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 3

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

Ronald Williams 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 20, 2003 Le 20 juin 2003

Volume 3

TABLE OF CONTENTS / TABLE DES MATIÈRES

PAGE / PARA

PHASE I

PRESENTATION BY / PRÉSENTATION PAR:

Global Communications Limited 633 / 3790

Edmonton Radio Limited 702 / 4266

Edmonton, Alberta / Edmonton (Alberta)

--- Upon resuming on Friday, June 20, 2003

at 0900/ L'audience reprend le vendredi,

20 juin 2003 à 0900

3783 THE CHAIRPERSON: Order, please.

3784 Good morning and welcome to our hearing.

3785 Mr. Secretary, please.

3786 MR. LEBEL: Thank you, Madam Chair.

3787 The next application is an application by Global Communications Limited for a licence to operate an English language FM commercial radio station in Edmonton. The new station would operate on frequency 99.5 megahertz on channel 258C with an effective radiated power of 100,000 watts.

3788 Mr. Peter Viner will introduce his colleagues. You have 20 minutes to make your presentation.

3789 MR. VINER: Thank you.

PRESENTATION

3790 Good morning, Madam Chair, Commissioners and Commission staff. My name is Peter Viner and I am the Executive Vice-President of CanWest Global Communications with a responsibility for the company's radio development. Commissioners, we are pleased to appear before you today to present our application for an easy listening station to serve Edmonton.

3791 With us today, to my left, is Charlotte Bell, Vice-President of Regulatory Affairs. Next to her is Mr. Ross Porter, Vice-President of Programming for CJZZ and COOL-TV. Mr. Porter recently joined our company and brings with him an extensive knowledge of music of all kinds, including jazz, for which he is regarded as a leading authority in the country.

3792 In the row behind us, at the far left is Chris McGinley, our General Manager for Alberta, who is also a chartered accountant and is here to address our financial questions. Next to her is Mr. Ken Johnson, Vice-President of CanWest Media Sales; and next to him is Mr. David Oakes, President of Oakes Research, who conducted our demand survey.

3793 I would like to take a moment to talk about our relatively recent entry into radio in Canada and how our proposal for a new easy listening station in Edmonton fits with our radio plans.

3794 With the recent launch of our jazz station in Winnipeg, and more recently, the licensing of a new contemporary hit station to serve the Kitchener-Waterloo region, we have begun to move forward in the radio sector in Canada. The proposal before you today represents another important building block in our plan to establish a new radio voice in Canada.

3795 It also provides an excellent opportunity for Canadian talent to benefit from the strength of our cross-promotion capabilities over a number of media platforms, including television, print and the Internet. CJZZ-FM Winnipeg is on the air and making inroads in the city where it all began for CanWest. The upcoming launch of COOL-TV, our digital specialty channel dedicated to jazz, blues and world music, will help solidify our place in the Canadian jazz scene and provide additional cross-promotion opportunities between stations for the benefit of Canadian artists.

3796 We are here today looking forward to continued growth in the radio sector with our proposal for Northern Light, a distinctive new FM radio station to serve Edmonton.

3797 This application reflects our commitment to serve and support local communities and local talent in the Edmonton area as well as across Alberta and throughout Canada. By approving this proposal you will help us create a forum to support, nurture and promote new and emerging easy listening, folk, jazz, blues and world beat artists. At the same time, we will be providing an attractive alternative to listeners in the Edmonton market.

3798 I would now like to ask Charlotte Bell to tell you more about our application.

3799 Charlotte.

3800 MS BELL: Thank you, Peter.

3801 This application fully responds to the Commission's selection criteria for licensing new stations.

3802 Northern Light will be a quality service providing a high level of diversity to the Edmonton marketplace.

3803 It will provide significant exposure for both new and emerging and more established Canadian easy listening, folk, blues, jazz, and world beat artists.

3804 Northern Light will provide a new reflection of the local cultural scene.

3805 It will make a significant contribution to Canadian talent development.

3806 And Northern Light will do all this while having a minimal impact on incumbents.

3807 Commissioners, we began this exercise by asking Oakes Research to survey Edmonton residents in order to assess their musical interests and tastes. The research clearly told us that there was demand for an easy listening music service in this area.

3808 Our Canadian content levels exceed Commission regulatory minimum requirements. Northern Light has committed to broadcast a combined minimum of 40 per cent Canadian content in Categories 2 and 3. Our commitment to Canadian Category 3 artists is especially significant because it is often difficult for them to get air play on mainstream, commercial radio.

3809 Finally, our comprehensive Canadian talent development proposal will direct more than $2.6 million over the period of the licence term to local and national easy listening, jazz and jazz-related artists. In addition, we have committed $175,000 to the Aboriginal Multi-media Society of Alberta to help fund a new aboriginal journalism program they are developing with the Northern Alberta Institute of Technology (NAIT) that would combine classroom time with practical, hands-on experience. In total, our commitment in these two areas is significant and is $2.8 million over seven years.

3810 MR. PORTER: Commissioners, the easy listening format of today serves the needs of the modern, mature listener. With a distinctive blend of consistent, calm, relaxing music styles, the modern easy listening format as developed by Northern Light will offer a completely new offering to Edmontonians, providing listeners with a local and distinctively relaxing service. In fact, more than two-thirds of the respondents to our demand survey agreed they wanted a new Edmonton radio station that offers this type of music.

3811 The musical tastes of today's easy listening audience are unique. While they enjoy some instrumental musical selections, they were raised primarily on vocal music and by extension they have developed an appreciation for the softer, melodic sounds of calm, relaxing vocal music. Currently, however, there is no local station in Edmonton devoted to this sound.

3812 Demand for this service is also evident from the overwhelming support we received from more than 260 individuals who signed letters of support, providing a strong basis for demand.

3813 Northern Light will offer a modern, easy listening format that will be truly unique and distinct to Edmonton, and indeed, to Canada. Using a blend of easy listening favourites, softer jazz-related music styles, and newer soft musical selections, the station will provide a "calm and relaxing" music format.

3814 In fact, the blending of all forms of these softer styles allows this format to appeal to the widest possible audience within the 35 to 64 age group. The diversity of artists represented in this blended genre includes Michael Buble, Barry Manilow, Mark Jordan, Neil Diamond, Barbara Streisand, Gordon Lightfoot, P.J. Perry, Herb Alpert, Loreena McKennit and Moe Koffman.

3815 Our specialty programming will provide access to radio play for Canadian artists performing in specialty music styles including jazz, blues, instrumental and world beat.

3816 Our approach to news, entertainment, and information programming will be decidedly local. While Northern Light will benefit from the news gathering and cross-promotional resources of our other media outlets, the station will have its own dedicated news department, including a news director who will be responsible for decisions relating to the news content of the station.

3817 Beyond all of this, our application has proposed a sizable and significant commitment to spending on Canadian talent development, more than $2.6 million over the licence term, to help nurture, develop and expose Canadian artists from the easy listening, softer blues, softer folk, softer world beat, jazz and jazz-related music styles that we have described in our application.

3818 Our plan includes a local talent search that will result in the creation of 14 professionally produced CDs by the end of our licence term, funding for additional performances for finalists of our local talent search, training for emerging radio journalists and music talent, and a significant contribution to FACTOR to help fund local, provincial and national artists.

3819 Music is inherently diverse and we have proposed a format that embraces a holistic approach in its sound. As such, we will ensure that the station promotes openness and embraces the inclusion of cultural differences through its music, spoken-word programming aud community support. As part of our Canadian talent development initiatives, and specifically our local talent search, we will encourage participation from artists representing a variety of cultural groups. and will ensure that our judging panel is representative of the cultural community.

3820 We will also ensure that at least half of the annual scholarships to attend post-secondary programs in support of music and/or radio broadcasting education will be awarded to students from visible minority or Aboriginal groups.

3821 Commissioners, this proposal fully meets your licensing criteria and meets the needs of an under-served audience in search of a dedicated easy listening, relaxing music service on their Edmonton FM dial. Our short video presentation will give you a glimpse of what the station will sound like.

Video presentation / Présentation vidéo

3822 THE CHAIRPERSON: Thank you and welcome, Mr. Viner and your colleagues. Commissioner Cram has questions for you.

3823 COMMISSIONER CRAM: Thank you. Good morning.

3824 I was listening to that and I said to my colleague, Commissioner Langford, that we are lucky we didn't see this this afternoon, at about 3:00 in the afternoon, we might all be dozing off, it was a -- so it is for the modern, mature listener creating a mellow mood.

3825 I guess my first question is what is the real tactic? To create a kinder, gentler Edmonton or a kinder, gentler Alberta? That was a joke.

3826 MR. VINER: No. It was actually a kinder, gentler Commission.

3827 COMMISSIONER CRAM: Ah, thank you.

3828 Anyway, I will be starting -- I thought we already were.

3829 MR. VINER: You're wasting your time sport.

--- Laughter / Rires

3830 COMMISSIONER CRAM: I will be starting off with format. When we are looking at all of the applications here in Edmonton in terms of your target demo there are two others who have applied for the same sort of demographic, and that is Edmonton Radio and Rawlco. Can you tell me how your format differs from theirs?

3831 MR. VINER: Yes. I mean ours is what we would like to describe as a new easy listening format as opposed to what many of us remember as the old easy listening format which had a -- was pronounced or at least had a -- was relying heavily on instrumental. And ours is a blend, it's a fusion, of a number of formats including jazz. So we think ours is quite distinctive, but I will ask our music expert, Ross Porter, to explain.

3832 MR. PORTER: I think the music format reflects the way that our target demo buys music. I think if you were going to go and look at their CD collection you wouldn't find that it was limited to one musical genre. You would find that there were smatterings of folk, of world beat, of blues, of jazz, of softer styles of pop and rock. I think that's the thing that gives us a really distinct nature is the blending of the musical styles.

3833 COMMISSIONER CRAM: So if I look at Rawlco versus your easily listening, it appears from the play list you gave to us with your deficiency letter in March that there is about 30 per cent Category 3, and it appears that combined with what you had again in your play list there was a lot of Contemporary Category 2, so it sort of looks 60 per cent like Rawlco, the smooth jazz. Am I fair in saying that?

3834 MR. PORTER: No.

3835 COMMISSIONER CRAM: Okay. Tell me why not.

3836 MR. PORTER: I think I would go back to what I said previously about the blending. I also think that it's the deep commitment that we have to developing the Canadian aspects of it and I think incorporating the spoken word. I think that's one of the areas that we are going to be very distinct in terms of how all of this is bridge, how all of it's brought together. It's going to have a very distinct personality in terms of the people that are speaking about the music.

3837 COMMISSIONER CRAM: So even though the play list may be -- 60 per cent of the play list may be similar, what is going to be different is the mood and the spoken word. Is that what you are saying?

3838 MR. PORTER: Yes. Absolutely.

3839 MS BELL: Commissioner Cram, that's part of it. When we look in fairness at the difference between the play lists, a jazz station would be devoting most of its Category 3 music to jazz and jazz sub categories. Jazz would only be one of four or five sub categories in Category 3 that we would be using. So I think the blend and the percentage of jazz that would show up on this station would be quite a bit lower than what you would see on the Rawlco proposal.

3840 COMMISSIONER CRAM: Are you talking pure jazz or are you talking what is commonly used in the smooth jazz, because smooth jazz does include, doesn't it, a fair bit of that? It's Category 3, you know, all --

3841 MS BELL: It still is Category 3 and if 30 per cent of our schedule is Category 3 and the rest is Category 2, then in fairness -- and the percentage of jazz from Category 3 on our service would be a lot lower than what you would find on the Rawlco station. I just think there is a distinction.

3842 COMMISSIONER CRAM: Yes. But smooth jazz includes all Category 3.

3843 MS BELL: That's right.

3844 COMMISSIONER CRAM: And so if we looked at your play list, and that's what we did, and compared it to sort of the smooth jazz, it ends up that it is about 30 per cent of Category 3; and then we looked at your Contemporary 2, that you had in your 2, from your play list, and it looked like there was about 30 per cent overall that would be very similar to a smooth jazz or that would fit into a smooth jazz format.

3845 So what I'm saying is it looks to me like you're doing 60 per cent smooth jazz and 40 per cent something else, Category 2 less contemporary.

3846 MS BELL: I don't know that we would categorize this as a smooth jazz station. Under Category 3 we still have other categories, like folk, for example, that would find its way on this station, which I don't think would necessarily be a large proportion of what the Rawlco proposal would be.

3847 COMMISSIONER CRAM: You had something to say, Mr. Porter?

3848 MR. PORTER: It was said very well by Charlotte.

3849 COMMISSIONER CRAM: If we are looking at the -- what was the word -- modern, mature listener, how does your proposal, format-wise, present the best diversity and the best choice of format for Edmonton listeners, and that's compared to of course Edmonton Radio and the Rawlco proposal?

3850 MR. VINER: We arrived at this format selection after some extensive research, and it's the research that pointed us to this format, and I would ask Mr. David Oakes to expand on that.

3851 MR. OAKES: Thank you, Peter.

3852 There currently isn't a station that plays easy listening music in this market, at least specializes in it. There will be a number of cross-over artists that we will share.

3853 Now could I ask you a question? The 60 per cent duplication with Rawlco, was that by song or was that by artist?

3854 COMMISSIONER CRAM: No. It was just by sort of the sound of it. It wasn't specifically by artist, no.

3855 MR. VINER: Okay. Because we would categorize, say, Nat King Cole as soft pop where perhaps under Rawlco it might get put in a Category 3, so I'm -- but going back to the uniqueness of this format, there really isn't a station specializing in it in the Edmonton market right now.

