Controller and next to Mr. Dinicol is Brian Sandlesky from WTR Media Sales Incorporated.

823 This dedicated management team spearheaded the development of our application and will be responsible for the day-to-day management of our new classic rock station, should our application be approved by the Commission.

824 Madam Chair, we are now ready to start our presentation.

825 The Jim Pattison Broadcast Group is a regional player in the two most western provinces of our country, Alberta and BC. Our group consists of 23 radio and TV stations, with all stations located in small markets, except for our two major market stations in Vancouver and our medium market stations in Kelowna.

826 In Alberta, in addition to our FM station in Red Deer, we have a stand-alone FM station in Grande Prairie, an AM/FM combo in Medicine Hat, a stand-alone CBC-affiliated TV station in Medicine Hat and two FM stations in Lethbridge/Taber along with two very small stand-alone stations in Drayton Valley and Rocky Mountain House/Nordegg.

827 As a small market broadcaster, we have made major commitments to all the communities we are licensed to serve. Our commitment is to top-quality local programming, outstanding local news and information services and a total dedication to be intertwined in the cities and towns we serve.

828 Our local stations and staff are the "voice" of our communities, whether it's a local hospital fundraising sponsorship, the United Way or the Cancer Society's "Relay For Life". Our broadcast group's public service record, I'm proud to say, does speak for itself and has been recognized by the CAB, regional associations and the RTNDA on a number of occasions over the years.

829 The Pattison Broadcast Group knows how important it is to provide local and regional reflection and is proud of our commitment in all of our markets, where we are local and stay local. Our stations are the building blocks of the communities we are licensed to serve.

830 We have local management in place at all of our stations who make local decisions in the best interest of the station and the community. We employ people locally, with all of our stations having sufficient on-air, news and information personnel to provide local "live" reflection in these marketplaces, rather than from a network set up in a major market or much larger centre.

831 Our mandate is to ensure that our best practices for the marketplaces is that of local programming staffed by live personnel.

832 Turning to our application for Red Deer, we are the sole stand-alone FM radio station in the marketplace, up against two formidable Corus FM stations.

833 Our Pattison station, CHUB-FM, is an adult contemporary station with a format designed for women aged 25 to 54. Our competitor's stations are CKGY-FM, a country station targeted to a mature 45+ audience, and CIZZ-FM, targeted to adults 18 to 44 with a hot AC/rock format.

834 In late summer of last year, and with the desire to protect our license not only in Red Deer, but of our very small market sister stations in Drayton Valley and Rocky Mountain House/Nordegg, we put a strategic plan in place for the long-term viability of our operations in Central Alberta.

835 One of the main building blocks of our future plan was to equal or level the playing field for our stand-alone FM station in Red Deer by applying for a second licence to serve the market with a classic rock format.

836 Regarding the City of Red Deer, the population base of the community according to Statistics Canada 2001 community profiles, is only 69,978. Although this is an increase of 12.7 per cent since the last census in 1996, this is considered a small market for our industry.

837 Our number one issue is our stand-alone station being at a great disadvantage against the two Corus properties, CKGY/CIZZ. In fact, in the latest Spring 2003 BBM ratings, this point is driven home in a big way. As you can see in Attachment No. 1, the Corus stations garner over 70 per cent of local radio hours tuned while our station, CHUB-FM, garners less than 30 per cent.

838 The competitive nature of our market is such that distant TV and radio services from Edmonton and Calgary, local newspaper, transit and billboard advertising all play a significant role in the make up of the marketplace, which has and will continue to impact our stand-alone FM station.

839 Adding to this, if the Commission approves all of the television applications presented during this hearing, these additional new services will only exacerbate the future viability of our station on a going-forward basis.

840 In our opinion, we cannot remain competitive as a stand-alone FM station without something significantly changing the competitive balance in the marketplace.

841 We know the challenges we face as a stand-alone FM station and are before you today to discuss our exciting new plans for a new and distinct second FM radio license to serve Red Deer. Our proposed classic rock station will repatriate the 35 to 54-year-old male audience which is now, for the most part, listening elsewhere to satisfy their hunger for the music they grew up on.

842 I will now turn our presentation over to our Red Deer team, lead by Paul Mason.

843 MR. MASON: Good Morning.

844 Jim Pattison Industries owns and operates CHUB-FM in Red Deer. Our radio station was established in 1948 as CKRD-AM, and after 52 years was converted to FM in 2000 and remains the sole radio property of our company in the city.

845 As you have already heard, our Red Deer station is also responsible for the management and financial viability of our very small market stations, CIBW-FM in Drayton Valley, and CHBW-FM in Rocky Mountain House/Nordegg.

846 Our application, based on our own research and that of our consultant along with BBM, clearly indicates that a major portion of the Red Deer radio audience is not being served by a locally domiciled FM station playing a unique and distinct format, which is classic rock.

847 As you can see by Attachment No. 2, currently the underserved male audience 35 to 54 must tune elsewhere to satisfy their musical tastes for classic rock music. It is quite clear in BBM data that over 35 per cent of men 35 to 54 are not listening to a Red Deer station, as there is not a format that suits their musical genre. The repatriated male audience will benefit from us providing a new local classic rock format.

848 From a historical perspective, our staff and management along with our programming commitments have been dedicated to providing ongoing community service to our market for over 50 years. In fact, a substantial number of our staff have been with our team for over 15 years.

849 With approval of a second FM license, our commitment would double, thereby further benefiting our growing community. In past years, our station has been selected "Business of the Year" as well as "Corporate Volunteer of the Year" in Red Deer, recognition we are proud of and a commitment that would be equally important to our new classic rock station if we were granted approval of our application.

850 Our proposed new station would employ, from the very first day of operation, 15 new additional employees, from on-air announcers, news and sports reporters, to creative writers, sales and promotion personnel. We are very committed to being a live local radio station.

851 We have made a major decision to put our money into Canadian talent through the hiring of new broadcasters who will come to our city, work at our station, buy homes, pay taxes, settle down, perhaps meet someone and marry, have a family and contribute to the future of our city.

852 This Pattison philosophy of putting money into Canadian jobs and the local Canadian economy in small markets is one that we are committed to now and into the future. It's also a philosophy we are very proud of.

853 Now Jim Hall will review why classic rock is our format of choice.

854 MR. HALL: Good morning.

855 In a promotional piece sent to us, classic rock is the "energizer bunny" of radio music according to consultant Mark Kassof.

856 In market after market, research shows classic rock sub-genres like older classic rock Led Zeppelin, Jimi Hendrix, Pink Floyd, along with younger classic rock like Van Halen, ZZ Top, the Eagles and the Doobie Brothers consistently rank at or near the top of listeners' preferences. The appeal of Classic Rock isn't only big... it has a very broad base.

857 In our own opinion, and those of others, the format has been tested and well proven to be the domain of males 35 years of age and older. The distinct and very unique classic rock format continues to grow across Canada and the United States as our population ages. In the last several years, classic rock is one of the top music cluster choices of 35 to 54-year-old adult males in the radio marketplace.

858 There are a number of contributing factors to the format's performance. Among them is target demo focus. Classic rock stations, like the one we have proposed for Red Deer, have a core audience of men 35 to 54.

859 It was just over five years ago that classic rock surpassed oldies in 35 to 44-year-old men's listening choices and the format hasn't looked back. Clearly, a classic rock station like our application supports is open for males who graduated high school between 1970 and 1984, who are now in their mid 30's to early 50's.

860 A classic rock station as we propose will be distinct and unique from what's already available in the Red Deer market. By spreading its wings and programming great music, our new station will reintroduce many songs and artists that appeal to the 35+ male and have not been aired on any local station in significant numbers.

861 By carefully balancing pure classic rock artists such as the Rolling Stones, Eric Clapton, The Guess Who, Boston, Neil Young and The Doors, along with the Eagles, Steve Miller, Prism, The Doobie Brothers and Trooper, as well as one-hit wonders from War, Gerry Rafferty and Stealers Wheel, to name a few, the classic rock format has become as comfortable for the 35+ male as a pair of Levis or a Mustang convertible.

862 Even deeper excursions into the 60's classic rock founders like the Beatles, Jimi Hendrix, Janis Joplin and CCR have helped the format increase its market share. With today's rock music more polarized than ever before, it is becoming increasingly difficult for many over 35 to listen to rock radio.

863 They know their music polarized their parents, but back then they didn't care. The music then known as rock and roll, but today labelled classic rock was, and is, the target listeners' very own.

864 Here's an example of what their new radio station will sound like:

--- Audio Presentation / Présentation audiovisuelle

865 MR. HALL: In putting our application together, we realized that imaging the format is very important as well. If our application is approved, our goal will be to create a bond with our listeners stronger than most stations can, simply because the target audience will associate the music and surrounding pop culture of the station format with the best times in their life.

866 They are not feeling old, but forever youthful because of that relationship, and the music win define their lives.

867 Our search for a desirable format was for one that would have minimal impact on the three other stations already established in Red Deer. Our proposed classic rock format will be designed to appeal to males 35-54 years of age, but could also include male listeners five years younger or older on either side of this demographic.

868 The musical focus win be primarily on artists and groups from the last 35 years with a spotlight on those artists and groups from the mid 60s, to the 70s and 80s who established themselves as the driving force of what is now referred to as the classic rock genre of music.

869 We also propose to introduce a new weekly one-hour, long-form music and spoken word program titled the "Classic Rock World Review", which would focus on Canadian and international artists of the classic and new classic rock compatible genre. It would also spotlight new and emerging Central Alberta artists and give them the opportunity to expose their music to a new audience.

870 Now to our commitment to local reflection, here's Lamya Asiff.

871 MS ASIFF: News and information will also play a very important role in the make up of our proposed new station. After all, we are talking about reaching men 35 to 54 years of age. News, sports and local community information will be part of the daily reflection on the lives of those individuals in Red Deer.

872 Our commitment includes hourly five-minute newscasts from 6:00 a.m. to 5:30 p.m. Monday to Friday, with additional half-hour updates of three minutes weekday mornings from 6:30 to 8:30, plus afternoon updates at 4:30 and 5:30. Live news coverage will continue on the weekend as well. Our newsroom will remain staffed Saturdays with five-minute news reports airing from 7:00 a.m. until 1:00 p.m., with half-hour updates at 7:30 and 8:30, plus Sundays we will have live newsroom five-minute updates hourly from 9:00 a.m. to 1:00 p.m.

873 Sports win also play an important role in defining our information commitment. Updates are scheduled every 30 minutes following our weekday newscasts from 6:00 a.m. to 8:30 a.m. and then throughout the day as it happens.

874 Our reports would concentrate on local sporting activities but would also include regional, national and international updates. Our weekly commitment to local news and sports reflection will be seven hours and 55 minutes.

875 Weather reports play a major role in the lives of everyone in Central Alberta. Climate changes are an everyday way of life in this region, not only from day to day, but even hour to hour. We have learned from living in this region for so many years that extreme weather swings can occur at any moment, from snowstorms that effect school closures and bus cancellations on a constant basis, to storm warnings and tornado sightings.

876 It cannot be stressed enough that being "live and up to date" is critical to those who live in Central Alberta. That is why we have proposed to dedicate a minimum of 30 minutes airtime each weekday specifically to environmental coverage. Weekends would also see our commitment continue with 20 to 24 minutes daily. Our weekly commitment to local environmental coverage totals three hours and 18 minutes. Our total weekly commitment for local reflection of news, weather and sports will be 11 hours and 13 minutes.

877 MR HALL: As part of our strategic plan for our new proposed station, we are committing to a substantial amount of live-to-air programming. We plan to program a live broadcast schedule of 18 hours a day weekdays from 6:00 a.m. to midnight, and 12 hours a day on weekends that will keep our station's programming and on-air personalities totally connected throughout the day and evening with our audience.

878 Access to their favourite radio station is appreciated by listeners. Having someone answer the phone after hours, for example, especially when weather conditions are less than desirable or something of a major news event is unfolding in the community is crucial. This commitment to live programming not only serves the community, but also will help us develop up and coming Canadian broadcast talent.

879 As a footnote, it should be mentioned that CBC's Ron McLean got his start with CHUB in its days as CKRD, and is an example of the Canadian talent that can be developed given the opportunity.

880 To reiterate, in determining the format for our proposed new classic rock FM station, we first assessed the stations already established in the market. Our A/C station, CHUB, caters to adults 25-54. The musical range of the station is a blend of 80s, 90s and current hits covering artists such as Eric Clapton, Hall & Oates, Fleetwood Mac, Sarah McLachlan, Alanis Morrisette, Madonna, the Goo Goo Dolls, and 98 Degrees.

881 The two competing stations are owned by Corus. CKGY is country, while CIZZ, the direct competitor of CHUB, plays a hot AC/rock format similar to CHUB with familiar bits of the 80s but with more of a concentration on 90s hits and current music.

882 Our assessment of the two other applications for radio licenses in the Red Deer market immediately showed a much broader overlap of services already established in the city.

883 Rogers is promoting a classic hits format focusing on their established JACKfm format. A musical analysis of the JACK playlist shows that 32.3 per cent of their playlist is currently being played in Red Deer by our station CHUB. An additional 36.6 per cent of Rogers' playlist is currently in our library and is routinely rotated on-air on CHUB. This means 68.9 per cent of their proposed format is already duplicated in the marketplace by CHUB alone.

884 Newcap Inc., who is proposing a gold-based adult contemporary format, claim their proposal would expose listeners to a musical format that would present a unique and diverse sound in the market, which we do not concur with. Their music focus would be of the softer variety, and predominately non-current by only playing two to three new songs per hour.

885 However, their proposed musical lineup shows very clearly that their core artists and music are no strangers to the Red Deer market, since they are already part of the CHUB library. Newcap's own research indicates there is a great deal of overlap in musical content currently between CHUB and Corus-owned CIZZ.

886 It should also be noted that if the Newcap application was approved there would be a significant additional overlap with their new station and our own CHUB, effectively pinching CHUB between two other stations while sharing a significant portion of our format and music library.

887 Our proposed format for classic rock would be dedicated to rock hits of the mid 60s, 70s and 80s, with roughly 80 per cent of our library and hourly playlists dedicated to those two and a half decades. The remaining 20 per cent would come from the rock genre of the 90s and today with new and recurrent music that is classic rock compatible.

888 Artists such as Nickelback, Matthew Good, Our Lady Peace, Bruce Springsteen, Train, and 3 Doors Down would fit the new rock-compatible music list and at all times the focus would be on males.

889 As you can see in Attachment No. 3, the latest BBM survey results show 83 per cent of all females between 25 and 54 were being satisfied by the current three radio stations in the Red Deer market. Conversely, only 65 per cent of males between 25 and 54 in our central market could make that same claim, meaning 35 per cent are tuning elsewhere for their radio needs.

890 Our application for a classic rock radio station servicing Red Deer and Central Alberta was done so with the intention of promoting something new and unique for our listeners, fulfilling a request from the audience that presently tunes out of market to satisfy their radio needs.

891 MR. ARNISH: In conclusion, we are before you today seeking approval for a new second FM radio license that will, in our opinion, react to a very underserved and under-represented segment of the Red Deer radio audience.

892 We believe our application is right for the times and will contribute significantly to the objectives of the Broadcasting Act, as well as providing a new and highly desired, local radio station with live local programming and local reflection. It will also level the playing field regarding a competitive balance perspective with the two Corus competitors in the marketplace.

893 The impact of a new stand-alone commercial competitor in Red Deer, we believe, will be very detrimental to our stand-alone station in particular, and would certainly upset the competitive state of the market to the advantage of the current two-station Corus combo.

894 Respectfully, a third commercial licensee would bring a destabilizing impact to the market with past history supporting the fact that a new entrant would offer lower advertising rates, thus undermining the stability of the Red Deer market to continue supporting the level of local reflection that the current three stations provide today.

895 Our business plan as presented is well thought out and is certainly a reflection of the commitment The Jim Pattison Broadcast Group has to all of our small market radio stations and the communities we are licensed to serve.

896 We strongly believe that being local, staying local, and committing the financial resources to hire Canadian broadcasters that will live and work in markets such as Red Deer, are for the betterment of the community and the industry as a whole.

897 Our proposed new station will have the staff and the resources, which will play a very integral role reflecting the local community, its makeup, its attitude and its future and that of the well being of its citizens.

898 We sincerely appreciate the overwhelming and outstanding support we received from the entire community of Red Deer for our application, including the mayor, MLAs, MPs, the Chamber of Commerce, business community and citizens of our great city. With over 160 letters of support, dozens and dozens of e-mails and a 1,200-name petition, we will not disappoint the city of Red Deer if our application is approved.

899 I wish to thank the Commission for this opportunity to explain our proposal to you and the benefits it will bring to the city of Red Deer, Alberta.

