ARCHIVED -  Transcript / Transcription - Gatineau - Quebec / (Québec) - 2004-06-09

Various broadcasting applications /

Plusieurs demandes en radiodiffusion

HELD AT: TENUE À:

Conference Centre Centre de conférence

Ooutaouais Room Salle Outaouais

Portage IV Portage IV

140 Promenade du Portage 140, promenade du Portage

Gatineau, Quebec Gatineau (Québec)

June 9, 2004 Le 9 juin 2004

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.

Various broadcasting applications /

Plusieurs demandes en radiodiffusion

BEFORE / DEVANT:

Andrée Wylie Chairperson / Présidente

David Colville Commissioner / Conseiller

Ronald Williams Commissioner / Conseiller

Jean-Marc Demers Commissioner / Conseiller

Joan Pennefather Commissioner / Conseillère

ALSO PRESENT / AUSSI PRÉSENTS:

Sylvie Jones Legal Counsel /

Conseillere juridique

Mike Amodeo Hearing Team Leader /

Chef d'équipe de l'audience

Pierre LeBel Secretary / Secrétaire

HELD AT: TENUE À:

Conference Centre Centre de conférence

Ooutaouais Room Salle Outaouais

Portage IV Portage IV

140 Promenade du Portage 140, promenade du Portage

Gatineau, Quebec Gatineau (Québec)

June 9, 2004 Le 9 juin 2004

PAGE / PARA

PHASE I

PRESENTATION BY / PRÉSENTATION PAR:

Brian Cooper and Daniel McCarthy 672 / 4018

Bayshore Broadcasting Corporation 744 / 4575

Gatineau, Quebec / Gatineau (Québec)

--- Upon resuming on Wednesday, June 9, 2004 at 0902 /

L'audience reprend le mercredi 9 juin 2004 à 0902

4004 THE CHAIRPERSON: Good morning ladies and gentlemen.

4005 Mr. Secretary, please.

4006 MR. LEBEL: Thank you, Madam Chair.

4007 Items 11 and 12 on the agenda are competing, and we will hear them as follows:

4008 First, we will hear the application, starting with Item 11, then Item 12. And applicants will be granted 20 minutes to make their presentation. The presentations will be followed by questions from the Commission.

4009 Secondly, we will ask the applicants, in the same order, to intervene on the competing application. Again, questions from the Commission may follow.

4010 In the last phase, we will ask the applicants, in reverse order, to respond to the interventions. Questions from the Commission may again follow.

4011 We will now hear Item 11, which is an application by Brian Cooper and Daniel McCarthy on behalf of a corporation to be incorporated for a license to operate an English-language FM commercial radio programming undertaking in Kincardine with transmitters in Goderich and Port Elgin.

4012 The new station would operate on frequency 95.5 MHz (on channel 238A) with an effective radiated power of 5,660 watts (non directional antenna/antenna height 38.7 metres).

4013 The transmitter in Goderich would operate on frequency 99.7 MHz (on channel 259A) with an effective radiated power of 1,670 watts.

4014 The transmitter in Port Elgin would operate on frequency 99.7 MHz (on channel 250A) with an effective radiated power of 1,620 watts.

4015 The applicant is proposing an Adult Classic Hit format.

4016 And, appearing for the applicant, Mr. Brian Cooper, who will introduce his colleagues.

4017 You have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

4018 MR. COOPER: Thank you.

4019 Good morning, Madam Chair and Members of the Commission. My name is Brian Cooper and I am President and CEO of The Coast, a proposed new FM station to serve Lake Huron and coastal communities of Kincardine, Port Elgin and Goderich.

4020 Before I begin our presentation I would like to introduce you to the members of our team.

4021 On my immediate right is Andrew Forsyth of Bohn & Media Associates.

4022 Next to Andrew is Robert Malcolmson, a Partner at Goodmans, our regulatory counsel.

4023 On my immediate left is Mack Frizzell, who has 37 years experience in the radio business. For 20 years, Mack was the General Sales Manager for Bayshore Broadcasting's Owen Sound stations.

4024 We are excited to be here today to talk about why we thing The Coast will fill a real need in the underserved communities of Kincardine, Port Elgin and Goderich. As coastal towns along the shores of Lake Huron, the communities share common interests.

4025 We know from our research and from the letters of support that there is a strong audience and advertiser demand from a new radio station.

4026 We also know that our combination of strong local news and information programming and the proposed "Adult Classic Hit" format will fill a clear void in the programming spectrum.

4027 Let me start by telling you a bit about myself.

4028 I am a new entrant to the radio business, but I am not new to the broadcasting industry. I am one of the co-owners of Insight Sports, a diversified broadcasting and production company.

4029 On the production side, is one of North America's leading producers of high-quality, multimedia sports productions. We produce some of Canada's most innovative television series and sports documentaries.

4030 Some of our series, to name a few, include "The Business of Sports" which airs on Sportsnet across this country and is available in 21 million homes in the United States.

4031 We produce "Ice", an animated show which airs on CBC's Hockey Night in Canada.

4032 We also produce "Be a Player" for the NHL Players' Association which is broadcast on Sportsnet and ESPN2.

4033 Other productions include a recent release of "Cold Ultimate Gretzky", a DVD release that we did for Warner Brothers out of Los Angeles.

4034 As well, we did "100 years of Canadian Sports" for TSN, "Kurt Browning: By Request" and "Gold Rush", a best-selling DVD of Canada's gold medal winning olympic hockey team.

4035 On the broadcasting side of the business, Insight Sports is a partner in the NHL Network, a Category 2 specialty network that launched four years ago.

4036 Insight also recently acquired a significant minority equity position in The Score, an analog sports service that serves over five million Canadian households.

4037 Our other interests include the Coaches' Network and the soon-to-be-launched Global Fishing Network which will launch in Canada and the United States.

4038 I know what it takes to launch a successful business in a competitive environment and I look forward to the challenges and the opportunities presented by The Coast.

4039 I spend every summer and most every weekend throughout the winter in Kincardine with my wife, who grew up in the area.

4040 It became apparent to me, as I spent time in the region, that the area is badly underserved in terms of local radio. In fact, there are no radio station originating from Bruce County at all.

4041 There are some signals from stations located either inland, and others from Owen Sound, but nothing that is based in the heart of the Lake Huron shoreline.

4042 Moreover, the topography of the area is such that the out-of-market stations that are available have a limited signal coverage and poor reception in coastal communities.

4043 These Lake Huron coastal communities have common interests which are not being met. Indeed, of the applications before you, ours is unique as it proposes to serve all of the communities along Lake Huron shoreline, including Goderich.

4044 We will do this with a technically innovative network of three transmitters in each Goderich, Kincardine and Port Elgin which takes into account the topography of the region and provides a strong local station in each community served.

4045 Together with my business partner Danny McCarthy, we decided to do some in-depth research to determine if a local station based in Bruce County and serving the Lake Huron shoreline was viable.

4046 Andrew Forsyth will give you more details about the research That Bohn & Associates and Ipsos-Reid conducted, which was filed with the application when we submitted it over a year ago.

4047 But first, I would like to highlight a few facts.

4048 Bohn & Associates conducted a market study. It showed, among other things, that Kincardine and surrounding area is poised for growth.

4049 The average annual household income in the area is almost 14 per cent higher than the Canadian average.

4050 And, most importantly, potential radio revenue was, at the time we filed, conservatively estimated to be in excess of two million dollars, easily accommodating one or more new radio entrants.

4051 We also commissioned Ipsos-Reid to conduct a survey among local retailers and business to assess their current use of radio advertising, their level of satisfaction with what is available today, and demand for a new FM station.

4052 The results show that almost half of those interviewed felt that a new FM station would benefit their business and improve their advertising options, while over half said they would consider advertising on a new FM station.

4053 With this information in hand, we see enormous potential in a new FM station based in Kincardine with transmitters in Port Elgin and Goderich.

4054 We think we have a winning format in the adult classic hits genre, with programming produced in, and strongly focused on the coastal communities of Lake Huron.

4055 We have also put together a Canadian Talent Development package that strongly invests in the local community.

4056 In addition to a main street presence from a store-front studio in Kincardine, sponsored community activities and strategic partnerships, we will inject $70,000 over the licence term to support live performances by Canadian artists at local festivals and in events in Kincardine, Goderich and Port Elgin.

4057 We will also contribute $3,500 to FACTOR over the licence term to support new Canadian talent.

4058 This commitment of $73,500 represents a significant benefit to the Canadian Broadcasting System.

4059 I would now like to ask Andrew Forsyth to highlight some of the findings of the research.

4060 MR. FORSYTH: Thank you, Brian.

4061 Bohn & Associates prepared a study analysing the revenue potential for a new FM station in Bruce County, a copy of which is on file.

4062 Overall, our findings suggest that an already-strong local economy will continue to grow, based on renewed investment in the energy sector and an increase in both population and employment.

4063 As Brian has noted, there is no local radio station that directly addresses the local issues and needs of this growing region. The out-of-market signals that reach Kincardine and Bruce County primarily serve either Wingham or Owen Sound.

4064 Our research showed that Kincardine and communities along the Lake Huron shoreline are experiencing strong growth.

4065 Energy and tourism drive the area's economy, supported by telecommunications, agriculture and manufacturing.

4066 Bruce Power employs almost 6,000 people in the area and seasonal tourism can more than double the population along the Lake Huron shoreline throughout the summer months.

4067 Kincardine has a higher employment rate than both Ontario and Canada as a hole; an average household income that is significantly higher than the Canadian average; and higher home ownership rates than in Ontario or Canada generally.

4068 In addition, the Bruce Power Plant in Kincardine, which already employs almost 6,000 people, is expanding.

4069 All of this supports our findings that the region is poised for continuing employment and population growth.

4070 The health of the target market, combined with the fact FM Radio is performing well these days, bodes well for the new station.

4071 The CRTC Financial Summary for Radio in 2003 stated that FM stations grew at a rate averaging 7.5 per cent in each of the preceding three years peaking in 2003 at 9.8 per cent.

4072 Statistics Canada's 2001 Bulletin showed that small market radio has achieved a healthy PBIT rate of 14 per cent over a four-year period.

4073 We calculated the potential revenue for Kincardine by examining radio advertising as a ratio of retail sails.

4074 We filed our application over a year ago, and at that time, 2002 retail sales in Bruce County were 576 million dollars.

4075 Today, retail sales have grown to 727 million dollars, increasing dramatically by almost 30 per cent in just two years.

4076 These 2004 retail sales numbers translate into three million dollars in available radio revenue in Bruce County alone, which is one million dollars in excess of our projections for radio in Bruce County.

4077 This figure, by the way, does not include revenues from Goderich which is located in Huron County, where, according to Financial Post Market Data, retail sales are in the 649 million dollars range.

4078 The Coast's first year financial projections show just under $785,000 in advertising revenue - about 26 per cent of the available revenue in Bruce County, without taking into account the revenue potential of Goderich.

4079 Given the financial prosperity enjoyed by the Lake Huron communities, we believe The Coast's revenue projections are easily achievable.

4080 And with the growth we are seeing, the market can support more than one entrant.

4081 Ipsos-Reid was commissioned in March 2003 to conduct a survey of local retailers and businesses in each of the Kincardine, Port Elgin and Goderich areas.

4082 The research had several purposes:

4083 to measure the general media usage among local retailers and businesses;

4084 to measure their satisfaction with local media; to assess the demand for a new local FM station;

4085 to look at current radio usage by these advertisers;

4086 and to assess their current media and radio expenditures.

4087 The results are noteworthy and confirm Bohn & Associates assessment that there is strong demand in the market.

4088 I would like to highlight some of them for you today.

4089 First, Ipsos-Reid discovered that radio is not considered an essential advertising medium - only 20 per cent used radio advertising at all.

4090 Of those who did use radio to advertise, 75 per cent reported they were only "somewhat satisfied" with the results.

4091 None reported they were "very satisfied."

4092 Almost half the businesses felt a new FM station would benefit their businesses and improve their advertising and marketing options, and 65 per cent stated they would consider advertising on a new FM station if it met their needs in terms of cost and audience reach.

4093 We think this is particularly interesting given the finding that half of those interviewed have a budget for radio advertising that currently goes unused.

4094 And fully 70 per cent of the businesses stated that their radio advertising budget would likely increase if a new FM station launched that targeted their primary audience.

4095 Given these figures, we believe that there is substantial room for the exploitation of radio revenues in the Kincardine, Goderich and Port Elgin markets.

4096 MR. FRIZZEL: Good morning, Commissioners. My name is Mack Frizzell.

4097 I have 37 years of radio experience in and around Bruce County.

4098 For 20 of these years, I was the General Sales Manager of Bayshore's Owen Sound stations. In that capacity, I sold and supervised airtime sales for Bayshore's three Owen Sound stations and its repeater in Port Elgin.