3856 COMMISSIONER CRAM: I was curious because after reading the Rawlco application and they talked about the fact that smooth jazz is a protected reserve because it is a specialty so nobody else can get into their market, and then the older demographic having more money and sort of more professionals. So the real distinction between what you are proposing in terms of format is that, at least from a regulatory point of view, is that you are aiming at the over fifty demographic because they are relatively well off or should be, some of them are, but because you are not doing the specialty format it means you can change your format.

3857 MR. VINER: That may be from a regulatory point of view. That is not why we chose this format. We chose this format because we thought it had the broadest possible reach in the 35 plus category. We weren't concerned or interested necessarily in having a defensive, protected franchise. We were just conserving the broadest number of citizens of Edmonton in a format that was compatible with the interests of a 40 plus, 35 plus group. So that's how we chose it after we read, interpreted, Mr. Oakes research.

3858 COMMISSIONER CRAM: Moving into programming, how many hours of local programming do you anticipate?

3859 MR. VINER: I will ask Ross to expand on that.

3860 MR. PORTER: It will all be locally generated.

3861 COMMISSIONER CRAM: And spoken word, you said that the spoken word would be 25 per cent including commercials. So how much would be spoken word without commercials?

3862 MR. PORTER: Twenty and a half hours a week.

3863 COMMISSIONER CRAM: So 20 and a half hours over 126. Is that what I'm supposed to --

3864 MR. PORTER: The breakdown would be: total spoken word in news and information packages would be seven hours a week; total surveillance, this is spoken word outside of the newscasts, would be eight and a half hours a week; and total special programming, this is the spoken word component to it, would be five hours weekly, giving you a total of 20 and a half hours.

3865 COMMISSIONER CRAM: Okay. So newscasts, how long are they going to -- I'm sure Madam Chair is going to ask the individual who has his cellphone on to turn it off.

3866 Back to newscasts, when will they be and how long will they be?

3867 MR. PORTER: They will start at 6:00 in the morning and go until 6:00 p.m. Monday through Friday and then on Saturday and Sundays they will go from 6:00 in the morning until noon.

3868 COMMISSIONER CRAM: Until noon?

3869 MR. PORTER: Yes.

3870 COMMISSIONER CRAM: And on the hour?

3871 MR. PORTER: I'm sorry; say that again.

3872 COMMISSIONER CRAM: On the hour or on the -- every half hour?

3873 MR. PORTER: On the hour and then in the mornings there will be periodic updates approximately around half hour. As you structure the format of the clock, the plan is to have them at half past.

3874 COMMISSIONER CRAM: So in the mornings there will be, starting at six o'clock, hourly newscasts. How long will they be?

3875 MR. PORTER: In the mornings they will be approximately five minutes in length, and by noon it will be a news package that will be somewhere between 10 and 13 minutes. Now, I'm folding into this business news and entertainment.

3876 COMMISSIONER CRAM: Okay. So is it going to be five minutes and a half every hour until noon?

3877 MR. PORTER: Yes.

3878 COMMISSIONER CRAM: Okay. Noon is going to be a little longer and then five and a half minutes until 6:00 in the afternoon?

3879 MR. PORTER: Yes.

3880 COMMISSIONER CRAM: Okay. And then you say there will be little updates around the half hour.

3881 MR. PORTER: Yes.

3882 COMMISSIONER CRAM: And how long will they be?

3883 MR. PORTER: About 90 seconds.

3884 COMMISSIONER CRAM: Ninety seconds. Okay.

3885 And on the weekend what will happen in terms of news?

3886 MR. PORTER: It will be on the hour.

3887 COMMISSIONER CRAM: And how long will they be?

3888 MR. PORTER: Between three and five minutes.

3889 COMMISSIONER CRAM: Six to six?

3890 MR. PORTER: Six to noon.

3891 COMMISSIONER CRAM: Six to noon.

3892 Your application says there will be a news director to supervise a team of journalist announcers. How many will be in the team?

3893 MR. VINER: We expect there will be a news director and three journalists -- and three journalists.

3894 COMMISSIONER CRAM: My hearing must be going. Thank you, Mr. Viner.

3895 Then there is the Edmonton Report and the Edmonton Report Weekend Edition. How is this going to be put together?

3896 MR. VINER: I will ask Ross to elaborate on that.

3897 MR. PORTER: The news director will be the editor-in-chief for the programming. The content will come from the three reporters but will also come from some of the on-air staff if there are stories that their -- interviews, contributions that they would like to make to the programming that can be folded into it.

3898 COMMISSIONER CRAM: The reason I was asking this is it appears that in Montreal CKGM has something like a simulcast or a tape from the Global TV newscast so it won't be similar, Edmonton Report will not be similar?

3899 MS BELL: No.

3900 COMMISSIONER CRAM: So Edmonton Report and the weekend one will be totally generated within the station itself.

3901 MR. VINER: That's correct.

3902 COMMISSIONER CRAM: In terms of synergies you talked about synergies with CITV here in terms of news gathering. Any thoughts of synergies with the newspaper?

3903 MR. VINER: Yes, there certainly would be some promotion opportunities with the newspaper and with the television station, synergies in terms of beyond that are primarily promotion. There are some synergies in economies of scale in terms of what I would call the back shop, which we have calculated for the purposes of the application.

3904 COMMISSIONER CRAM: So payroll is usually the --

3905 MR. VINER: Payroll, human resources, that kind of thing, engineering.

3906 COMMISSIONER CRAM: In terms of the synergies with CITV, the same kind of thing?

3907 MR. VINER: Yes. That's correct. I mean I think the advantage of owning the other assets is primarily promotion, the ability to promote the station --

3908 COMMISSIONER CRAM: Cross-promotion, yes.

3909 MR. VINER: Yes. The ability to promote artists, to promote venues.

3910 COMMISSIONER CRAM: So no programming content synergies with CITV?

3911 MR. VINER: None are contemplated, no.

3912 COMMISSIONER CRAM: And overall, I think you said, Mr. Porter, that it will all be live programming. Did you mean --

3913 MR. PORTER: No. I said that it would be local programming.

3914 COMMISSIONER CRAM: Local programming. So will the local programming be live?

3915 MR. PORTER: A goodly portion of it.

3916 COMMISSIONER CRAM: How much?

3917 MR. PORTER: The nature of some of the programming, because it requires guests and commentary to the written, you know, journalistically and presentation-wise, it's better to record these programs in advance, particularly if they are highly produced, so some of the programming of Northern Light Jazz and Northern Light Blues the Global Beat, those portions, those programs would be recorded in advance.

3918 COMMISSIONER CRAM: So those special programs that you talked about and referred to in your application, they would be pretaped but they again would be local.

3919 MR. PORTER: Yes. Now, just a footnote in this too, I mean we would certainly be interested in music from across the country that would go into this too, you know.

3920 COMMISSIONER CRAM: Oh, yes.

3921 MR. PORTER: Okay.

3922 COMMISSIONER CRAM: No. All I am worried about is that you are not talking voice-tracking from Winnipeg for 23 hours of the day. So would you be convolvating any voice-tracking during the night?

3923 MR. PORTER: From midnight until 6:00 in the morning, yes.

3924 COMMISSIONER CRAM: And what about the weekends?

3925 MR. PORTER: We would probably be live from 6:00 in the morning until noon, depending on when we were going -- when we put in the specialty programming that we were doing.

3926 COMMISSIONER CRAM: So then voice-tracking both Saturdays and Sundays and statutory holidays from noon to 6:00 a.m.?

3927 MR. PORTER: From noon until 6:00 in the afternoon, 6:00 p.m.

3928 COMMISSIONER CRAM: Voice-tracking?

3929 MR. PORTER: Yes.

3930 COMMISSIONER CRAM: And then 6:00 p.m. until midnight would be --

3931 MR. PORTER: We would have a prerecorded program in there. Once again, this depends on the scheduling and the availability of the staff, you know. I mean in my heart it would be great if we could be a station that was live 24 hours a day, but then there is the reality of making all of this work.

3932 COMMISSIONER CRAM: Based on your business plan though, what is going to happen from -- you said it will be -- on the weekends you said it will be voice-tracked from noon until 6:00 p.m. Based on the business plan you have in place now, what is going to happen from 6:00 p.m. on the weekends and statutory holidays until the next 6:00 a.m.? Is it going to be voice-tracked?

3933 MR. PORTER: On the weekends, from -- I am just checking the schedule here, yes, we will voice-track.

3934 COMMISSIONER CRAM: Canadian content, you said it will be 40 per cent combined commitment Category 2 and Category 3. Does that mean 40 per cent Category 2 and 40 per cent Category 3?

3935 MR. VINER: Charlotte, would you like to expand on that?

3936 MS BELL: The commitment was in fact to have a 40 per cent Canadian content overall combined for Category 2 and Category 3. That was our original commitment.

3937 COMMISSIONER CRAM: So at the end of the day it could mean that we would have 50 per cent Category 2 and 10 per cent Category 3 essentially?

3938 MS BELL: That's not our intention, but essentially, for all intents and purposes, it could turn out that way. That's not the intention here. If the Commission feels more comfortable with a separate commitment in both categories we are prepared to do that.

3939 COMMISSIONER CRAM: Okay. So you would accept a COL, either a 40 per cent combined commitment Categories 2 and 3 or separate COL's, 40 per cent Category 2 and a separate Category 3, 40 per cent?

3940 MS BELL: Correct.

3941 COMMISSIONER CRAM: On your CTD, first I wanted to talk about your letter from FACTOR that we go this morning. I am not sure. Were you listening to the Red Deer portion of this hearing?

3942 MS BELL: We are aware of the issue with the FACTOR letters, yes.

3943 COMMISSIONER CRAM: Of the which?

3944 MS BELL: We are aware of the issue that came up yesterday consider the FACTOR letters.

3945 COMMISSIONER CRAM: The incrementalism.

3946 MS BELL: Yes.

3947 COMMISSIONER CRAM: And you are aware that the way the present letter that you have from Ms Ostertag, it does not say the money would be incremental to the area and therefore apparently in accordance with what had happened before it may or may not be incremental to the area. So the 50 per cent of funds for Canadian artists from Alberta, in fact may not be incremental?

3948 MS BELL: Sorry. I guess I misunderstood. I believe the issue yesterday was to make sure that any money that wasn't spent in one year, if it was being rolled over in the following year would be spent in Alberta.

3949 Our intention is this money has to be incremental. And 50 per cent of this is to be spent in Alberta, and that's our understanding and that is the undertaking that we believe we have from FACTOR.

3950 COMMISSIONER CRAM: Yes. Ms Ostertag gave a letter to Newcap actually saying that it would be incremental to the moneys otherwise spent and it doesn't say that in your letter.

3951 MS BELL: Okay. We can have that letter revised and refiled with the Commission by the end of the day if that -- if you require.

3952 COMMISSIONER CRAM: Moving on to the other CTD, your letter of March 4 talked about the bursaries but it didn't seem to be fleshed out and so it was -- where we are now is $60,000 a year but we don't know which institutions and the amount per institution per year. Now, you did talk about that today I think. Oh, you talked about the AMMSA money.

3953 MR. VINER: Excuse me, Commissioner Cram. We have specified I think the institutions. It is the Grant MacEwan College, the Northern Alberta Institute of Technology and/or Alberta College. What we have not done is specified the amounts per.

3954 COMMISSIONER CRAM: Which one.

3955 MR. VINER: We have had discussions with those institutions and our determination at this stage is that we will, in consultation with them, allot the money based on their needs in terms of what they tell us. But it is a commitment and it is a commitment to those three institutions.

3956 COMMISSIONER CRAM: So when you allocate the money, it won't be based on -- I don't know -- number of students in media training, it will be based on what they say they want?

3957 MR. VINER: No. I mean we are certainly not going to give it out quite that way. It will be a determination of what we think is the greatest need and the greatest return for the institution and for the radio industry.

3958 COMMISSIONER CRAM: For the particular institution involved.

3959 MR. VINER: Yes.

3960 COMMISSIONER CRAM: You are not sort of -- like, in my mind probably a better way to do it would have been to have an open bursary and just have people apply for it, but --

3961 MR. VINER: Well, that may be one of the recommendations from the schools, but there may be specific projects that relate or specific needs that we may be able to assist them with. You know what? This will be reviewed annually, so --

3962 COMMISSIONER CRAM: And there was also this reference to -- on page 8, of ensuring that half of these scholarships would be awarded to students from a visible minority or aboriginal groups.

3963 MR. VINER: That's correct, and that's been part of our discussion with the institutions.

3964 COMMISSIONER CRAM: So you don't have any sort of rules in place, but this will happen. Is that what --

3965 MR. VINER: All of the institutions have agreed to it and welcome that initiative so -- if it's a question of formulating on an annual basis how the money will be split.

3966 COMMISSIONER CRAM: Have I got it right? You have talked to Grant MacEwan, there was a list here, of the university and were there two more?

3967 MR. VINER: Yes. There is the University of Alberta and Northern Alberta Institute of Technology.

3968 COMMISSIONER CRAM: Yes, NAIT. Yes.

3969 MR. VINER: NAIT.

3970 COMMISSIONER CRAM: If you get the licence, then what you will do is you will talk to them and say, you have got $60,000 a year, and how do they propose you would disburse it. Is that what I'm hearing?

3971 MR. VINER: Well, we have already talked to them and told them that this was a possibility and asked them to think about how they would use -- or what their needs would be for a portion of this money, but essentially that's it; we will sit with the institutions every year and determine how to allocate the money.

3972 COMMISSIONER CRAM: And it would be in terms of some media training. It would be in the area of media training, would it?