900 Madam Chair, Members of the Commission, we are now ready to reply to your questions.

901 THE CHAIRPERSON: Thank you. Good morning and welcome, Mr. Arnish, and your colleagues.

902 As planned earlier, we will now break for lunch until 2:00 at which time we will proceed with our questions.

903 We will see you then. We will adjourn until 2:00.

--- Upon recessing at 1225 / Suspension à 1225

--- Upon resuming at 1400 / Reprise à 1400

904 THE CHAIRPERSON: Order please. Welcome back.

905 Commissioner Langford, please.

906 COMMISSIONER LANGFORD: Thank you, Madam Chair. Welcome to beautiful downtown Edmonton. I have a few questions.

907 I think you probably answered more than I got in your opening statement, but my ears are outside of your demographic and you people can deliver more information than I can take in.

908 I have the written copy of it, of course, and I have gone over it. So pardon me if I do force you to repeat a few things, but our job here is to make sure we know exactly what you are going to do and it's better to err on the side of repetition than to miss it.

909 What I am going to look at is basically -- you have been sitting here this morning; you know exactly what I am going to look at. I am going to look at your format and the business market and some of the synergies that you think you can accomplish with a second firm, the same sort of questions we were asking the others. It's a competitive process so naturally we want to see how people measure up against each other as well as how to weigh your application in and of itself.

910 So I want to go back a little bit to the concept of format. I know we don't regulate format, but as we try to tell any applicants we do look at format as a measure of how you may succeed in a market, and whether you picked a format that will enhance your business plan and your projections, or whether you perhaps picked one that incompatible.

911 We have another possible impact situation here in that we might licence more than one. I mean, it's conceivable we could. So then how would your format fit with the others? So format does become a bit of an issue, not that you can change it the second day you are on the air, but still that is what you have presented us with and that's what we have to deal with.

912 So you are looking for, you suggested or indicated, a format that you call classic rock and, as you know, Rogers has got something called JACK, and we have to teach JACK to think outside of the box. Then we have Newcap with something called classic hits. I think that we need a little bit of help to differentiate among those three, if we could.

913 MR. ARNISH: Thank you, Commissioner Langford.

914 I am going to turn your question over to Jim Hall, but let me say this first off: When we looked at our application of applying for a second licence for Red Deer, we certainly looked at the competitive state of the market to begin with and, as you heard in our presentation today, there is a country station in Red Deer owned by Corus. There is a hot AC rock station owned by Corus, and our own adult contemporary station.

915 So we looked at a couple of elements, an awful lot more than that, but the two main ones were: What is the hole in the marketplace we could fulfil with a new FM licence? It was very clear, as you heard from us this morning, that in the research that we did that the 35+ male audience in Red Deer is being totally underserved at this point in time.

916 We didn't want to come before you with an application that basically replicated music that was in the marketplace currently. We believe that the classic rock format that we have presented to you today is certainly vastly different than the JACK classic hits format presented by Rogers and the same would apply to the Newcap classic hits format as well.

917 We feel, and Jim can talk about this, that a lot of the other applicants' music is already being aired in the marketplace and that ours is going to be vastly different than what is currently available in the marketplace.

918 I would also add that we looked at the situation of having four stations in the Red Deer market, and by looking at that we know by other markets that we are in where we have two radio companies, maybe an AM/FM combo or two FMs for each licensee, that the marketplace at the end of the day when there are four licensees in a market the size of Red Deer or Lethbridge or Prince George or Kamloops, for example, that the marketplace will dictate that to be competitive and be in the business you have to have four distinct formats. In those types of markets that we are very familiar with, the markets do derive four distinct formats. That's another criteria that we apply to Red Deer.

919 So with that I will turn it over to Jim and he can give you some more explanation on the format.

920 COMMISSIONER LANGFORD: Just before you start, Jim, not to interrupt, but I have read what you have here on page 12 and I will want to talk to you a little bit about your percentage breakdowns of how you think certain other formats are already represented, but if you could just reiterate for me where you are pulling your music. Rogers seems to be mostly 80s. Others are saying 70s and 80s. You are saying sort of 70s, 80s, 90s, I gather. I am trying to get a breakdown of what to expect if we listen to this radio. I heard it there, but I am a little outside your demographics. So I need some statistical analysis.

921 MR. HALL: What we are saying is that roughly 80 per cent of our music we want to be mid-60s to the 90s, and then the remaining 20 per cent would be the 90s through to present day of a compatible classic rock type genre of new artists.

922 We want to target 35+ males. Basically that demographic of males 35 to 54 years of age, as we stated, who were born 1970 to about 1984, and it would place them, of course, in that age demographic at this point. The music that we are talking about is classic rock. It is not popular hits of the 70s or the 80s.

923 We are trying to specifically target the format of the radio station to those stations of that era that played album rock, there were album cuts. They are definitely going to be of a heavier edge. You heard with our demo earlier this morning that we are not talking about popular hits of the 80s or 90s as we saw with the other two applicants.

--- Pause

924 COMMISSIONER LANGFORD: Sorry, I didn't have my microphone on.

925 What I was saying is I think you did describe it earlier on at one point as kind of softer and at another point as sort of hard edge. I had kind of trouble.

926 But anyway, why don't we just start at the beginning? Tell me what percentages, more or less, would come from these different decades, if that would help, and then perhaps compare it for me to the type of formats you heard described today by the other applicants.

927 MR. HALL: We mentioned that we wanted roughly 80 per cent of our musical library to be from the mid-60s through to the 80s, concentrating on the classic rock, such genres like older classic rock which would encompass Led Zeppelin, Jimi Hendrix, Pink Floyd, and then into the 80s, artists like Van Halen, ZZ Top, the Eagles, even some of the Doobie Brothers' tunes. In terms of how we are going to break that down in percentages, I just see it as an even spread from the mid-60s right through to basically the 90s. So we are encompassing the mid-60s, 70s and 80s, and encompassing 80 per cent. We are not saying that we want say 50 per cent of our library to be from the 80s and the remaining percentages all broken down in smaller numbers. We are trying to spread it across evenly from the mid-60s through to the 90s.

928 The remaining 20 per cent we want to be classic rock compatible artists from the 90s right through to present day today.

929 COMMISSIONER LANGFORD: And how does that differ in your mind, in your experience, from what we heard from other applicants today? In other words, what is the difference between what you are going to give us and what JACK will give us and what the classic hits will give us?

930 MR. HALL: In our opinion, both Rogers and Newcap are proposing classic hits formats, but both companies have interpreted that title, I guess, in different manners. It seems to us that both companies are serving an audience with some form of popular music.

931 Rogers says their format is designed for adults 25 to 54. They are using popular hits from the 80s and 90s to do that.

932 As we mentioned earlier, our analysis of what they are proposing and what is already being played in the Red Deer marketplace by our stand-alone station CHUB shows that two-thirds of their music has already been exposed to the Red Deer market.

933 Newcap is saying that theirs is classic hits as well, but they are interpreting it as a gold-based adult contemporary format for I guess particularly females, according to the research, and we already claim that the females in the market are already being served by the three radio stations there.

934 COMMISSIONER LANGFORD: How much of what you are going to deliver under your format, your classic rock format, is already there?

935 MR. HALL: In terms of overlap with what is already being played in the market?

936 COMMISSIONER LANGFORD: Absolutely. The same test you are applying to Rogers and Newcap, I would like you to apply to yourself.

937 MR. HALL: Okay. With the stations that are in the market right now, CHUB is female-leaning as well as CKGY which is a country format. CIZZ is the other FM Corus-owned station in the market. Our analysis of their playlist, and we do this on a regular basis because they are our competition, showed roughly 50 per cent of their playlist that is the year 2000 or newer, leaving say an average hour of ten songs, five of those are the 80s and the 90s.

938 We broke that down even further: Two songs out of their average hour are 80s, three are 90s. We are saying that 80 per cent of our library we want to be 1990 and older.

939 So if you are asking me in terms of how much overlap are we going to see right now, I say it's going to be minimal.

940 COMMISSIONER LANGFORD: So 10, maybe 20 per cent, depending on the day, but --

941 MR. HALL: Well, yes. I mean, you could break down even further and say they are playing 30 per cent of hours 90s, and we are saying 20 per cent of our music is going to be 1990 and newer. What are the chances of there being significant overlap when we want to be predominantly male and older?

942 COMMISSIONER LANGFORD: Now, you can jig your own station CHUB to be what you want it to be, obviously, but at this present moment how much duplication is there between your two stations, the one you have going now and the one you are proposing?

943 MR. HALL: The one we are proposing is going to be male. We want it to be predominantly male. We want it to target males. We feel that is where the hole in the market is right now.

944 With CHUB we have always tried to direct it to 25-54 females, to have not necessarily a harder edge, I guess which is the new station that we are proposing, which is going to be classic rock. The new station is -- I shouldn't say the new. CHUB is 80s and 90s and today. We cater popular music and we lean it towards females. We don't try to play a lot of the harder edge music.

945 COMMISSIONER LANGFORD: So another 10 or 20 per cent safe, or is it fair to say at this present point, given that --

946 MR. HALL: I would even say it's less than that.

947 COMMISSIONER LANGFORD: Less than that.

948 Now, when you talk about looking for the hole in the market, I may have missed it, but did you do a formal demand study on the market, or is this from experience that you are speaking? How did you come to the conclusion that classic rock was the hole where you wanted to be?

949 MR. HALL: Originally we had done some market research with John Yerxa. When we had conducted the flip from AM to FM for our AM station, we initially had done some research back in the late 90s-2000 with John Yerxa.

950 Since that time, we have sort of kept that in the back of our minds that this is a possible format that could be exploited. We have done on the street research, surveys, things like that with -- I don't want to say petitions, but --

951 COMMISSIONER LANGFORD: No, you filed some of the narrative from "streeters", or surveys, or whatever it is that you did, but you didn't do a formal study. I am don't think you are going to lose points for this. I am just kind of trying to figure out whether there is something here that perhaps you didn't include with your application.

952 So it's basically based on your own experience, your own sense of the market that you are doing this.

953 MR. MASON: Commissioner Langford, that is true. We also use BBM and we have looked at BBMs. I mean, we have been in the market over 50 years so we have been reviewing that on an ongoing basis and we have seen that there is a definite hole there.

954 One of the nice things about living in a small market is that you interact with a lot of people and a lot of the research that is done, whether it's BBM or John Yerxa or some of the research done by our competition for an application, a lot of times they will use a number like 200 people and statistically I guess they say that you can work that out and that's a good number.

955 But when you live in a small market and you are interacting with thousands of people -- and I do mean thousands -- we hear on a daily basis requests, especially since it was announced the format that we were choosing, that people were stopping us on a day-to-day basis telling us that they would love that format. So we put a lot of merit in that.

956 COMMISSIONER LANGFORD: And yet -- and I don't want to be the skunk at the picnic here -- there is a little more to what you are trying to accomplish here than just filling one hole in Red Deer because by your own application in a sense you are also trying to repatriate and take away listeners from outside sources of music and some of those will have some crossover and some of those, I am sure, will have some duplication.

957 On page 4 of your supplementary brief filed as part of this application, you list all the radio outlets in Calgary and Edmonton that I assume get some kind of play in Red Deer, or they wouldn't be here.

958 I look in those lists and I see CIRK-FM classic rock out of Edmonton, and I see CJAY-FM classic rock on the Calgary side of your ledger. There are other things, adult contemporary. There has to be some crossover in some of those, some duplication. So without a formal study, are you at all worried that you won't be able to achieve the repatriation goals that you have obviously stated here?

959 MR. MASON: Actually, on that page that you are talking about, page 4 --

960 COMMISSIONER LANGFORD: Yes.

961 MR. MASON: One of the things that we stated in the sentence prior to those statistics, or the listing, is that that is a Red Deer full coverage.

962 COMMISSIONER LANGFORD: Sorry, could you say that again? I just missed it.

963 MR. MASON: Yes. The sentence leading into that list states full coverage. So a lot of those signals don't actually get into the Red Deer market, but they do get into our full coverage area. Now, one of the things that I have been hearing, and I have listened to the TV hearings as well, was that we are a regional market and that we are this major corridor. Well, we are, but our business is based on the local market. Our revenues are derived from central market. Very little, about 5 per cent, of our revenues come from outside of that single-market area.

964 Once we get outside the central market, then you do. We are in a situation, and that's one of the reasons why we are applying, you get in the full coverage area, it's probably one of the more competitive markets in Canada because we are getting Calgary and Edmonton signals coming into our full coverage area.

965 So we are having to compete. Like we have Newcap with a sales rep living in Red Deer presently selling local revenue for their station in Drumheller. So we are having to compete with that. And on the northside we have the same.

966 COMMISSIONER LANGFORD: Isn't that precisely the point that I am trying to make? I probably didn't make it very well obviously, but we are not just looking at the 67,000+ thousand people that live in Red Deer. Your business plan surely is not based on that. According to my reading of the application, you are looking at the bigger, perhaps 200,000 person-market. Aren't you?

967 MR. MASON: No. Our business plan is based on -- I mean, with our station, our existing station, as I mentioned, we only have 5 per cent of our revenues coming from outside our central market area. So our business plan is based. So this consideration about talking about the licences in our case, in our company, because we are a stand-alone, we are talking about that central market area.

968 When you get into the big players that have stations in Edmonton and Calgary, they have some efficiencies. They can sell the whole Alberta market, including Red Deer. We are in a position where we are just selling Red Deer.

969 COMMISSIONER LANGFORD: But are you telling me that when you go to your advertisers or your perspective advertising clients and try to sell them a minute of time on your new or existing station, that you do not try to make them a little more enthusiastic in the sense of how many people you are actually reaching.

970 Surely you don't tell them you are only reaching 67,000 people. Surely you tell them you are reaching people outside the city limits of Red Deer as well. Surely that's a factor in the success of your marketing campaigns, wouldn't it be?

971 MR. MASON: I am not sure what the question is though.

972 COMMISSIONER LANGFORD: Well, then it becomes pertinent as to what station those people outside the narrow boundaries of the city limit are listening to, and if you are going to repatriate, then you have to take into consideration all the signals that these people receive because you are trying to attract them -- gosh! I don't want to try to teach you how to do your business because I am sure I would fail, but surely you have to attract not just the people within the tight parameters of Red Deer, but as many people outside as well so that you get your numbers up and you make your sales pitches that much more attractive.

973 To do that, it seems to me, using your repatriation argument in your very application, you have to be convincing those people not to listen to at least some of these stations you have listed on page 4. Would I not be correct in saying that?

974 MR. MASON: Actually, in a lot of the small markets, one of the things that we focus on as a smaller radio station in a small market is that we don't sell numbers. Like we don't go out telling everybody how many people are listening to our radio station around that area because numbers change from book to book. We sell our product.

975 Are we trying to repatriate? Yes, we are because we think that if we can say that we have a strong station and people in small markets know. When you are in Calgary or Edmonton, I guess from the standpoint of an average person, it's hard to know necessarily who is number one or who is number two or three or four. In a market like ours, in most cases, you end up somewhat splitting the market to a certain extent. So we don't sell numbers, as far as numbers of audience.

976 COMMISSIONER LANGFORD: Well, our statistical analysis tells me that at different times over the last few years, your existing station, CHUB, has been number one or number two. It has done almost as well as Corus' two stations combined at one point. Not as well now, but one year it did.

977 Surely you must use that as a selling point. Do you not go to the advertisers and say, "Look, here are our numbers. We are doing better than Corus. We are doing almost as well as Corus combined"?

978 MR. ARNISH: Let me jump in on that, Commissioner Langford. I will get Bonnie Fraser to respond to your comment and query as well.

979 I mean, in our small markets that we are in, yes, in some cases we do if it's a particular account where we have a competitor in the marketplace talking about numbers, and we know in this game of radio everybody can be number one. But we have tried diligently over the years in our group not to sell numbers in the local marketplace. We leave those numbers to our rep shops and the agencies to take a look at the marketplace when they are buying their regional or national advertising out of Calgary, Edmonton, Vancouver, Toronto, whatever the case may be.

980 We have certainly dealt with our local sales staff in our markets not to sell numbers because we strongly believe you live by the ratings, you die by the ratings. You just alluded to that just a moment or two ago, about the fact that about two years ago we did very well with CHUB-FM against an AM station which was CKGY-AM, and the other Corus FM station, but since they converted their AM to FM, they have basically taken over 66 per cent of the market.

981 So if we are out there selling ratings on a daily basis to the local community, at the end of the day the local advertiser doesn't believe anyone. So we tell your sales reps for the most part, "Please don't sell ratings in the local marketplace because at the end of the day it means nothing".