4099 My experience allows me to speak to you today about the revenue potential of the market, based on my years of operating experience in the area.

4100 I have always thought that there was a significant revenue opportunity if an originating radio service was extended to the local coastal communities of Kincardine, Port Elgin and Goderich.

4101 There is a clear void in these markets which only a new originating station can fill.

4102 With an application like this one, which has an originating station right in the heart of the shoreline community, I think there is a great opportunity here.

4103 The Coast is proposing a strong amount of local programming directed at the people of the Lake Huron coastline; a format that does not exist in the market; and an innovative technical plan that is designed for the topography of the area.

4104 Based on my long experience with these markets, I believe that there is ample revenue in the target market and that advertisers will sign on and support The Coast Pioneering effort.

4105 MR. COOPER: As Mack pointed out, The Coast has put forth a technically innovative service to address the reception problems that are typically found along the Lake Huron coastline.

4106 These problems are due mainly to the topography of the region, which often causes signal issues in low-lying areas.

4107 We have solved this by creating a network of three frequencies to cover the Kincardine, Port Elgin and Goderich areas with studios centrally located in Kincardine.

4108 This solution will not only assure reliable signal strength, but will cover 50 % more people within the combined central contours of the transmitters that would be the case with a conventional configuration.

4109 Our original application for the Port Elgin transmitter was for the 97.9 frequency.

4110 As you know, months after we filed, Bayshore put in an application for a new FM station on the same frequency.

4111 Following the filing of interventions and prior to reply, Bayshore contacted us about resolving our differences.

4112 These discussions have been productive and the situation has been resolved to the mutual satisfaction of our group and that of Bayshore.

4113 As a result, The Coast now proposes to use the 90.9 frequency for the Port Elgin transmitter, allowing Bayshore to use the 97.9 frequency for its proposed new station.

4114 Our broadcasting engineer has confirmed with Industry Canada that the 90.0 frequency is available for our use and that other suitable frequencies are also available as well.

4115 We can confirm that this frequency provides the same coverage area and technical parameters as the one we originally identified.

4116 Thus, except for this change in frequency, our application remains as originally proposed in the application we filed a year ago.

4117 MR. FORSYTH: Turning now to the format.

4118 Our research showed that the existing stations are targeted towards women 35 and older with two adult contemporary-oriented stations, two country stations and one oldies station that attracts primarily an audience of 55 plus.

4119 It was clear that the proposed adult classic hits format, appealing to a broad 25 to 54 audience, is a good fit with existing stations.

4120 This format includes a musical play list with a wide variety of adult contemporary, album rock and pop music from the last thirty years, along with current hits.

4121 We are talking about tracks like those from classic albums by Dire Straits, Supertramp, the Police; modern pop alternative artists like Sheryl Crow and Sugar Ray; and golden hits by acts like Flock of Seagulls and Tears For Fears.

4122 In addition, the play list will feature contemporary Canadian artists like Tom Cochrane, Nickelback, Nelly Furtado and the Barenaked Ladies.

4123 It is designed to appeal to the widest possible audience in the coverage area - an audience that is currently underserved by existing stations.

4124 The Coast will also fill an identifies need by delivering strong local information programming, including station-produced local and regional newscasts.

4125 Coverage will include local social, entertainment, arts and community events, municipal politics, and the local economy.

4126 There will be opportunity for commentary from local residents, and the production of topical features that will be attractive both to residents and visitors.

4127 This will fill the gap with programming that is truly local and directed to the unique needs and aspirations of the residents of the Lake Huron coastal communities.

4128 MR. COOPER: Thank you, Andrew.

4129 Members of the Commission, that concludes our presentation today. I hope you will agree that our proposal offers numerous advantages to the Canadian broadcasting system:

4130 more choice and diversity for Lake Huron listeners with an adult classic hits format;

4131 a significant contribution to the Canadian broadcasting system with over $73,000 in tangible Canadian talent initiatives;

4132 the repatriation of revenues and audiences to Kincardine, Goderich and Port Elgin from out-of-market stations;

4133 a technically innovative service plan;

4134 a new local voice and diversity of ownership to the system;

4135 and, most importantly, a solid, firmly local station that these communities can truly call their own.

4136 We thank you for the opportunity to appear before you and we are pleased to answer any questions you may have at this point.

4137 THE CHAIRPERSON: Thank you, gentlemen.

4138 Commissioner Williams, please.

4139 COMMISSIONER WILLIAMS: Good morning, Mr. Cooper and Coast's panellists.

4140 Tell me a bit about this area: Kincardine, Goderich and Port Elgin. Which part of it is known as Saugeen Shores?

4141 MR. COOPER: Saugeen Shores is closer to Port Elgin. Recently, they had an incorporation of the townships there too, similar to other municipalities where they expand and create efficiencies through the infrastructure of an expanded township.

4142 And Saugeen Shores takes in Port Elgin, but it does not include Kincardine.

4143 COMMISSIONER WILLIAMS: So, is it correct to refer... Should I be referring to the area of Port Elgin as the community or Saugeen Shores?

4144 MR. COOPER: In most cases, people refer to it as Port Elgin.

4145 COMMISSIONER WILLIAMS: Okay. I just want to take advantage of your local knowledge.

4146 MR. COOPER: Okay.

4147 COMMISSIONER WILLIAMS: I guess what I would like to do this morning, or to start this morning, is by examining in more detail your local and regional programming plans to get a better understanding of how you would serve the three communities of Kincardin, Goderich and Port Elgin.

4148 You have provided in response of deficiencies of chart outlining your spoken-word programming.

4149 According to the chart, you propose 11 hours and 19 minutes of spoken word per week. In addition to a news and surveillance program, you propose weekly features such as entertainment and community calendar online and town hall for a total of 126 minutes per week.

4150 And you will establish a community advisory board made up of representatives from a cross-section of the coastal communities, businesses and organizations to discuss the station's role in meeting the needs of the community and to make recommendations to your management team.

4151 You would also establish an online and interactive listener community where participants would give feedback on the station and submit information for their community.

4152 Now, in your supplementary brief, you state The overall objective is to make the station a connecting element between the coastal towns contributing to a distinct identity based on shared experiences, goals and lifestyles of the residents.

4153 So, in light of this statement, can you point out the common elements and differences in the three communities that you are proposing to serve and what measures you would take to reflect these common elements and differences in your proposed programming?

4154 MR. COOPER: Certainly. I think the common elements... Actually, this service and the idea for this service was born out of a couple of common elements.

4155 One, of the coastal communities, all of them have a shadowing signal from the current radio signals that they get and, due to the topography, you at some point in any one of those towns and not get the full signal. So there was one common need.

4156 I think the commonality that they share on the coast is it is one thing to be inland, but when you live on that body of water, you share the good times and the bad times.

4157 The good times happen to be when it is great weather and tourism is booming and the town is full and the economy is going great.

4158 The bad times are road closures when there are storms that come off that lake as it was two weeks ago. We lost seven boats to the bottom of Lake Huron that had not been found as of yet.

Three of the docks had been ripped away to a torrential rainstorm that came through and also that was damaging Goderich as well, damaging homes from the same storm.

4159 Living on that body of water, right on the edge of that body of water, there is a commonality. And everybody uses Highway 21 as the connecting point at this point in time.

4160 You know, I believe that there are... having a voice of their own will be similar to years ago when we only had CBC broadcasting the NHL games of Toronto and Montreal Canadians. And then, Calgary got their own team. And then, Edmonton got their own team.

4161 And while they were smaller markets, everyone in that market wore red and wore blue. And that became their identifying point.

4162 And I think, with the growing nature of these three markets, with the common elements, we want to give them a common voice.

4163 How we are going to do that? By being completely interactive with them, by having an advisory council.

4164 I went out and spoke to the BIAs in these communities. I got letters of support from their mayors. I spoke to the chambers of commerce as well.

4165 I have friends and family up and down the shoreline. As I said, my wife grew up inland actually, in Wingham. But they vacationed on the coast.

4166 And so, when I first started dating her, that is where we vacationed. In fact, I got married on the beach in Kincardine.

4167 So, I am a resident and feel that we can provided a voice for the shared interest.

4168 And I guess, lastly, Bruce Power Plant is the largest nuclear power plant in North America. Recently, it opened two new reactors. It is planning to open, within the next three years, another two new reactors.

4169 I spoke with Duncan Hawthorne, the president. I told them that we can be a strong link to almost entirely their entire work force. Not only that, I said we could be your early warning system.

4170 But we need to create an interaction between you, your work force and the community. And he has agreed with that.

4171 So, our initiatives outlined in our summary brief, we believe are going to be street-level as is our station itself.

4172 COMMISSIONER WILLIAMS: What do you mean by being the distant warning system for the Bruce Power Plant.

4173 MR. COOPER: No, Mr. Commissioner, do not get me... do not let me mislead you. When I said the voice of The Coast could be stronger than any signal that they had on sight at the plant is what I meant in saying that.

4174 But, really, what I mean Bruce Power has an initiative that's talk about safety and talk about community. And, we can help them achieve those goals.

4175 COMMISSIONER WILLIAMS: And, can you elaborate a bit on your statements from your supplementary brief where you would... your station would become a connecting element featuring shared experiences, goals and lifestyles.

4176 Give me some examples of how you would do that.

4177 MR. COOPER: Well, first of all, we intend to have stringers... in-market stringers in each one of those markets that are to provide to us, on a daily basis, updates, whether it is road closures, whether breaking news, municipal politics, entertainment, social events.

4178 Again, whether it is the building tourism through its salmon derby or the art fairs or the Festival of Lights or the Pumpkin Festival, these economies and townships have energy and tourism in common.

4179 But there is nothing else linking them. And we believe that we can be that link.

4180 COMMISSIONER WILLIAMS: Okay. With respect to the total amount of spoken word, can you confirm whether this 11 hours and 19 minutes includes the deejay banter.

4181 MR. COOPER: I believe it does not include deejay banter. That was 11:19. But Andrew, you may want to answer that more?

4182 MR. FORSYTH: I can confirm that this is strictly spoken-word programming in terms of information and news, and not background material by the deejays.

4183 COMMISSIONER WILLIAMS: Okay. Thank you.

4184 You have indicated that you will feature a daily community calendar outlining events of interest to the residents of Lake Huron shoreline and a town hall feature giving access to municipal officials.

4185 How would you publicize these feature programs and how would you gather the information for inclusion in these programs?

4186 MR. COOPER: Well, we would promote it on the radio station itself through promo spots. And, leading up to it, we would also be contacting those organizations directly.

4187 We would do the connection, as I said earlier, by having those three stringers in those markets on a permanent basis.

4188 COMMISSIONER WILLIAMS: So you feel the radio station, proposed radio station, would be a sufficient means for promoting its own service? You would not need to involve any other media?

4189 MR. COOPER: Well, we have a promotions budget and an advertising budget. And, actually, year one is significant in that we have earmarked $55,000 for launch plus another $50,000 in barter to let them know who we are and that we are yours.

4190 But, on an on-going basis, we have budgeted money to do that type of advertising.

4191 COMMISSIONER WILLIAMS: Can you tell me a bit more about how you would gather the specific information. Like, say, what would your approach be to the town hall meetings, for example?

4192 MR. COOPER: The town hall meetings, and again this is on an informative base, would be separate in each community. We would choose... In the spring, we would go to Goderich, and we would talk to the people of Goderich and bring in a few people from the other communities.

4193 Then, we would then move it in the fall to Kincardine, and bring in a few people. But, base it in each one of those communities and bring some outsiders in, so that they can talk about their common interests and their common issues.

4194 COMMISSIONER WILLIAMS: So the town hall would not be, I guess, reporting on regular town meetings, municipal meetings, then. It is more of a forum for people to get together and talk about issues of the area.

4195 MR. FORSYTH: Yes, sir.

4196 COMMISSIONER WILLIAMS: Would that be correct?

4197 MR. COOPER: And then, just to clarify, we will cover municipal politics as part of our on-going business. The town halls are special events where we are looking to bring to a point any issues that each of those communities share and want to speak about.

4198 COMMISSIONER WILLIAMS: Okay.

4199 MR. FORSYTH: If I may, just to add some clarification, and again, in a proposed situation, in other words, in an application, it is sometimes difficult to be able to illustrate how these things would happen.

4200 But certainly, from experience, having consulted with stations in smaller markets, where obviously local programming is the key to their survival, I can just sort of expand, perhaps, and give you a... paint a picture of how I would see Brian implementing some of this.

4201 He does have allocations and staff for three full-time news people. They would be on air, obviously.

4202 But they would also have either administrative duties such as the News Director. I think the other two news people would be readers, be they would also be reporters.