3973 MR. VINER: Primarily, yes.

3974 COMMISSIONER CRAM: Okay. What else?

3975 MR. VINER: When I say "primarily" I mean it's media and music.

3976 COMMISSIONER CRAM: And music.

3977 MR. VINER: Yes.

--- Pause

3978 COMMISSIONER CRAM: Mr. Viner, could you turn your volume up a couple of decibels when you are talking. No, I don't think that's --

3979 COMMISSIONER LANGFORD: I think you have to do it physically.

3980 MR. VINER: My volume. Oh, I'm sorry. I was blaming it on this.

3981 COMMISSIONER CRAM: You have to do it on your own. Commissioner Langford is having --

3982 COMMISSIONER LANGFORD: Yes. I apologize. I am sitting under a vent here and I am just not quite catching you and so I would like to hear the whole thing. Thanks.

3983 COMMISSIONER CRAM: Then there were the money for festivals and that's $75,000 a year. I know there was a list of festivals that you considered giving money to. Have you firmed that up any more in terms of which ones you would give it to, how much you would give every year to individual ones?

3984 MR. VINER: No, we have not. The list was really to indicate the breadth of festivals or the breadth of opportunities.

3985 Charlotte, do you want to --

3986 MS BELL: There were five festivals that actually have a music component in the city. Some of them are big, some of them are smaller. We have talked to every single one of them.

3987 In addition to that, we have also spoken to the people at the Heritage Days. We do do some work with them with our television station and they are also quite excited about this proposal.

3988 So our intention would be of course because of the nature of these -- some of the festivals draw eight or 9,000 people and others closer to 25,000. They all feature Canadian artists and our intention for this money is to be divided among these festivals or others that may come up or may emerge through the years in order to fund a showcase for Canadian artists. That is what the money is to be used for.

3989 COMMISSIONER CRAM: So, for example, the Jazz Festival is this weekend and you would find a jazz musician, Canadian certainly, and you would pay for his performance within the Jazz Festival. Is that the concept?

3990 MS BELL: Absolutely. It is to fund performances of Canadian artists.

3991 COMMISSIONER CRAM: Would you be giving the money then to the festivals so they could hire somebody or would you actually be hiring the talent, the Canadian talent, yourself? How would you ensure it would go to Canadian talent?

3992 MS BELL: I think it would go to the festival with the condition that the money is to be used to showcase Canadian artists, so it funds the performance, whatever technical costs or payment to the artist for that particular performance if that's how the money would be spent.

3993 COMMISSIONER CRAM: Okay.

3994 Then there is AMMSA. Initially you were going to give them $50,000 a year, and then later when we -- there was a discussion about whether it was true CTD or frankly just as a valuable contribution it was changed to $25,000. Is that what you referred to on page 5 of your introduction today?

3995 MS BELL: Yes, it is.

3996 COMMISSIONER CRAM: So the money will go to AMMSA to fund a journalism program for aboriginals with NAIT?

3997 MS BELL: Originally, when we included this commitment, and I can appreciate that normally the Commission would not have accepted this as a Canadian talent development initiative, we have had a number of discussions with them, and through those discussions we found out that they were working on or they were at the beginning of having discussions with NAIT to develop a journalism program through NAIT for aboriginal people only, and that this program -- their intention is that the program would include classroom time and practical hands-on experience in the media.

3998 We thought this was a very worthwhile initiative. Of course they are at the beginning of this and they are looking for funding to fund the development of this initiative, which is apparently one of their long-term objectives and they are determined to see this through. So we felt that instead of just giving them $25,000 to fund their other ongoing initiatives that we would like it to be directed here because we feel that this is very worthwhile for Alberta aboriginal people.

3999 COMMISSIONER CRAM: So you would give them $25,000 a year to work on the development of this program.

4000 MS BELL: That's correct.

4001 COMMISSIONER CRAM: I guess what I can't -- I am having problems thinking how we can measure it in terms of -- I can see giving $25,000 for a teacher or computers, but how do we measure the development of a program? I mean it is all very fine and good for you. You can stroke a cheque for $25,000 to AMMSA, but how do we measure that the program is being developed and that the money is going towards that?

4002 MS BELL: I think that conditional upon the money being given to them perhaps we could ask them to file a report with us, an ongoing, yearly report, progress report in terms of how they are spending the money and how they are progressing in this initiative.

4003 But I think in fairness we plan on working with them in a number of areas connected to this and we will be having ongoing discussions with them to make sure this money is spent the way we have proposed.

4004 COMMISSIONER CRAM: So if at the end of the day we are not satisfied with the descriptions you have given of your CTD, would you be willing to redirect the moneys to other eligible CTD initiatives?

4005 MS BELL: Yes.

4006 COMMISSIONER CRAM: Moving on to revenue, in year one you say 25 per cent of your revenue will come from existing stations. Given that there is no similar station in Edmonton, where do you believe you would be getting your revenues? What stations would you be getting them from?

4007 MR. VINER: Well, generally speaking, new radio entrants get a portion of their radio revenue from existing radio advertisers. It's very difficult to pinpoint, but generally speaking it would be those that wanted the audience profile we would attract or the demographic we attract. I don't think it's possible for us to pinpoint exactly the station. This is 25 per cent of our first year's revenue. It's not a huge amount of money.

4008 But I'm happy to have Ken Johnson elaborate if you have more questions on revenues.

4009 COMMISSIONER CRAM: I was just trying to figure out how you figured that out, that 25 per cent. What you are really saying is an educated guess.

4010 MR. VINER: That's exactly right. I mean, this is estimates arrived at based on our experience and based on the consultant's input.

4011 COMMISSIONER CRAM: Based on your knowledge of the Edmonton market, do you believe we could licence more than one radio station?

4012 MR. VINER: It appears to us the market is quite -- the radio market is quite robust and I would think that the market could absorb probably two stations, yes.

4013 COMMISSIONER CRAM: Could it absorb two stations -- certainly you would not think it could absorb two if there were similar formats.

4014 MR. VINER: I think that would make it very difficult, yes.

4015 COMMISSIONER CRAM: And certainly if they were similar demographic targets.

4016 MR. VINER: I think that would handicap both, yes.

4017 COMMISSIONER CRAM: I didn't --

4018 MR. VINER: I think that would handicap both stations, yes. It would seem logical to licence it, you know, one younger and perhaps one 35 plus.

4019 COMMISSIONER CRAM: The modern mature listener. I m in the demographic but I am not saying where.

4020 MR. VINER: So am I actually.

4021 COMMISSIONER CRAM: I am not saying where. I think I am in the younger part.

4022 I want to talk about concentration. I know in your letter of March 4 you talked about the national market, but radio is a very local medium and in Edmonton is it fair to say that you have 43 or 45 or 40 per cent of the TV revenues?

4023 MR. VINER: I don't think it's quite that high, but I will ask Mr. Johnson to --

4024 MR. JOHNSON: It's about 26 per cent of the revenues, the television revenues in Alberta.

4025 COMMISSIONER CRAM: No. I'm talking Edmonton.

4026 MR. JOHNSON: It would be similar to that in Edmonton as well.

4027 COMMISSIONER CRAM: Twenty-six per cent --

4028 MR. JOHNSON: Yes, that's the number we have.

4029 COMMISSIONER CRAM:  -- of the advertising revenues in Edmonton?

4030 MR. JOHNSON: Television revenues. Television revenues.

4031 COMMISSIONER CRAM: Television revenues.

4032 MR. VINER: Well, you have got CBC, the A-Channel and CTV counting for the balance.

4033 COMMISSIONER CRAM: And what about "The Journal" in terms of total circulation?

4034 MR. VINER: The circulation of "The Journal", it reaches about -- I have got it here somewhere.

4035 COMMISSIONER CRAM: How would be 60-some per cent?

4036 MR. VINER: Yes. That's correct. Yes, it's about 63 per cent.

4037 MR. JOHNSON: Commissioner Cram, it's 64 per cent. I have that number. Sorry.

4038 COMMISSIONER CRAM: Yes. So how, if we licensed the radio station, would this add to diversity in the Edmonton market?

4039 MR. VINER: It adds to diversity by its format I think. It adds diversity by the fact that we are obviously a new owner.

4040 COMMISSIONER CRAM: One second, I missed the last -- you have got to turn up your volume again. Sorry.

4041 MR. VINER: Sorry. We are a new entrant into the marketplace in the radio field. In fact, though, when you -- you know this is -- the radio station is not a significant -- it doesn't capture a significant audience versus the other two or significant revenues. In fact, when you add the estimated revenues to what we currently capture in the marketplace, our share of advertising sharing goes down for the market.

4042 COMMISSIONER CRAM: So it's so small it doesn't matter that it doesn't -- in terms of diversity of editorial view?

4043 MR. VINER: Well, the editorial view will be quite separate and distinct from anything else in the market and I think that adds diversity. But I thought you were going in terms of advertising spend; I'm sorry.

4044 When you add the $41 million or $43 million of advertising in the market to the total market and you add our anticipated first year estimate, CanWest's share of advertising in Edmonton goes down.

4045 COMMISSIONER CRAM: And you add diversity because it's a new format?

4046 MR. VINER: That's correct.

4047 COMMISSIONER CRAM: But again, that is sort of not diversity of voice, it's just diversity of the music that is being played.

4048 MR. VINER: Well, this is a music application.

4049 COMMISSIONER CRAM: If we gave you a licence, how would that impact other incumbents in the market in terms of advertising revenue? Would it not give you a fairly huge competitive advantage?

4050 MR. VINER: No, not necessarily. We are obviously going after an audience that we believe is underserved. The advantage we would have, if any, would be cross-promotion.

4051 COMMISSIONER CRAM: Exactly.

4052 MR. VINER: Most stations have formal or informal cross-promotion arrangements with either the Sun newspapers or the CanWest papers or the A-Channel so it's not any different than what currently exists.

4053 COMMISSIONER CRAM: What about selling advertising?

4054 MR. VINER: What about...? I'm sorry?

4055 COMMISSIONER CRAM: What about selling advertising? Like, you could cover all three mediums.

4056 MR. VINER: That's true, but in fact you are, generally speaking, on a local basis, covering very different advertisers, and advertisers buy it for very different reasons. Television is bought primarily for brand and the newspaper is bought primarily -- the advertising is bought for reach and also for brand. Radio is bought primarily for tactical reasons and it generally attracts an advertiser who has less money. It is often a first time advertiser or an advertiser that is migrating up from flyers or directories. So it is not an unfair advantage in that sense.

4057 COMMISSIONER CRAM: This is all predicated on if we gave you the licence. What would you say if we would require structural separation between the radio and the television and newspaper, meaning a separate board, the whole --

4058 MR. VINER: A separate which...? I'm sorry?

4059 COMMISSIONER CRAM: Board. Board of directors.

4060 MR. VINER: I think there are some elements or some safeguards we could live with. You know, when I think again, we must remember that this is a music application. It is not a news service. There is not a -- it's very different in terms of its -- and would be very different in terms of its influence and its appeal but, you know, if necessary, and reluctantly, we would look at some safeguards, yes.

4061 COMMISSIONER CRAM: The question was, what would you say if we required you to have structural separation?

4062 MR. VINER: There are some structural separation that we could live with. The newspapers do not have a separate board from the television stations and I would think it would be awkward and unnecessary for the radio station to have a separate board.

4063 COMMISSIONER CRAM: So you would say no?

4064 MR. VINER: I think I would say no to that.

4065 COMMISSIONER CRAM: What if we required, as we did in Winnipeg, a separate newsroom director, journalists between both radio and TV and radio and newspaper?

4066 MR. VINER: I think we have offered that in our application.

4067 COMMISSIONER CRAM: What would you say to -- and in fact you said it in Montreal given the concentration -- that there would be -- that you would agree to a code of conduct similar to TVA-QMI, Decision 2001-384.

4068 MR. VINER: I'm going to ask Charlotte to respond to that because I think she responded to that in Montreal.

4069 MS BELL: I'm sorry; 2001-384. Our renewal was 201-458. I'm not sure --

4070 COMMISSIONER CRAM: No. In Montreal, on the radio application you said you would agree to a code of conduct similar to the TVA-QMI in Decision 2001-384.

4071 MS BELL: I apologize, but I don't recall what the specifics are of that code of conduct. If you could remind me.

4072 COMMISSIONER CRAM: I tell you what, I will give you the decision and you can then get back to us in phase four.

4073 MS BELL: Perfect.

4074 MR. VINER: Thank you.

4075 COMMISSIONER CRAM: The CBSC Journalistic Independence Code only talks about TV and paper. Would you agree to extend it to radio?

4076 MS BELL: Yes.

4077 COMMISSIONER CRAM: Now, you have asked for the frequency of 99.5 megahertz and then your second choice is 102.9. Would you agree to any other frequencies or would they be acceptable to you?

4078 MR. VINER: We have not looked at any other frequencies, but based on their suitability, yes, we would.

4079 COMMISSIONER CRAM: Would there be any financial implications in terms of moving from your first choice to your second choice or to any others?

4080 MR. VINER: It's unlikely. Charlotte?

4081 MS BELL: Our engineer has looked at the alternative frequency from a preliminary perspective. We don't think there is any impact on the financials, but we would have to do more work to make sure that we would have the same, pretty much the same coverage area.

4082 COMMISSIONER CRAM: Okay.

4083 In your deficiency letter, at page 15, the one of March 4, you refer to and were talking cultural diversity. It is a response to question 14, the second paragraph, the second sentence.

--- Pause

4084 COMMISSIONER CRAM: Have you got it?

4085 MS BELL: It's the March 4 letter?

4086 COMMISSIONER CRAM: Yes.

4087 MS BELL: What was the question number?

4088 COMMISSIONER CRAM: Fourteen.

4089 MS BELL: Fourteen. I have it now.

4090 COMMISSIONER CRAM: The reference is:

4091 Can you explain what that means?

4092 MS BELL: What we are talking about are the relationships that we are in the process and have started to build with a variety of groups in each of the markets where we operate stations.