982 Bonnie, do you want to talk about that?

983 COMMISSIONER LANGFORD: And yet you speak about repatriating listeners. So I don't understand why that is a strategy. If you don't really -- I won't say care, but if it's not relevant whether you are number one or number two or number three, why are you interested in repatriating listeners?

984 MR. ARNISH: I wouldn't say that we don't care about being number one. Certainly we like to have stations that are at the top of the rating book which helps our national and regional advertising without question.

985 But in our application in front of your today, we respectfully submit to you that in looking at the marketplace there is a major hole to be filled to serve the adult 35+ male, 35 to 54, and that is what we are trying to do here and we think we can do very well with that in the local marketplace.

986 If we do very well, the national and regional advertising will certainly come to us with a top-rated radio station.

987 COMMISSIONER LANGFORD: Perhaps it would help me -- and I sound so simplistic, I apologize for the question, but could you tell me what you mean when you say "market"? When you are looking at the marketplace, what precisely are you looking at geographically in terms of this application?

988 MR. MASON: Red Deer.

989 COMMISSIONER LANGFORD: The City of Red Deer.

990 MR. MASON: The City of Red Deer, central market. That is what impacts our whole business. The buy for regional and national is based on our central market and that is what the numbers are. So we focus on that area.

991 COMMISSIONER LANGFORD: And when you speak of repatriating listeners, where are these listeners?

992 MR. MASON: Actually, a lot of the people that we talked to on the street, the people I mentioned earlier, are basically telling us they tune to whatever they have to listen to to get the pittance of the kind of music that they want to listen to. It's the best of what is available.

993 So I think in a lot of cases they are listening to all stations, or they listen to CDs or they get cable or they go to the Internet.

994 COMMISSIONER LANGFORD: So looking at your list of stations on page 4 of your supplementary brief, could you tell me from which of these stations you can reasonably expect with this format to repatriate some of your listeners?

995 In other words, I assume that some of the listeners in Metropolitan Red Deer, which is now we are now describing as the marketplace -- and you are nodding your head so you agree with that -- those are the listeners we are looking at. Some of those listeners in Metropolitan Red Deer are listening to some of these stations and you feel that your format will get them back, will bring them to listen to your station.

996 Could you give me an idea of where on this list some of these tuning hours are going now?

997 MR. MASON: If I hadn't made that clear, I will try again.

998 MR. HALL: I will try and answer your question. In the City of Red Deer itself, the point was made earlier that on page 4, the stations that we are talking about are stations that are received within the full coverage area and we are talking specifically about the City of Red Deer.

999 Well, really the only stations that you can receive clearly within the City of Red Deer are the AM signals that are coming out of Calgary and Edmonton. I mean, Red Deer is not right next to Edmonton and these signals do not come in loud and strong to the point where you can turn your radio on and listen to any of the FM radio signals perfectly out of either Edmonton or Calgary. They are very, very scratchy.

1000 So what we are talking about in terms of having to listen to one of these stations, or wanting to listen to a Calgary or Edmonton station, pretty much has to be done on cable or over the Internet.

1001 COMMISSIONER LANGFORD: Mr. Hall, I was directed earlier to read the sentence above the list, the double list of radio stations, and now I will read it out loud. I read it to myself. It reads as follows:

1002 Under the colon, there is a double list, one headed "Edmonton", one headed "Calgary". Are you now telling me -- and it's fine if you are, but I want to be clear on it -- that, in fact, you aren't faced with competition from these people?

1003 MR. ARNISH: Yes, we are. There is no doubt about it. There is a lot of people, the 35+ male audience, that live in Red Deer, work outside of Red Deer and would work in the gas business, the cattle industry, farming, the petrochemical business. When they leave the City of Red Deer, they are able, if they want classic rock music to listen to, to get Calgary and Edmonton stations that indeed play the format that we are proposing in our application.

1004 A lot of the listening is to CDs. It's listening to cassettes. It is listening on the Internet or cable, as Mr. Mason and Mr. Hall have alluded to, but a lot of the workforce in Red Deer works outside of the central area. So they actually are able to get a lot of these signals, whether it's from Calgary or Edmonton, and they list to those stations when they are at work or travelling, for that matter.

1005 COMMISSIONER LANGFORD: All right. So help me with this question then: My name is Harvey Wheelright. I live in downtown Red Deer. I get in my car every morning and I drive to work somewhere outside of Red Deer in the oil and gas business. I get far enough outside of Red Deer that I am listening to Calgary CJAY-FM classic rock, because that is my preferred type of music.

1006 You have lost that person, at least during the day simply because, I guess, they can't get your signal and they can get the Calgary signal.

1007 I now return to Red Deer at night. I park my car. I go into my house. I turn on the radio. Who am I listening to now before you people are in the field? I like classic rock. Who is there for me to listen to? Are you saying I have to listen to CDs or cable?

1008 MR. ARNISH: In Red Deer you would have to, yes.

1009 COMMISSIONER LANGFORD: And so those are the listeners you are hoping to repatriate.

1010 MR. ARNISH: Yes, we are.

1011 COMMISSIONER LANGFORD: Mr. Wheelright who comes home, turns on his cable-fed radio and listens to classic rock from somewhere else.

1012 MR. ARNISH: That's partially true, but also we believe that there is a large segment of the male population in Red Deer that is there all the time that for the most part is not listening continuously to any local radio stations at any great length because they can't get the music that they want.

1013 COMMISSIONER LANGFORD: So that would fit under the heading of "repatriation" as well.

1014 MR. ARNISH: Absolutely.

1015 COMMISSIONER LANGFORD: Now, if we take my fictitious Mr. Wheelright and all his friends and relatives who like your type of music, the type of music you are suggesting, and put them in a position a year from now where they can turn on the radio and get not only your new signal, but one of the other applicants' as well, hypothetically.

1016 What does that do to your business plan? What does that do to your projections? Are JACK and classic rock, or classic hit and classic rock, so separate from each other in terms of format that they would not impinge on each other in the terms of market share? Is that question just too twisted and hypothetical for words?

1017 MR. MASON: I would say from the standpoint of our new licence that there wouldn't be a lot of overlap. That wouldn't be a concern. From the standpoint of the existing stations, there is going to be major overlap because we are going to have three stations almost serving the same audience.

1018 Now, the problem that we had, and that is really why we applied for a licence to become FM in the year 2000, we were an AM station before that. We had probably one of the best signals in the province other than maybe CHED, and actually we used to get a lot of calls from people in Calgary that loved listening, and so forth.

1019 Unfortunately, those people listening in those areas didn't add to our bottom line or generate any revenues. We were in a position where at that point in time Z99 were an album-oriented rock. They realized after a period of time that to be competitive they had to change their format and they moved their format basically to be almost a mirror of what our format was. So we were in a position where we were an AM station. They have a combo and their FM, plus they have country, and we had to compete.

1020 I guess that is the problem that we have, is that when you have a combo in the market and you have a stand-alone, there is absolutely nothing stopping the combo from building a station exactly like your station.

1021 COMMISSIONER LANGFORD: Well, I will get to combos in a minute, and I understand your point. You make that clearly in your application and you make it here again today, and we will get to that point in a minute.

1022 Excuse me for being a bit slow, but I just want to ensure that I understand how your business plan and the format works.

1023 You of all the applicants are the only one that projects you will be profitable in the very first year. I wonder why that is, having heard what is being offered now by your competitors -- let's assume for a moment we only give one licence, so you are all in competition for one licence -- why is it that what you are offering would make you profitable and what they are offering wouldn't make them profitable?

1024 MR. MASON: I guess I go back to my comment in the last statement that they are duplicating a service that is already available. We are opening up a new market. We really believe there is a lot of advertisers in Red Deer, and we believe this from interacting with these people on a daily basis.

1025 There is a lot of shops, paint shops, the oil field business. There are a lot of males in our market that want that format and we really believe that we will be able to generate revenues as a result of that.

1026 You are asking why we would be profitable. We have looked at the expenditures that people have in the marketplace to come up with, as you have seen in our supplementary brief, what percentage of costing they have for advertising. We have looked at the market overall utilizing the Financial Post's financial data, and we have determined that we feel with this format that we would garner 20 per cent of the market. In doing that we calculated the revenues and we have come up with the 1.5 million and we feel that we can attain that.

1027 COMMISSIONER LANGFORD: And would you still feel that confident if we were to license yourself and one of the other applicants, either Newcap's classic hits or Rogers' so-called JACK, which I think probably you might be able to call a form of classic hits as well?

1028 MR. MASON: I have been in Red Deer since 1975 and one of the things I guess I am most proud of is the fact that we have been consistent in our commitment to people. I notice in our industry there have been a lot of cutbacks and there is a lot of voice tracking, there is a lot of automation. We haven't got into that other than midnight to 6:00. We are committed to people and we continue that commitment with our new application.

1029 We get requests quite often from students looking for jobs. They can't find jobs because everybody is voice tracking or a lot of people are voice tracking and doing the automation. We are one of those players that can do that.

1030 If indeed, there is a fifth station i the market, it would definitely put us in a position where I am sure we would have to drastically look at our expenses and our commitment to the people that we have had in those positions for -- as you saw in our application, we have a lot of people who have been with us for over 15 years. We would have to seriously look at that because there is no doubt that applicant would hurt us.

1031 One of the areas where it would probably hurt the most -- and I know that that is where they are talking about generating a lot of their revenues -- is the fact that they are in Calgary. One is in Calgary, the other one is in Calgary and Edmonton and owns, as you know, 23 licences in reference to Newcap. They are in Stettler, they are in Drumheller. They are going to take a lot of money out of our market and a lot of that with their Alberta buy would be national and regional revenues. That would definitely hurt us.

1032 COMMISSIONER LANGFORD: So I think what you are saying in a nutshell, is your preference would certainly be for us to license only one applicant this time around and for that applicant to be you, obviously.

1033 MR. MASON: I would love that.

1034 COMMISSIONER LANGFORD: I got that feeling somehow. I don't know why.

--- Laughter / Rires

1035 COMMISSIONER LANGFORD: That is one message that came through to me clearly. I don't understand a lot, but to use the term we heard yesterday, I "overstand" that position.

--- Laughter / Rires

1036 COMMISSIONER LANGFORD: You were talking about -- and maybe that is a nice segue into it -- your other type of programming and how you would have live programming for, did you say 18 hours a day, 6:00 to midnight?

1037 MR. ARNISH: Yes.

1038 COMMISSIONER LANGFORD: I would like to talk to you a little bit about that. Maybe we could start with the obvious, and that is news.

1039 As I understand it, you are going to have various newscasts during the weekday and various newscasts during the weekend and I think we are pretty clear on what those are, particularly from your opening statement today and from your application's supplementary.

1040 What I am a little uncertain about is why you cease newscasting at 6:00 p.m. on weekdays and 1:00 p.m. on weekends? Why do you leave that long, long space of time where there is no news and information whatsoever?

1041 The reason I ask that is because this morning you made a very, very eloquent statement about how important this type of news and information is with tornadoes, ice, different storms, real local situations that people really desperately need information about. Why would you leave these long gaps of silence, if I could put it that way, on each day and particularly on each weekend?

1042 MR. ARNISH: Excellent question. This is not a new phenomenon in radio, I don' think, in Western Canada in many different markets where after six o'clock at night, in a lot of cases, markets are fully voice tracked and automated.

1043 We are proposing here that we are going to have live announcers in the evening from 6:00 p.m. until midnight, certainly weeknights, and, as we know, in my opinion a lot of people are tuning to television news in the evening and are getting their news fix for the day, more or less, from either reading the local newspaper at night when they get home from work and/or watching local television and regional television as well.

1044 Our format is geared to playing more intensive music in the evening and on weekends, but certainly the point is that if something major does happen, and we are on the air from 6:00 until midnight, for example, and we are on the air until six o'clock on Saturdays and Sundays, we have somebody there in the station that can deal with an emergency, relevant emergency at the time and can bring in our news department personnel to cover any major or minor events that we feel the general public needs to know about.

1045 COMMISSIONER LANGFORD: So you are prepared to step in as long as you are live broadcasting, and I suppose if you have gone to voice track overnight, maybe the manager gets out of bed and drives in or something.

1046 MR. ARNISH: You know, that has happened. It may not have happened in Red Deer, but I know our other radio friends in the room could relate to that, that indeed markets where there has been a major catastrophe or a heavy snowfall that has happened overnight, indeed the manager or the Program Director, or whatever, has gotten up and got into the station first and got on the air with it.

1047 COMMISSIONER LANGFORD: You have find out what kind of car he drives.

1048 MR. ARNISH: Exactly right.

1049 COMMISSIONER LANGFORD: Speaking of non-music or spoken word programming, could you quickly just bring me through again just precisely what you are doing in terms of non-music programming, if I can call it that.

1050 I think your opening statement today was very, very clear on the news and the weather. We have that down very clearly and you don't have to repeat that. We have seven hours and 55 minutes and three hours and 18 minutes mentioned on page 10 of your opening brief. But what about anything else that is just not music?

1051 MR. HALL: Commissioner Langford, we also plan to throw a couple of other programs on the air, two specifically. One was called "Red Deer Connects" which was going to be a daily 60-second mosaic-type program that would offer local groups and organizations the opportunity to broadcast their upcoming events and activities. We would broadcast that a couple of times a day.

1052 COMMISSIONER LANGFORD: Sorry. How many times a day?

1053 MR. HALL: Twice.

1054 COMMISSIONER LANGFORD: Twice a day. So that's one minute.

1055 MR. HALL: One minute each.

1056 COMMISSIONER LANGFORD: Sorry, two minutes.

1057 MR. HALL: Two minutes.

1058 COMMISSIONER LANGFORD: Times two, right? Thank you.

1059 MR. HALL: We also put together a program called "The Classic Rock World Review" which would be a 60-minute show that would focus on international musical artists of the classic and new rock genres, reflecting more or less the ethnic, cultural and racial diversity of rock. International classic rock artists that we came across that we felt could be featured on a program like this would include the Scorpions from Germany, AC/DC from Australia. We have the Stones, Deep Purple, Pink Floyd from England, to name a few, Slade from Scotland.

1060 But to develop a program around that, in addition we also wanted to try spotlight new and emerging Canadian artists and showcase Central Alberta talent and we felt this was a perfect opportunity to do so.

1061 COMMISSIONER LANGFORD: And that will be done on the classic rock and roll show as well?

1062 MR. HALL: Yes.

1063 COMMISSIONER LANGFORD: Thank you. I just wanted to make sure that wasn't a different one.

1064 MR. ARNISH: We also, and it's a normal practice for radio stations to certainly have interaction with the listening audience as well. Our announcing staff would certainly have the latitude within the format to discuss major developments of the day or situations related to music, or whatever the case may be, in a sort of mosaic format that is not necessarily structured or programmed, but it would certainly come up in the flow of a four or five-hour shift.

1065 The same thing would apply to local reflection in the area of making sure that the community knows what is going on with public service announcements and things like that. So some of it is structured, but a lot of it is not as well. It's just a daily practice.

1066 COMMISSIONER LANGFORD: So with an announcement I can see if something is up, but how would you work this mosaic format? Would you be inviting listeners to call in and then taping the best of the calls, or would you be running an actual phone-in show? How do you anticipate that would work?

1067 MR. HALL: Are you referring to our broadcast schedule over the entire week or the one show I was speaking of?

1068 COMMISSIONER LANGFORD: I'm referring to what Mr. Arnish just mentioned.

1069 MR. HALL: The entire day.

1070 COMMISSIONER LANGFORD: This kind of mosaic interacting in an unstructured way with the listeners. I'm not quite sure how that would work.

1071 MR. HALL: Well, I believe our philosophy has always been that the radio station is open to the public. One of the primary access that a listener has to the station is the phones. So we would certainly encourage that. We do that presently on CHUB. It plays a very large, I guess instrumental role in the identity of the radio station.

1072 COMMISSIONER LANGFORD: So how does it work? I phone in and I say, "Hi, it's Harvey Wheelrigth. I am back from work. I'm listening to your station" --

--- Laughter / Rires

1073 MR. HALL: So what are you telling me, Harvey?

--- Laughter / Rires

1074 COMMISSIONER LANGFORD: Do I actually talk to you on the air, or do I talk to a machine that records me and then you pick the best of the Harveys that week? How does this --

1075 MR. HALL: No. You would be talking directly to the announcer in the studio.

1076 COMMISSIONER LANGFORD: So you have a hotline into the studio? Any wacko can call you at any time of the day?

1077 MR. HALL: You can.

1078 COMMISSIONER LANGFORD: Geez! I am going to keep my job and you can have yours, sport, thanks.

--- Laughter / Rires

1079 COMMISSIONER LANGFORD: How much of a sort of average hour does that take up?

1080 MR. HALL: I guess it depends on what is happening that day. We have found that a lot of it comes down to what is on the listener's mind as opposed to us trying to say or structure what the topic of the hour is going to be.