4203 So they would be in the field. They would be sussing out new stories that they would have leads to.

4204 But, over and above that, there would be, as he has already discussed, three stringers.

4205 So, that is six people within the area that are out there looking for news.

4206 And, generally, what comes around goes around is the experience that... If you are in the market, and you really are reflecting what is going on in the market, the audience picks up on it.

4207 The audience recognizes you are there and they actually start to demand more, which is sometimes a very good thing.

4208 They will be giving you a lot more information than sometimes you even need.

4209 So, I think it is really a case of setting up a structure, which Brian has spoken about, and letting that grow within the community.

4210 And being able to go to a large organization such as Bruce Power and use them as a central point where you can say "Fine, this is a radio station that we are associated with and we do things with this group" would be very much like the... a similar situation in Hamilton, for example.

4211 Hamilton radio stations collectively, I believe, and I do not think it is divided up amongst ownership lines, collectively have always done work with the two major employers in that market.

4212 Both Stelco and Defasco have taken quite a role in working with the radio stations to be community-based.

4213 And I think this is the objective here... is to have Bruce Power as part of the radio station. And let the radio station be a spokesperson for it in the community.

4214 COMMISSIONER WILLIAMS: How do you...

4215 MR. FORSYTH: There are different ways of connecting to the community that way.

4216 COMMISSIONER WILLIAMS: Yes. I understand. Thanks.

4217 How do you reconcile, okay, that Bruce Power may have some goal. Your summer visitors may have different needs. You say that is when the community is at its most vibrant.

4218 How will you adjust your programming for the seasonality of it then?

4219 MR. COOPER: Well, the adjustment and the Bruce Power needs are really to weave itself within the community.

4220 And, within the community means within the economy and within their lifestyle. That included the tourist base for the summer time.

4221 I mean, and Mr. Commissioner please do not get me wrong, this is not going to be a barker station for Bruce Power at all.

4222 COMMISSIONER WILLIAMS: Yes, I did not think so...

4223 MR. COOPER: They have certain social benefits that they need to provide the community, and we are just going to be working with them hand in hand.

4224 But we are not going to be in any way a barker station for them.

4225 COMMISSIONER WILLIAMS: Yes.

4226 MR. COOPER: Does that answer that question, sir?

4227 COMMISSIONER WILLIAMS: Yes, it gives me a better idea. I thought, from your previous answer, that you were becoming quite focused on them, on the Bruce opportunity.

4228 MR. COOPER: Not at all.

4229 COMMISSIONER WILLIAMS: Yes. Okay, the local reflections for these communities, in addition to the town halls and the other features that you have described, and your news... Can you give me an example of how you think your deejays will try and pull the different communities together through their chatter, I guess?

4230 MR. COOPER: Well, first of all, in addition to the deejays, we are going to have out- and in-market, summer cruiser, and attending winter events as well, that will be doing life remotes from those things.

4231 COMMISSIONER WILLIAMS: Will you be doing any work in the smaller communities, say between the...

4232 MR. COOPER: We will stop... Between all of the communities, the major communities, we will definitely stopping along the way, along the coast, to include them as part of our programming.

4233 And it is not unlike... The philosophy is not unlike what CHUM did with City TV and that brand across the country of being everywhere, being part of the community.

4234 COMMISSIONER WILLIAMS: In terms of your news stories that are of relevance to each of these three main communities, will you divide the coverage up by percentages, and if so, what percentage of each community would receive coverage of its stories?

4235 MR. COOPER: Well, I do not know if we will be that pedantic, but I believe the story that has the greatest impact on all of those communities would be your lead story.

4236 Certainly, if there is really no news today in Port Elgin, there is nothing to report. And we will focus on other areas.

4237 We will look and have someone on the ground in all of those communities to make sure we are not missing any opportunity to report on something that is affecting them.

4238 But we are not going to put in I would say less than news just to make them feel inclusive.

4239 COMMISSIONER WILLIAMS: So it is a regional approach to news for the general area...

4240 MR. COOPER: For those three markets.

4241 COMMISSIONER WILLIAMS: Yes.

4242 MR. COOPER: Yes.

4243 COMMISSIONER WILLIAMS: You talked earlier about your stringers. Where will they be headquartered? Where will they be located?

4244 MR. COOPER: One in each of those communities: Kincardine, Port Elgin and Goderich.

4245 COMMISSIONER WILLIAMS: Again, more on your news, what percentage of your news would be station-produced?

4246 MR. COOPER: I believe our, and Andrew I am going to ask you to help me on this. We try to do everything possible in-house.

4247 And I assume that we are going to be getting some national news.

4248 Andrew, do you want to speak to that?

4249 MR. FORSYTH: Certainly, from the point of view of production, it would all be centered from the radio station.

4250 And, as Mr. Cooper has indicated, there may be a subscription to broadcast news as a news supplier, but not as a voice, if that clarifies your question.

4251 COMMISSIONER WILLIAMS: How would your news stories be gathered and packaged and put on air? And how would you go about collecting news out of the three main communities? With your stringers and...

4252 MR. COOPER: Well, yes, Mr. Commissioner, I go back to that we would probably have a news service of world news that we would gather, again produce with our own voice, in studio.

4253 We would have our stringers. I am sure that, as we go along, we would build up friends within the community, our online service.

4254 We are looking to have a very high interactive e-mail open online to our network news as well issues.

4255 And that is all of that interactive philosophy.

4256 COMMISSIONER WILLIAMS: So, let us try an example. Let us say, let us say there was a boating accident at Goderich. How would the information eventually get to be so it is put on air? What exactly would happen?

4257 Let us say there has just been a boating accident, how would your company handle that?

4258 MR. COOPER: Well, I would... First thing, that our stringer would know about it.

4259 Secondly, I think that we may have a scanner in the station that would have any Coast Guard activity on radio.

4260 Thirdly, phone line and keeping... You know, it is our program, our news director, job to stay in touch with these communities.

4261 And I would imagine there would be a daily phone call. Or anything of interest that came up, we would get a call.

4262 COMMISSIONER WILLIAMS: And you would interview them over the phone, or this would be done over the telephone...

4263 MR. COOPER: We would interview them over the phone, along we would have our stringer down there on site. We would send a reporter there as well.

4264 COMMISSIONER WILLIAMS: Okay. With your deficiency response of June 18, you also include a chart indicating the number of proposed page or volunteer programming staff at the station. The chart shows seven full-time staff and two interns.

4265 It would appear from your chart the station would offer live-to-air programming during most of the weekly broadcast.

4266 Would you confirm for us the number of programming staff you intend to hire both full time and part time?

4267 MR. COOPER: Yes, Mr. Commissioner. As we mentioned there is seven full-time programmers in studio, the three stringers...

4268 COMMISSIONER WILLIAMS: They are all programmers? The is no administrative staff in this?

4269 MR. COOPER: Oh no. I will go through all of this.

4270 COMMISSIONER WILLIAMS: Okay, sorry.

4271 MR. COOPER: Three stringers that are in-market, that we referred to, and two interns in programming.

4272 In G&A, general administration, there is a general manager, a receptionist. In addition, there is a community coordinator and an assistant community coordinator.

4273 In addition to that there are four full-time sales people and, by the way, I should also mentioned that the general manager will also do some sales as well.

4274 And that is for a total of 15.

4275 COMMISSIONER WILLIAMS: If your license was approved, when would you plan to be live-to-air and when do you plan to be voice-tracked or automated?

4276 MR. COOPER: Well, we would like to be live-to-air most of the time. We would use voice tracking to alleviate burden of hours on some of our programming staff that is on air doing the morning news and is also news director.

4277 In that case, we would use some voice tracking.

4278 We would also want some voice tracking... We want to be able to go to air in case of a live or emergency need, that there is some type of catastrophy or there is some type of road closure or crash on a wide... I do not know how we would... We need to be able to do that.

4279 And that would be the cases that we would use it.

4280 Andrew, you may want to expand.

MR. FORSYTH: Yes, again, typically, the model that Brian is speaking of is utilizing voice tracks to allow people to do other work.

4281 However, that does not mean that there will not be anybody in the station. Perhaps the only place for them may be overnight.

4282 But, speaking of the model that he has really looked at, certainly during the daytime, there will always be somebody at the radio station doing perhaps administrative work while the voice track is on.

4283 However if an emergency comes up, if there is something that needs to go to air, there will be somebody there to put it on right away.

4284 Certainly it is not a case of turning off the lights and leaving the radio station...

4285 COMMISSIONER WILLIAMS: Heading to the beach...

4286 MR. FORSYTH: And certainly, weekends, as Brian has indicated, he spends a lot of time in the area, and, you know, he will tell you as will Mack, that weekends are very busy in that whole area.

4287 And weekends is when the place really comes alive. So, in fact, it is a radio station's obligation to reflect that.

4288 And, even from both an entertainment and cultural point of view, there will be things going on in the market. Those things have to come to the radio station and be reported on live from the small communities around there.

4289 Also, there is obviously retail opportunities to do remotes and that sort of thing.

4290 So, under circumstances like that, it is to the radio station's advantage to have live personnel.

4291 So, it is being able to utilize the personnel in a manner that is most effective for the radio station. It is certainly not a case of trying to minimize the number of people that are on air.

4292 COMMISSIONER WILLIAMS: Okay. As I have looked at your financial projections that you filed with your application, and specifically the projected programming expenses, I note estimate expenses of 305,690 in year one and that there is a significant reduction of approximately 40,000 in year two.

4293 The following year show incremental increases of approximately 9,000 per year for a total expenditure of 310,000 by the seventh year.

4294 Could you explain to me the reason for the reduction in programming expenses in year two?

4295 MR. COOPER: Well, part of it, Mr. Commissioner, is start up. In any business, there is a little bit of padding to make sure that start up covers something unforeseen.

4296 And, then, there is levelling off.

4297 But, Andrew, maybe you want to expand on that a bit.

4298 MR. FORSYTH: That is correct. The start up figure is rolled into year one. So, you will see, that's correct, that year two appears to be less.

4299 In fact, there is an increase in year two from year one. Year one just happens to include start up.

4300 And start up, I believe, was set up to look at three months start up before going to air. So there is some salaries there for people like the program director, obviously, a music director, putting that type of infrastructure together, the news department, where the news person would have to hired and go out and get his or her network set up.

So, there is a lot of those expenses built into year one.

4301 COMMISSIONER WILLIAMS: Okay.

4302 MR. FORSYTH: ...that do not appear in year two and onwards.

4303 COMMISSIONER WILLIAMS: The area I think we will move into now is your Canadian Talent Development proposals.

4304 In your application, you indicated that you accept this conditional license to participate in the Canadian Talent Development Plan as created by the Canadian Association of Broadcasters and as set out in CRTC Notice 1995-196.

"Even though the plan calls for a contribution of $400 for small markets, the applicant may elect to contribute more to the plan." (as read)

4305 You originally indicated that you would be prepared to spend $10,500 per year for the seven-year license term on Canadian Talent Development.

4306 Of this total 500 would be directed to FACTOR and 10,000 would be to fund either a headline Canadian act and/or development fund for local bands or at summer music festivals.

4307 In response to some of our deficiency questions, you decreased the amount directed to FACTOR to 400 and increased the summer music festival total to 10,100. There is a shift of $100 there. It is probably a typing error or...

4308 MR. COOPER: I believe that was a typo. I mean, all along we said that was $10,000 that was going to the initiative and $350 for the FACTOR.

4309 COMMISSIONER WILLIAMS: Are you prepared to accept by conditional licence that these amounts will be directed on a yearly basis to FACTOR and to the summer music festival initiatives?

4310 MR. COOPER: Without a doubt, sir.

4311 COMMISSIONER WILLIAMS: With respect to the establishment of the summer music festivals, you application states:

"The funds will be used for development of a new talent festival for Kincardine, Goderich and Port Elgin, by funding either a headline Canadian act and/or a development fund for local bands whereby the station will pay the bands to perform live."(as read)

4312 What is your selection process for this Canadian act and/or local band?

4313 MR. COOPER: First of all, Mr. Commissioner, because these markets are in the tourist industry, there are a lot of festivals that go on throughout the year, but mostly in the summer.

4314 So, I want to support whether it is the Mass Bands or the Canadian Big Band Festival or the Festival of Lights.

4315 What we were talking about there was specifically where we were looking at bringing in some talent.

4316 In my company, Insight Sports, my partner is a guy named John Brunton who produces the show called Canadian Idol.

4317 And John and I spoke about bringing each year the Canadian Idol to do some type of performance and then working in local performers as well.

4318 In addition to that, the Kincardine Music Festival, which is known throughout the province and if not the country, provides an opportunity for youngsters to develop their skills.