4093 As we reported to the Commission in February when we came to discuss our cultural diversity plan and initiatives, one of our main goals is to build more bridges with all of these groups, have meet and greet sessions, have ongoing dialogue with them. This is basically what we are doing now and we are going to continue to do this and it would extend of course to any radio holdings that we have.

4094 COMMISSIONER CRAM: So how are you working closely with them?

4095 MS BELL: I could ask Chris McGinley, actually, who is a general manager in Alberta, who could give you some examples of what she is doing.

4096 MS McGINLEY: Thank you. We have a database that we have developed of the various cultural groups within Edmonton, and we have met with them to have an open house to communicate to them how they can get a hold of us on issues and events.

4097 We have a daily out there bulletin board to provide the various groups with an opportunity to inform the community of events that are coming up. We provide approximately 33 hours of local news per week for which we have an opportunity to cover the various events that hit the ethnic groups.

4098 And that pretty much summarizes it.

4099 MS BELL: In terms of employment also, in each of the markets where we operate, and with the cultural and ethnic groups in each of those markets, we are sending our job postings, any external job postings to them so that they can either post them on their Web sites or make members of their associations aware, and again it is a matter of communicating and building bridges.

4100 COMMISSIONER CRAM: Ms McGinley, how many people in the four designated groups do you have on air on TV in Edmonton?

4101 MS McGINLEY: Three.

4102 COMMISSIONER CRAM: And how many do you have off air on staff?

4103 MS McGINLEY: Eight.

4104 COMMISSIONER CRAM: Out of...? Out of how many?

4105 MS McGINLEY: Approximately 150 employees.

4106 COMMISSIONER CRAM: In your supplemental brief, on page 13, you talked about working with Edmonton's aboriginal community. I don't know if you heard yesterday, Mr. Cardinal was saying by the year 2014 50 per cent of the school population will be First Nations, and so the term in your supplemental brief is:

4107 You then go on:

4108 I always have problems with that word that is phrased in the future.

4109 How many aboriginals do you have on staff, Ms McGinley, in Edmonton?

4110 MS McGINLEY: We do not have any in Edmonton who are aboriginal on staff.

4111 COMMISSIONER CRAM: How in the past have you sought out stories about the aboriginals?

4112 MS McGINLEY: What we have done is we have, through our local news, we have maintained relationships with the various community leaders and have provided them the opportunity and communicate with them to ensure that their stories are brought forward on our extensive local news on a daily basis.

4113 So, most importantly, we know who the community leaders are and it is primarily through our news department and our news director who manages those relationships to ensure the stories get brought forward.

4114 COMMISSIONER CRAM: Can you tell me a positive story that you have aired about aboriginals within the last month?

4115 MS McGINLEY: Early this week we met with the Minister of -- I had her name down, Van Cusen, the Minister of Aboriginal Programs, because Aboriginal Awareness Day is forthcoming and we had her on the news for an interview.

4116 COMMISSIONER CRAM: And what about the paper. Do you know how many aboriginals you have on staff at the paper?

4117 MS BELL: I apologize; we don't have those numbers with us. We can get that number for you, if you would like.

4118 COMMISSIONER CRAM: And give me the total, the total number of staff and the total number of aboriginals.

4119 MS BELL: Sure.

4120 COMMISSIONER CRAM: Thank you, Madam Chair. Those are all my questions. Thank you.

4121 THE CHAIRPERSON: Commissioner Langford.

4122 COMMISSIONER LANGFORD: Thank you, Madam Chair.

4123 I must say I am having trouble -- I feel like I have got jet lag listening to Mr. Porter at this time of the day. It seems I was curled up listening to him last night with a mug of Sleepytime Tea and I am having trouble shaking the feeling, but it is pleasant to see you and finally see what --

4124 MR. PORTER: We can turn down the lights, if you like.

4125 COMMISSIONER LANGFORD: Yes. Well, that would be great. It's always interesting to see what comes with the voice, so welcome to Edmonton.

4126 My question is about format. Of course it's free for anyone to choose whatever format they want, but you probably know, having reviewed the other applications, that after a lot of serious surveying and studying, the same sort of undertaking you people went through, quite a few of the applicants came up with the notion that the real unserved niche here was modern rock or modern rock with a smattering of urban, but something going to quite a young, don't wrinkle your nose up, Ms Bell, you know; young people can listen to what they like, but aimed at quite a young demographic.

4127 Your surveys must have shown that same niche and since in the end radio has to be a business or it goes under, why didn't you go down that route yourself?

4128 MS BELL: If I may just clarify.

4129 If you look at the demographic make-up in this city, the under 25 population is 15.1 per cent, the 45 and older percentage is 53 per cent. So if you are looking at serving the largest segment of the population that is underserved, I would suggest to you that perhaps it is an older demographic.

4130 COMMISSIONER LANGFORD: And do your marketing people bear out that this as kind of shopping the generation, the older types? I mean, we try to think of the geezers like myself as already having a house and enough suits and if we don't gain too much weight enough shirts to go around for a while. I'm certainly not going to get anything pierced downtown and my snowboarding days are over. So are we a good demographic other than for sort of hearing aids and funeral services?

4131 MR. VINER: You seem to be jumping ahead a few years, but in fact it is a very affluent group. It's a group that is musically literate. It's a group that is spending more and more of its money on second homes, financial services, holidays, perhaps not furnishing their own home but furnishing their kids' homes, so it is a group that has significant appeal to advertisers.

4132 COMMISSIONER LANGFORD: Was it a close race? Perhaps, Mr. Oakes, you have done the surveying, what did you find in the sense of market needs between these two groups, or was there even a third group that hasn't been yet identified, a third niche?

4133 MR. OAKES: In my survey, I found in fact that the modern rock/new rock was considerably down the list in the size of the audience it would produce compared to the easy listening audience. One of the reasons why is The Bear 100.3 is already playing modern rock.

4134 COMMISSIONER LANGFORD: Thank you very much. Those are my questions, Madam Chair.

4135 THE CHAIRPERSON: Thank you.

4136 Commissioner Cardozo.

4137 COMMISSIONER CARDOZO: Thank you, Madam Chair.

4138 A couple of questions. I just wanted to understand a bit better the differences and similarities between your proposed station here and the jazz station in Winnipeg.

4139 MR. VINER: Well, they are very different. One is a pure jazz station, if I can put it that way. In our application before you today we are going to blend elements of jazz and other elements of Category 3, world music and folk, into the format.

4140 But Ross is our music expert. Perhaps you can articulate on that further.

4141 MR. PORTER: Simply stated, the predominant difference is this is a Category 2 licence and Winnipeg is a Category 3.

4142 COMMISSIONER CARDOZO: I'm glad that makes sense to me (off microphone...). Sorry. I hope the person out there isn't listening to that answer, but I do understand --

4143 MR. PORTER: Would you like more musical differences? Would this help?

4144 COMMISSIONER CARDOZO: Sure. Yes.

4145 MR. PORTER: Here is a good example in terms of just what is being considered easy listening right now. You are seeing a shift with artists such as Rod Stewart and Boz Scaggs. They both have put out albums of jazz or North American popular song is probably the best way of referring to its standards. They have just put out albums that would fit into Category 2.

4146 I think that, as I had said, the predominant focus for this station is Category 2. I would look at Category 3 as being the flavouring, the seasoning that would go into it, while the station in Winnipeg is Category 3 with some Category 2. So the Category 3 in Winnipeg is the predominant flavour with some smatterings of Category 2.

4147 COMMISSIONER CARDOZO: Okay. So would this be more accessible or have a wider audience? You don't have to be an aficionado of a certain --

4148 MR. PORTER: Absolutely. This is about building bridges, not walls.

4149 COMMISSIONER CARDOZO: I understand Izzy Asper is micromanaging that station and I'm tempted to ask if he is going to micromanage this one too, but that question doesn't need an answer.

4150 MR. VINER: Thank you for resisting.

4151 COMMISSIONER CARDOZO: On the matter of cultural diversity, I was intrigued by your answers to Commissioner Cram. It strikes me that if with the general purpose television station, especially on the aboriginal issue, you have had so little success, why would you have more on this, which is more specific specialty in its orientation?

4152 MS BELL: Commissioner Cardozo, in fairness, the aboriginal community in Edmonton at this time represents about 4 per cent of the population, so even though we have started to work with groups in terms of trying to find qualified people to hire at the station I think the pool is growing and it's starting to grow, which is why we are trying to put money into initiatives that will help with training people in terms of providing an outlet for them to work in.

4153 MS McGINLEY: I would like to add, with our Yellowknife news bureau that we have set up, that provides us an access to a larger potential opportunity to explore the aboriginal community, and through our affiliation with their Edmonton television station we are hoping that there will be more opportunities for people in that area in our profession.

4154 COMMISSIONER CARDOZO: Okay. Thank you for that.

4155 Thank you, Madam Chair.

4156 THE CHAIRPERSON: Ms Bell, as you recall, in Montreal we did have a lot of discussion because of the parties before us and their proposals about the cross-media question. Cogeco, if you recall, had proposed a condition of licence they were prepared to live with because their proposals for radio stations would have had them own TV and radio in the same market.

4157 One of the differences I see between the one that was imposed in Winnipeg and that you are proposing would be suitable or appropriate here is the addition of the word "exclusively". In other words, the news gathering, the news management, the employment of a separate radio news director and separate journalists, et cetera, would you have a problem if that notion was added to the Winnipeg one, to be attached here, in other words, not only do you have them separate but that they deal exclusively in one medium and not with the other?

4158 MS BELL: I think it does a disservice to those people, to be honest with you, because it doesn't give them an opportunity to delve into other areas. Cross-media is not just an advantage for the broadcaster who owns outlets on different platforms. It is an advantage for the people who work in this business and especially young people, they are training in a variety of areas. In fact, this initiative with AMMSA, they are trying to ensure that journalists will be trained in print, television and radio.

4159 So I think if we start building walls around what people are allowed to do and not allowed to do, it is not doing them really a service in terms of expanding their experience and their skills. That's the first thing.

4160 I guess the issue for us is we are absolutely committed and every single one of our stations has its own news director, its own reporters, but I think that in fairness there have been many instances where great stories would not have been told had they not been able to share news gathering with other components.

4161 There was one situation where in fact I guess a few months ago when the shuttle disaster happened, there was a reporter at the Ottawa Citizen who managed to find information that no one else had and broke a story. Now, he couldn't print it until the next day. It got wired to our national news bureau and Kevin Newman broke the story even before CNN. That's the advantage. That really is what the advantage is.

4162 THE CHAIRPERSON: Then I take it from your answer that the condition which was attached in Winnipeg and which you reminded Commissioner Cram was offered as a suitable or appropriate one in this case does not exclude sharing and the possibility of working together even though it says that they will be separate, the word is "separate", news management, news gathering, news decisions and so on. You will have a team in either but they can all work together and that's why the word "exclusively" that Cogeco added would not be suitable.

4163 MS BELL: That's right. But if you tune into the radio station in Winnipeg or the TV station, you are not going to find news reporters from the TV station reading into -- reading the news on the radio station. They are separate.

4164 THE CHAIRPERSON: But they may have had converged news gathering --

4165 MR. VINER: They will certainly share information. Yes, that's correct.

4166 MS BELL: That's right.

4167 THE CHAIRPERSON: Tell me, what is the possibility in this world of convergence of having some TV programming useable on radio, for example, in something like the "Edmonton Reports" or "Canada", any type of magazine program on TV? We already have experienced, as far as I know, although after the broadcasting beginning at midnight, some magazine programs in one city at least being repeated on radio verbatim.

4168 MR. VINER: We certainly don't have any plans for that. I don't see that, given the type of format that we are applying for, that would be a likelihood.

4169 THE CHAIRPERSON: Does it have anything to do with format when it's a magazine and talking heads, more or less, and then the audio is put on the radio?

4170 MR. VINER: I mean I think that's highly unlikely. I can't see that happening, to be honest. I don't see what the advantage would be. I don't think -- I don't know.

4171 THE CHAIRPERSON: It would be the advantage of using the same program on two media.

4172 MR. PORTER: Our magazine show would be geared to our radio audience, to the specific demographic that we are after in radio, so I don't see the duplication.

4173 THE CHAIRPERSON: Could it not be the same as the demographic for TV? It's technically possible, but that's not --

4174 MR. VINER: It is technically possible, I suppose, but we don't contemplate it and I can't see how it would enrich the station at this stage. I mean, at some time in the future there may be an instance, but I certainly don't contemplate it.

4175 THE CHAIRPERSON: Yes. Because from our perspective, of course when we worry about cross-media we worry about the diversity of voices, the diversity of what is heard. Is it all the same interesting news or are there different programs?

4176 MR. VINER: I think that's a fair point, but we worry about it too. We have to, first and foremost, attract and keep an audience, and if we were repeating something they had heard somewhere before in the same way, that's not going to be in the interests of the radio station.

4177 THE CHAIRPERSON: Yes. Although, you must admit that with the repeats that we see on the media you can repeat with commercial success some programming, at different hours, different --

4178 MR. VINER: Yes, I think that is very true of television.

4179 THE CHAIRPERSON: Then of course, if you could put it on the radio it would reduce diversity.

4180 So in the news area, which is of course the most worrisome about editorial voices, the Winnipeg condition of licence is what you think is most appropriate and you are not prepared to go with or accept the notion of exclusivity that was added in Montreal.

4181 So there will be about, what, 31 hours spoken words, 30 hours? I'm not sure I added them.

4182 MR. PORTER: There is 20 and a half hours.

4183 THE CHAIRPERSON: And how much of that will be other than news, you told Commissioner Cram, other than news and surveillance? It would be the "Edmonton --

4184 MR. PORTER: I can give you the breakdown again, if you like.

4185 THE CHAIRPERSON:  -- Report" --

4186 MR. PORTER: Total spoken word in news and information packages would be seven hours weekly. Four hours of that would be specifically news. Total surveillance spoken word outside of newscasts would be eight and a half hours.