1081 COMMISSIONER LANGFORD: So how do you screen the sort of Harvey Wheelrights from the Ernst Zundels here? What is the procedure to get through to you? It's just straight through?

1082 MR. HALL: Yes. Just pick up the phone and call.

1083 MR. ARNISH: But, Commissioner, it's not live though. We certainly tape everything, put everything onto a hard drive and then edit it out so that it's not -- we are not just going willy-nilly and putting you on the air even though you might like to do that.

1084 COMMISSIONER LANGFORD: Oh, I have no desire one way or the other to be on the air, but I was a little worried about how would keep it altogether.

1085 MR. ARNISH: I mean, it's normal business practice as well that if we are inviting listeners to call in for various things, we certainly tape it and edit it and put it on the air. It has to make sense to us and fit what we are doing and fit the topic discussion of that particular hour.

1086 COMMISSIONER LANGFORD: Now, to sort of ease ourselves on the subject of your synergies and how you want to level the playing field -- and I know you are anxious to talk more about that, and have a second voice in the market. While we are on the subject of non-music programming, news, information, there could be less impact here on the Red Deer comments or the classic R&R show, but for news and information, how do you anticipate that your two stations will work together? How do you anticipate using the synergies of these two stations to your benefit?

1087 MS ASIFF: I can answer that, Commissioner Langford.

1088 What we would be doing with our proposed new station, we would be hiring two new news personnel and those staff would be dedicated to our proposed classic rock station in terms of reporting and announcing, but they would also be working with our current CHUB staff of five people in our newsroom. So we would be working together, and while those two new staff would be dedicated to announcing the news on our classic rock station, our proposed station, they would also be working with our current reporters to get all that local news and information and sports and weather on the air.

1089 So we would have two new voices for our proposed station, but we would be using our current five newsroom staff.

1090 COMMISSIONER LANGFORD: So you have a five-person news staff at CHUB?

1091 MS ASIFF: That's right.

1092 COMMISSIONER LANGFORD: Is that you call it, CHUB, C-H-U-B?

1093 MS ASIFF: Yes.

1094 COMMISSIONER LANGFORD: And you would have two more come on board with your new station if you are successful. Could you kind of roughly give me the sort of three or four-word job descriptions of the five existing?

1095 MS ASIFF: Sure. Currently at CHUB we have a morning news anchor/reporter; an afternoon news anchor/reporter; a sports director; a beat reporter; and --

1096 COMMISSIONER LANGFORD: Slow down a little bit. So a sports...?

1097 MS ASIFF: Sorry. A sports director.

1098 COMMISSIONER LANGFORD: Right.

1099 MS ASIFF: A beat reporter and a reporter/weekend anchor. That is the current staff at our CHUB station.

1100 COMMISSIONER LANGFORD: And what would be the sort of similar job descriptions of the new people that you are adding?

1101 MS ASIFF: They would both be anchors/reporters.

1102 COMMISSIONER LANGFORD: Now who does the assignment? I'm sorry. I haven't been in the news for so long that there were real Indians on Pontiacs when I was doing it.

1103 MS ASIFF: It would be the news director. I'm sorry. The only reason I left that out is because that's me as the news anchor/reporter. So it would be the news director. That is inclusive in the five current news positions at CHUB.

1104 COMMISSIONER LANGFORD: You are the assignment editor and the sort of --

1105 MS ASIFF: Yes, that's right.

1106 COMMISSIONER LANGFORD:  -- chief newsperson.

1107 Now, that means essentially what you have here is one news operation expanded. Is that fair?

1108 MS ASIFF: That's right, yes. We would be able to cover more local news with our two additional staff.

1109 COMMISSIONER LANGFORD: There is no doubt about that. You would have more.

1110 Now, some of the things we are interested in -- generally you hear about it with huge operations like Global News with all of their newspapers and radio coming on television, but we are still interested at all levels -- is bringing diverse voices into a marketplace.

1111 It would seem to me that what you are telling me is that on the spoken word side of your application you are not really adding diversity in the sense of a second voice. You are adding more of the first voice and playing it over two stations.

1112 Would that be a fair assessment?

1113 MS ASIFF: Well, we don't think so. We think that we would be adding some diversity because adding those two new personnel would allow us to achieve more -- more local news generation, more local information reflection.

1114 COMMISSIONER LANGFORD: Well, let's look at it, first of all, from a business point of view, from your side of the ledger before we get over to our regulatory side.

1115 Your statements would be attempting to appeal to two very, very different audiences. So why would they want the same news, first of all? You know, you have males who may be more interested in hockey. You have women who may be more interested in, I don't know, curling. Sorry, it's not my world, but --

1116 MS ASIFF: Right.

1117 COMMISSIONER LANGFORD: I can't break down the world the way you people do, I have trouble with it, but I assume that you have ways of doing that and you know what appeals to people and what will give you -- I know you don't like the word "rating", but at least give you some sense of popularity in town and enable you to make a business case for yourself.

1118 So how do you now pitch one -- even though you have two extra bodies, how do you pitch one news service over two signals that are attempting to draw in very different demographics?

1119 MS ASIFF: Well, we will, as the combined seven news staff, be working together generally on the same stories. The two dedicated news personnel for our proposed station, the big difference there would be presentation. That is why they would be dedicated to the proposed new station. The presentation of that information sometimes is more important than the information.

1120 If you present it differently directed to your demo, which in this case is men 35 to 54, the presentation, a change in that, would help diversify the news, if you will. So the two new personnel for our proposed station, they would concentrate on presenting the news in a way that hits home with our target demo.

1121 MR. ARNISH: And I would certainly say, adding to Lamya's description of our newsroom makeup, that this is not dissimilar to any other radio licensee that has an AM/FM combo or an FM/FM combo. You get a lot of synergies by having more bodies in the newsroom, covering news, weather and sports in the marketplace and we are suggesting the very same thing as well. We believe that there is certainly lots of news in the Red Deer region that perhaps we are not covering because we don't have a significant amount of newspeople today vis-à-vis a larger market that has a larger newsroom.

1122 In this case, and I know in a lot of our other markets where we have FM/FM combos or AM/FM combos, the news department is basically one and they are covering news stories for both stations.

1123 COMMISSIONER LANGFORD: But in a sense, and I am not trying to be negative here --

1124 MR. ARNISH: No.

1125 COMMISSIONER LANGFORD: Our job is to try to find out how to use these scarce frequencies in the best way for people out there listening to the radios. In a sense I think I could make an argument that you, in fact, have less news capacity after you have hired these two people than you do now because you still only have, for example -- all right, you have had to hire two anchors, let me back up.

1126 You have two anchors on your present station. You have to hire two anchors on your second signal because the second microphone somebody has to be there in front of it, and so then they are still have to feed the sports director, the beat reporter and the sort of reporter weekend anchor person. That is all that is there.

1127 So instead of feeding two news anchors, these people are stretched into trying to feed four and you have just said you want the news to be presented differently. So they are going to have to write it up differently. And so in a sense aren't you by only hiring two people -- and I am not trying to bankrupt you here, I have no relatives in Red Deer looking for news jobs, I can absolutely assure you -- but in a very real sense, aren't you going to end up with less capacity than you have now?

1128 MS ASIFF: We don't feel like we will. It doesn't necessarily mean that what we generate in that newsroom has to be replicated exactly on both stations with the two very different demos that we would have. The reason that those two new personnel would be anchors/reporters is that they can as well work on stories that are more relevant to that demographic. On a classic rock station targeted to men we would be working more on sports stories, more sports stories that we would say have on our current stand-alone station.

1129 So those reporters would also be generating stories targeted specifically to our demo.

1130 COMMISSIONER LANGFORD: Now, the other 12 people you are hiring, could you give me another one of your snappy just job descriptions, your three word or four-word job descriptions on those 12 individuals? It is 14 all total, and I assume we have done two in the news. So there must be 12 others.

1131 MR. MASON: Actually there are 15.

1132 COMMISSIONER LANGFORD: I'm sorry. For some reason I got the feeling there were 14. I apologize.

1133 MR. MASON: On top of that we will also have shared employees. That is not counting that.

1134 We have two for the morning show; one for midday; one for our drive show; two for evenings and weekends; one for promotions; a creative writer; three in sales; one technical; and one admin. Then we would have eight shared staff.

1135 COMMISSIONER LANGFORD: I must be doing something wrong. I am up to 14 before we even get to the eight sharing.

1136 I have one admin -- I am working backwards here. One admin; one technical; three sales; one creative writer; one for promotions; two evenings and weekends; one for the drive show; two midday; two morning. Does that add up to 14?

1137 MR. MASON: No, one for midday, and two for the morning.

1138 COMMISSIONER LANGFORD: There is it. Thank you very much.

1139 MR. MASON: You are welcome.

1140 COMMISSIONER LANGFORD: And the eight shared, what do you mean when you say "shared"? It's sort of administrative jobs, receptionist, that sort of thing?

1141 MR. MASON: We have a common program director. Actually, that could end up being an extra half-person because we would probably take our program director off the air on our morning show on CHUB and he would be split half and half.

1142 I am talking about half a person as far as our sales manager is concerned, and in administration we have a receptionist, an office manager and myself. That's another one and a half.

1143 COMMISSIONER LANGFORD: You count as one and a half?

--- Laughter / Rires

1144 MR. MASON: Well, if I don't lose some weight, I will be.

1145 COMMISSIONER LANGFORD: Sorry, I am teasing you. That's fine. It was clear.

1146 Moving to benefits, you have recommended -- and what you have recommended is clear, but there is a question that arises in my mind about it. You have indicated that you were prepared to invest $3,000 a year for seven years, being $21,000, over the term of your licence: $400 would be your basic small market player fee into the CTD plans, like CAB's Canadian Talent Development Plan, and the other $2,600 per year would go to something called talent showcase.

1147 Could you just, for the record, tell me a little bit about talent showcase?

1148 MR. MASON: We are working with the Westerner Exposition Association in Red Deer and currently they have in place a talent showcase. They have minimal budget. They are not getting the support that they require. There are approximately 30 entrants that they are getting for musical talent with the idea that the winners would go to Edmonton and compete at Northlands.

1149 At the original meetings with the Westerner Association, we were talking about the budgets that they had in place for this talent showcase and we were surprised to hear that they were only looking at in the area of $500 to $800 that they have available and basically that is the budget they were looking at.

1150 At that time, I asked them what they would require to make it more efficient, make it more viable, and the $2,600 is the number that they gave me.

1151 Now, since that meeting, we have had discussions with them and they have informed me that Northlands Klondike Days have informed them that they would like to make that 60 participants in the showcase. That's why in the deficiency letter the number went from where we were up to the $9,000 to $10,000. It's because of their request to try and make it a bigger and more successful showcase.

1152 COMMISSIONER LANGFORD: So let's make sure I have this right. The showcase exists, but it's under budget, terribly underfunded at only $500 or $800. So in order to help them bring in 30 entrants, you committed to $2,600 top up.

1153 MR. MASON: To maintain, yes, that's correct.

1154 COMMISSIONER LANGFORD: Now they are coming back to you -- they do have appetites, don't they?

--- Laughter / Rires

1155 COMMISSIONER LANGFORD: They are coming back to you and saying, "Gosh! We would like to double that" and, of course, dollars never seem to rise exactly at the same level as talent or as desire or need. So that is going to come to perhaps $9,000 or $10,000.

1156 Now, are you saying today essentially that up to some sort of ceiling you are willing to make up the shortfall? Are you committing to that in some way?

1157 MR. MASON: Yes, we are. When you are in small market like that, obviously it's good for us to be involved in the community and for them to be in a position where they have a good format like that and it's not working. It's something that we do like to get involved in and, yes, we would commit to that.

1158 COMMISSIONER LANGFORD: That's good because I have a feeling that my legal friend at the other table will be trying to sharpen your focus on that one a little bit before we are finished, and I will leave it to him, but I think you can understand that what you have done here is a wonderful community effort, but in terms of stating in a regulatory way it leaves us with a bit of a problem because what you have put on the record is, "We will spend $2,600", but believe me it's going to cost more. I guess we need some kind of commitment from you, maybe not that the sky is the limit, and that it's endless, but some kind of commitment to how much shortfall you would be willing to make up because, of course, if it fails then you are not spending anything and then we are back to a problem where you haven't met your benefits.

1159 So it does chase itself around and around this sort of problem.

1160 MR. ARNISH: Commissioner, we totally respect and appreciate what you have said, and we can discuss that with legal counsel or discuss it now, but I will definitely say that, for some reason if this particular situation with Westerner didn't move ahead after year two or year three, we certainly would reallocate the monies that we have committed to another worthy cause in the Red Deer community. We certainly would inform the Commission of that and get guidance from them on that particular situation as well.

1161 But what we commit to, we commit to.

1162 COMMISSIONER LANGFORD: Well, I will leave you in the capable hands of Mr. McCallum later to work out the fine details, but I wanted to give you a heads up on the fact that we want something. Perhaps what you have just said is definite enough, but he will certainly guide you, I can promise you that.

1163 Now, finally, I will ask you a little bit about the technical parameters, but I am almost done. I would like to get to one of your favourite themes, and I don't want to feel that I have left it out today, but the notion that if you can have that second signal, that you can be on the level or playing field, an even playing field, with your competitor.

1164 We have obviously talked a little bit about that, about how you would have some synergies in your newsroom, and stuff, but fill me in a little more about precisely why that is necessary because my -- I won't say skepticism, but my doubt in a way is based on your own success. You have done very, very well with your one station here, and we have other competitors who are saying, "Look, we are willing to play with one station in that market". Now, you have put that in another framework by saying, "Yes, they have stations in very close other markets". So it's that sort of thing I would to hear about, just precisely what this means to you in the sense of a business plan, this second operation in the same market.

1165 MR. ARNISH: Well, first I would like to give the accolades to our management team in Red Deer for doing such a great job with the stand-alone FM station. The team is in front of you today, and they have done an excellent job. There is no doubt about it.

1166 But the dynamics are such that the market in Central Alberta, in Red Deer, in our opinion, is dramatically changing. As we alluded to in our opening dialogue before you today, there is no guarantee at the end of the day that you are not going to go ahead and license four new television scenarios in Alberta. That, we believe strongly, would impact the Red Deer marketplace substantially.

1167 We heard all those applicants in front of you over the last couple of days present their plans to you, and most of the plans were very well done and obviously those applicants feel that they can deliver a good Canadian product to the marketplace. But if you do license those four scenarios in front of you, it will certainly impact our business on a going-forward basis.

1168 If we are not, at the end of the day, granted a licence in Red Deer by you, based on our business plan and on our unique and diverse format that we have proposed to you, and another licensee comes into the marketplace, we feel very confident that the market will become very, very destabilized.

1169 We are up against the two Corus competitors, as you heard, and I don't want to beat a dead horse here, but that's the reality of the situation.

1170 COMMISSIONER LANGFORD: Oh, this is you day. Beat away!

--- Laughter / Rires

1171 MR. ARNISH: Thank you.

1172 The destabilization issue is really a big, big deal to us. We know that -- well, we are assuming, and I am always one to say to our team we never assume anything, but if you don't license us and license one of the other very fine broadcasters that are in front of you as well, and they come in with a stand-alone FM station, there is no doubt the market is going to be destabilized and they are going to come in with predatory pricing because that is what happens in the radio business. We know that they are not going to come and hold rate.

1173 We believe if that happens, then we are going to have to -- and advertisers are very fickle. They will go to -- I mean, in some of our other markets -- where the cost is the lowest. Even though you may have a top two or top one-rated radio station, they will go and certainly spend their dollars where they feel they are getting the best bang for the buck more or less.

1174 But the situation in Alberta is such that the economy is very strong right now, but there is no -- I mean, we haven't got a crystal ball to say at the end of the day that the petrochemical business and the oil and gas business in Alberta may not come crashing down around our shoulders all based on the world economy, the U.S. economy, the Iraq oil situation.

1175 We talked about the mad cow disease and it seems to be clearing itself up, but all these things play a factor in the economy.

1176 If we have two Corus stations, a stand-alone Pattison station and then another new entrant, we don't see where that, at the end of the day, is going to totally benefit the community as a whole because it definitely will impact our business plan as a stand-alone FM station.

1177 We have had other scenarios. I know in the market that I live in in Kamloops, and it's a market larger than Red Deer, where we had a scenario back ten years ago when our friends at Newcap owned an FM stand-alone station in Kamloops that lost $3 million over about ten years and they decided in 1993 to sell that station to the AM competitor in Kamloops because the market was in a negative PBIT situation.

1178 They exited the market and for the marketplace that was the best thing that happened to the radio market in Kamloops and for the benefit of the listeners and the general public.