4319 And there are the Bluewater Playhouse and there are other opportunities to provide for the development of talent.

4320 And we intend to be involved with them. As many as we can.

4321 As well, we may use the community advisory council to help in the selection of some of these.

4322 I sit on a fair amount of charitable boards that give out funds for use whether it is for disadvantaged children or the causes, and we provide them with a criteria sheet that they need to meet.

4323 The criteria:

4324 that they are involved with the community;

4325 that the funds are going directly to the talent that needs to be developed;

4326 etc.

4327 And, along with the community advisory board, we would put that type of process in place.

4328 COMMISSIONER WILLIAMS: So you do not see the creation of new festivals, but working with the existing festivals.

4329 MR. COOPER: So it is really more supporting the existing ones and, along the way, there may be an opportunity to create a new event. But the majority of it would be for supporting existing...

4330 COMMISSIONER WILLIAMS: So, would these festivals or festival support rotate, say, between the three communities or are they focused in Kincardine as...

4331 MR. COOPER: No. As I said, the Canadian Big Band and the Pumpkin Fest are two properties that are in Port Elgin. Certainly, the Festival of Lights is in Goderich.

4332 I would not focus in any one. I would try to figure out a formula that I would have a significant impact for each one of these, yet at the same time, put some funds aside for new and upcoming initiatives.

4333 COMMISSIONER WILLIAMS: Are there many local bands and entertainers in this area?

4334 MR. COOPER: Mr. Commissioner...

4335 COMMISSIONER WILLIAMS: Within the three communities?

4336 MR. COOPER: In terms of local rock bands, to be honest with you, my age is showing here, I do not know. I know there are a fair amount that play in the various bars and pubs along the way, especially throughout the summer.

4337 Some of them, you know, tour Ontario. But certainly, some of them are home-grown.

4338 COMMISSIONER WILLIAMS: Would your local advisory board have membership that would know of local up and coming bands...

4339 MR. COOPER: I would hope that they would.

4340 MR. FORSYTH: If I may add to that again, common practice is when a local radio station signs on, it is almost inevitable that every musician within the range of the radio station who may not have a recording contract or may, you know, wish to have one will contact the radio station.

4341 I can speak from the experience that, three years ago, the Commission licensed John Wright in Kingston with CIKR, and John's staff, within virtually days of signing that radio station on, we inundated by tapes and CDs and demos from various artists wanting to get on the radio station.

4342 Now they have a venue for that...

4343 COMMISSIONER WILLIAMS: Was any of this solicited or did they just come forward voluntarily?

4344 MR. FORSYTH: No. They were not solicited at all. In fact, as I said, the radio station had just signed on.

4345 They were still in the business of sort of getting known in the community and they were faced with a flood of that type of material.

4346 So it is typical that when a radio station signs on the local artists, musical community, knows pretty quickly and tends to come to them.

4347 You do not really necessarily have to go to them. But, as Brian says, certainly using a community advisory board would also be another good way of networking and finding out what is there.

4348 COMMISSIONER WILLIAMS: The next area I want to explore with you is the methodology associated with the calculation of your radio advertising revenue potential.

4349 On page 19 of the study by Bohn & Associates, a projection of radio advertising revenue potential in excess of two million for Bruce County was set aside for 2002.

4350 This figure is apparently arrived at by calculating the ratio between radio advertising and retail sales.

4351 Can you please discuss in more detail the methodology employed? And what portion of this two million dollars in radio advertising revenue potential would attributable to each of the three markets?

4352 MR. COOPER: So how are...

4353 COMMISSIONER WILLIAMS: So how are the two parts...

4354 MR. COOPER: We used what was considered industry standards in the calculation, in taking the Financial Post data of the retail sales.

4355 In actual fact, we took 2002 data, which I believe was 567 million and then multiplied that by the three per cent that was available for all media, and then took 14 per cent of that, which comes down to available radio media.

4356 That came out to about two million dollars in Bruce County.

4357 In actual fact, in 2004, the Financial Post data number has climbed over 30 per cent to approximately 727 million.

4358 Using the same ratios, it comes out to a little over three million dollars.

4359 We did not factor into that Huron County, of which Goderich is 25 per cent of the population base there, which would probably, using the same numbers -- not probable -- using the same numbers, would net us another $750,000 available on an annual basis for radio media.

4360 COMMISSIONER WILLIAMS: How did you arrive at your estimate of 10.5 million being spent on media advertising in the area defined by you as your target market?

4361 MR. COOPER: Mr. Commissioner, can you repeat the question please?

4362 COMMISSIONER WILLIAMS: Sure. You estimated total advertising spent on other media specific to the defined market area as totalling 10.5 million.

4363 So, how did you arrive at that estimate, at the estimated market size of 10.5 million?

4364 MR. COOPER: For Bruce County, I believe we took the retail sales, multiplied it by three per cent, and then came out with the - am I correct? - the 10 million.

4365 Andrew correct me if I am wrong.

4366 MR. FORSYTH: That is correct.

4367 COMMISSIONER WILLIAMS: Okay. Thank you.

4368 The objective of this next series of questions I am going to ask you is to have you discuss aspects of your projected revenue sources and the relevance to the business plan of the results of the Ipsos-Reid survey of businesses in the shoreline market.

4369 In response to deficiency questions dated June 18, question 6, page 4, you list expected sources of year one advertising revenue.

4370 In fact, you projected 70 per cent of your total revenue in year one, approximately 550,000, will come from other media such as print and television, the majority from print media.

4371 Could you tell us how much of this 550 would come from print media, in your estimation?

4372 MR. COOPER: Andrew, I will defer that question to you. But, before I do, we did extensive research through Bohn and the Ipsos-Reid research was supportive of that.

4373 The sample size was not as big as what we did with Bohn, but it supported the same end result for us.

4374 Presently, in those markets, radio is not working for them, and specifically Kincardine and Goderich.

4375 Print works for them to the extent that it reaches out to two or three markets.

4376 But they are paying for markets that no one is going to travel to. They are going to read their add, but they are not going to travel to Goderich from where they are coming from to purchase.

4377 And what we found from them, and what they told us, if we had a focused market and a focused voice to purchasers or consumers, it would thin their driving range and market that they would spend on radio and take away from print.

4378 COMMISSIONER WILLIAMS: And what per cent... Okay. Sorry.

4379 MR. FORSYTH: Certainly, just to follow up on that, it really was a question of looking at it and seeing that 70 per cent... We felt that based on the fact that only 20 per cent of the Ipsos-Reid respondents were utilizing radio that obviously there was a huge demand.

4380 Seventy per cent said that they would use radio if it was available.

4381 And, on that basis, we felt that that revenue, given the market sizes, would be coming primarily from print, which...

4382 COMMISSIONER WILLIAMS: Would you care to venture a percentage in what you think may come from print?

4383 MR. FORSYTH: Of that number, I would suggest upwards of 70 per cent.

4384 COMMISSIONER WILLIAMS: Seventy per cent of the seventy per cent.

4385 MR. FORSYTH: Yes.

4386 COMMISSIONER WILLIAMS: Okay. Thank you.

4387 What strategy do you plan on using to convince businesses currently advertising in newspapers to switch to your radio station?

4388 MR. COOPER: Mr. Commissioner, again, I go back to the strategy that we are your voice and we are your market.

4389 And I go back to the analogy I made when Calgary got their own team.

4390 We are going to prove to them, through our programming, that we are part of your community, that we are talking to the people and listening to the people that you want to reach as a business person.

4391 And we have planned excessively in terms of the type of programming that we have discussed earlier.

4392 We have put the supportive dollars behind it, as you can see from our budget.

4393 We are investing, in the first two years, at a loss. But I do not look at it as a loss, but I look at it as an investment to a long-term successful business plan.

4394 And I think that is the way we are going to get current advertisers using print to convert to radio, because it is their community and it is reaching who they want to reach.

4395 It is an efficient use of dollar as well for them.

4396 MR. FORSYTH: If I may just add a point, I would like to throw it to Mack because Mack has had a lot of experience in selling radio in this area and really knows the community very, very well.

4397 But certainly, I think, we even heard this discussed yesterday, that, you know, in local radio, where you are, it is not just the matter of being the radio station, you are the next-door neighbour.

4398 Your customers knows you. And you know your customer. Number one.

4399 It means you have to be able to look at them in the eye everyday, and say "We did the right job for you", "We did not do the right job for you."

4400 But you have to be able to have that sort of credibility with your local advertiser.

4401 And the pool, you know, is not infinite. It is a very finite pool you are working with.

4402 I think, looking at examples such as Sudbury yesterday, I have done a lot of work with Rick Doughty in that market place, and one of the issues that he always brings forward, I know, to his salespeople is "Make sure that it is the right buy at the right place and it is effective. And radio has to work the client."

4403 And I think in a local community that is what you strive for even more than you might in a larger community where you could afford some losses.

4404 But I will let Mack speak to this, because he has been doing this for a living for 30 years.

4405 MR. FRIZZELL: He has done a very good job of saying what I would have said.

4406 Yesterday, you also heard from Gary Miles saying that the sales staff that is well-trained is experienced in a way of how to approach the business community and individuals, and take the needs of that individual and place it properly on their radio stations.

4407 The Kincardine-Goderich area, as well as the Port Elgin, are a booming part of the coast line at this point. In the last two or three years, they have enjoyed extremely good expansion and an increase.

4408 The businesses I have talked to along the shore are all smiling and waiting for yet another profitable summer tourist season.

4409 But there are a number, a great number, of publications of various things - some you wonder if they really have an existence or is it somebody in the backroom decided to put this publication together and went door to door selling advertising space to get some particular cause out.

4410 And I think that is an area that will be a large opportunity that is not really, in my interpretation, considered to be media. It is almost junk mail if you want to call it that.

4411 The actual newspaper media, each community has their own. None of them are particularly strong newspaper media, but they are garnering a large portion of advertising, in my estimation, that they do not deserve.

4412 I have talked to some out-of-the-area newspaper people that keep looking at the shoreline because there is an opportunity.

4413 But they, like the radio business recently, have made the move to go in and take advantage of the opportunity for advertising that is available on the shoreline.

4414 MR. COOPER: Mr. Commissioner, I just may add, if you will, our research has showed that there was unused radio budgets and that there is pent-up demand and dollars that are sitting there for the taking.

4415 And the reason is there is no local station.

4416 COMMISSIONER WILLIAMS: In your response to deficiency questions in June 18 again, why did you not list incremental spending by existing radio advertisers... Why did you not demonstrate that there is this pent-up demand or this extra potential revenue and opportunity?

4417 MR. COOPER: Mr. Commissioner, I thought we clarified in our application that the research showed that there was pent-up demand.

4418 COMMISSIONER WILLIAMS: Yes. Well, the results say... For example, the results of the Ipsos-Reid study suggest that over 70 per cent of businesses that currently advertise in radio would likely increase their current spending on radio advertising if a new station is licensed to serve the communities.

4419 Given this finding, why did your response to deficiency question dated June 18^th not list incremental spending by existing radio advertisers as a source of year one revenue?

4420 MR. COOPER: Andrew...

4421 MR. FORSYTH: I think, overall, the philosophy of these projections has been conservative.

4422 And we were specifically trying to answer the question "Where was this money going to come from relative to existing advertising?" And that was the number we used.

4423 So, it was really just being conservative. We had looked at the other number but had not included it.

4424 COMMISSIONER WILLIAMS: Okay. You talk about 30 per cent of your 70 per cent coming from television.

4425 What would be the catalyst driving the switch from TV to radio in your opinion?

4426 MR. COOPER: Efficient use of dollars, creative programming, lower production cost, and measured results.

4427 COMMISSIONER WILLIAMS: Thank you.

4428 Which stations in particular do you project will provide the sources of revenues projected as coming from out-of-market radio and why do you believe advertisers would switch from these stations to your proposed service, so from one radio to another now?

4429 MR. COOPER: Mr. Commissioner, I think there will be some that switch. I think there will be some that share based on the demographic of our adult classic hits format.

4430 I believe there will be some that do it because it is more targeted and it is a prudent business move to do it.

4431 COMMISSIONER WILLIAMS: And why do you believe advertisers would switch from these stations to your proposed services? You have given us your reasons why for television and why for newspaper.

4432 MR. COOPER: For the same reason. And again the format is going to reach a broader base from some of the existing stations: 25-54 adult classic hits.

4433 I also believe that it is a repatriation of the revenues, the advertising dollars, back into the community.

4434 All of these advertising dollars have been...

4435 COMMISSIONER WILLIAMS: It is right, outside...

4436 MR. COOPER: ...in out-of-market service.

4437 And it is a repatriation of these advertising to the businesses that are back in this community, including The Coast.

4438 I think Goderich, in this case, is real good example of receiving an out-of-market signal, not having many other options, that we can...