4187 THE CHAIRPERSON: Yes. What I am curious about is what is left after news and surveillance, and I wasn't sure I had taken down the numbers you gave her. What is the other spoken word once you remove news?

4188 MR. PORTER: The last category is total special programming. The spoken word content is five hours.

4189 THE CHAIRPERSON: Five hours. Okay. I had the five hours but I wasn't sure whether I attributed the right characteristic to it.

4190 So your plans are to have programming that is focused on the demographic and of course exclusive to radio.

4191 MR. VINER: That's correct.

4192 THE CHAIRPERSON: At least in the production of it if not the idea.

4193 MR. VINER: Yes. That's correct.

4194 THE CHAIRPERSON: Thank you.

4195 Counsel?

4196 MR. McCALLUM: Yes. Just to pick up on a few points. Again, dealing with that word "exclusively" and adding the word "exclusively" to the condition of licence that was imposed in Winnipeg, is that a fair -- is that the final answer, if you like, that you are not prepared to accept exclusivity?

4197 If the Commission wanted to add the word exclusively to that condition of licence that was in the Winnipeg decision, do I take it from your answer that that would be unworkable and frankly unacceptable. Is that the final --

4198 MR. VINER: I think we would say unworkable and unnecessary. That's correct.

4199 MR. McCALLUM: Thank you.

4200 I would like to just tie down in terms of one of your undertakings where you undertook to come back with the staffing of the newspaper of aboriginal persons in response to I think a question asked by Commissioner Cram. I wondered if you could come back with an answer to that question in phase two.

4201 MR. VINER: Yes, we can.

4202 MR. McCALLUM: And I wondered, with the permission of the panel, when you come back with comments on Decision 2001-384, that's the one in Montreal, if you could come back with comments on that also in phase two rather than phase four, because it's helpful to us to have the answer on the record sooner rather than later.

4203 MR. VINER: Yes, we can do that.

4204 MR. McCALLUM: Thank you.

4205 In responding to one of the questions from Commissioner Cardozo, I wonder if we had a complete answer on the record as to why you chose not to have a smooth jazz format here in Winnipeg. I heard you suggest that you would have a wider audience here if you went with the easy listening format rather than smooth jazz. Is that the only element or are there other elements that led you to choose easy listening?

4206 MR. VINER: You know, our whole strategy in radio is to try and find underserved niches that are financially or commercially viable, and the research -- so we are not -- as we did in Kitchener where we applied for a contemporary hit radio station and we will apply for formats that suit and fit a market in the future -- we did not apply for smooth jazz because we thought it was more of a niche format. We thought that easy listening would be -- would attract a broader audience, not just the jazz aficionados and we thought it would be a more commercial undertaking. This all came out of Mr. Oakes' research.

4207 MR. McCALLUM: Did you also think that the easy listening would give you more flexibility rather than having a condition of licence that you operate as a specialty format? Is that another element that went in?

4208 MR. VINER: That's a side benefit but, no, we didn't do it for that. We did it because we wanted to attract the biggest underserved audience that we had identified and not confine ourselves to a niche.

4209 MR. McCALLUM: I see. So it fell out as a benefit after you had selected the format.

4210 MR. VINER: Yes. I mean I think -- yes, that's correct.

4211 MR. McCALLUM: Dealing with the proposed AMMSA funding of $25,000 a year or $175,000 over a seven year tear, I take it from your answers you would accept the imposition of that as a condition of licence?

4212 MR. VINER: Yes, we would.

4213 MR. McCALLUM: Could you clarify a bit more in terms of the staffing plans, particularly in the area of programming?

4214 MR. VINER: Yes. Ross, can you speak to the staffing plans?

4215 MR. PORTER: Yes.

4216 We would have the people in the -- there are four people in the newsroom. We are talking about on-air people or do you want the whole ball of wax?

4217 MR. McCALLUM: I think it would be helpful to have the whole ball of wax, but start with the programming and then move on from there.

4218 MR. PORTER: Okay. There would be four people in news. There would be five announcers that would work through the day. There would be a swingshift announcer, and there would be another announcer that would work on the weekends. Then there would be two part-time people that would come in and help with the overnight programming and some of the more specialized programming that we were doing.

4219 There would be a traffic manager. There would be a production manager. There would be two people in creative.

4220 The sales department would be initially four people, there would be a sales manager plus three sales associates.

4221 A program director. One of the on-air positions would be a hybrid position working both on air and as a music director. Then there would be a station manager.

4222 That's it.

4223 MR. McCALLUM: Thank you.

4224 Are any of these positions shared with any other global property?

4225 MR. PORTER: No.

4226 MR. McCALLUM: So all of these people are exclusive to the radio?

4227 MR. PORTER: They would be based here.

4228 MR. McCALLUM: Thank you.

4229 Finally, the one thing I didn't catch, and partly because I think of the microphones, was related to the educational bursaries. I didn't quite catch what the educational bursaries would involve aside from the media training that you described. Could you give just a bit more detail on that, please?

4230 MS BELL: I'm not sure what you are referring to. The bursaries that would go to the educational institutions, there are journalism programs and there are also music programs, so some of those bursaries would go to students who are studying music. Aside from that, I'm not sure what your question is.

4231 MR. McCALLUM: But you don't have any further breakdown, aside from that?

4232 MS BELL: No.

4233 MR. McCALLUM: And some would go to journalism program and some to music program?

4234 MS BELL: That's correct.

4235 MR. McCALLUM: But again, you don't have a further breakdown between those two?

4236 MS BELL: Well, let's put it this way. Most of it is going to go into music programs because in fact I think the only journalism program on our list is the program at the Northern Alberta Institute of Technology, and so the other institutions, Grant MacEwan, they are going to the music departments.

4237 MR. McCALLUM: So for $60,000 a year, I would infer from your answer that, say, $40,000 would go to the music program and $20,000 to the journalism program, plus or minus. Is that a fair --

4238 MS BELL: That would be a fair statement.

4239 MR. McCALLUM: Thank you, Madam Chair.

4240 THE CHAIRPERSON: Thank you.

4241 Thank you, Mr. Viner and your colleagues. We will see you again at phase two no doubt.

4242 MR. VINER: Thank you very much.

4243 THE CHAIRPERSON: Have a nice weekend.

--- Pause

4244 THE CHAIRPERSON: Oh, I forgot to give Mr. Viner his five minutes to say why he is going to be -- he should be granted one of the many licences most of you think we should grant in Edmonton, so go ahead, Mr. Viner.

4245 Thank you, Mr. Harper.

4246 MR. VINER: Thank you very much.

4247 I will share this honour with Ms Bell, but let me start.

4248 We think that our application deserves your serious consideration and a licence because we think we have chosen the right format. Our research underscores that.

4249 We have a Canadian development program that reflects our commitment to the community and our resources.

4250 We believe we are contributing to the diversity in the market, both in terms of ownership and in terms of format. We are obviously a newer player in the radio market.

4251 We have the resources to develop and sustain what I would refer to as non-mainstream formats, those beyond call it the original eight.

4252 We will have the minimum impact on existing radio stations, and as a company you know we honour our commitments.

4253 Ms Bell, would you like to add anything?

4254 MS BELL: I have nothing to add, for once.

4255 THE CHAIRPERSON: Thank you very much, Mr. Viner and your colleagues.

4256 MR. VINER: Thank you.

4257 THE CHAIRPERSON: We will see you, now that this phase for you has been completed, in the further phases of this process.

4258 We will now take a 15-minute break and then hear the next one, which is Edmonton Radio.

4259 We seem to have a new crowd this morning. Would you please pass the message on to your colleagues and friends that we do not want telephones to ring in this room.

4260 Thank you.

--- Upon recessing at 1035 / Suspension à 1035

--- Upon resuming at 1055 / Reprise à 1055

4261 THE CHAIRPERSON: Order please.

4262 Are you ready? Mr. Secretary, please.

4263 MR. LEBEL: Thank you, Madam Chair. The next application is an application by Edmonton Radio Limited for a licence to operate an English language specialty FM commercial radio station in Edmonton.

4264 The new station would operate on frequency 91.7 megahertz on channel 219C1 with an effective radiated power of 100,000 watts.

4265 You have 20 minutes to make your presentation.

PRESENTATION

4266 MR. FUSTUKIAN: Good morning, bonjour, Madam Chair and members of the CRTC.

4267 My name is Bryan Fustukian, President of Edmonton Radio Ltd. Thank you for the opportunity to present this application for a new FM broadcast licence in Edmonton, Alberta.

4268 Joining me today is: Mr. Ed Bean, on my far left, my partner in Edmonton Radio; Henry Budnitsky, our legal counsel, to my left; and Lew Roskin, a senior consultant with Edmonton Radio, to my right.

4269 Also joining us is: our engineering consultant to my right, in the rear there, Lyndon Olson; and Billie Warwick, one of our senior consultants with Edmonton Radio.

4270 We believe an FM station dedicated to a true easy listening format with music from the forties, fifties and sixties and geared to a mature audience is needed in Edmonton.

4271 Our research indicates that the proposed radio station would fill a niche not held by any other radio station in the Edmonton market today.

4272 The benefits include music, news and features designed for the mature listener. In Canadian talent development, one of our initiatives is the local talent spotlight. Another is the high school band competition open to all high school bands in the Edmonton area, as well as a live weekly radio show, plus an active involvement with communities.

4273 The target demographic for Edmonton Radio is a mature audience that enjoys quality entertainment.

4274 In terms of overall demographics, we are living in an aging world and over the past few years the western world's population has continued on its evolutionary path from high birth and death rates to one represented by low birth and death rates. At the heart of that transition is the growth in the number of older citizens.

4275 By 2025, 7 million Canadians, almost one-quarter of the population, will be seniors. Edmonton currently has five AM stations, six FM commercial stations, all with favourable income reports based on the active economic environment of Edmonton and area. No other station in this market is providing the music or the programming concept proposed by Edmonton Radio.

4276 In view of that, a station operating the kind of music we intend to play will have no significant impact on other stations in the market but will have a very strong impact on a large segment of our population base.

4277 In the summer of 1999, Senator Banks and I were discussing the Edmonton radio options and the lack of a quality commercial radio station. He and I decided to pursue an application for an FM licence, a radio station with a format of easy listening standards, the forgotten music of the 20th century, at least by programmers in Edmonton.

4278 Senator Banks had to drop out of the project following his appointment, however his interest continues in spirit and he will continue to provide insight in an advisory capacity only.

4279 I carried on with the development of our project and incorporated Edmonton Radio Ltd.

4280 The principal partner with Edmonton Radio is Mr. Ed Bean, a successful businessman in Edmonton and western Canada for over 50 years. He was instrumental in assisting the community with projects such as the police helicopter program. He was also a major force in establishing the Crystal Kids Centre as part of his ongoing commitment to the community and helping underprivileged children. As well, he is a major shareholder with the Edmonton Oilers.

4281 We are joined on the advisory board by Mr. Lew Roskin, a man whose credits include being a member of the Canadian Association of Broadcasters Hall of Fame. Mr. Roskin's 55 years in broadcasting include managing stations in Dawson Creek, Vancouver, Calgary and Winnipeg, and he successfully founded and operated CHQT Radio in Edmonton. Mr. Roskin brings a wealth of knowledge in broadcasting and will act as a senior advisor to the station in terms of sales and programming.

4282 All our board members are long time residents of Edmonton.

4283 Regarding my qualifications, I began in radio in 1959 as an announcer and producer and I have had top rated shows at stations in Lloydminster, Winnipeg, Edmonton, Ottawa, Toronto and Providence, Rhode Island.

4284 Most recently, I am the owner of a telecommunications company dedicated to the manufacture and distribution of electronic broadcasting equipment for telephone systems.

4285 I have had success on both sides of the microphone as an announcer, producer and music director in radio resulting in awards such as Most Influential Programmer on the North American Eastern Seaboard in 1967 and 1968 by Downbeat Magazine.

4286 As a recording artist, I have had success in Canada and the U.S. with A&M Records and Columbia in Canada. In the U.S. I was under contract as a recording artist and writer with Jim Reeves Enterprises. I was signed by the executive who at one time was head of RCA Dunbar, the publishing arm of RCA, who was also responsible for signing such acts as Paul Anka and Elvis Presley.

4287 Having been exposed to both sides of the industry makes me fully aware of the needs of the Canadian recording artist and the path that artist has to follow to establish and maintain a career.

4288 I grew up with the kind of music we are proposing, and I believe this will give me an advantage in delivering the programming philosophy of our proposed station.

4289 Our team has the experience and the knowledge to guide the proposed station to a successful position in the Edmonton market and to fully respond to the needs of the community.

4290 Being a locally owned and managed company, we would reflect the community rather than a corporate head office in Halifax, Toronto, Regina, Calgary or Winnipeg. We believe this will strengthen our opportunities in assisting with the development of the musical standards in this community and contribute to the overall picture of today's Edmonton radio landscape.

4291 Our programming philosophy is steeped in traditional radio. During this period, some of the most memorable music of our history was created, the forties, fifties and the sixties. Whether it is radio, movies, television or music, this era is always referred to as the classic era in pop culture.

4292 While we embrace the music of that significant period, we also look to the future in developing programming that will include local recording artists.

4293 Canadian talent development, our local talent spotlight, will feature artists from western Canada and specifically Edmonton, during our programming schedule four times daily, seven days a week. In addition to this feature, we will provide a weekly one half hour, live broadcast from a venue in Edmonton featuring local artists such as Kennedy Jenson, Diane Donovan, P.J. Perry and even perhaps Senator Tommy Banks.