1179 We see that in a medium-sized market in Kelowna where we have an AM/FM station in Kelowna. There is a standard AM/FM combo and there is a stand-alone FM. It's a market much larger than Red Deer. The central area is about 110,000-115,000 people. There are five stations in the market, as the Commission is aware. The market is, for the most part, in a negative situation. There are stations losing money there as well, and we have histories of markets that we have been in where a stand-alone FM against an AM/FM combo or a double FM and another FM stand-alone, the market goes negative not positive.

1180 Paul may have some things he wants to talk about here, but we have been there before and we don't want to go down that avenue anymore.

1181 COMMISSIONER LANGFORD: Before we get to Paul, just one question following up on what you have said.

1182 This market must be incredibly strong in your mind. You have declared it to be, and everyone has declared it to be, from the National Post right on to anyone we can think of. Certainly this radio market is strong. There are some questions in television, but we are not talking about television today. It's so strong that you anticipate making a profit in year one, if you are licensed.

1183 So let me try some scenarios on you. These are hypotheticals. There is no need to panic. I am just going to ask you some scenarios.

1184 If we were to do nothing, simply leave it as it is. You have a station. Corus has two stations. You can do with them what you will, switch the formats, whatever. What would your financial situation or your financial outlook be?

1185 MR. ARNISH: I think it would remain as it is today.

1186 COMMISSIONER LANGFORD: Sort of sharing one third, one third, one third basically.

1187 MR. ARNISH: Yes.

1188 You guys agree with that, right?

1189 COMMISSIONER LANGFORD: Everybody does all right.

1190 MR. ARNISH: Yes.

1191 COMMISSIONER LANGFORD: If we were to license you so that you and Corus now, to use your terms, are on an equal playing field, a level playing field, what is your general forecast about how you will be doing? What it will look like in a few years? Will you pull ahead of Corus, do you think, or will you just stay even?

1192 MR. ARNISH: Well, there are various scenarios that you can talk to abut that, and Bonnie you may want to discuss that in a moment.

1193 Certainly, if you have four stations with four distinct markets, in our opinion -- it's just our opinion only -- regardless or irrespective of gradings or anything else, you have four distinct formats -- you are basically going to end up splitting the marketplace on a local level and we have past history of that in all of our markets where we have another radio competitor with two stations. So we have past history with that.

1194 Where you may gain some share around the Corus stations, if we were to have two stations in Red Deer, would be with regional and national revenue-based. Again, we talk about ratings in this particular case.

1195 I think if we are licensed with a second station in Red Deer, I must reiterate though before that that we can all talk about how great the economy is here and how it's growing and blooming and there is all this new retail, and everything coming into town, but the Cosco's of the world that are here don't spend money in radio.

1196 I will give credit to companies like Home Depot, for example, but a lot of the big-box retailers that come into a marketplace don't spend money on radio. So we can talk about how the economy has grown, and it's not as if -- and I don't want to leave you with the impression from our side that all of a sudden there is a gargantuan amount of dollars out there for five radio stations in this marketplace.

1197 Having said all that, we believe that we can get -- if our classic rock format in front of you today is given approval, is given the green light, we can certainly repatriate again a lot of advertising dollars from advertisers that aren't spending money currently in radio in Red Deer and it's going to come from other sources, mind you, or they will increase their radio budgets.

1198 Do you want to add something, Bonnie?

1199 MS FRASER: Just to expand on that. On a local level, Rick mentioned that there is a lot of large big-box stores coming in, and that type of thing, and it is a fact that the majority of them are not spending money in radio. In the Red Deer economy right now -- I actually have an article here that was -- I will just read it to you. A chief economist from the BMO Financial Group said Wednesday -- this was in Red Deer at a Chamber of Commerce luncheon:

1200 It just states that when we take a look at the market right now, when we are competing as a single FM against the combo, we run into this constantly where the cost of the market to buy our station is continually being driven down, the cost per point in the market, because they do have two strong FM stations. They are both targeting different demographics and so we are sort of caught in the middle and right now, on a local level, what does happen is we can be easily eliminated from buys just on rate alone. Staying even away from the ratings, they can walk in and undercut rate anytime they want, which is what happens right now. It leaves us sort of out in the back 40.

1201 So by bringing in a fourth station and bringing us on an even playing field, it will certainly give us four distinct formats. It will bring the local advertisers into perspective. Who are we dealing with here? Who are we targeting for return business? And we want to see a return on our investment and I think it certainly is a huge benefit to the business community in Red Deer who are battling against the big-box stores that are coming into town. We can say this is what Red Deer has to offer. I think it certainly a benefit all the way around to even the playing field on a local level, just staying away from the national regional business alone.

1202 COMMISSIONER LANGFORD: Anyone else? So I assume then -- just to reduce it to boring old numbers -- that if we leave it the way it is, it's all things considered one third, one third, one third. If we grant you this application, it would be one quarter, one quarter, one quarter, one quarter basically. It's going to be very stable and you will both be competing equally.

1203 So here comes the last scenario. We grant a licence to you so you are evened up with Corus, but we also grant one of the other applicants a licence. How is that going to shake out, for you. You don't have to answer for the rest of the world. I am wondering how, in your mind, it would shake out for you?

1204 MR. MASON: As I mentioned earlier when we were talking about out commitment to our staff, a commitment that, as we mentioned in our application, we are really proud of the fact that we have maintained the staff that we have.

1205 When I look at our budgets in our stand-alone station, our payroll budget for our stand-alone CHUB is $1.1 million which almost equivalent to the entire budgets for the two other applications.

1206 That would definitely take a hit. If we are looking at five stations in the market, any business, I guess if there is only so much revenue to go around, the next place a person goes, if you are struggling to hit your bottom line, is you have to look at your expenses. We would really have to look at that. It would be unfortunate, from where we stand.

1207 We have worked really hard building our image in the community and being good community citizens to have to look at our staff and say, "Guess what? We are going to have to cut back".

1208 I mean, all you have to do is look around in the major markets and all the markets around and that's what a lot of people do. We have never done that.

1209 MR. ARNISH: I would like to add to your comment about how would we be impacted financially as well.

1210 If there were five stations in this marketplace, we can assume in this particular case that we -- let's just say you grant us a licence. We have two FMs, Corus has two FMs and there is another independent. I think we have clearly stated that we believe it's going to have a major negative destabilizing effect on the marketplace.

1211 If that was the scenario, we feel again that we have the chance to be impacted most even with two FMs. If it was Rogers that received your green light for a stand-alone FM, they are sold by Canadian Broadcast Sales. Corus Radio is sold by Canadian Broadcast Sales. So all of a sudden we would be up against a triple combo against our two FMs.

1212 If it was Newcap as a fifth entrant in the marketplace, there is every reason to believe that they could very well pony up with CBS as well and the Corus stations here in Red Deer again have three stations against our two.

1213 I would like Brian Sandlesky just to talk about what that kind of effect can have on the marketplace when buyers normally buy only three station deep.

1214 Brian?

1215 MR. SANDLESKY: Usually when buyers plan a market, it doesn't matter whether there are three stations, five stations. They are going to buy so many points in the market.

1216 With a triple combo, they can take all the points away without even having a chance based on ratings. It's strictly ratings. So if you are four or five you would never have a chance -- not never, but you would have a hard time getting on on most buys.

1217 COMMISSIONER LANGFORD: What was that last sentence? Sorry.

1218 MR. SANDLESKY: I was saying that with a triple combo, in most cases they can come in, they can undercut your rate, and if you are four and five it's harder to get on a buy than if you were in any other situation.

1219 COMMISSIONER LANGFORD: Four and five in terms of ratings?

1220 MR. SANDLESKY: Ratings, yes, strictly ratings. I am talking about national and regional sales.

1221 COMMISSIONER LANGFORD: I see. Thank you very for that. I hope I didn't alarm you with these scenarios, but this is a competitive process and it is very interesting to see how business cases will be impacted and how formats interweave with each other, and that sort of thing.

1222 Just almost a housekeeping question. You and the CBC have both applied for 99.9 and I think you filed something earlier today indicating that you have an alternative or that there is another signal you would be willing to use.

1223 MR. ARNISH: Yes, that's correct. We filed actually about a week and a half ago with the Commission.

1224 COMMISSIONER LANGFORD: I beg your pardon. I only saw it today, but let's get it on the record, if you don't mind.

1225 MR. ARNISH: Yes, there certainly is another frequency that we have found and I will just go to my technical report here, if you will just bear with me for just a second.

1226 We talked to our consulting engineer after we realized that we had a mutually exclusive situation here with the CBC.

1227 We went back to them after all of this, and asked him if there was any possibility that we could come up with another frequency. He dealt with Industry Canada, it was DEML, and they have identified that channel 294C1 is available at 106.7 MHz, which is the alternative frequency to 99.9 and we certainly would, if you give us an approval in your decisions, to file a new application with Industry Canada and with the Commission related to 106.7.

1228 COMMISSIONER LANGFORD: And would a move to that frequency have any impact on your business plan or the projections that you have provided to us?

1229 MR. ARNISH: None at all, Commissioner.

1230 COMMISSIONER LANGFORD: It wouldn't impact on your timeframe other than making the application?

1231 MR. ARNISH: No, not at all.

1232 COMMISSIONER LANGFORD: Those are my questions.

1233 MR. ARNISH: Thank you very much.

1234 COMMISSIONER LANGFORD: Thank you.

1235 THE CHAIRPERSON: Commissioner Cram.

1236 COMMISSIONER CRAM: Thank you.

1237 Newcap gave us a map -- and I don't think it's a good thing to give us maps because then we look at them and we think about them. You were talking in your introductory statement about developing a strategy in relation to Drayton Valley and Rocky Mountain House.

1238 Can you explain -- are you then planning on selling all three together? Is that the concept? What is the strategy, or is it secret? If it's secret --

1239 MR. MASON: Basically those markets, as you would know, have lost money right from day one. We found that they really weren't making a commitment to the communities that they were in because of their financial situation.

1240 Actually I was the person who got the phone call from the owner at that time mentioning that every month there was a cheque coming from Toronto just to keep them going. So at that time we were Monarch Broadcasting. It was my job -- and I say "my job" because it was entrusted to me by Monarch -- to take over those stations.

1241 So we basically subsidized those stations from our Red Deer situation. We tried to share our talent as far as people helping out and making them a better station and doing a better job in those communities. As far as the sales is concerned, there was no real overlap on the sales side.

1242 At this present time, we are struggling in a big way specifically in the Drayton Valley situation because we find that the Edmonton stations' impact our business there, specifically CFCW which is a country station, which is a Newcap station.

1243 So we are in a tough fight there. They will do things like promote themselves and they have a lot more funds than we have available to promote themselves even in the Drayton Valley market. We just can't afford it.

1244 So I guess in a long runabout way, no, we are not looking at packaging that on both as one lump-sum package.

1245 MR. ARNISH: I would like to add as well, Commissioner Cram, that we certainly financially support the stations over in Rocky Mountain House and Drayton Valley as well. They are very, very small stations and we have staff in Rocky Mountain House and Drayton and we have a manager over there responsible for both those stations, but we certainly support them financially as well out of Red Deer.

1246 COMMISSIONER CRAM: So what is the population of Drayton Valley and Rocky Mountain House? Help me, I am sorry.

1247 MR. MASON: Both those markets are around 5,000 -- the direct town itself is right around 5,000 or 6,000.

1248 COMMISSIONER CRAM: Thank you very much.

1249 MR. MASON: You are welcome.

1250 COMMISSIONER CRAM: Thank you, Madam Chair.

1251 THE CHAIRPERSON: Did I hear you compare the operating expenses of the other two applicants to yours and say that some of them would be double?

1252 MR. MASON: In our existing operation for --

1253 THE CHAIRPERSON: But not in the --

1254 MR. MASON: No, no.

1255 THE CHAIRPERSON: Not in the projected one.

1256 MR. MASON: No, but the different scenarios that the Commissioner was throwing out about three or four stations and us being a stand-alone. Being a stand-alone station, we have a commitment to our people with a payroll of $1.1 million which is basically equivalent to the total commitments expense wise from the other applications. My point was that if indeed there are five stations in the market and the competition increased, we would definitely have to look at expenses as a way of being more efficient and maintaining hopefully a profitable bottom line.

1257 THE CHAIRPERSON: But where you have a very healthy BPIT right now, despite that high expense. If I look at the 2002 numbers, you have a very healthy profitability out of that station.

1258 MR. ARNISH: But as we have alluded though, Madam Wylie, we do know if there is another station licensed in the marketplace and it's not our application, that the market is going to shift and change and it is going to have a negative impact on our business and, yes, at the end of the day we are going to have a business plan that we are going to try and maintain a profitable PBIT, but it certainly won't be at the extent that it has generated today.

1259 THE CHAIRPERSON: So what is it that you expect that another applicant would remove from your listenership? Have you tried to figure that out in percentages?

1260 MR. ARNISH: Sorry, I misunderstood your question.

1261 THE CHAIRPERSON: When I look at the other applicants -- suppose we only licensed one and it wasn't you -- they have lower revenue expectations than you have. In fact, I think Commissioner Langford alluded to the fact that you are expecting a positive return from year one, but the competing applicants are not. In fact, Rogers is expecting a negative income for all seven years because their revenue expectations are lower.

1262 You believe that that is too conservative because you alluded to in your presentation or answers to questions to the strength of the applicant, and so on. So you think that those revenue expectations should be higher and will be higher at your expense -- would be higher at your expense.

1263 MR. ARNISH: I think you have answered the question, but we can't speak for the other applicants. I would say though that perhaps the revenue projections are lower than perhaps they should be, but I guess the big step up that we have is that we are a stand-alone FM station in the marketplace of Red Deer, have been here for 50 years, and know the marketplaces well and understand, talking to the business community when we put our application together, as you can see and as we have alluded to in our presentation, that the business community is behind us substantially in the overwhelming response in support to our application.

1264 They have said to us that they will advertise in this new radio station and we do know that we can repatriate or even garner new dollars in the marketplace and that's how we built our business plan.

1265 THE CHAIRPERSON: So this is what would allow you to hit the ground running and have that half a million projected more for year one. Because when I look at the expenses, they are not all that different except for technical expenses. Yours are much lower.

1266 Is that because you are already in the market?

1267 MR. MASON: Yes, that's true. The other thing -- there is quite a difference actually in the programming expenses.

1268 THE CHAIRPERSON: Oh, yes?

1269 MR. MASON: I can only assume I know that a large part of ours is payroll. I don't know the breakdown of their expenses, so I can't determine what that is or why that is.

1270 THE CHAIRPERSON: Well, it depends. If you look at the programming expenses in their projections, you can see the difference and then, of course, the Canadian talent difference.

1271 By combining the two, yes, yours are somewhat higher, but they are certainly not higher to the point of -- the big difference, the bottom line is the revenue projection. There is no dramatic difference, or do you see one in the expense line, expect in technical, yours are much lower.

1272 MS FRASER: If I could just make a comment about the revenue, and I am specifically referring to the split that was made in all three applications in regards to where the revenues would be achieved and where they would come from.

1273 There is certainly a drastic difference between -- our proposal says that we would be achieving say 15 per cent of our revenues from the local stations that are here now. Whereas Newcap they say 10, Rogers says 40 per cent. There are significant differences there.

1274 Even when we weigh out the other, they are saying people increasing their budgets. I can't really see that happening in the market. When you take a look at new dollars, yes, there are definitely new dollars that are going to be available in the market because of the new stations coming in. People will certainly take a look at that, but just accessing the revenues I think there is just such a difference. We are saying those revenues would be achieved from primarily print because print is certainly -- they are getting an unfair share of the dollars in pretty much any market, and I know it's certainly happening in ours.

1275 So I see that from our side of things, but from our competitors' point of view it's a much lower figure. So when you are addressing revenues and the differences, I guess my concern is we are in the market, we see this. I think we have a fairly strong idea of where those revenues are going to be coming from, and I am not quite sure why there are such drastic differences in the other areas.

1276 THE CHAIRPERSON: Counsel?

1277 MR. McCALLUM: So you think a good portion of that first year's and subsequent years' revenues would come from the print media? Is that what you are saying? And probably repatriation, I guess, is what you also said as well.

1278 MS FRASER: Certainly.

1279 MR. McCALLUM: Any other sources? I am looking at the differential really, not the total, but really the differential between your revenue projections and your competitors' revenue projections.

1280 MR. MASON: So do you want a breakdown of where we see the revenue coming from?

1281 MR. McCALLUM: That would explain the differential.

1282 MR. MASON: Okay.

1283 MR. McCALLUM: Print and repatriation are two of the sources.

1284 MR. MASON: Yes, and a large part to new advertisers because of the fact that there is no station in the market that meets their needs and Yellow Pages, as well as couponing and other paper publications such as magazines. Basically that's it.