4439 COMMISSIONER WILLIAMS: Would signal quality and other technical considerations be a motivation as well?

4440 MR. COOPER: Without a doubt, Mr. Commissioner.

4441 And, you know, the innovative technical transmission formula that we have come up with was born out of the need.

4442 I remember sitting on the beach and not being able to get the signal and going my then... my father-in-law - who has since passed away and he worked for the Wingham station for 35 years, and my wife worked for the Wingham station - and saying "Why is the signal going and why has someone not addressed this?"

4443 It is the topography. And I am sure Wingham tried to address it, but it is the topography.

4444 But it is the common need and common problem.

4445 And we are giving a common solution to all of those coastal communities.

4446 MR. FORSYTH: Just to add to that, I am certainly, by no means, a technical expert. I do not even pretend to have that.

4447 But you can see the contour map that is up on the board and certainly, I am sure, within the application that filed by our consulting engineer.

4448 It is very interesting that in the first cut of this, as Mr. Cooper and Mr. McCarthy came to Bohn & Associates for a look at the market revenue and whether there was potential there, he also went to Imagineering and said "Is there technically a way to fix this problem that he had already experienced?"

4449 And our consulting engineer came back with the sort of very traditional "Well, you know, you put a big stick up and you look for a C-class frequency and you boom in, you know, 50,000 watts of power and that will not do it."

4450 "It is not going to work. We are going to do no better than anybody else if we go this route."

4451 And went back and said: "Okay. There is got to be another way of doing this."

4452 And the way in doing it is to do what he has come up with, and that is to use eight A-class frequencies which are generally unused or throughout the country.

4453 But put them into a position that really does supply an adequate signal for those coastal communities and solve that issue.

4454 MR. COOPER: And, Mr. Commissioner, I might add that that was at a greater cost to do that, a greater marketing challenge to brand all these, because we have three frequencies. As people move from market to market. Plus The Coast.

4455 And we will take greater initiatives to make sure that we get our brand out.

4456 COMMISSIONER WILLIAMS: Okay. So, if I am driving down the shoreline highway, I would have to change frequencies as I work through each of the communities?

4457 MR. COOPER: As you are driving down the shoreline highway, you will see a sign as you are starting to leave Saugeen Shores.

4458 And you will see a sign that says "The Coast" and it will put the 90.5 frequency.

4459 And as you go down and further South of Kincardine and entering Goderich, you will see "The Coast" and it will have the new frequency as well.

4460 Yes.

4461 We will have some type of tag on it.

4462 COMMISSIONER WILLIAMS: Okay. I think that concludes the questions on... my questions on your application, Mr. Cooper. And I have enjoyed learning a bit more about this resort area of Canada.

4463 I am interested enough now that I am going to probably have to take a drive down that highway at some point and see what it is all about.

4464 MR. COOPER: Thank you very much.

4465 COMMISSIONER WILLIAMS: Thank you.

4466 Those were my questions.

4467 THE CHAIRPERSON: Mr. Cooper, this application was filed on behalf of a corporation to... of a company to be incorporated which would be 50 per cent owned by you and 50 per cent by Mr. McCarthy. Correct?

4468 Is that still the plan?

4469 MR. COOPER: Yes, Madam.

4470 THE CHAIRPERSON: What will be Mr. McCarthy's role in this endeavour?

4471 MR. COOPER: Danny McCarthy and I, just to add a little context, sat next to each other at 17 years old and both went through the accounting stream at St. Mary's University in Halifax and then both worked for accounting firms and stood for each other at weddings and Danny has been to my home at Kincardine many, many times. He loves the whole coast area.

4472 Danny's role really has been financial support equally with myself as well.

4473 And Danny's role is a business advisor. And, that is basically it, he will be a business advisor with me.

4474 In the day-to-day, I mean, he will probably do a lot less than... I will be doing doing more day to day.

4475 THE CHAIRPERSON: And an investor, obviously.

4476 MR. COOPER: Excuse-me.

4477 THE CHAIRPERSON: He will be an investor in the company.

4478 MR. COOPER: An investor, but also actively involved in. He is a very good businessman, very successful.

4479 THE CHAIRPERSON: So, will the investment represent the 50-50 that we see as the number of shares to be held by the company in each case?

4480 MR. COOPER: At this point, yes.

4481 But I should also tell you that we are like a good marriage and I am the woman.

4482 I have final say in any of the final issues, whether it would be budgeting or anything else.

4483 And we both agree to that.

4484 THE CHAIRPERSON: Will you have a shareholders' agreement of any sort between each other or simply...

4485 MR. COOPER: We will.

4486 THE CHAIRPERSON: ...a marriage?

4487 COMMISSIONER WILLIAMS: A prenuptial...

--- Laughter / Rires

4488 MR. COOPER: We have an agreement into place and, when we incorporate, we will have an agreement, a formal agreement.

4489 THE CHAIRPERSON: And this formal agreement will formally recognize your wifely part in the partnership.

4490 MR. COOPER: Yes, it will, Madam. I am sorry...

4491 THE CHAIRPERSON: Because, as you know, these endeavours do not always pan out exactly as Pat Bohn told you.

4492 And, when they are closely held, it can be a difficulty when more money is required or things do not pan out as predicted.

4493 You will have then a legal arrangement as between the two of you as to what your expected roles are.

4494 MR. COOPER: Madam, we will have a legal arrangement and we will have complete corporate governance as I outlined to you, with myself having the final say.

4495 THE CHAIRPERSON: And that is what the modalities will be, that you will operate and have the final say?

4496 MR. COOPER: Yes, Madam.

4497 THE CHAIRPERSON: And with regard to investment, will it cover what happens when more funds are required, etc.?

4498 MR. COOPER: Yes, it will.

4499 THE CHAIRPERSON: It may be wise to file this agreement with the Commission or this proposed agreement.

4500 I guess it was not requested earlier today.

4501 But it is always... When there have been difficulties before, where people did not plan, especially new players in the broadcasting industry, where plans or projections do not pan out exactly, and it a comfort to the Commission to know that there is something in place to ensure that it will be... you know, that there will be a smooth continuation of the undertaking once a license is granted.

4502 MR. COOPER: Madam, I will do that.

4503 But, I should point out, with all due respect, while I am new in radio, I have a partnership in place with TSN and the NHL on the NHL Network.

4504 We have operated and been an investor to the tune of four and a half million dollars for the last four years.

4505 And a lot of that...

4506 THE CHAIRPERSON: With Mr. McCarthy?

4507 MR. COOPER: No, not with Mr. McCarthy.

4508 THE CHAIRPERSON: No.

4509 MR. COOPER: But I know the... What I am saying in the context of having a proper contract in place...

4510 THE CHAIRPERSON: Right. I see that you have extensive business as well as accounting, but... on-hands business experience, so you obviously know what I am talking about, the necessity to have some type of assurance when there is no clear equity control that there will not be difficulties if more funds are needed or if decisions have to be made.

4511 Mr. Malcomson, you have something to add?

4512 MR. MALCOMSON: Certainly. Thank you, Madam Chair.

4513 I think a way to resolve this, if it tends to be an issue for you, is to, if you were to grant the license, recognize in the decision Mr. Cooper's wifely role and require the filing of a shareholders' agreement that reflects that wifely role.

4514 We would be happy to do that if that gave the Commission some comfort in terms of knowing the certainties of the ownership structure.

4515 THE CHAIRPERSON: It is always, of course, easier if the governance is filed.

4516 I have to check the Broadcasting Act and see if we can do marriages.

--- Laughter / Rires

4517 MR. COOPER: Madam, I am sorry and regret the analogy at this point.

--- Laughter / Rires

4518 THE CHAIRPERSON: Not at all. I will pass this on to my husband.

--- Laughter / Rires

4519 THE CHAIRPERSON: Commissioner Pennefather.

4520 COMMISSIONER PENNEFATHER: I am sorry, Madam Chair, I should have indicated before, I just wanted to hear you very briefly.

4521 On the employment equity area, you indicated in your application that you would have a senior-level employee of the radio station responsible for addressing equitable representation.

4522 Who will that senior manager be?

4523 MR. COOPER: The General Manager will be the person that would look after that...

4524 COMMISSIONER PENNEFATHER: The General Manager...

4525 MR. COOPER: ... and ensure that. Yes.

4526 COMMISSIONER PENNEFATHER: Will you also have anyone in the program area?

4527 MR. COOPER: In programming, the would be a structure, a corporate structure where the Programming Director would also be involved in those decisions.

4528 COMMISSIONER PENNEFATHER: And have you begun any discussions as indicated with the Saugeen Indian Band at this stage, in terms of your proposals, vis-à-vis an internship program? Have you begun any of those discussions?

4529 MR. COOPER: Madam, I have not done any of those discussions, but that is a good concept.

4530 COMMISSIONER PENNEFATHER: Thank you.

4531 THE CHAIRPERSON: Counsel.

4532 MS JONES: Hi. I would like to go back to programming for a minute, I have a couple of questions.

4533 In your newscast, how do you propose to devote news to the three areas of Goderich, Port Elgin and Kincardine?

4534 What percentage do you propose to devote to these three areas in your news?

4535 MR. COOPER: I think those are our primary news base.

4536 Again, I mention that it depends on the actual impact of the news.

4537 If there is a news item that is going to affect all three, that is the lead on the news and that is what we will focus on.

4538 If there is something, and that could be a road closure or a storm or it could be some type of government windfall for coastal towns, but...

4539 At the same time we will have people on the ground in each market in the stringers, our reporters are going to be following up stories related to recent town council meeting and the developments or the awarding of a contract, as just happened in Goderich for the Communities in Bloom construction, as you enter the town, to have a Welcome sign coming in.

4540 Those are the type of things that we will focus on.

4541 I do not know... I mean, we would love to be able to do it 33 per cent each, but again, it is impact.

4542 I think you take those things based on that.

4543 MS JONES: Okay. And the other question is about voice track or automated.

4544 Do you have specific times in mind that you would have voice track?

4545 MR. COOPER: Yes. I think, in general terms, we discussed it. Specific times, because we have some of our on-air announcers performing other tasks, like the morning show, a certain portion - and a small portion, I believe - will be voice-tracked.

4546 And that goes to the afternoon as well for those three people that perform multiple tasking.

4547 And Andrew, maybe you can add to that.

4548 MR. FORSYTH: I think that predominantly voice tracking would occur overnight, in the overnight periods.

4549 There would be some application of voice tracking during mid-days during the week, but that would be on a minimal basis.

4550 MS JONES: So, you are planning to be mostly live during the weekends?

4551 MR. COOPER: That is correct.

4552 MS JONES: Okay. And, with respect to... Mr. Frizzell is here today as a consultant I suppose.

4553 If you were granted a license, would Mr. Frizzell be occupying a position with this station?

4554 MR. COOPER: I would hope he would.

4555 MS JONES: And the last thing I wanted to mention is that you have indicated your intention to use another frequency for the Port Elgin area.

4556 And I just want to make you aware that, in the event that the Commission grants you a license, you might be required to file an application for that change of frequency and also to follow proper Industry Canada documentation.

4557 MR. COOPER: I understand that and we would hope that we would be able to be granted a license conditional on Industry Canada approving us of this new frequency.

4558 Our consultant Ed Bogdanowicz has already had quite extensive discussions and research with Industry Canada saying that 90.9 is available in addition to five others that are available as well.

4559 And I believe - did we submit this?

4560 But we can submit the correspondence between Ed Bogdanowicz and myself on that.

4561 MS JONES: Okay. Thank you.

4562 These are all my questions, Madam Chair.

4563 THE CHAIRPERSON: Thank you, gentlemen and Madam.

--- Laughter / Rires

4564 COMMISSIONER PENNEFATHER: That is so rare...

4565 THE CHAIRPERSON: We will now adjourn for 15 minutes and then hear the next application.

4566 Thank you.

--- Upon recessing at 1023 / Suspension à 1023

--- Upon resuming at 1038 / Reprise à 1038

4567 THE CHAIRPERSON: Mr. Secretary, please.

4568 MR. LEBEL: Thank you, Madam Chair. We will now hear Item 12 on the agenda, which is an application by Bayshore Broadcasting Corporation for a license to operate an English-language commercial FM radio programming undertaking in Port Elgin.

4569 The new station would operate on frequency 97.9 MHz (on channel 250B1) with an average effective radiated power of 3,800 watts.

4570 The Commission notes that the applicant is presently licensed to operate the radio programming undertaking CFOS Owen Sound with a transmitter, CFPS in Port Elgin.

4571 And the applicant indicates that the new FM station would replace its transmitter CFPS Port Elgin and that, should its application be approved, it would cease the operation of CFPS Port Elgin following the implementation of the new FM station.

4572 The proposed FM undertaking would operate as a full service English-language commercial FM station programming an adult contemporary format.