4294 This will create a platform for local artists to develop an audience and provide further impetus in creating a broader talent base for the Canadian recording industry.

4295 In addition to financial support, our station will provide what every developing artist needs, exposure of their recordings to promote the successful development of their careers.

4296 As part of this support, Edmonton Radio will invite high school bands and orchestras throughout the city and surrounding area an opportunity to participate in a competition to be aired on a regular basis on Saturday mornings and repeated Sundays. These competitions will offer students and the school administrators an unprecedented opportunity to enhance personal growth and talent development.

4297 The competitions will be scheduled with a recorded live broadcast of the final performance held at the Winspear Theatre here in Edmonton.

4298 This broadcast time will improve the local music and recording industry and acquaint Edmonton Radio listeners with the talents of our younger generation.

4299 Regarding Canadian music initiatives, we will establish a music format that will contain not only the recognized artists of this past century but some of the new artists now embracing this kind of music.

4300 New artists are emerging constantly, which indicates that this music is not a vanishing art form. Canadian artists such as Diana Krall from Nanaimo, B.C., are joined by Carol Welsman, an excellent new artist from Toronto.

4301 In the Edmonton area, Kennedy Jenson is another recording artist who has recorded this kind of music successfully and has three albums to her credit.

4302 If we are successful in securing a licence, we will do our utmost to assist and help sustain the careers of these and other Canadian artists.

4303 While our proposed financial assistance to Canadian talent development may not equal the other commercial applicants here, Edmonton Radio will go beyond the monetary level and do more for Canadian talent development by providing valuable airtime.

4304 In addition to our local talent spotlight, we will have an extended feature, "Spotlight Canada", on the same schedule four times daily. This will provide an opportunity to discuss in greater detail the artist and the recording in terms of history and product availability.

4305 In these ways, our commitment to CTD will have a profound impact for the artist and our proposed audience.

4306 As programmers, we feel it is necessary to not only adhere to the Canadian content parameters but go beyond those parameters and make something special of our Canadian artists in a very positive programming environment.

4307 In spoken word programming, we believe a radio station must address the topical issues of the day. We intend to do this with an active news and sports department with all the technical requirements and human resources necessary to provide a complete and up to date service.

4308 We will combine that news service with programming features that illustrate the issues that concern our audience, features that include health and wellness, travel, gardening, personal finance and a host of other features, all designed for a mature audience.

4309 Regarding the overall format, I could list the names of the recordings and the artists, but that list could go on. There are names like Rosemary Clooney, Frankie Laine, Rita MacNeill, Percy Faith, Louis Armstrong and many others.

4310 I do have here a full page from the Edmonton Sun, dated May 4, 203. This page is devoted to Bing Crosby, saluting what would have been his 100th birthday. Here is a contemporary newspaper which feels that this is significant news to its readers. The Edmonton Journal also had a similar feature that weekend. We would be hard pressed to hear any Bing Crosby on existing radio stations in Edmonton.

4311 Another example is from 1965. In the midst of all the excitement of the Beatles and the wave of rock music, the grammy award winning album in that year was by Frank Sinatra called "The September of My Years". A year later he won album of the year again for "Sinatra - a Man and His Music". Included in the documentation today are two articles that appeared in the Edmonton Journal this past weekend, one on Sinatra the other on this kind of music being welcomed back into the mainstream.

4312 This year at the 45th Annual Grammy Awards, Norah Jones, a 22 year old pianist and singer who got her inspiration from Billie Holiday, took an unprecedented eight awards out of eight nominations, including top album, record of the year and best new artists. Also recognized at the Grammies was Diana Krall, who won the award for best jazz vocal album.

4313 None of the artists I have just mentioned is heard today on radio in this market with any frequency.

4314 All these examples clearly demonstrate the huge interest in this kind of music and the lack of that music on the radio here in Edmonton.

4315 We have received letters of support form many prominent Edmontonians, including Mayor Bill Smith, who said on our behalf:

4316 The Honourable Gene Swozdesky, who in addition to being at MLA was the former president of the Alberta Recording Industry. The Hon. Mr. Swozdesky stated:

4317 Ron Hayter, City of Edmonton Councillor:

4318 Bill Comrie, businessman:

4319 Kevin Low, General Manager, Edmonton Oilers:

4320 To sum up, in view of the recent events taking place throughout the world, it makes it even more necessary it would seem to have a radio station that embraces the values and the music from another era, an era presented with today's technology and a staff who can view this page in history with the proper respect that it deserves.

4321 The music created during this era was some of the most beautiful music of all time. However, we don't hear that kind of music in Edmonton today. It is like taking all the greatest paintings created during one period in time and locking them away in a closet.

4322 Music needs to be recognized and appreciated no matter what era we live in, and the music we propose is a reflection of a time when life was different.

4323 In order to be successful in radio you need to be different and offering listeners a choice is vital.

4324 Edmonton Radio can be a very important part of completing the broadcast landscape of our society. It is our goal to be a voice for the community and a link to an era that was the beginning of where we stand today as a society.

4325 I am making this application not only on behalf of my partners and associates with Edmonton Radio, but on behalf of radio listeners in Edmonton. Every person I have talked to has said they would listen to this kind of station. In fact, they all said they would welcome it, and these were statements from all adult age groups. That is not a scientific study, but based on instinct it does reflect the need for a station with this format.

4326 I believe there are many of us who would recognize and appreciate the recordings of Perry Como, Jim Reeves, Peggy Lee, Nat King Cole, Artie Shaw, Glenn Miller, Anne Murray and Frank Sinatra. We don't hear that kind of music in Edmonton today.

4327 There is still a strong segment of the population that would share the days when we listened to all forms of music operating under the banner of popular music. It would be a refreshing alternative to the existing choices in Edmonton to hear a station dedicated to the music from an historic time in music and the world.

4328 We believe there is a genuine need for the kind of station we are proposing. I know I would enjoy hearing it.

4329 Thank you again for this opportunity to offer our proposal to the CRTC on behalf of the radio listeners in the city of Edmonton and Edmonton Radio Ltd.

4330 We would like to close with a demo of the sound we are proposing with a brief air check.

--- Audio presentation / Présentation audio

4331 MR. FUSTUKIAN: We now welcome your questions.

4332 THE CHAIRPERSON: Thank you, Mr. Fustukian and your colleagues.

4333 This type of music reminds me that when I went to high school I was unilingually French and we had in Ontario to memorize 50 lines of English to be able to pass the English class. Usually, Shakespeare was required, which just became completely impossible. The teacher decided and said, well, you come and tell me 50 lines of English, 20 at a time, at any time, anything, you can pick songs. So you can imagine a 14 year old and a 45 year old English teacher and me saying: my prayer is to linger with you at the end of the day --

--- Laughter / Rires

4334 THE CHAIRPERSON:  -- and some of these other songs, because he kindly allowed me to repeat anything I wanted, even if it was very repetitious, so a song would be -- when I think of that now I find it quite amusing that this nice gentleman allowed me to get through the year.

4335 Commissioner Cardozo.

4336 COMMISSIONER CARDOZO: Thank you, Madam Chair. Hello, Mr. Fustukian.

4337 I think there should be a rule against playing easy listening music at a CRTC hearing. It makes us very, very relaxed. In fact, I was watching one of the other applicants, Linda and Roger Charest here, and they seemed to be enjoying it so much, reading their body language and their lip reading I think they were thinking maybe we should have changed our application and applied for this. But they are obviously feeling very easy too listening to it.

4338 Is this your first hearing with us?

4339 MR. FUSTUKIAN: Yes.

4340 COMMISSIONER CARDOZO: Okay. Well, welcome, and I hope it will be a memorable experience for you in a positive sort of way.

4341 MR. FUSTUKIAN: It already has been, yes. Thank you.

4342 COMMISSIONER CARDOZO: Let me just quickly explain the process to you, just so you are clear about what we are doing here.

4343 As you know, the applications are judged based on the written information you provide, letters of support and then everything that happens in the context of this public hearing today and the remaining phases. What we are really doing here is completing the record and it is on the basis of this record that we make the decision, so feel free to present us with as much information as possible, answer the questions we ask as well as the ones we fail to ask, anything you think will help your case.

4344 Some of the questions will be very specific and that's because if you are licensed, often we then need to be very specific in the licence, especially around expectations or conditions of licence.

4345 As you probably know, there is one person who usually leads the questioning, that will be me, who will go over a number of issues that we have all agreed to in advance and then my colleagues and legal counsel may ask some additional questions as well. The questions I will ask cover five areas which are fairly common with the others, but they will cover format, some questions on spoken word programming, your Canadian talent development offerings, your economic analysis and some technical issues lastly.

4346 Just to remind you at the end of all the questioning Madam Chair will give you five minutes to summarize your case. So that is when you get to either keep your best lines or repeat your best lines.

4347 MR. FUSTUKIAN: Okay.

4348 COMMISSIONER CARDOZO: You have seen the applicants you are up against. There are some very big players, some middle players, some smaller players and then there is you.

4349 MR. FUSTUKIAN: Right.

4350 COMMISSIONER CARDOZO: I appreciate your telling us a bit about the background of the people because that is very important for us to understand who you are.

4351 You have got experience, a lot of experience in radio and a lot of experience in management. I just wanted to get a sense of whether there was any experience in radio management among you.

4352 MR. FUSTUKIAN: Mr. Roskin has managed stations since 1963 -- was it? -- 1963 and he, acting our senior consultant, can guide us on some of the issues that may present themselves in terms of management, so we rely on his expertise. But managing a radio station --

4353 COMMISSIONER CARDOZO: Excuse me.

4354 Mr. Roskin will be a senior consultant to the application. Will he be a senior consultant to the station if you are licensed?

4355 MR. FUSTUKIAN: Right.

4356 COMMISSIONER CARDOZO: Okay. Sorry. Carry on.

4357 MR. FUSTUKIAN: But radio is a business like any other business, you have a product and you market it. You get a good management team and good personnel and go out there and do the job. As far as we are concerned, we have the human resources to do that.

4358 COMMISSIONER CARDOZO: Okay.

4359 With regards to the format, I want to understand that a bit better. Is it somewhat like -- there are a couple of nostalgia stations that have been licensed in Toronto and Winnipeg, CHWO in Toronto, CKVN in Winnipeg. Are you aware of those stations?

4360 MR. FUSTUKIAN: Yes.

4361 COMMISSIONER CARDOZO: Is there a similarity between what you are suggesting and what they have suggested -- what they are doing?

4362 MR. FUSTUKIAN: There is a similarity, yes.

4363 COMMISSIONER CARDOZO: How would you describe that?

4364 MR. FUSTUKIAN: Well, the over fifty demographic target is similar. The music we are proposing is similar to what they would lend -- it could be considered as nostalgia. They tend to put those into pockets of I guess recognition and able to determine what they are really all about.

4365 "Nostalgia" is kind of a broad term, but it does reflect what we are all about.

4366 However, on the other hand we do look to newer artists, the Diana Kralls and Carol Welsmans and the Norah Jones of the world that come up, as well as some of the new artists so we are not locked into the forties, fifties and sixties, although that is where our main body of music comes from.

4367 COMMISSIONER CARDOZO: And when you say over fifties, is it more over sixties?

4368 MR. FUSTUKIAN: No. Madam Chair responded to one of the songs "My Prayer" by the Platters. That was out in 1958-59 I believe, so these are songs that go back in the era -- well, it's just a bank of songs from the forties, fifties and sixties that -- where they have an endless supply of -- am I responding to your question properly?

4369 COMMISSIONER CARDOZO: Yes.

4370 How does your application differ from the Global application for non-specialty easy listening or the Rawlco smooth jazz application?

4371 MR. FUSTUKIAN: They play very limited, as far as I can determine, from what they have said and reviewing their applications, play very few of this what you have just termed nostalgia music, the forties, fifties and sixties.

4372 Our play list is primarily made up of that kind of music. They don't play any of that. You won't hear the Platters or Perry Como regarding that format. They play a more contemporary easy listening in terms of Global, and the smooth jazz format presented by Rawlco soon to come plays just that, smooth jazz, which is sometimes -- Senator Banks described it to me as elevator music. That is maybe a derogatory term, I suppose, but it sometimes has no real identity, it doesn't have any actual title to it in terms of recognition.

4373 So I would say our format differs quite a bit from the other two.

4374 COMMISSIONER CARDOZO: Okay. I noticed your age demographic is fifty plus and Global's is 35 to 60, so that would also help define the difference in the type of music.

4375 MR. FUSTUKIAN: Right. By the same token, may I add that I have a daughter -- two daughters in their early twenties and they are all excited about this kind of music, and I didn't ask them to be excited, they just volunteered.

4376 COMMISSIONER CARDOZO: Did they write letters of support?

4377 MR. FUSTUKIAN: No.

4378 COMMISSIONER CARDOZO: You might want to talk to them about how CRTC hearings work.

4379 With the eclectic mix, though, if as you say it is sort of fifties plus but there are people like your daughters and others who are interested, does it become something for everybody and not enough for an identifiable group?

4380 MR. FUSTUKIAN: Well, it's good music, it's quality music, and I think anybody who appreciates that, no matter what age they are, is able to appreciate it based on those terms. Music, as much as we like to categorize it, in most situations if it is good music people will enjoy it.

4381 COMMISSIONER CARDOZO: I think there are a couple of applicants who might think that Swollen Members and Eminem are also good and quality music, but we won't go there right now.

4382 MR. FUSTUKIAN: Well, I have listened to that music as well, so I know what it's --

4383 COMMISSIONER CARDOZO: No. I understand what you mean.

4384 Let me talk a little bit about the local and spoken word programming.

4385 You have talked about nine to 10 hours of news and spoken word description in one spot and at another place in terms of -- when we looked at your daily sampling it was more like 15 hours. Can you just clarify how many hours of news and spoken word programming you will have?