1285 MR. McCALLUM: Thank you.

1286 MR. MASON: You are welcome.

1287 MR. McCALLUM: You mentioned in your presentation this morning, and several times this afternoon, the effect of approving the television applications upon the marketplace. I don't know that I quite understand how approval of one or other of the television applications would necessarily affect the radio market in Red Deer.

1288 Could you explain what you mean by that?

1289 MR. ARNISH: We believe if any or all of the applications are approved as presented over the last couple of days, it's certainly going to hurt the radio market in Red Deer, and I would have to say probably in other markets surrounding, as every one has been talking here, the Edmonton and Calgary corridor to a degree because of the fact that if you license the CHUM applications for Edmonton, Calgary, with a rebroad in Red Deer, and you license the CH applications in front of you for Red Deer, Edmonton, Calgary, you license the CBC applications in front of you as well with the disaffiliation of CKRD in Red Deer, there is no doubt in our mind that we are going to be impacted significantly from regional and national advertising.

1290 As you have heard over the last couple of days, conventional television and specialty television is taking the bulk of the media dollars and electronic media, and other media for that matter, on a going-forward basis from 2003 and froward, and has done very well, as we all know, for the last great numbers of years.

1291 With additional TV signals in this region -- and we have seen it in British Columbia as well where we have television stations as well, that there is no doubt that the radio business is going to be impacted by these new potential entrants again taking away radio dollars that have, up until now, been earmarked for the radio industry in Alberta.

1292 Brian, do you want to talk about that any further? Okay.

1293 Paul?

1294 MR. MASON: I just want to add that part of our application was discussing the fact that we are in a market where most of our competition sell a combo package and that television is no different. Global -- and we are actually in their building -- they have an agreement with CFRN and they sell CFRN in the market as well.

1295 So there is no doubt that with the new licensing, it will definitely hurt us.

1296 MR. McCALLUM: Between the two -- I mean, I can understand, for example, if both television applications were licensed that there could be some impact. But between the two, assuming for the sake of argument that the Commission says yes to one of the two television applications in total. So it says yes to Global in the disaffiliation, or it says yes to CHUM.

1297 Which of those two scenarios would hurt you more and why, assuming also that you got the radio licence for the same market.

1298 MR. ARNISH: That's an interesting question. A very good question.

1299 I would say that the Global licence would perhaps affect us more. I haven't looked at the CHUM business plan, so I can't really comment about that. They have proposed what appears to be an excellent application for Edmonton, Red Deer and Calgary.

1300 But I would say with Global, with all due respect to our friends at Global, them having another signal in the CH model -- and I am just giving you my own personal opinion here -- in those three markets as well, they would be a dynamite force and you talk about combos. There is no doubt about it that they will sell Global Television, Edmonton, Red Deer, Calgary and CH Television, Edmonton, Red Deer, Calgary as a double combo and they will be a force to be reckoned with.

1301 That, in our opinion and in my opinion, is going to take dollars away from the radio industry.

1302 MR. McCALLUM: But isn't there a huge differential between advertising rates for television and advertising rates for radio? That's why I am --

1303 MR. ARNISH: Well, there is, and I think, counsel, that that came up over the last couple of days at the hearings here for the TV applications. We know that some station groups are driving rates and markets so high that the advertising community is saying, "We need more television signals to be able to advertise our product in those marketplaces". It certainly has happened in Vancouver, and my understanding is it's happening here in Alberta and in the major markets of Edmonton and Calgary -- probably Calgary more than Edmonton.

1304 That is why you have other applicants in front of you wanting a TV station in those markets so that it does give the advertising community, that is very focused, in my opinion, on television -- not radio, but on television -- to spend their advertising dollars in television and not in radio and that certainly is a negative impact for radio.

1305 MR. MASON: Can I just add something? I happened to be at the press conference in Red Deer when CHUM were doing their presentation. I have to tell you, I was really concerned when one of the local people asked about buying local advertising. The response was by the CHUM Group -- he told the audience that there is more demand than supply for local advertisers, and CHUM would provide a cheaper option. A new player is always going to be more affordable.

1306 So that kind of alludes to your question about TV, but the other side of that is that really concerns me that somebody would be coming and sell local advertising -- another television competitor in the market.

1307 MR. McCALLUM: Thank you.

1308 If I could move to the matter of the talent showcase and the discussion that you had with Commissioner Langford.

1309 There were a number of numbers put on the record, if you like. There was the original $2,600 number and then the $9,000 number and then the possibility of it going up to $10,000.

1310 For the purpose of designing a condition of licence, obviously for the Commission we would need to have a specific number for a condition of licence as to what would be the commitment, I guess per year for Canadian talent development.

1311 So what would be the firm number?

1312 MR. ARNISH: We have discussed this thoroughly amongst ourselves and with the Westerner Association and we have made a commitment to them to help fund this project that they have to the tune of $9,000 and we would be prepared to accept that as a condition of licence on a going-forward basis.

1313 MR. McCALLUM: So for the entire licence term $9,000.

1314 MR. ARNISH: Annually.

1315 MR. McCALLUM: Annually.

1316 And just to be sure, Commissioner Langford walked you through three possible licensing scenarios and there could be others, the first one being the Commission does nothing. I assume the condition of licence holds firm in that scenario.

1317 The second one was that they license you only and I assume that the condition of licence holds firm in that scenario as well.

1318 Does the condition of licence that we have just discussed hold firm as well in the last possible scenario of a licence to you and one to another applicant?

1319 MR. ARNISH: We are committed to the community of Red Deer and our record speaks for itself. I think we have articulated our position on licensing five stations for the market.

1320 If the Commission decides to license five stations for the market, we will commit to the $9,000 annually for the seven-year term.

1321 MR. McCALLUM: Thank you, Madam Chair.

1322 THE CHAIRPERSON: Mr. Arnish, is it your understanding, or perhaps it was your colleague, that if CHUM were licensed in Edmonton and Calgary with a rebroadcaster in Red Deer, that they would be soliciting and accepting local advertising in Red Deer?

1323 MR. ARNISH: Well, I know in questioning of the CHUM applicants, I think that particular question or something near to that was asked of them, but in our opinion they did not --

1324 THE CHAIRPERSON: And...?

1325 MR. ARNISH: And they did not, in our opinion, say to the Commission that they would not solicit local advertising in the City of Red Deer.

1326 THE CHAIRPERSON: Well, are you not aware that that is usually what happens? You don't get local advertising out of the market if you don't serve it.

1327 MR. ARNISH: But they are talking about having --

1328 THE CHAIRPERSON: A bureau.

1329 MR. ARNISH: A bureau here, so that's what we are concerned about, Madam Wylie.

1330 THE CHAIRPERSON: And the Global, of course, if it were licensed outside it would be a Red Deer station.

1331 MR. ARNISH: Yes.

1332 THE CHAIRPERSON: But you are not suggesting that the usual almost inversion of local to national as between TV and local would not sustain -- you are not suggesting that the TV rates would be so low that they would be competitive in radio.

1333 MR. ARNISH: Not at all, no.

1334 THE CHAIRPERSON: And that the amount or the ratio of local revenue in radio compared to national and that on TV would be changed by their licensing.

1335 MR. ARNISH: No, I don't think so. It --

1336 THE CHAIRPERSON: You know what I mean, that radio revenues is mostly local.

1337 MR. ARNISH: Well, where we see that they could impact us, if they were allowed to do this, and I am only thinking hypothetically here, is that they could certainly split fee their service to the Red Deer market because we do it. We have done it in other areas in radio, and certainly it has been done on television.

1338 THE CHAIRPERSON: Who?

1339 MR. ARNISH: I'm talking about the CHUM applicants. If they were allowed to sell local advertising in Red Deer because they had this bureau here -- and I am not suggesting for a moment that they are necessarily going to do that --

1340 THE CHAIRPERSON: But that was not their application at the moment, as far as I know.

1341 MR. ARNISH: No.

1342 THE CHAIRPERSON: They would have a local bureau, but --

1343 MR. ARNISH: But not sell advertising.

1344 THE CHAIRPERSON: But it would be a pure rebroad.

1345 MR. ARNISH: Okay. That is good to hear.

1346 THE CHAIRPERSON: Well, I think that is what the application was. You seem to have had a different impression.

1347 MR. ARNISH: I guess because we didn't think that they answered the question about the Red Deer situation, the scenario on advertisers being able to purchase local advertising because of comments that they have said leading up to the hearing in the Red Deer market. That is the reason why we had that concern.

1348 THE CHAIRPERSON: We will, of course, give you the last word as well to tell us why it is that your application would be the best to license in Red Deer, especially if there were only one. You have already been through the scenarios as to how you would live if there were more than --

1349 Go ahead.

1350 MR. ARNISH: Thank you very much, Madam Chairman.

1351 We do appreciate the opportunity to be in front of you today to discuss your plans for Red Deer. I think I have seven points that I would like to briefly talk about this afternoon just to recapitulate our presentation to you today.

1352 One is that we believe that we have the only unique and distinct new radio format for Red Deer. You have heard us in our application process and through today talk about the fact that we are after repatriating the 35+ male listener in the Red Deer market, that now, by our determination is not listening to local radio, with this classic rock format.

1353 Two, we are very committed to hiring 15 staff for this new station in Red Deer to supplemental the 28 staff that we have at CHUB-FM to employ 53 some-odd people in our Red Deer stations, if we are lucky enough to receive your approval.

1354 Three, one of the big issues is the competitive balance situation. We, I believe, have demonstrated to you that we are at a competitive disadvantage with our Corus where they have two-thirds of the audience and we have a third, and that is certainly is a situation that could get worse, I guess, or could get better for us even we remain as a stand-alone station. But we don't think that that is going to happen.

1355 We do believe strongly that we need in this market to be on a competitive basis another station so that there are four stations in the marketplace and we have two of those four.

1356 Our spoken word commitment in our application is there. It's very real. We propose, and you have heard us propose to you throughout this hearing, that our spoken word is the largest of any of the other local applicants -- 11 hours and 13 minutes -- and I think that is a very major commitment to this marketplace for our proposed new station.

1357 Five, we plan on having 18 hours a day on average Monday through Friday live local programming and that's certainly a major commitment from us as well.

1358 Six, to license a new stand-alone station in the market of Red Deer -- and you have heard us say this again -- would totally destabilize the market, in our opinion. Our friends at Rogers and Newcap certainly have market situations similar to what we are talking about here in Red Deer where the market has been destabilized, where they also have licenses and there are too many licences in the marketplace.

1359 Recently in St. John's, Newfoundland-Labrador there was an application approved by the Commission for a new entrant in the marketplace. Newcap at that hearing was extremely concerned about the destabilization of the marketplace with a new entrant coming in and they, as you know, certainly supported the local incumbent that had an application in front of you that you didn't approve because they felt in the best interest of the marketplace it was better to give them two licences to compete against their multi-licences in the St. John's market.

1360 So we again reiterate that the destabilization of the marketplace will take place, in our opinion, if there is another independent licence granted here.

1361 Seven, we believe we have the best, most unique and distinct format and that is shown by the support that we got out of the community of Red Deer.

1362 You heard in our presentation that we had overwhelming support from the community and a petition of support, e-mails, 160 letters from the community-wide, politicians to the business community, and the people desire, the listeners in Red Deer desire a classic rock station and we wish to fulfil that wish of the listeners of Red Deer.

1363 With that, Madam Wylie, we want to thank you very much for hearing our application today and wish you well in your deliberations.

1364 THE CHAIRPERSON: Thank you, Mr. Arnish and your colleagues for your cooperation.

1365 We will now take a 15-minute break. We will hear the application by the CBC and we will hear the three applicants in Phase II and one of the intervenors, the Friends of CBC2 in Red Deer who are here today.

1366 We will then begin tomorrow morning with, I believe, an intervention by teleconference from Mr. Tarleck and then proceed with Phase IV, just so you have an idea of what the rest of the day will look like, in part because of the presence of this intervenor who can't be here tomorrow and that it's still fairly early for us. You know the hours we keep. This is what we will do.

1367 So in 15 minutes we will be back.

1368 MR. ARNISH: Thank you.

--- Upon recessing at 1550 / Suspension à 1550

--- Upon resuming at 1605 / Reprise à 1605

1369 THE CHAIRPERSON: Mr. Secretary, please?

1370 MR. LeBEL: Thank you, Madam Chair.

1371 Item 4 on the agenda is an application by the Canadian Broadcasting Corporation to amend the licence of CBR-FM Calgary. The licensee proposes to add an FM transmitter at Red Deer to broadcast the programming of CBR-FM in order to provide Radio Two service to the population of Red Deer. The transmitter will operate on frequency 99.9 MHz (channel 260C1) with an effective radiated power of 100,000 watts.

1372 Mr. Orchard, you have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

1373 MR. ORCHARD: Thank you very much.

1374 Good afternoon, Madam Chair, ladies and gentlemen of the Commission.

1375 I am happy to be able to present our application to provide CBC Radio Two service to the people of Central Alberta through a new FM transmitter in Red Deer at 99.9 FM.

1376 We hope to persuade you that the Red Deer application is in the public interest. It's crucial for the 150,000 residents of the area, many of whom enthusiastically support the Radio Two application.

1377 And it is key to the promised roll-out of the cultural and music network of the CBC as mandated by the Broadcasting Act and specific CRTC expectations in our most recent CBC Radio 2000 network license renewal.

1378 With me today from the CBC are: Philip Savage, Senior Manager of Regulatory Affairs, Suzanne Lamarre, Senior Engineer of Coverage and Spectrum, and I am Don Orchard, CBC's Regional Director in Alberta.

1379 I will start by asking Philip to talk to the commitments that CBC has made to extend our Radio Two signal coverage and the very strong support for Radio Two expressed in Red Deer and Central Alberta.

1380 I will then detail from my vantage point as Alberta Director some of the cultural activities we currently cover but would do so better with Radio Two in Red Deer.

1381 Suzanne will then describe how our application at 99.9 FM makes the best use of public spectrum.

1382 Philip?

1383 MR. SAVAGE: Thank you, Don.

1384 The Broadcasting Act charges the CBC to be made available throughout Canada by the most appropriate and efficient means, as resources become available for the purpose. We take seriously our role to serve as many Canadians as possible.

1385 However, as you probably know, due to budget cutbacks throughout the 1980s and 1990s there was a real limit on the number of coverage extension projects we could carry out, no matter how worthy.

1386 Based on a careful stewarding of resources in the past few years, CBC was able to promise to Canadians in 1999 that we would extend our Radio Two network significantly.

1387 The Commission in its renewal decision of 2000 set out an expectation that 75 per cent of English-Speaking Canadians in each province should be able to receive Radio Two off-air by 2007. That is the end of the licence period.

1388 I am very happy to report to the Commission that, as of June 2003, our national Radio Two coverage is just over 80 per cent of the English-speaking population, and this, as I said, exceeds our overall national expectation and does so four years ahead of schedule.

1389 On the 75 per cent per province pledge, we have come through in seven of ten provinces, well ahead of the regulatory deadline.

1390 Although it does entail financial burdens, we have entered into Radio Two extension with good spirit. This is particularly the case in mid-sized communities where public demand is high.

1391 In cities like Kelowna, Sudbury, and Corner Brook -- and in those three communities we have established new transmitters since 2000 -- CBC Radio Two as the national Canadian music and cultural network is crucial. It serves as a dynamic connection with the rest of the Canadian arts scene, something people might take for granted, or more for granted, in our largest cities.

1392 That support for Radio Two in Central Alberta and the theme of cultural connection is evident in the interventions you have seen in support of our application before you today.

1393 To say we have heard enthusiastic support for CBC Radio Two from the people of Red Deer and Central Alberta would be an understatement.

1394 We have the support of municipal leaders, presidents and faculty from the two leading colleges in the area -- Red Deer College and the Canadian University College -- from leading cultural groups in the area, including the Red Deer Symphony Orchestra, and business groups including the Red Deer Downtown Business Association.

1395 However, it is individuals and their passion for the service and the cultural connection with other Canadians that we think are perhaps most important. Here are just a couple of examples.

1396 Larry Herr, a Professor of Archaeology from Lacombe, wrote to you lamenting his inability to pick up a clear signal. He said:

1397 Twenty-two year old Kelsey Hoffman from Ponoka got turned on to the range of music which CBC Two offers while working in Swift Current Saskatchewan:

Kelsey wrote, adding that:

1398 In fact, a new community group was formed, the Friends of Radio Two in Red Deer, whose sole purpose is to bring Radio Two to the area.

1399 They have been very active in encouraging the CBC to move into central Alberta. We certainly appreciate the interest and dedication of all of the groups and individuals, many of whom were unable to make it to the Edmonton hearing.

1400 Finally, before turning it back over to Don I wanted to end with a bit more of a status report on our Radio Two coverage extension across Canada and in Alberta.