4573 Appearing for the applicant, and will ask to introduce the panel members.

4574 THE CHAIRPERSON: Good morning.

PRESENTATION / PRÉSENTATION

4575 MR. CALDWELL: Good morning, Madam Chair.

4576 Thank you very much.

4577 And good morning commissioners.

4578 My name is Douglas Caldwell. I am the President of Bayshore Broadcasting Corporation in Owen Sound, Ontario, and I am as pleased to be here today as I was some 20 years ago when the Commission granted approval to the purchase of CFOS AM in Owen Sound.

4579 And, by the way, speaking of CFOS, this is a very special year for the radio station because it is celebrating its 65^th year of broadcasting in Owen Sound, Bruce and Grey counties.

4580 In the intervening years, we have grown and expanded in this region, with the addition of two FM stations.

4581 The services we have provided on our three stations has been well received, I believe, and we are gratified by the response and support from the local community over the years.

4582 I would especially like to thank all the many groups and individuals who took the time to write to the Commission on our behalf, for this application.

4583 It has always been my personal philosophy to give back more than you receive, and hopefully our radio stations and staff have been able to reciprocate in this manner by being closely involved in the community.

4584 Their contribution has not gone unnoticed, with their tireless fundraising, volunteering in the community, and generally making a difference, a huge contribution

4585 Our management and staff are a strong, industrious group of dedicated broadcasters, and I am happy to be here with them today and this week to add my support to this application.

4586 In the event this proposal finds favour with the Commission, we are looking forward to adding another milestone to Bayshore's proud history in Owen Sound, Bruce and Grey counties.

4587 With that, I would like to turn this presentation over to Mr. Ross Kentner, General Manager of Bayshore Broadcasting.

4588 MR. KENTNER: Madam Chair, commissioners, staff members, joining me today are my colleagues from Bayshore, who will be assisting me with this presentation.

4589 On my far right Mr. Douglas Caldwell, whom you have already met.

4590 Beside Mr. Caldwell is deb Shaw, our General Sales Manager.

4591 On my left, Rob Brignell, our Director of Marketing and Development and beside Rob is Lois Reid, who is the Business Manager at Bayshore Broadcasting.

4592 Seated in the second row are Chris Byrnes, Bayshore's Music and Programming Specialist, and Michael Fockler, Radio Broadcasting Specialist.

Madam Chair, Bayshore is the licensee of three radio stations and a full-time repeater station.

4593 The three radio stations are located in Owen Sound Ontario, comprised of two FM stations, and an AM station with a repeater located in Port Elgin.

4594 This application is to replace the existing Port Elgin AM station CFPS, a repeater service of CFOS-AM Owen Sound, with a new, full service FM station to serve Port Elgin and Kincardine.

4595 CFOS-AM has been serving Owen Sound and Bruce and Grey counties for 65 years.

4596 And the Port Elgin repeater service has been in existence for 25 years and now, with the explosive growth in the area, the region is ready for its own local FM radio station.

4597 One thousand watts day and night for a growing population like this simply is not acceptable service to be offering the residents of this community.

4598 MRS. SHAW: Bayshore has always considered its AM operation in Port Elgin as more than just a technical facility.

4599 We consider it much more than just a "repeater" from Owen Sound.

4600 We have always thought of it as an actual radio station and a going concern.

4601 Over the past 25 years, we have maintained a news bureau and sales office in the community.

4602 Our reporters and sales representatives are working there now.

4603 We have originated many remote broadcasts from the Port Elgin area over the years and our news coverage is continuous.

4604 But, in recent years, as the area has grown, we have noticed an increased reliance on the station's facilities in Port Elgin - more requests for news coverage, more requests for public service announcements, and an increased demand for advertising time.

4605 We have sunk deep roots in those 25 years.

4606 We have close ties to our listeners, the municipal leaders, community groups and, of curse, our advertising clients.

4607 Hopefully, our many letters of support from these groups and individuals reflect this close relationship with the community.

4608 But today, this repeater service in unable to meet the needs of the growing population.

4609 And with its low power and limited nighttime signal it is unable to reach listeners in nearby Kincardine just down the highway... a community we also propose to serve, and which forms part of the principal marketing area in this application.

4610 These two communities are closely linked and mutually dependent on one another.

4611 They have a strong community of interest.

4612 It is this area Bayshore proposes to serve with a decidedly local FM radio service.

4613 And you see it clearly outlined there, the three millivolts and the .5.

4614 The similarities and connections between Port Elgin and Kincardine are remarkable.

4615 Both communities have a population of over 11,000; such supports a vibrant retail market and, in each case, retail spending surpasses the national average.

4616 Both centres serve a large agricultural and industrial sector, including the giant Bruce Nuclear Power development, which employs 5,500 workers.

4617 The Bruce plant is located mid-way between Port Elgin and Kincardine, and most of the employees make their homes in one or the other of these communities.

4618 Bayshore's valuation of these two markets discloses retail sales have increased 4,8 per cent in this last year alone.

4619 In our research and discussions with local merchants and advertisers, we are confident of achieving our revenue forecasts, regardless of any media competitors we may encounter on the street.

4620 The local economy is very strong, and we are confident it can support our application.

4621 MRS. SHAW: As the General Sales Manager of Bayshore Broadcasting, I have to be cautious about the financial impact this new radio station will have on our existing operations.

4622 We estimate we will indeed lose some of our revenue on our AM station because that is the service currently broadcast in Port Elgin.

4623 We doubt our two FM stations will be affected to any great degree because they cater to a larger regional audience, and furthermore, their program and music formats are decidedly different from that proposed for the New FM in Port Elgin.

4624 Our long-term financial model forecasts that any possible financial impact that might occur to our stations in Owen Sound will be more than compensated for by the increase in market share on the New FM station.

4625 Bayshore values the retail of the combined Port Elgin and Kincardine markets to be strong, and growing, and is certainly a stable radio environment.

4626 I estimate that, even when taking competition into account, there will still be surplus radio advertising revenue in Port Elgin and Kincardine alone.

4627 Our sales team is no stranger to the Port Elgin and Kincardine areas. We already have a substantial list of clients who advertise with us.

4628 Some advertise on all of our radio stations, and some use just one station to target a specific audience.

4629 Therefore, in preparing a sales forecast for this application, I estimated nearly half our revenue will be new advertising dollars within the Port Elgin-Kincardine area.

4630 These retailers will now find radio advertising is effective and affordable for their particular local interest.

4631 We also anticipate many of our current advertisers will be attracted to the new formats and to the improved signal coverage, and thus will increase their total spending with Bayshore as well.

4632 It is our intention to make the New FM radio station affordable for the retailers in the Port Elgin and Kincardine markets. With our local signal and local approach to programming, we expect to attract many new advertisers.

4633 In summary, our revenue forecast in intentionally modest, however I should add that from a Sales Manager's point of view, I am never satisfied with minimum levels of achievements, and will be always seeking out new sources of revenue.

4634 Having said that, I believe our goals are achievable and realistic, and reflect the reality of this market that I know so well.

4635 MRS. REID: Madam Chair, commissioners, as is the case with most small market radio stations, if it cannot be called "sales" or "programming", it seems to fall on the desk of the Business Manager.

4636 Should this application be approved, my job at Bayshore will be to assist the New FM with a number of services from our Owen Sound offices such as administration, accounting, traffic, and payroll services, to name just a few.

4637 With regard to the existing AM repeater service in Port Elgin, we have already absorbed many of the expenses of an originating radio operation.

4638 For example, we already have a presence in Port Elgin with office spaces for our receptionist, sales and news staff.

4639 And there is ample space to add studios and more offices for our proposed station.

4640 Our business plan includes employing 10 full- and part-time professionals in Port Elgin, including programming, news, sales, and office employees.

4641 Overall, the New FM represents a good "fit" for Bayshore Broadcasting, and will benefit from the economies of scale necessary in smaller markets such as Port Elgin.

4642 MR. BRIGNELL: Madam Chair and Commissioners, our programming will comprise adult contemporary music and information services.

4643 The New FM will carry programming appealing to the broad demographic and lifestyle groups of the area we would like to serve.

4644 It has been our experience in small markets such as Port Elgin that we must endeavour to "be all things to all people".

4645 "All things to all people" does not mean we expect every radio listener in the coverage area to be tuned to the New FM station.

4646 But instead, we hope to appeal to a broad spectrum of demographic and lifestyle groups who will find something desirable on the station at different times of the day or the week.

4647 We will be a stand-alone operation 126 hours a week. We will be live-to-air 84 hours a week. And we do not plan any syndicated or network programming.

4648 Our music will be characterized as middle of the road A/C with a more "retrospective" bent; it will differ from the oldies format of our AM station, it will certainly not sound like our country FM station, and it will sound decidedly different from the modern contemporary A/C format of our other FM station.

4649 In other words, there will be no duplication of service between the New FM and any other Bayshore radio station in Owen Sound.

4650 In fact, it will be distinctly different from any other station available in the area.

4651 With respect to spoken-word content, the New FM will provide a minimum of 22 hours a week of enriched programming.

For example, we plan to carry over 15 and a half hours each week of locally-produced news, weather, traffic, and sports.

4652 Why so much local news you might ask? Our listener in Port Elgin have relied on the extensive local news coverage of CFPS-AM for over 25 years.

4653 It is our intention to carry this same commitment forward to the New FM, but with a noticeable difference.

4654 The New FM will produce a broadcast all of its own local news from its own studios, gathered and report by its own reporters based in Port Elgin.

4655 It will be distinctly different from anything originating from the Owen Sound newsroom.

4656 Local news coverage will be comprised of Council meetings, school and hospital boards, news conferences, emergencies and the like, which is expected to make up as much as 60 per cent of each news cast.

4657 As you may have already noticed in the many letters of support we received, Mr. Kentner and I personally made this commitment of local news to the community many months ago, when we were researching the feasibility of this new FM service and soliciting their support.

4658 We are committing to a one-hour open-line program each morning from 9 AM to 10 AM, Monday through Friday.

4659 We also intend to carry numerous brief 'drop-in' features such as the Lake Huron Explorer... and features dealing with agriculture, consumer, health, entertainment, community events, sports and recreation.

4660 And during the hockey season, we plan to carry play-by-play broadcasts of the local Junior B hockey team.

4661 Overall, there will be a minimum of 22 hours a week of spoken-word content, not including hockey broadcasts.

4662 Madam Chair, I would like to briefly refer to our plans for Canadian Talent Development. In our application, we made a commitment to contribute $4,400 per year.

4663 This is a minimum annual figure.

4664 But with a closer examination of Bayshore's financial forecast, you will see we clearly detail an additional $2,100 in expenditures allocated directly to talent development.

4665 Therefore, when including this amount to the minimum commitment of $4,400, Bayshore will allocate a total of $6,500 each year, for a total of $45,500 in direct contributions over the seven-year license term.

4666 MR. KENTNER: Commissioners, when our application was gazetted, it was deemed "Technically Mutually Exclusive" with another applicant at this hearing, namely Brian Cooper and Daniel McCarthy on behalf of a company to be incorporated, Item 11.

4667 Since that time, the matter of technical mutual exclusivity has been overtaken by events.

4668 The issues have now been amicably resolved between the two parties.

4669 And, as a result of both groups' desire to serve Port Elgin, Cooper-McCarthy has found a new frequency, which allows Bayshore to continue with its current proposal for 97.9 MHz.

4670 Both groups have recognized the economic strength of Port Elgin, and believe that two stations can successfully co-exist in this market.

4671 In this regard, Bayshore has compiled with the Commission's request to forward our response regarding the viability of our business plan under the scenario that would see the approval of both Bayshore and Cooper-McCarthy's applications to all who intervened in support of our application.

4672 In summary, we have endeavoured in this verbal presentation to address the main criteria associated with an application for a new FM service.

4673 We have been in Port Elgin and the region for 245 years, and we believe we know the strengths and weaknesses of this market.

4674 We believe the local economy can support our proposed FM radio service... competition notwithstanding.

4675 This application will add to the diversity of the competitive state of the market, with a music and program format that we are characterizing as being 'all things to all people'.

4676 We will not have an impact on any existing commercial radio stations, other than our own, and that will be minimal because the other stations are large regional services.

4677 We are proposing a small, local operation targeted only at Port Elgin, Kincardine and surrounding communities.

4678 This application will add to the diversity of voices in the market by producing more than 22 hours of new spoken-word content weekly.

4679 We will no longer be repeating the newscasts and programs from a originating radio station in Owen Sound. We will be different.

4680 We are proud that our business plan allocates 47 per cent of our total expenses to programming, as compared to the Ontario average of 31 per cent.

4681 Similarly, we allocate 68 per cent of our total revenue to programming, as compared to the Ontario average of 21.7 per cent.