4386 MR. FUSTUKIAN: I think that's in the supplementary response.

4387 COMMISSIONER CARDOZO: I think in the supplementary you said nine or 10, and just from our calculations, looking at the sample listing it came out to more like 15, so pick either one and that's the one we would hold you to if you were licensed.

4388 MR. FUSTUKIAN: Excuse me for just a moment.

--- Pause

4389 MR. FUSTUKIAN: I would say the 15 hours.

4390 COMMISSIONER CARDOZO: Okay.

4391 MR. FUSTUKIAN: We intend to do, as is evidenced by our format description, a lot of spoken word programming as far as features are concerned.

4392 COMMISSIONER CARDOZO: You have also talked about information and lifestyle features on things like healthy living, movie reports, stock market reports, a total of eight hours, which would be about 70 minutes a day -- eight hours a week, you have 70 minutes per day. Will that be station produced information?

4393 MR. FUSTUKIAN: Yes.

4394 COMMISSIONER CARDOZO: And would that all be fresh or was there a certain amount of repetition within that?

4395 MR. FUSTUKIAN: We are going to do some repeats during the all night portion because we are going to be running these features at different times of the day, so these would repeat during a 24 hour period but not after that. They would be fresh on a daily basis.

4396 COMMISSIONER CARDOZO: So of the eight, would about half of that be fresh programming?

4397 MR. FUSTUKIAN: Daily? On a daily basis it would all be fresh programming but only repeated during that 24 hour cycle.

4398 COMMISSIONER CARDOZO: Okay.

4399 Can you just give me a breakdown of your news versus the information, lifestyle, what proportion to news, what proportion to information and lifestyle?

4400 MR. FUSTUKIAN: Well, our newscasts are five minutes each on the hour every hour, two minutes on the half hour every hour, and sports at quarter to the hour at different times during the broadcast day. That's the separation as far as spoken word content with the news.

4401 COMMISSIONER CARDOZO: In your letter of February 14, you talked about broadcast news. Would that be the wire service that you would be using?

4402 MR. FUSTUKIAN: Yes.

4403 COMMISSIONER CARDOZO: The daily newscast that you have got, you are promising 24 to 36 daily newscasts, how many of these would be live and how many would be repeats?

4404 MR. FUSTUKIAN: The nights of course would go to broadcast news, and those sometimes are repeated, those --

4405 COMMISSIONER CARDOZO: So between 6:00 and 12:00 they would all be --

4406 MR. FUSTUKIAN: It's 6:00 and 6:00.

4407 COMMISSIONER CARDOZO: Sorry 6:00 a.m. and 12:00 midnight they would all be fresh?

4408 MR. FUSTUKIAN: Between 6:00 and 6:00, 6:00 p.m. and 6:00 a.m. we would bring in broadcast news.

4409 COMMISSIONER CARDOZO: But the actual newscast then between 6:00 a.m. and 6:00 p.m., each of those would be live.

4410 MR. FUSTUKIAN: Live. Right.

4411 COMMISSIONER CARDOZO: Can you tell me a little bit about your staffing? How many reporters and how many other staff do you plan to have?

4412 MR. FUSTUKIAN: We plan to have two full time news reporters and two freelance part time reporters and on air staff, morning personality, midday personality, a sports announcer, afternoon drive personality and the rest is voice-tracked from 6:00 to 6:00, 6:00 p.m. to 6:00 a.m.

4413 COMMISSIONER CARDOZO: So that would be Monday to Friday. Would it be the same on weekends?

4414 MR. FUSTUKIAN: The same on the weekend.

4415 COMMISSIONER CARDOZO: You stated in your letter of February 14 that your live to air program would increase over time. You would start 6:00 a.m. to 6:00 p.m. and it I guess would increase into the evenings once revenues increased. Do you have a sense of when that would be? Would it be year two, year three?

4416 MR. FUSTUKIAN: Hopefully within the first year. That's what we are anticipating. We would like to keep the programming as live as possible obviously.

4417 COMMISSIONER CARDOZO: Okay.

4418 With regard to automated programming, you would have, just to clarify then, the 6:00 a.m. to 6:00 p.m. --

4419 MR. FUSTUKIAN: Is all live.

4420 COMMISSIONER CARDOZO:  -- would be live, and 6:00 p.m. to 6:00 a.m. would be...?

4421 MR. FUSTUKIAN: Voice-tracked.

4422 COMMISSIONER CARDOZO: Automated. Voice-tracked. Okay.

4423 Now, your projected expenses, the projected expenses that you have put forward as we look at your application and some of the others are significantly lower. Your commitments are quite impressive. Do you think those are realistic program expenses? Do you think you can really do all that?

4424 In year one your projected programming expenses are $161,800 and in year seven they are $286,700. Is everybody paid or have you got a certain amount of volunteer component to the --

4425 MR. FUSTUKIAN: No. Everyone is paid hopefully. That would be the plan. No, we feel these are livable numbers. We don't anticipate any difficulty with those numbers.

4426 COMMISSIONER CARDOZO: Okay. Canadian talent development.

4427 You said that you would commit a minimum of $24,000 to direct expenditures in year one and this would increase 10 per cent a year over the licence term. How would those be broken down in terms of the different expenses or the different amounts that you would be spending within that? Will that just be prorated?

4428 MR. FUSTUKIAN: Is that CTD?

4429 COMMISSIONER CARDOZO: Yes.

4430 MR. FUSTUKIAN: Prorated, yes.

4431 COMMISSIONER CARDOZO: Okay. And the Canadian Music Week Bronze program, could you tell me a little bit about that?

4432 MR. FUSTUKIAN: That's an entry level situation they have with that group and we are in discussions with them and they advised us that this would be probably a more practical way for us to enter their concept and elevate ourselves as time went on.

4433 COMMISSIONER CARDOZO: Okay.

4434 The high school orchestra competition that you have got, I suppose that is one of your attempts to get a younger listening audience or get younger people to appreciate the music that you will be playing. One of the things you have got in there, and I just wanted to clarify this with you, you have got these concerts that will take place and you have talked about additional revenue that would be garnered through ticket sales.

4435 From the perspective of our Canadian talent development program, we expect that to be an amount that the station puts -- an amount of money that the station puts out into the community for specific purposes, so in a sense the charging of ticket sales would be contrary to that.

4436 MR. FUSTUKIAN: Well, the moneys generated from ticket sales would be turned back into a prize fund to be distributed equally amongst all the participating schools, not just the winners but every one of the schools in the school system that has participated. And we are doing it for our listeners and acquainting them with what the younger population is doing because I don't think enough recognition is paid to these programs. There are good, young musicians out there who are just starting, and they have no platform for exposure except in their own school auditorium, so this provides a venue and gives them an opportunity that they wouldn't otherwise have.

4437 I have never, ever heard of it before and I think it could be a very excellent program.

4438 COMMISSIONER CARDOZO: I don't quibble about the program itself. I just want to understand the mechanics of the money aspect of it.

4439 Are you saying in a sense that the money you put in at the front end then leverages more through ticket sales and then that money also goes into talent development?

4440 MR. FUSTUKIAN: The ticket sale revenue is completely separate. Our money is solid in there in terms of --

4441 COMMISSIONER CARDOZO: But the ticket sale money doesn't come back to you at the station?

4442 MR. FUSTUKIAN: No. No, not at all.

4443 COMMISSIONER CARDOZO: The recording engineer that you talked about, this may not qualify as Canadian talent development because it would, in a sense, be what we would consider to be part of doing business, the cost of doing business. So having the recording engineer as part of your CTD expenditure would fall outside the way it is usually done, unless you have another explanation for that.

4444 MR. FUSTUKIAN: The recording engineer for the show itself at the Winspear?

4445 COMMISSIONER CARDOZO: That's right.

4446 MR. FUSTUKIAN: He would be paid by the station. He is an employee of the station.

4447 COMMISSIONER CARDOZO: Okay. So that wouldn't come out of CTD expenditures?

4448 MR. FUSTUKIAN: No.

4449 COMMISSIONER CARDOZO: Now, with any of these aspects that we have talked about, at the end of the day if you were to be licensed and we felt that one or more of these programs didn't fit our Canadian talent development criteria, would you be willing to redirect these funds to another project that would be more directly related to CTD or common to the way that these expenditures are usually done?

4450 MR. FUSTUKIAN: Yes. We would look at all areas of developing Canadian talent in finding solutions.

4451 COMMISSIONER CARDOZO: Yes. My question is though, if we felt that some of these expenditures were not allowable under our guidelines, would you be willing to redirect the funds?

4452 MR. FUSTUKIAN: Yes.

4453 COMMISSIONER CARDOZO: Thank you.

4454 On the economic analysis, I just wanted to talk to you about the buying power of your listeners. What is your sense of the buying power of the listeners in relation to the advertising that you would attract?

4455 MR. FUSTUKIAN: Well, many years ago I think when people grew older they didn't buy things that were new, they didn't buy new houses, new cars, new furniture, new appliances, but those days have changed. People now who are over 50, and all of us here are a little over 50, and we are buying things.

4456 I was in The Brick not too long ago and I looked around and I saw an equal proportion of age demographics in there, young people, middle aged and older people, all buying new appliances, furniture or whatever. These are the kinds of things I think that are evident in the economy today. People buy new cars and a lot of different things that they didn't buy in days gone by.

4457 I think our demographic is very wealthy or at least their financial level is such that they can purchase things that maybe others can't, the younger demographic, so I think it is a healthy marketing area.

4458 COMMISSIONER CARDOZO: So are you saying that the buying habits of the over 50 group is changing I suppose all that advertising is paying off at last.

4459 MR. FUSTUKIAN: Yes.

4460 COMMISSIONER CARDOZO: Why do you feel the easy listening format is best suited to the Edmonton market?

4461 MR. FUSTUKIAN: Well, there isn't one here in the city. There is Easy Rock, but by that very title they play rock interspersed with some easy listening material that would be not unlike what the Global people are presenting.

4462 Ours is a true easy listening format that hasn't existed in this market since CHQT in days gone by of which Mr. Roskin was president. His was an easy listening format that based itself on pretty much the same music as we are presenting here today, but nobody else does that kind of music here in the city. CKOA has done it to a limited basis, they have an hour per week on the weekend -- two hours actually, one devoted to big bands and one devoted to nostalgia, the hit parade of the past or "Play it Again" I think it's called, and they do play this kind of music, but those are the older stations.

4463 COMMISSIONER CARDOZO: Does that translate into good economics for the station?

4464 MR. FUSTUKIAN: I believe so because we are the only ones doing it and I believe we would have a good, strong listener base from which to draw our marketing power.

4465 COMMISSIONER CARDOZO: Would your model work as well if we licensed other applicants that are before us in this hearing and specifically if we licensed other easy listening or smooth jazz applications?

4466 MR. FUSTUKIAN: I think it could co-exist with either of the other two easy listening stations that were presented -- or the one that has been presented. I don't think that they would actually touch the music that we are playing. They may come close once in a while, but not on a consistent basis.

4467 COMMISSIONER CARDOZO: Okay.

4468 You have estimated that 7 per cent of your advertising revenues would be garnered from existing local radio stations. How do you come to that estimate?

4469 MR. FUSTUKIAN: Most of our clients we feel would be new clients, new business, and this is the way we are aiming our marketing strategies, to look at those levels. Seven per cent, it could be of course higher or lower, we are not exactly sure. One just has to estimate broadly what that would mean to us. But in our analysis, 7 per cent seemed like a realistic figure and we are confident that we will get most of our business as new business.

4470 COMMISSIONER CARDOZO: Yes. You said 79 per cent would be new advertisers. How do you come to that estimate?

4471 MR. FUSTUKIAN: Well, according to our analysts, experts, we felt that that was a good number to go at because it seemed like that's where most of our business would come from, new advertisers.

4472 COMMISSIONER CARDOZO: Could you give me more information. I don't know if Mr. Warwick or anyone else would have more information on how you get those two figures, the 79 per cent and the 7 per cent.

4473 MR. FUSTUKIAN: Well, I think I'm the only one that can answer that actually.

4474 COMMISSIONER CARDOZO: When you say 79 per cent, which is a huge amount of your advertising pie, I would like some more information on what products, what companies would be new advertisers who are not advertising now, who would look to your station to advertise now for the first time.

4475 MR. FUSTUKIAN: Traditionally it seems, in recent times anyway, in nostalgia stations, if you like, or these older demographic stations, they have little or no national business. All their business is local, but they do very well.

4476 There is a station in Phoenix that is a similar kind of station and they are almost sold out all the time. The station in Toronto I think is doing very well based on their format.

4477 We would gear it towards the mature audience of course, but we are looking at the things that would appeal to the older demographic, the car buyers, the travel, insurance, health and these other things that are related to the older demographic but are not being touched by present radio stations. So these are areas that we can open up as far as advertising is concerned, develop a new client base.

4478 COMMISSIONER CARDOZO: In terms of creating loyalty to your station, how do you focus on your demographic? Do you plan to develop -- through your spoken word programming and others, do you plan to have a closer relationship around certain issues?

4479 I recall at the Winnipeg hearing, when we were hearing the group there, there were a lot of veterans, for example, who had been listening to that station when it had an exempt status, and then it was a -- it used to be a special events -- had a special events exemption so it would air around certain times, and one of the times it did was around Remembrance Day, so it kind of fostered a special relationship with veterans and their families.

4480 Do you see yourself developing a special relationship with people, with the demographic, based around either particular events or issues?