1401 I spoke a moment ago about the seven provinces in which we now reach 75 per cent of the population. Alberta is not yet among them.

1402 Currently in Alberta, we serve just under 72 per cent of the population through three transmitters in Calgary, Edmonton and Lethbridge, short of the CRTC's 75 per cent minimum expectation and short of our own commitment to Canada's fastest growing province.

1403 The largest remaining population centre in Alberta is Red Deer. In fact, as some of the interveners have pointed out, Red Deer is the largest city in the entire country without Radio Two transmission in 2003.

1404 The application before you today remedies the situation by bringing service to an additional 150,000 and extending the Radio Two population coverage to beyond the CRTC expectation, that is to 78 per cent of Albertans.

1405 MR. ORCHARD: Thank you Philip.

1406 Every day CBC Radio Two in Alberta provides listeners with the serious music of the province and the country, as well as featuring arts and cultural events in their communities as well as in the larger Canadian and international contexts. The culture, events and issues of central Alberta are reflected to other audiences both in Alberta and across every region of Canada.

1407 However, most Central Albertans are not able to hear their music and stories on the cultural network of the national public broadcaster because there is no dedicated transmitter for the area.

1408 In addition the existing Radio One regional programming very well serves Central Alberta. Considerable music and arts programming is made available by a dedicated group of CBC journalists, producers and performers, and much of this also makes its way to the national networks reflecting the areas strong cultural vitality.

1409 The irony is that the in-depth radio performance and arts coverage from a region like Alberta, that is the staple of Radio Two programming, is not available.

1410 Red Deer was recently named one of five "Cultural Capitals of Canada" by the Canadian Department of Heritage. Unfortunately, Red Deer is the only one of the five not yet served by Radio Two.

1411 Our reporters and producers work and travel throughout Central Alberta and are very well aware of the cultural richness of the district.

1412 Each day they reflect it to the Radio Two network of listeners across Canada, but not to the area itself.

1413 Red Deer benefits only indirectly from the work of our dedicated Alberta Arts reporter, Adrienne Lamb. Adrienne generates over 150 stories from Alberta each year, shared across the network. A large number of these come from Red Deer and Central Alberta. For example, Adrienne has had stories about:

1415 Throughout the province we also run public service announcements on Radio Two with special emphasis on all regions, including PSAs from Central Alberta on:

1416 These are messages that currently reach only a portion of the people to whom they matter most.

1417 CBC Radio Two in Alberta has a weekly "Our Music" series, which features area artists such as flutist Leslie Newman, recorded for broadcast in her hometown of Lacombe. In addition nearly all of the Red Deer Symphony soloists have been recorded, some of which have been picked up for network play:

1418 Because the "Our Music" program reaches only a few listeners via cable in the Central Alberta area, we have focused lately more on Edmonton, Calgary and Lethbridge. We have plans to rectify that if a transmitter is licensed drawing on the considerable Central Alberta talent we have identified.

1419 Of course, there is much more than classical music on CBC Radio Two. Jazz, blues and roots music has made its way to Radio Two listeners in others part of the country, including that of the hip-hop group, War Party, from the Hobbema Reserve in Central Alberta.

1420 I will now ask Suzanne Lamarre, our Senior Engineer and Director of Coverage and Spectrum, to explain the specific engineering steps we took to identify 99.9 FM as the best frequency to serve Central Albertans with Radio Two.

1421 MS LAMARRE: Thank you, Don. Good afternoon.

1422 In the 1989 Revised Long Range Radio Plan, the CBC's intention was to use a class A frequency limiting the service to the community of Red Deer itself. However, our renewed commitment to extend Radio Two service widely across Canada, coupled with the extraordinary demand for the service, not just in Red Deer but in surrounding areas of Central Alberta, led us to reevaluate our spectrum needs for this area.

1423 In 2001, as we were planning for the new service, we decided to look for a channel that would provide for extensive coverage. 99,9 FM was a class B frequency allotted to Red Deer and fit the purpose.

1424 Not only would it fit the purpose, it was also a frequency that could be added to our current installation in Red Deer with minimal technical modification. So in March 2002, we officially change the frequency identification for Red Deer in the Long Range Radio Plan to the class B frequency 99,9 (channel 260).

1425 There was never any question that 99.9 would be used to its full capacity, but there was discussion about the best timing for it. The discussion had to be concluded even faster when another applicant pointed out that 99,9, a class B allotment in Red Deed, could be upgraded to a class C1, for operation at 100 kilowatts.

1426 At 100 kilowatts, we can reach far beyond the Red Deed centre, close the gap on the commuting roads between Calgary, Red Deer and Edmonton, and offer the most reliable signal level throughout the coverage area. It was the ideal solution to provide Radio Two to a maximum number of people, with the optimum usage of our infrastructure.

1427 Since we have made changes from the original Long Range Radio Plan parameters, we will have to reassess the parameters of adjacent locations in the plan, namely Rocky Mountain House and Stettler. We will conduct field surveys in these areas, once the Red Deer Radio Two transmitter is on-air, to make this determination more accurately.

1428 Don?

1429 MR. ORCHARD: Thank you, Suzanne.

1430 There have been some delays in ultimately making this presentation for a full coverage application on 99.9 FM in Red Deer. We tried to balance efficient operations with appropriate coverage and were required to resubmit our technical brief in order to do so.

1431 We believe that the combination is now right, and we hope that if licensed on 99.9 FM this year we will be very soon on the air to serve Central Albertans.

1432 In particular, we are satisfied that we can provide a continuous uninterrupted network of coverage between Calgary and Edmonton that a smaller Red Deer coverage pattern would not have allowed.

1433 This is very important in an area of heavily travelled highway routes -- some estimate up to 70,000 daily -- and crucial for a national public broadcast network.

1434 As we are all aware, the public broadcaster is bound by the requirements made by the Broadcasting Act and the broadcasting regulator has the role of enforcing these obligations.

1435 Our purpose today is to ask the Commission to help us to fulfil our obligation to reach out and serve as many Canadians as possible both on Radio One and Radio Two.

1436 We also ask the Commission to help us reinforce our cultural presence in Central Alberta, as Alberta is important to the CBC and, we believe, as the CBC is a vital part of Alberta.

1437 Thank you, Madam Chair. We look forward to responding to your questions.

1438 THE CHAIRPERSON: Good afternoon, Mr. Orchard and your colleagues, and welcome to the hearing.

1439 Commissioner Cram.

1440 COMMISSIONER CRAM: Thank you, Madam Chair.

1441 I wanted to first say that Saskatchewan has more than CBC Two and cheap insurance. I will just leave it at that.

--- Laughter / Rires

1442 COMMISSIONER CRAM: Anyway. I wanted to talk about CBR and the local programming. It is apparently at one hour 25 minutes and what is that? What is that local programming?

1443 MR. ORCHARD: I think, if I understand your question correctly, you are referring to our music. I will give you a detailing of all the local programming that we produce if that is helpful.

1444 COMMISSIONER CRAM: Yes.

1445 MR. ORCHARD: Our music is a program that runs on Sundays from noon until 1:00 p.m. and it is produced and hosted out of Calgary.

1446 The mandate of the program is to reflect, support and share Albertan talents. The emphasis in doing that is really on the musician, if you will. The music tells a story, but we try to hear from the person, their motivation, et cetera, their experience.

1447 So that program differs from the national program that we do called "Symphony Hall" which is on the same day from 10:00 until noon. That program is mandated to provide a reflection of regional orchestras whereas in some large markets it's not too difficult for larger market orchestras to get access. This program looks to give that access to smaller markets, to regional orchestras across the country.

1448 On Radio Two we also have I call them arts calendars, and these run on the hour just before the top of the hour. They are just one minute, but what they allow us to do is each hour of the day, from seven in the morning until 6:00 p.m., to talk about events in the community that may be of interest to the residents living there.

1449 We also have three times a day a national arts report that a reporter like Adrienne Lamb that I mentioned, and we have another reporter in Calgary by the name of John Spittle, they would feed their reports into the network where they would be assembled and fed back.

1450 And so these four-minute reports very often contain information again about Alberta that comes back to Albertans which residents of Red Deer and area don't have access to now.

1451 The other component of the local programming is that CBC Radio One and Radio Two present across the course of the day what we call blended newscasts. The word "blended" is used to describe the fact that we take international news from our network, national news from all across the country, and regional and local news, and we turn this into a package that is produced and presented locally. This is exposed on Radio Two as well.

1452 So any information about the community would be integrated into that package as well.

1453 COMMISSIONER CRAM: So do I understand that Ms Lamb is actually -- is she a Red Deer reporter, is that it?

1454 MR. ORCHARD: No. We don't have a reporter in Red Deer. She is based in Edmonton.

1455 COMMISSIONER CRAM: Okay.

1456 MR. ORCHARD: Yes.

1457 COMMISSIONER CRAM: So it's now a minute on the arts report. What coverage do you have of Red Deer right now?

1458 MR. ORCHARD: What happens is we have Adrienne and her colleague, John Spittle, who if they find a story of merit, they will travel to Red Deer and that is the way we service the area.

1459 I don't envision changing that. It's a resource issue. If we could, obviously we would. But we hope that, through new contacts, that we would develop as a result of a successful application, that we would have more information coming to us to facilitate our knowledge of events that are happening in the community.

1460 We are not in a position to say that we can put a resource to do that job. This is really about extending the service to that community, but our interest certainly is to tell that story and we would do that through reporters like Adrienne and others.

1461 COMMISSIONER CRAM: And I remember doing the CBC television renewal and the question is: Is there any more room in the schedule to give that information because it is really essentially going to be a rebroad of Calgary.

1462 MR. ORCHARD: Yes, yes. Well, there are a number of other areas. I wanted today to just talk about Radio Two, but a lot of the kind of information that we do makes its way to Radio One, to our information programs.

1463 COMMISSIONER CRAM: Yes, but we are talking about you getting a transmitter for Radio Two.

1464 MR. ORCHARD: For Radio Two. So I will restrict my comments there, and there isn't another place in the schedule to achieve that.

1465 What we would have, however, is if, for example, our music producers become aware of a talent or a story that we want to share with the rest of the country, all of the schedule potentially is a place for that to go, but those really are network decisions, right. We would make the pitch, we would send it off and there would be consideration.

1466 What I have described are the local windows that Alberta controls.

1467 COMMISSIONER CRAM: Yes. So if you are talking about trying to expand your coverage of Red Deer, and there is no more time, then you are essentially talking about reducing the time you would give to Calgary.

1468 MR. ORCHARD: I wouldn't frame it that way. The stories that we do really are sold on the merits of the story, and if we have a relationship with the community of Red Deer because we are providing service to it, our hope would be that we will know more, we will be able to pitch more, and those stories would be reflected more effectively to the rest of the country.

1469 We don't think we are doing a terrible job of it now because we do a lot of the stories out of Red Deer. We think we can do better, but on a daily basis when you are dealing with a lot of competing program elements you do have to make these decisions and our producers would continue to make those.

1470 COMMISSIONER CRAM: This "Music to go" that you have, do you still have that?

1471 MR. ORCHARD: Yes, we do.

1472 COMMISSIONER CRAM: Because we don't have something like that in Regina. So she does talk about sort of surveillance issues and issues like that, Calgary surveillance issues?

1473 MR. ORCHARD: It's an experiment. What we wanted to do within that program was to see what benefit would come by adding certain values to the program.

1474 It was really one of our staff's idea prompted by a response from the community that they knew. What I wanted to do is I wanted to present the music that people would be used to hearing, add to its survival information -- in other words they don't have to go somewhere to find out about weather, they don't have to go somewhere else to find out if there is a major traffic issue.

1475 We don't treat that kind of information in the way that we might on a Radio One format. We tell people when they need to know as opposed to kind of putting in their face.

1476 It also is a way for us to redefine, and I think significantly improve, the relationship that we have with various cultural organizations because that gives us a great deal of real estate to tell their story.

1477 But it's also very important to note it's an experiment. We are trying to get the learning out of it, and it wouldn't be fair for me to leave you with the impression that that is something that we could bring to Red Deer.

1478 COMMISSIONER CRAM: Okay.

1479 Now, Ms Lamarre, from a strictly technical perspective, why is your proposal for 99.9 the best proposal?

1480 Mr. Orchard, anybody can answer.

1481 MR. ORCHARD: I am going to defer to Ms Lamarre.

1482 MS LAMARRE: He is happy to do so.

1483 The use of 99.9 at 100 kilowatts allows not only to cover the people within the main area of Red Deer but also surrounding areas where the population is much more scattered and where obviously we could not afford to go around and install new transmitters all along those smaller locations.

1484 It's also a frequency that allows us to use our current antenna that we have in Red Deer with the minimum of modifications.

1485 If we were to use another frequency, we would need additional modifications to the antenna. That would be more costly as far as the investment is concerned. So that is why we are so keen about 99.9 for Red Deer.

1486 It also turns out that it was a class B allotment, but as it turns out it can be upgraded to a class C one and looking at the surrounding coverage, what we have in Calgary and what we have in Edmonton it allows us to really close in the gap, put in a small comfort zone of overlap. It's really a modest overlap. It's just a little bit of comfort to make the network seamless, if I may use that expression, and it allows really Albertans to have almost an entire coverage over a very large area.

1487 COMMISSIONER CRAM: And I did want to talk about if there was an alternate FM. So you would agree that there would be other alternate FM frequencies that CBC could potentially use.

1488 MS LAMARRE: Coverage wise, yes, there are other frequencies that could give us the same extent of coverage, but they would turn out to be more constant as far as our investment and equipment would be concerned.

1489 COMMISSIONER CRAM: Yes, it's the transmitter issue.

1490 MS LAMARRE: The antenna issue, yes.

1491 COMMISSIONER CRAM: What would that extra cost be? Do you have any idea?

1492 MS LAMARRE: Yes. It would be between $25,000 to $30,000.

1493 COMMISSIONER CRAM: You said to me why, from your perspective, CBC getting 99.9 would be the technically best use of the frequency.

1494 From our perspective, trying to look at objectively what is the best use of that frequency, what would you say about us comparing say the coverage you would be using, because it's a technical coverage issue, versus that as proposed by Pattison?

1495 MS LAMARRE: From your perspective, the coverage would be the same. Really the two or three issues that are at stake here are the following:

1496 First, there is the long range radio plan issue. Like 99.9, yes, granted it was not the original frequency that was identified, but it was identified in a timely fashion that all other applicants knew about before filing their applications.

1497 The other issue is of changing the equipment on the tower, and we are talking -- well, I don't want to say that private investors' money is not important, but this is tax dollars that we are talking about. So to me $25,000 to $30,000 difference in a project, if we have six or seven projects like this over a period of ten years, well it's one transmitter that we won't be able to put on air at the end of the licence term.

1498 So that's why we are very careful about this and the savings will end up being used on other transmission projects. So that was the second issue.

1499 The third issue is coverage wise definitely, from the CRTC perspective, it's all the same. Trade in channel 281 or 294 or 260, I mean all of us applicants here are going to be happy at the end of the day that we have the same coverage. But I think that you have to factor in also the fact that it will come at a higher expense for the CBC and it's going to factor in not an extreme dealing, but it's going to factor in also in another two or three months extra dealings in filing for a new brief and putting the order for changing the specifications on the antennas, and all that.

1500 COMMISSIONER CRAM: Anyone of the other frequencies that have been identified for Red Deer, they would still get you over the 75 per cent, would they?

1501 MS LAMARRE: Yes, there is no question about that.

1502 COMMISSIONER CRAM: Thank you.

1503 Thank you, Madam Chair.

1504 THE CHAIRPERSON: Commissioner Williams?

1505 COMMISSIONER WILLIAMS: I just have one quick one from your presentation. You state that Red Deer has been designated one of five Department of Heritage cultural capitals. What is a Department of Heritage cultural capital? What does that involve for Red Deer?

1506 MR. ORCHARD: What does it involve? Well, I think it gives Red Deer, first of all, a reason to feel good and to celebrate that work that it has been doing to try to build a culture.

1507 I know that this is the area that we have talked about. How do we explore this? How do we tell this story? I don't know in detail yet what the City of Red Deer plans to do to take advantage of that, but I do know that it's a licence for them to think big and it gives us the opportunity to try to tell that story as well. In other words, it makes them a destination for us in a sense.

1508 What their plans are, I can't speak to. I hope that one of the submissions later is that it would be well placed that question to know what the city has planned, but our programmers will certainly find out.

1509 COMMISSIONER WILLIAMS: Thank you very much.

1510 THE CHAIRPERSON: Commissioner Cardozo?

1511 COMMISSIONER CARDOZO: Thank you, Madam Chair.

1512 I just have one question with regards to CBC Two. I just wanted a sense from you as to the evolution of the service and the kind of music you play. I think on page 9 you talked about:

Et cetera. You talk about a hip-hop group, perhaps an Aboriginal hip-hop group.