4682 In other words, we believe programming is our first priority.

4683 However, should our revenue forecast fall short, or should our expenses be greater than forecast, Bayshore has the financial capacity to meet all the objectives of the business plan, and will provide additional funds to augment the broadcast operations, should they be required.

4684 And, in this regard I would just like to say we appreciate the fact that Mr. Caldwell has taken the time to join us today to lend his support to this presentation.

4685 And I would be very pleased to answer any questions you might have.

4686 Thank you.

4687 THE CHAIRPERSON: Thank you, ladies and gentlemen.

4688 Commissioner Demers, please.

4689 COMMISSIONER DEMERS: Thank you, Madam Chair.

4690 Good morning, ladies and gentlemen.

4691 In fact, you already are in Port Elgin as we understand it. It is very clear.

4692 And you have indicated in your oral presentation that, at least in one point, where sometimes advertisers from Port Elgin may buy - maybe I did not understand that correctly - but may buy a part, may not buy all your stations. So maybe you could clarify that.

4693 But, in the following sense: Is it possible, at the moment, is it possible for advertisers in Port Elgin or Kincardine to buy advertising only on your station in Port Elgin?

4694 MR. KENTNER: I can answer that and then perhaps Deb would like to expand on it.

4695 But, yes, it is very easy to buy Port Elgin, but because it is a repeater, when you buy our Port Elgin station you also get Owen Sound, CFOS, which means that you will be talking to people from Tobermory to Wasaga Beach, I would say a distance of 120 miles, not kilometres.

4696 And, if you are a small retailer in Port Elgin that is not necessarily the most efficient use of your advertising dollar to speak to so many people you cannot really serve.

4697 MRS. SHAW: That is true, although we do have strong advertising support from Port Elgin, not only on our CFOS and CFPS station, but on our two FMs as well.

4698 COMMISSIONER DEMERS: Also to establish what is actually happening, is there any particular program only on your repeater at any time?

4699 MR. KENTNER: It is a full-time repeater. I will say that we pride ourselves on a number of remote broadcasts have done over the years and continue to do throughout the Lake Huron shoreline market.

4700 COMMISSIONER DEMERS: Thank you.

4701 Now I will have a few questions on local programming, on CTD, on your business plan and on, maybe at the end, but you have more or less taken my fire out of my questions on the 'mutual exclusivity' or 'mutual'... the fact that you have solved the frequency matter.

4702 So, let us start with local programming, and I have a couple of sentences as preamble.

4703 In your written application, you have characterized the Port Elgin-Saugeen(City maybe)-Lake Huron shoreline region as an area that has matured to become a distinct and growing market.

4704 You go on to say that a distinct market, that as a distinct market, that people in the business community of Port Elgin and the Lake Huron shoreline now deserve their own local radio voice, suggesting that local needs have outgrown what the existing regional and out-of-market radio services can provide.

4705 To address these needs you have outlined your local and spoken-word programming plans for the proposed station.

4706 We would like to take the time to review your local and spoken-word programming plans in more details in order to gain a clearer understanding.

4707 So, at page 18 - and I do not know if you have with you your application - but I have a very short quote here. It is right in the middle of the page. You state that the ability of CFPS FM signal to provide 24-hour service to Kincardine as well as to Port Elgin:

"In our programming reflection of this part of the market, we will increase our value to listeners and retailers there." (as read)

4708 So, as noted on page 18 of your application, Port Elgin and Kincardine are the two principal cities within the Saugeen Shores-Lake Huron Shoreline market that you would serve if your application is successful.

4709 What is your assessment of the commonalities and differences between these two communities?

4710 MR. KENTNER: I am going to ask Rob right now to comment further on this.

4711 But I would just like to say that there are three distinct communities here starting at the North: the beautiful town of Southhampton, the town of Port Elgin and then the town of Kincardine.

4712 And what has happened is that through municipal amalgamation, Port Elgin and Southhampton have come under the term Saugeen Shores. They are one municipality now.

4713 And, because of the municipal amalgamations, Saugeen Shores and Kincardine actually share a common border. They are abutting municipalities now.

4714 Rob.

4715 MR. BRIGNELL: To further add to commonality, since 1982, there has been a tourism trading area which stretches from Kincardine to Saugeen Shores, and it has been known as the Lake Huron Shoreline Tourism Trading Partners.

4716 And, so, the commonality there is that there is a business relationship within the tourism industry, which is a major employer of this area, and it stretches right up the shoreline which has become... It is our community of interest.

4717 So there is a huge commonality with respect to retail, trading, tourism - all 365 days of the year, as this area is becoming more and more a winter destination.

4718 Traditionally, it has been a summer destination. But with more and more winter destination, there is fantastic cross-country skiing, snowmobile riding, ATV, that kind of thing.

4719 As Ross mentioned, the boundaries of each community abut. So they share the coast line from North to South.

4720 Their Chambers of commerce work together to encourage trade in that area.

4721 And the area is seeing outstanding growth right now, over the last couple of years, particularly spurred by the regeneration of power at the Bruce Power and also with the influx of folks who are looking to this area to retire.

4722 So the population is growing quite dramatically. Retail sales are growing quite dramatically. And the expansion in retail housing is on the up swing.

4723 So, the commonality is there. All three communities are distinct ports of call. They have been for a long, long time. They continue to be that way. Taking American and Canadian traffic.

4724 Is there anything more you need?

4725 MRS DEMERS: I imagine you do not see much differences between the two.

4726 MR. BRIGNELL: Really not. People travel between those two communities quite regularly. I live in Sauble Beach, which is just North of Southhampton.

4727 And my boys play hockey and we travel between Southhampton, Port Elgin, Kincardine, and we traverse those roads in the days when there is lots of snow and also on other better times.

4728 So, there is a fairly constant flow of traffic back and forth. People looked at these communities as almost twin communities.

4729 I said to Ross the other day: "I kind of liken them to Oakville and Mississauga." As they grow, they are growing into one large municipality.

4730 The dividing line, while noted by a sign, is really invisible.

4731 COMMISSIONER DEMERS: Thank you.

4732 So, as an example in the news coverage, surveillance, community and truths to programming, in your mind, it is just one large community? How will you reflect this theoretically to two different communities?

4733 MR. KENTNER: Could I submit here that we already, as a routine, cover the municipal councils of Saugeen Shores and Kincardine distinctly.

4734 Everyone of their public meetings is covered. We cover their major developments. There are hospital plans in both Southhampton and in Kincardine unfolding.

4735 And these are covered on a routine basis.

4736 Where I see the role for a new FM service that would be centered on these two communities is to help interpret them. The mandate is to help them grow together successfully. And I feel that their daily open line is going to play a critical role.

4737 This area does have its own distinct issues. And we have a daily open line in Owen Sound that has been going on for 25 years.

4738 But it can only go to Port Elgin occasionally. I mean, it cannot deal with Huron shore issues continually.

4739 Not long ago, we did have Duncan Hawthorne, the Chair of Bruce Power, on the program to talk about some of the important developments that are happening there right at the moment.

4740 But this is the role that I see the news station and its open line fulfilling and providing an opportunity.

4741 We also see that being important for the Saugeen Reserve, which is having a huge... It is a small community, but it is having a huge impact through its major land and even under water claims, seabed claims, in the region.

4742 And there is a great need for these people to be able to explain their story more successfully to the local residents and to find more commonality there.

4743 And, again, a daily open line in a place like Port Elgin will play a very important role.

4744 COMMISSIONER DEMERS: So, in a sense, in your strategy and in news coverage, local news coverage, you would not consider that there would be a share of the time for news that would be devoted to Kincardine and to the other municipality?

4745 MR. KENTNER: There would be equal opportunity in my mind as there is with all of our communities, but more so... In other words, the principal focus of news coverage on this station will be these two communities: Saugeen Shores and Kincardine.

4746 And, obviously, they will get what we believe 60 per cent of each newscast will be fundamentally news from throughout this area. It will be super-served.

4747 COMMISSIONER DEMERS: Thank you. There are also smaller communities that are not on the shore. Does your local programming plans also include serving these areas, these smaller areas and in what way?

4748 MR. KENTNER: By all means. And perhaps, Rob, you would like to speak to that.

4749 MR. BRIGNELL: As has been our practice for 65 years, we try and service all of the communities that we serve.

4750 This FM station will be no different. The two major communities being Kincardine and Saugeen Shores. But all of those communities within that area will be dealt an even hand when it comes to news coverage and representation.

4751 We have community cruisers that are on the road 365 days of the year. They attend at community events. They file live reports from those community events.

4752 Our reporters are always on the look out for news and information and happenings in those areas.

4753 And we will continue to support those communities in any way that we can.

4754 MR. KENTNER: If I may, commissioner Demers, as well, there is sort of an equal split between the Bruce Power workers, between the communities of Saugeen Shores and Kincardine.

4755 And I am being reminded here that they are certainly distinctive communities. As Mr. Hawthorne said on the open line, Kincardine is only slightly more Scottish than Scotland.

4756 And they are very different communities.

4757 And we have worked in them for many years and I believe we can help them grow together as they are through the economics of the situation more successfully.

4758 COMMISSIONER DEMERS: Thank you. Although we have touched on news and surveillance and information, that is spoken word, we would like you to expand on some the news and information programming details. You provide it in your written application. So based on...

4759 So you plan to feature news and surveillance packages every half hour during the morning drive, hourly during the afternoon drive and on weekends.

4760 MR. KENTNER: That is correct.

4761 COMMISSIONER DEMERS: My question is... and there is an in-depth package at noon and at five o'clock.

4762 What is the approximate duration of each to these specific day parted news and surveillance packages?

4763 MR. BRIGNELL: In the morning, in the six o'clock hour there would be eight minutes of news. So, four minutes at the top of the hour; four minutes at the bottom of the hour. And that goes from six through till the nine o'clock hour.

4764 And then, every hour there after would be a four-minute news package at the top of the hour.

4765 Six minutes at the twelve o'clock hour. Then four minutes per hour from 1:00 through until 4:00 PM.

4766 And then our major news package at five o'clock, which is 14 and a half minutes between five and six.

4767 And then, at six o'clock, another four minute package.

4768 So, throughout the day.

4769 On top of that there would be three minutes devoted to weather and sports with each of those news packages.

4770 MR. KENTNER: If I may, Commissioner Demers, at this time, we actually have two part-time news people working out of our Port Elgin office as part of their contribution to the news service from Owen Sound.

4771 COMMISSIONER DEMERS: Thank you. For example, during the weekend, the weekend packages, have you indicated how long these would run?

4772 MR. BRIGNELL: Yes, we will have news beginning in the 6:00 AM hour running all the way through to the 6:00 PM hour.

4773 And those casts would be three minutes each and they would also include weekend weather and sports. On top of that, during the winter months and the summer weekends, we include traffic reports.

4774 Weather obviously plays an important role in the travail in the winter time. And so our traffic reports are fairly extensive for winter travellers in our local community.

4775 Then, in the summer time, of course, the road ways tend to get a little bit busier on Friday evenings and Sundays and/or Mondays depending if it is a long weekend or not.

4776 And we provide road surveillance included with those packages so that our visitors and our week-end visitors are well served.

4777 So that when they tune to our station, they know where the traffic tie ups are, if there is any accident delays, that kind of thing.

4778 COMMISSIONER DEMERS: Thank you.

4779 If I remember correctly, you have indicated that you would broadcast is it 22 hours of spoken word programming?

4780 MR. BRIGNELL: That is correct.

4781 COMMISSIONER DEMERS: Thank you.

4782 Have you specifically indicated a total amount of time devoted to news in that?

4783 MR. KENTNER: I believe it is something over...

4784 MR. BRIGNELL: Yes. It is 15 hours, 36 minutes, weekly.

4785 COMMISSIONER DEMERS: Okay. Thank you.

4786 In the evenings, especially in the weekends, after 6:00 PM, did I get you correctly that you would not have news?

4787 MR. BRIGNELL: No, there would no be news packages in the evening. There would be weather reports throughout the evening from 6:00 to the ten o'clock hour.

4788 COMMISSIONER DEMERS: Thank you.

4789 MR. BRIGNELL: Now, having said that...

4790 COMMISSIONER DEMERS: Yes.

4791 MR. BRIGNELL: ...we do have staff that will be living in Port Elgin.

4792 And it is our practice with our current three stations, if there is any kind of a weather emergency or any kind of a major emergency that occurs within our broadcast area, those people automatically come into the radio station and we then cut into our voice-tracked hours and provide that news and surveillance information as is necessary.

4793 COMMISSIONER DEMERS: You have basically an adult contemporary format, which attracts people, we say, up to 54.

4794 Would they not want news after six o'clock, a regular news bulletin or what? What is your interpretation of your audience wishes.