4481 MR. FUSTUKIAN: Well, we intend to make more of things like Remembrance Day playing music that rock stations can't play but we can play them because they existed during that time. And of course community involvement is also what we are concerned with.

4482 But getting back to the music portion of it, for instance, Easter, Christmas and areas like that, that's how I think we can develop a loyal audience by participating with them in the celebrations of life, whatever they may be. By playing the music they would remember or at least if they were new listeners they might be inspired in other directions, Easter, Thanksgiving and all of these kinds of events, that have music out of them but are not played today or at any other time by radio stations here in Edmonton.

4483 COMMISSIONER CARDOZO: Can you tell me a bit about your community involvement, what your plan would be?

4484 MR. FUSTUKIAN: Well, we are going to develop -- we have a promotions person that is going to be developing a liaison with all the communities. Mr. Bean has met many times with the community and we will be enhancing that to a large degree because we feel that is a very strong point of our mandate and our format will be relative to existing with the communities and providing them with an information source so they can get the information out to the people, community billboards and that kind of thing, individually, communities in the city of Edmonton.

4485 COMMISSIONER CARDOZO: I am not clear still about your community involvement. Would you be a sponsor of events? Would you have your banners up? Would you be handing out pens? What is it that would play -- how would you use community events or help community events? How would community events and your station -- how would they help your station?

4486 MR. FUSTUKIAN: We would publicize the events that exist within their communities and help them in any way we can by promoting the events and have an ongoing liaison with them so that we can participate on an ongoing basis, not just once in a while but a direct input into our station on a regular basis and having announcements made on a regular basis, so I believe that communities is going to be a very strong point of our station.

4487 COMMISSIONER CARDOZO: Okay.

4488 Just to come back to the issue of where you would get your advertising, you are saying 7 per cent would come from local market radio stations. Is that a way of saying that your impact on the market would be minimal, would be low?

4489 MR. FUSTUKIAN: No. I think our impact will be significant. I believe --

4490 COMMISSIONER CARDOZO: Actually, you want to say, yes, it will be low is the better answer.

--- Laughter / Rires

4491 MR. FUSTUKIAN: I'll go with you then, yes.

4492 COMMISSIONER CARDOZO: No. Maybe you don't understand my question. You are putting a case forward that you will have a robust station.

4493 MR. FUSTUKIAN: Right.

4494 COMMISSIONER CARDOZO: The point I am asking you is will you have a negative impact on the rest of the market? Will it cause financial hardship to existing stations?

4495 MR. FUSTUKIAN: No. It will have little or no impact on other stations but will have impact on our potential audience.

4496 COMMISSIONER CARDOZO: That's the right answer.

--- Laughter / Rires

4497 COMMISSIONER CARDOZO: Actually, there aren't right or wrong, but some are more right than others I think.

4498 Can I ask you a couple of questions about your technical expectations or plans.

4499 You have applied for 91.7 and 102.9 would be your backup. If these were not available, are there any others that you would be willing to use?

4500 MR. FUSTUKIAN: 98.1, 99.5 are two alternatives, and 89.3. Those would be suitable according DEML and Associates who drafted our technical proposal.

4501 COMMISSIONER CARDOZO: So those would be suitable for the type of music you want to play in terms of strength.

4502 MR. FUSTUKIAN: Yes.

4503 COMMISSIONER CARDOZO: Did you look at AM at all?

4504 MR. FUSTUKIAN: No. I think to fully justify this kind of music we need a stereo FM application.

4505 COMMISSIONER CARDOZO: Okay. And if you were to be on any of these other frequencies that you have mentioned or 102.9, your business plan, as filed, would stand?

4506 MR. FUSTUKIAN: Yes.

4507 COMMISSIONER CARDOZO: Okay. Those are my questions. Thanks very much.

4508 MR. FUSTUKIAN: Thank you.

4509 COMMISSIONER CARDOZO: Thank you, Madam Chair.

4510 THE CHAIRPERSON: Thank you. Commissioner Williams.

4511 COMMISSIONER WILLIAMS: Good morning Edmonton Radio panel.

4512 MR. FUSTUKIAN: Good morning.

4513 COMMISSIONER WILLIAMS: Mr. Fustukian, what was the name of your band in 1980?

4514 MR. FUSTUKIAN: In 1980? It would be the Battle River Band.

4515 COMMISSIONER WILLIAMS: I'm going to ask you another question. When is the start-up date and what are the preliminary performance objectives for the two year period that triggered the management incentive Mr. Bean and yourself have agreed to in your shareholders' agreement dated August 29? The reason I am asking is, should your application be successful, we would not like to be responsible for you not being able to double your shareholding because of the time it takes us to render a decision.

4516 MR. FUSTUKIAN: I think I will have Henry Budnitsky, our legal counsel, respond to that.

4517 MR. BUDNITSKY: The timing would start at the time that the radio licence is granted.

4518 COMMISSIONER WILLIAMS: Thank you.

4519 Mr. Bean, are the preferred shares that you have issued, are they interest bearing and if they are what is the rate?

4520 MR. BEAN: Could you repeat that please?

4521 COMMISSIONER WILLIAMS: In your financial ownership data it states that Mr. Edwin Bean will purchase a certain number of preferred non-voting shares for a value of $150,000. Are the preferred shares interest bearing and if they are so at what rate of interest?

4522 MR. BEAN: Yes, they are.

4523 COMMISSIONER WILLIAMS: And at what rate of interest?

4524 MR. BEAN: Six per cent.

4525 COMMISSIONER WILLIAMS: Six per cent?

4526 MR. BEAN: Yes.

4527 COMMISSIONER WILLIAMS: Okay. Thank you. I have no further questions.

4528 THE CHAIRPERSON: Thank you.

4529 Mr. Fustukian, you filed or presented to us two documents. The other one is entitled "With Regard to the CKUA Intervention". I gather that one is for phase four.

4530 MR. FUSTUKIAN: Right.

4531 THE CHAIRPERSON: Thank you. Yes, I know that CKUA was an opposing intervener although not an appearing one.

4532 Thank you.

4533 Counsel?

4534 MR. McCALLUM: Yes. Just two things I would like to clarify if you like for the record.

4535 The first one, about the Canadian talent development, and I ask it in the context of the Commission possibly having to design a condition of licence. It wasn't clear to me, I think you confirmed with Commissioner Cardozo, that your commitment to support Canadian talent development would increase incrementally by 10 per cent per year. So, for example, the increment would go from $24,000 in the first year as your total commitment to $26,400 in the second year, which is an increase of $2,400, is the way I calculate it. Is that right?

4536 MR. FUSTUKIAN: Yes.

4537 MR. McCALLUM: What was not clear to me was, you had four initiatives and to take the year one basis, each of them was for $6,000, so four initiatives by $6,000 got you the $24,000.

4538 For the $2,400 increment, is that to be allocated equally among the four or is that --

4539 MR. FUSTUKIAN: Yes, it would be expanded upon each time. For instance, in the showcase for Toronto it would be increased and as well we don't have to really increase the money for the Winspear Theatre presentation, but for the other CTD financials we would increase that.

4540 MR. McCALLUM: The Winspear Theatre is the concert. Is that the concert?

4541 MR. FUSTUKIAN: Concert, yes.

4542 MR. McCALLUM: So would that remain constant at $6,000?

4543 MR. FUSTUKIAN: Our cost, unless the cost of the Winspear rises, it will remain that.

4544 MR. McCALLUM: Again, I am just asking in the context of designing a condition of licence. What is not clear to me is whether, if we did do this, if it should be $6,000 right across to year seven or if we should increase that one as well as everything else by 10 per cent right across the board.

4545 MR. FUSTUKIAN: I'm sorry; what was the last part? What if...?

4546 MR. McCALLUM: What I'm trying to understand is the Winspear one, just to take an example, you said might not increase but then it might, so for the purpose of designing a condition of licence we sort of would have to draft it one way or the other, and what I am trying to understand is whether it should be increased by 10 per cent each year, including the Winspear or whether we should hold the Winspear one constant at $6,000 throughout a licence term of seven years.

4547 MR. FUSTUKIAN: I would hold the Winspear constant with a rider attached to it at an increase in cost by the Winspear. Those costs of course are not written in stone, so we don't know what the costs will be in year seven. They are $6,000 now but they might be $8,000 in year five, so I don't know exactly how we can respond to that.

4548 MR. McCALLUM: One of the things that is nice is that conditions can sometimes be amended over time so, you know --

4549 MR. FUSTUKIAN: Okay.

4550 MR. McCALLUM: So that's the possibility.

4551 MR. FUSTUKIAN: Right. So I would say it would be holding fast at the $6,000 level.

4552 MR. McCALLUM: And dividing the balance prorata among the other three.

4553 MR. FUSTUKIAN: Right.

4554 MR. McCALLUM: The other thing I wanted to clarify was, first of all in the staffing, I wasn't sure if I counted eight programming staff or 10 programming staff.

4555 MR. FUSTUKIAN: Well, we have the morning announcer, two news announcers, a midday announcer, a sports announcer, afternoon drive and two weekend.

4556 MR. McCALLUM: Eight programming staff in all?

4557 MR. FUSTUKIAN: Eight I believe is our start-up figure.

4558 MR. McCALLUM: And how many non-programming staff would there be?

4559 MR. FUSTUKIAN: Oh, and one engineer operator in there as well.

4560 MR. McCALLUM: Oh, sorry, nine.

4561 MR. FUSTUKIAN: And there would be two part time freelance. Two part time freelance as well.

4562 MR. McCALLUM: And are there any other, like, non-programming staff, for example, in sales, that should be added to the figures?

4563 MR. FUSTUKIAN: Well, we have the station manager, program director. We also have the -- again, the weather analyst is a freelance part time. We have the promotion director. And you didn't include sales in that, did you?

4564 MR. McCALLUM: So how many for sales, for example?

4565 MR. FUSTUKIAN: We have five in sales, that's including sales manager.

4566 MR. McCALLUM: Okay. I really count eight on-air programming people. The ninth person you added to it I think would be a technical person.

4567 MR. FUSTUKIAN: Technical, yes.

4568 MR. McCALLUM: So I really count eight on air.

4569 But what is not clear to me is if I look at your programming expenses for the first year, you project approximately $161,000 of programming expenses and I count eight people or eight salaries to pay out of that $161,000, and dividing it equally, which I know wouldn't necessarily be the case, but dividing it equally it gets me a figure of just over $20,000 for each of the eight people.

4570 So my question is, is that really enough to cover eight salaries? I am dealing only with the first year because I see the figures go up after that.

4571 MR. FUSTUKIAN: Right. Well, some are on a part time basis and some are paid obviously more than others. Those figures I don't have at my fingertips here, so I can't relate them to you but in our analysis these were all fair wages for the people becoming involved in our station and as an entry level wage. It would be increased as time went on of course as our revenues increased, but we were hopeful that these would be satisfactory figures for our on-air staff to live with.

4572 MR. McCALLUM: But aren't there other expenses associated with programming costs as well, such as production costs, costs of microphones, cost of tapes, et cetera, in addition just to salary? I took a simple division and took the $160,000 divided by eight to come up with $20,000 in salary alone but, as I say, aren't there some other additional production costs that go into programming?

4573 MR. FUSTUKIAN: Well, we have that under our technical plan. That's all included in the technical area.

4574 MR. McCALLUM: So the examples I gave you are included in your technical figure?

4575 MR. FUSTUKIAN: Right. All the software and microphones and libraries and everything of that nature is included on the technical side.

4576 MR. McCALLUM: I take it you are saying that you are confident that the $160,000 approximately in year one is adequate to pay the salaries of the persons on air to be engaged.

4577 MR. FUSTUKIAN: Yes.

4578 MR. McCALLUM: Thank you, Madam Chair.

4579 THE CHAIRPERSON: Mr. Fustukian, looking at your expenses which are indeed low, the operating expenses, compared to the other applicants, under "Sales and promotion", is that the total amount of money, which is $264,564 in year one, or do we find that some of the sales expenses are deducted from revenues as commission, or are those representing salaries of the sales persons as well as advertising and promotion?

4580 MR. FUSTUKIAN: Those are salaries.

4581 THE CHAIRPERSON: As well. So there is no deduction from the revenue -- revenue was net of commission?

4582 MR. FUSTUKIAN: No.

4583 THE CHAIRPERSON: Okay. Thank you.

4584 You have five minutes to tell us why your application deserves one of the many frequencies that have been put before us.

4585 MR. FUSTUKIAN: Thank you, Madam Chair and all members of the CRTC for hearing us today. We appreciate this opportunity.

4586 We do believe sincerely that there is a need for this kind of music in this market. In my mind and the mind of many of my colleagues and the people I talk to on the street, there is a genuine need for this kind of music and the format that we are presenting enhances and embodies the spirit of this music and this era and the way of life that was from a bygone era. It was a remarkable time in our history and we feel that to preserve it and present it on the radio is something that Edmonton radio listeners should have an opportunity to listen to.

4587 We have made our research and we have analyzed the situation and we have listened to the other participants, not all of them but most of them, and we still feel strongly that we would fill the niche that isn't held by any other station or proposed station at this time. For that reason we feel that we should be granted the licence.

4588 Thank you.

4589 THE CHAIRPERSON: Thank you, Mr. Fustukian and your colleagues, and my prayer will linger with you.

--- Laughter / Rires

4590 MR. FUSTUKIAN: Mine too.

4591 THE CHAIRPERSON: We will now adjourn, Mr. Secretary, and resume at nine o'clock on Monday morning with the Rawlco application.

4592 It is our intention to hear all remaining four applicants on Monday.

4593 Thank you and a good weekend to all.

--- Whereupon the hearing adjourned at 1205, to resume

on Monday, June 23, 2003 at 0900 / L'audience

est ajournée à 1205, pour reprendre le lundi

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