1513 Is it your sense that the service is evolving with the demographics of Canada? I ask that specifically with regard to this market which is also growing at a fast rate in terms of population, and therefore will likely be more demographically diverse?

1514 MR. ORCHARD: We are working to try to increase accessibility to Radio Two. I am often surprised by the people that break my mental model around who might be a consumer of classical music.

1515 I will find myself sitting on an aircraft beside somebody who is 22 years old and they are a full-time Radio Two listener and they love the music.

1516 But what we are trying to do is we are trying to create programs that can allow that person a way to interact, to make a contribution to the service. I will give you an example.

1517 We have a program on Saturday evening called "New Music Canada", and it allows people to submit their own creation, and it is skewing the demographic. We are seeing young people create music, send it in, and the program turns it around.

1518 Certainly, "Roots and Wings" is about diversity, it is about trying to reach out to a broader potential audience. We are not trying to put a definition on who that would be, but we are trying to give people an opportunity to interact with the service that way.

1519 These are, I think, relatively modest approaches. The core remains classical music, jazz, but we do have to experiment, we do have to see where there is appeal.

1520 COMMISSIONER CARDOZO: Is there a limit of how far you can move from that core to attract new listeners?

1521 MR. ORCHARD: We don't know that yet.

1522 I can tell you, through the experience with "Music to Go" in Calgary, where we have talked about what we can add, in terms of value, to the service, and the tolerance for that value. It is that kind of experiment that actually allows us to see where the core listener group wants us to go.

1523 So we will do projects like I have described here and then we will listen very carefully to the kind of feedback we get.

1524 I don't know the answer to the much broader question that you may be asking about the ultimate definition of Radio Two, but I do think that, for the time being, we have to try things and the main goal is to allow people to experience it and have access to it and contribute to it in a way that just presenting a one-way kind of program, aimed at a certain demographic, might not do.

1525 COMMISSIONER CARDOZO: When you say "classical music", it is usually classical music which originated in Europe. Would it include, for example, Chinese opera or Indian classical music.

1526 MR. ORCHARD: We do opera, but I would expand your definition of classical music originating in Europe, because we do pick-ups here in Alberta of talented artists that make it on to the network and that is the goal of the service, to reflect what is happening here now, as well as present the classics, if you will.

1527 MR. SAVAGE: If I could just add a point to that, we actually have been experimenting quite a lot with moving beyond the European definition of classical music so that, for instance, this summer we will have a series, as part of the regular "In Concert" on weekday evenings, which will actually take the host from "Global Village" which does roots of world music, and have Jowi Taylor actually feature classical music from other traditions, beyond the European tradition.

1528 So that is something that we are very interested in experimenting with and doing more of all the time.

1529 COMMISSIONER CARDOZO: Thank you.

1530 THE CHAIRPERSON: Thank you, Mr. Orchard and your colleagues.

1531 Like the other three, since you are competitive, we will give you an opportunity to tell us why you should be granted 99.9.

1532 MR. ORCHARD: Thank you, Madam Chair.

1533 What I would like to do is simply reiterate what we think are the most important factors.

1534 We believe that the granting of this application for Radio Two on 99 FM is in the public interest because it is consistent with the tenets of the Broadcast Act and the Corporation's obligations to extend coverage to as many Canadians as possible.

1535 It is consistent with specific CRTC obligations for Radio Two extension to at least 75 per cent of the Alberta population in a timely fashion. It does so according to the orderly use of spectrum envisioned in the CBC and the CRTC's long-range radio plan. 99.9 FM was specifically identified in the LRRP for this purpose.

1536 Red Deer remains the single largest community unserved by an off-air CBC Radio Two transmitter in the Country.

1537 It is important that Central Albertans benefit from the cultural network of music and arts coverage provided by Radio Two from other regions to the Red Deer area and from their region to millions of other Canadians.

1538 Finally, and not inconsequentially, public demand and support is very high for Radio Two among civic, cultural, educational, business and other sectors, as well as many citizens throughout central Alberta.

1539 Thank you, madam Chair and members of the Commission.

1540 THE CHAIRPERSON: Thank you, Mr. Orchard and your colleagues for your cooperation.

1541 I will ask the secretary now to introduce Phase II of this hearing.

1542 MR. LeBEL: As you pointed out, madam Chair, we have now reached Phase II, in which applicants are provided with an opportunity to intervene on the competing application.

1543 Newcap's panel has already indicated that they would not be appearing in Phase II, so I will now ask Rogers to intervene at this point.

1544 MR. MILES: Madam Chair, members of the Commission, we will not be intervening.

1545 THE CHAIRPERSON: Thank you, Mr. Miles.

1546 Mr. Secretary, please.

1547 MR. LeBEL: Thank you, madam Chair --

1548 MR. McCALLUM: I'm sorry, madam Chair, could I ask a question of Rogers?

1549 THE CHAIRPERSON: Mr. Miles, don't run away.

1550 Oh yes, there was a question we didn't ask you that we should have, but perhaps we will wait until --

1551 MR. McCALLUM: I wondered if we could get it on the record at this point.

1552 THE CHAIRPERSON: Yes. Go ahead, counsel.

1553 MR. McCALLUM: Commissioner Wylie asked some of the other applicants to comment on the possibility of licensing more than one commercial station in Red Deer as a result of this process, and I wonder if we could get your comments on that possibility.

1554 THE CHAIRPERSON: You weren't trying to avoid the question, were you?

1555 MR. MILES: No, as a matter of fact, I was actually going to respond at a different portion -- I reviewed that and I realized that we had implied but had not specifically stated -- so yes we will be quite prepared to accept more than one application too, and we would also exclude the CBC from those.

1556 THE CHAIRPERSON: Thank you, counsel. Thank you, Mr. Miles.

1557 Mr. Secretary, please.

1558 MR. LeBEL: Thank you, madam Chair.

1559 I will now ask Jim Pattison to intervene at this point.

1560 MR. ARNISH: Madam Chair, commissioners and Commission staff, Jim Pattison Industries does not wish to intervene in this portion.

1561 THE CHAIRPERSON: Thank you, Mr. Arnish.

1562 Mr. Secretary, please.

1563 MR. LeBEL: Thank you, madam Chair.

1564 I will ask the CBC panel to intervene at this point.

1565 MR. ORCHARD: Madam Chair and commissioners, CBC does not wish to intervene at this point.

1566 THE CHAIRPERSON: Thank you, Mr. Orchard.

1567 You people get along so well. We'll give you each a licence.

--- Laughter / Rires

--- Applause / Applaudissements

1568 THE CHAIRPERSON: I have to consult with my colleagues, though.

--- Laughter / Rires

1569 THE CHAIRPERSON: Mr. Secretary, please.

1570 MR. LeBEL: Thank you, madam Chair.

1571 We have now reached Phase III, in which presentations of interventions from other parties will be presented, and I would like to indicate for the record that Michelle Cameron-Coulter has elected not to appear in Phase III and Mr. Tarleck will be participating tomorrow morning.

1572 So we will now hear from the Friends of CBC2 in Red Deer.

--- Pause

1573 MR. LeBEL: You have ten minutes to make your presentation.

INTERVENTION

1574 MR. WILSON: Madam Chair, members of the Commission, my name is Richard Wilson and on my left is my colleague, Grant Howell . We will be doing a joint presentation and I thank you for your indulgence in listening to us.

1575 First of all, I would also like to thank you for listening to us today and not tomorrow; tomorrow would have been impossible for us, but today is beautiful, thank you.

1576 Secondly, I must say that I feel very sorry for the members of the Commission in having to listen to me because, listening here today, we have heard from the commercial radio people, who all speak so well, eruditely, clearly and now you have to take me as last prize.

1577 THE CHAIRPERSON: You have made no comments about our erudition.

--- Laughter / Rires

1578 MR. WILSON: Ma'am... I shall proceed.

--- Laughter / Rires

1579 MR. WILSON: As I said, my name is Richard Wilson, and I would like to introduce myself a little bit, just so you understand my background, where I'm coming from in terms of the Friends of CBC2 in Red Deer.

1580 I am a professional engineer and my role in Red Deer right now is Project Manager on a $100 million hospital renovation, so my expertise is delivering large, complicated, technically sophisticated projects on time and on budget. I don't have any media experience or expertise to talk about, however, I do have a passion for music, and this music translates into community action. I am on the Board of the Red Deer Symphony Orchestra, where I act as secretary and, in my spare time, I also play in one of Red Deer's five community bands. So music is very much alive and well in Red Deer.

1581 And that doesn't just mean that we are stuck in the classical groove. Our tastes are fairly eclectic and we do have jazz and, in my own personal record collection -- I won't share my age, but -- Creedence Clearwater Revival is up there, and other such CDs.

1582 Anyway, I have been in Canada now for three years, and I have lived and worked in many parts of the world. I have always had an interest in music, and especially radio, because I believe radio really provides the variety that television can't compete with.

1583 One of the international standards for classical radio networks has been Classic FM in Britain against which many other stations are measured and, in my opinion, CBC2 is top of the heap. They really are very good.

1584 Many countries have classical station networks which are run by volunteers and these stations tend to, really, operate on a shoestring and don't have the full professionalism that CBC2 brings to its programming.

1585 When I came to Canada three years ago and discovered CBC2, it really was a pleasure and a joy to listen to such a station. Compared to stations I have listened to in Germany, France, England, Australia, Singapore, South Africa and other places, CBC2 ranks, in my opinion, at the very top.

1586 What a pleasure we had this morning driving up here, to start the day off with Tom Allen. And going home tonight, we should be able to listen to Jurgen Gothe and Danielle Charbonneau; excellent presenters.

1587 In between, there is the wonderful programming of Shelley Solmes, Rick Philips and Eric Friesen.

1588 It appeals to my sense of humour, I must admit, that on Saturday afternoons, if the opera is not your scene, you can always go to DNTO on CBC1 -- that's "Definitely Not The Opera".

1589 A really unique feature of CBC2 is the support, recognition and coverage of Canadian music affairs. This is not done as well anywhere else in the world. Classical and fine music performers in the rest of the world rarely get the coverage that Canadian performers enjoy. This can only be good for the future of up and coming Canadian music artists. Red Deer has an excellent Symphony Orchestra and I know the Orchestra is looking forward to CBC2's support in advertising their concerts.

1590 You can imagine my deep disappointment when coming to Red Deer to discover that CBC2 is not available off air. It is extremely unfortunate that Red Deer, as has said before by Mr. Don Orchard, is the largest city in Canada without CBC2.

1591 I can only hear my favourite programs when travelling to Edmonton or Calgary. There is a stretch of highway from Olds to Ponoka where CBC2 cannot be received and Red Deer is right in the middle of this section of highway, one of the busiest in Canada from, I would say, right from the U.S. border up to north of Edmonton.

1592 There is a loyal group of listeners to CBC2 in Red Deer who go out of their way to try and receive the station. Travelling down the highway is one option and I always look forward to travelling to Calgary or Edmonton for the pleasure of listening to CBC2.

1593 With the extraordinary development of Central Alberta over the last 30 years, a very diversified mix of listening audience has been developed whose musical tastes are also as varied. These varied tastes in musical appreciation need to be served just as much as the mainstream hit parade.

1594 Another big plus for CBC2 is the fact that we have a music station here without commercial breaks, and this is a breath of fresh air. As the public broadcaster, CBC is to be congratulated in providing CBC2 in a non-commercial format which only enhances the enjoyment of the listening public.

1595 CBC2 is a connecting link to all Canadians across the length and breadth of this vast country. It is comforting to know that generally, except in Red Deer, one can tune into one's favourite shows in all the large urban areas.

1596 As a Canadian taxpayer, I have to encourage the propagation of CBC2, especially when the station is of such a high quality that, I believe, it needs to be shared with all Canadians.

1597 I speak on behalf of all lovers of fine music in Central Alberta when I say that I hope the results of this intervention will result in the immediate broadcasting of CBC2 to Red Deer and environs.

1598 Thank you for listening to the few words I had to say, and I would like to hand over to my colleague, Grant Howell, for his part of the presentation.

1599 MR. HOWELL: Thank you, Richard. In terms of my own background, I am in the human resource business with a large organization in Red Deer, and also a member of the Red Deer College Board of Governors.

1600 So who is this "Friends of CBC2"?

1601 We are a group of people, most in leadership positions from a very broad spectrum of the community. Is has been described before -- we have city councillors, we have leadership of more than one college, we have business people, we have symphony people. We have a very vibrant cultural community and a very, very strong and urgent sense of anticipation to have CBC2.

1602 Why are we so anxious about this? We know that CBC2 is an outstanding radio service, and Richard has just described that, and we are at the core of Canada's fastest growing economic region, the second-fastest growing region in North America. The Toronto Dominion Bank -- TD Economics has just completed as special report, describing the growth in this corridor and, of course, the CBC gap is right where we live.

1603 The number of 150,000 people has been used in terms of the number of people who live there but, when you look at the folks living in and around the trading area and driving through, that number approaches a quarter of a million people.

1604 It has also been described that adding this transmitter would meet the CRTC's requirement of CBC for 75 per cent coverage in Alberta during this licence period, and I would also say that we are a little bit envious to see that Saskatchewan, seeing as how we have a good Saskatchewan resident here, that they have six times as many transmitters per population as we do. We really feel that it is time that we address this.

1605 We do have a dynamic, diverse and thriving cultural community and we have been named as one of Canada's cultural capitals -- and I will just respond very quickly to that question -- we have a cultural group called "Culture Inc." that has developed a master plan in our community that has been very active and won this award.

1606 It is a $500,000 award presented to the five cities in Canada, and we were one of the first recipients of that and I think that demonstrates the breadth of culture in our community.

1607 The final point we would like to make is that we really feel that time is of the essence. We have been working hard to see this introduction of CBC service for almost three years. We are concerned that if a decision is not reached relatively quickly that another construction season will be lost and we will wait yet another year for CBC2 in Red Deer.

1608 Our respectful request is that an early and, hopefully, positive decision to this application can be made, so that CBC can proceed this fall -- we would very much like to see CBC service by the end of this year. We know the demand is there. It does meet your directive and it appears to us that opposition to this frequency has been resolved.

1609 Thank you very much for hearing us and it is very much appreciated today.

1610 THE CHAIRPERSON: Thank you, and welcome to our hearing, Mr. Wilson and Mr. Howell.

1611 Commissioner Cram?

1612 COMMISSIONER CRAM: You have, unfortunately, left me with the contemplation of thousands of people in Red Deer driving around all night so they can pick up the CBC2 signal.

--- Laughter / Rires

1613 COMMISSIONER CRAM: My first thought is that it is not available on the Internet. It is unfortunate that you can't even get a second -- or through cable?

1614 MR. HOWELL: It is available on cable, but most of the opportunity that we get to hear the radio is while we are in transit. In the evening, there are obviously times when we can do that but it is usually --

1615 COMMISSIONER CRAM: So it is in your car that it is not available?

1616 MR. HOWELL: Yes, absolutely. And of course, those that are not hooked up to cable do not have any opportunity.

1617 COMMISSIONER CRAM: Yes. It would be on ExpressVu also, though, would it not? No? It's not? Okay.

1618 MR. HOWELL: That's a little too high-tech for me.

1619 COMMISSIONER CRAM: They carry Galaxie, which is owned by CBC, but...

1620 Anyway, save your gas. I realize you are desperate. Listen to cable.

--- Laughter / Rires

1621 COMMISSIONER CRAM: Thank you very much.

1622 THE CHAIRPERSON: Thank you very much for appearing and we thank you for your presentation.

1623 Did the CBC -- were you going to answer a question? I saw you jump up -- about the presence of CBC2 --

1624 MR. SAVAGE: Yes, about the availability of CBC Radio Two, it is on cable. It is also available on the direct-to-home satellite services both --

1625 THE CHAIRPERSON: If you take the Galaxie service.

1626 MR. SAVAGE:  -- if you take those. Unfortunately, in reality, they are usually available in only one room of the house, and our own research indicates that people move through the house, especially in the morning, listening to various radios --

1627 THE CHAIRPERSON: And certainly not in your car.

1628 MR. SAVAGE:  -- and the hook-up is not usually very conducive to that.

1629 THE CHAIRPERSON: Well there, you have learned something new.

1630 Thank you very much.

1631 We will now adjourn for today and reconvene at 9:00 tomorrow morning with the intervention from Mr. Tarleck. We will proceed then with Phase IV of the hearing.

1632 We wish you all a good evening.

--- Whereupon the hearing adjourned at 1657, to resume

on Thursday, June 19, 2003 at 0900 / L'audience

est ajournée à 1657 pour reprendre le jeudi

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