4795 MR. KENTNER: Commissioner, you have touched on a problem for all broadcasters.

4796 We have one of the largest newsrooms in Southern Ontario. For a small market broadcaster, we are very proud of it.

4797 But most of the demand for service comes in the morning, when people are getting up.

4798 And we are certainly mindful that, when visitors are in the area and the population does swell, there is more demand for news on weekends and in the evenings.

4799 We have done quite a bit to improve on that situation in our own market, and I think the main answer here is that we do have a very strong system of calling people in when something develops so that in the event - and there are... numerous emergencies do occur through the year.

4800 We find that we are part of tornado valley. For example, in Southern Ontario.

4801 And so we are very mindful of the need to be able to get people in and to work and...

4802 I thought of an example here, when you were discussing things with Mr. Cooper, and that is that when the tragic drowning accident happened with the students from Port Elgin at Tobermory, that evening, before parents arrived in Tobermory, we had reporters there.

4803 Those reporters stayed there. They stayed and were the chief source of information to many family members along the Huron shore.

4804 They tuned to our station to get that information. And, as things unfolded, we ended up with reporters there right through the inquest period, which was a very lengthy inquest.

4805 And, all I can say to you, I believe all broadcasters are struggling with... The demands for our service are very great and we all allocate our resources as best as we can.

4806 We are, I think, trying very hard to do the best job we can. And our market, from Tobermory to Walkerton, that's all Bruce County, is 120 miles that we have to be able to provide news coverage over.

4807 COMMISSIONER DEMERS: Thank you. Now, on employees.

4808 I gathered from your oral presentation that you plan to have 10 employees in Port Elgin.

4809 Let us maybe look at page 25 of your application where you list what these people will do.

4810 And let us discuss that in thinking of Owen Sound also as a close operation.

4811 We note your statement that the overall management of news sports programming, general programming and creative production will emanate from Bayshore's Owen Sound base.

4812 Is that correct from what I gather from you said?

4813 MR. KENTNER: It is correct in terms of what that is what our application says.

4814 Ten people. I suspect we will not be having this operation very long in holding the head count to ten. Obviously it will grow.

4815 And one of the first things that will develop is the need for management in the community. And that is certainly part of our business plan, to ensure that there is a management team developed right on the spot.

4816 MR. BRIGNELL: Each of our stations does have an individual sort of point person who is part of the management team.

4817 I fell that with this operation we will need the same kind of... so that there is someone on site directing operations.

4818 COMMISSIONER DEMERS: Thank you.

4819 So, trying to clear that relation between Owen Sound and Port Elgin, we are not entirely clear on the nature and level of originating program you would offer from your Port Elgin studio facilities. We would like to clarify the details.

4820 Maybe your oral presentation was more clear, but would your Port Elgin facility have its own on-air studio...

4821 MR. KENTNER: Oh, yes. Definitely.

4822 COMMISSIONER DEMERS: So you have described news gathering. Yes, you have... And news production facilities independent of Bayshore.

4823 MR. KENTNER: That is correct.

4824 COMMISSIONER DEMERS: Bayshore's Owen Sound.

4825 MR. KENTNER: Yes. What we are wanting to do though is to take advantage of the kind of technology that will enable our people to exchange audio files so that this radio station can have a sound that is equivalent to a major market station in terms of the audio that is available for news and, at the same time, we will be 60 per cent local in its newscast.

4826 But we will be 126 hours a week, that is 6:00 A to 12:00 P, from Port Elgin.

4827 And I believe it is the number of hours of live.

4828 MR. BRIGNELL: Eighty-four.

4829 MR. KENTNER: Eighty-four.

4830 MR. BRIGNELL: Eighty-four hours of live.

4831 COMMISSIONER DEMERS: Yes.

4832 MR. BRIGNELL: It is a fully stand-alone operation.

4833 COMMISSIONER DEMERS: Thank you.

4834 That is clear. Maybe at the back of our mind, we have... there was a feeling that the Owen Sound operations would have some kind of say in Port Elgin.

4835 Could bring it from that point of view, at the beginning, anyway?

4836 MR. KENTNER: Yes. I would say that.

4837 But I do not think it is possible to operate an independent radio station that far-distant from the head office, if you will, without some local management.

4838 And that is something that would obviously be put in place fairly readily.

4839 COMMISSIONER DEMERS: Okay. And being a little specific, news and sports, the management would come from Owen Sound?

4840 MR. KENTNER: We have a very accomplished award-winning News Director, who is looking forward to putting the team together to do this new station.

4841 But, again, I think that it would not be long, and you would have a News Director resident there, who would be having independent charge of the newsroom.

4842 COMMISSIONER DEMERS: Okay. So I can deduct from what you say that you believe the people from Port Elgin and the shore would be better served by a local News Director.

4843 MR. KENTNER: That is what I believe, yes.

4844 COMMISSIONER DEMERS: Thank you.

4845 How long would it take, in your estimation, before this becomes totally an independent operation, without any direction from Owen Sound?

4846 I am not saying that you would not be the owner and the...

4847 MR. KENTNER: Exactly. And obviously, we feel that there are efficiencies. We have always had the problem of being a head office with no branch plans.

4848 And we are finally getting an opportunity perhaps to support and help foster a small station to be successful, and we have wonderful resources in Owen Sound for that.

4849 But I would say, within two years, three years, at the latest, we would have... Like this will grow legs, no question.

4850 And we are looking forward to seeing that and supporting that.

4851 And we have always... like we have a large team of I would say protégés in Owen Sound, people who we have been grooming for jobs like this.

4852 And it will be very easy for us to ensure that we either put the person in place there or we recruit the person from the community who is what we are looking for.

4853 COMMISSIONER DEMERS: Thank you.

4854 You have indicated that you will rely on computerized operations at the new Port Elgin station that would, in your own words, enable both on-air and news staff to exchange audio files -- you have referred to that -- between the new station and the operations that you have in Owen Sound.

4855 As a result, the new station, while having a distinct local sound, will be strong and professional sounding for a station serving a market of that side.

4856 It sounds as if you plan to make some use of available programming synergies with your Owen Sound station in the area of general programming and news programming.

4857 I imagine this will always be the case that you will have synergies with Owen Sound?

4858 MR. KENTNER: Yes, I believe... Can I cite perhaps a rather unique example, something that has been popular on our Owen Sound stations is a program feature called The Georgian Bay Explorer.

4859 We have run nearly 5,000 original scripts. They are written by Andrew Armitage, an author from Owen Sound.

4860 And, they have become popular because people in the region have discovered that they really did not know their history. And they are very popular.

4861 The point is that we could think of transferring that feature. But, in fact, we have talked to Andrew about the Lake Huron Explorer, creating a new series totally devoted to the communities on the Huron shoreline.

4862 And he is very enthusiastic about doing that, and that is something we will be doing.

4863 COMMISSIONER DEMERS: Thank you. On page 9 of your application, you have a lot of figures there.

4864 On page 9 of your application, you provide revenue and expense projections for the proposed Port Elgin station.

4865 Projected programming expenses including news expenses come to $163,099 for the first year -- we have added news and other programming -- and will rise to $194,097 by year seven.

4866 The majority of these expenses relate to programming and news staff salaries, plus 10,000 for broadcast news.

4867 How will the information available through broadcast news service be integrated into your local news and surveillance packages?

4868 MR. KENTNER: Rob, you may have something to contribute here.

4869 But something we do not do is we do not use broadcast news as a network or as a syndicated feature. We do not just air their newscasts when we have a... like overnight or things like that.

4870 We use both the wire service (the digital service now) and the audio to augment the newscasts that we prepare, which are fundamentally local in their nature.

4871 But it enables us to ensure that the news is in fact comprehensive, that you are not, that we do not turn our listening area into a back water because there is no national or international news.

4872 COMMISSIONER DEMERS: Thank you.

4873 It is similar to what you use broadcast news for in Owen Sound at the moment?

4874 MR. KENTNER: Exactly.

4875 COMMISSIONER DEMERS: Thank you. Your annual programming expenses, that is your combined programming and news expenses, are somewhat lower than what would be expected for a full-service station.

4876 Perhaps these lower projected expenses are in some way related to the various program synergies you hope to realize with Owen Sound stations.

4877 MR. KENTNER: That is exactly correct.

4878 COMMISSIONER DEMERS: Okay. You stole my question.

--- Laughter / Rires

4879 COMMISSIONER DEMERS: We have heard at other hearings that live-to-air, phone-in, talk programming is expensive to produce.

4880 You will offer a daily one-hour phone-in talk show, Mondays through Fridays.

4881 Where are these expenses reflected in your projections?

4882 MR. KENTNER: They are incorporated in the news service.

4883 COMMISSIONER DEMERS: Okay. You will also offer seasonal, live, play-by-play hockey broadcasts.

4884 Where are these in your...

4885 MR. KENTNER: They will be part of the same...

4886 COMMISSIONER DEMERS: Same programming expenses or...

4887 MR. KENTNER: Yes. Programming and youths.

4888 COMMISSIONER DEMERS: And lastly, we find the creative and production expenses related to the preparation and production of your local newscasts and surveillance packages -- I should have said where.

4889 And lastly, where have you put the creative and production expenses related to the preparation and production of your local newscast and surveillance packages?

4890 MR. KENTNER: That would be in news.

4891 COMMISSIONER DEMERS: In news?

4892 MR. KENTNER: Yes.

4893 COMMISSIONER DEMERS: Thank you.

4894 MR. KENTNER: I thought, when you were speaking of creative, however, you were asking about creative and production, which we do not plan a large investment in that because we have surplus capacity in our facilities in Owen Sound.

4895 And that is one of the synergies we hope to take advantage of...

4896 Deb, that is her department. And I am sure she would be happy to tell you how many people we do have employed in that area in Owen Sound.

4897 MRS. SHAW: Well, it might be changing before I get back.

4898 But we currently have four, then two that are contractors as well that do creative and production for advertisers.

4899 COMMISSIONER DEMERS: Now, this would be a source for the Port Elgin station.

4900 Thank you.

4901 On CTD now, in your written application -- and you made comments -- but so that we put everything together, in your written application you indicated that you would allocate the required CAB-CTD planned annual $400 contribution in a matter that conforms to CAB-CTD guidelines.

4902 However, should your application be successful, a specific, eligible third party must be identified to in order to craft the appropriate CTD condition of license.

4903 To which eligible third party will you allocate the CAB planned contribution of $400?

4904 MR. KENTNER: We could do FACTOR. That would be fine.

4905 COMMISSIONER DEMERS: Thank you.

4906 Just a question or two on your business plan.

4907 We note that less than 10 per cent of your total advertising revenues throughout the license term are projected to come form national advertisers.

4908 This contrasts sharply with the average for Ontario FM stations, which see national advertising contributions just under 24 per cent towards total advertising revenue.

4909 Why are your projections towards national advertising lower than the average?

4910 MRS. SHAW: Our area is small and comprised of many small retailers. National advertising is generally with the big box stores and with those...

4911 Our national in Owen Sound is more comprised of facilities that you would see in a large centre.

4912 And this is a rural, you know, small centre with mostly owner-operated, small retail stores.

4913 So it does point out the differences in our area to other larger centres.

4914 COMMISSIONER DEMERS: Thank you.

4915 There is on this hearing a non-appearing item for a news station in Wingham by Blackburn Radio.

4916 Does this have any consequences, or do you have any comments to make in relation to your business plan so the Commission approves of that Wingham application?

4917 MR. KENTNER: Commissioner Demers, the Wingham application has been fully factored into our business plan.

4918 MRS. DEMERS: Thank you.

4919 I cannot ask you, because you are not... There is no problem with frequency.

4920 That would be my last question.

4921 Would you have any general comments to make. Any questions I did not ask or I should have asked and I did not ask?

4922 MR. KENTNER: Your questions were quite sufficient sir.

--- Laughter / Rires

4923 MR. KENTNER: But I would be pleased to have the opportunity of summarizing for the Commissioners if I may, Bayshore has a license in Port Elgin, and all we are really asking to do, is to convert our AM facility to an FM facility.

4924 It is very difficult for us to look forward to serving this market with only an AM repeater.

4925 It was a great idea 25 years ago, but this area is growing very fast. It has many sophisticated listeners in it, and we really need this facility to continue serving the market that we have pioneered.

4926 We had over 60 letters of support for this application, and I trust you have seen how passionate some of these people are about the service that we provide.

4927 And, we are thrilled with the support that we have received from the communities, both Kincardine and Port Elgin.

4928 And, I draw your attention to that, I do believe that I was looking for a question about Canadian Talent Development initiatives, but we inadvertently got a portion of them into the wrong line on our application.

4929 We do have $45,500 in direct initiatives to Canadian Talent Development of the term of the licenses and we have already done work with the two groups that we are working with.

4930 As far as scholarships are concerned, we have had discussions. The Saugeen Reserve is very interested in the possibility that we might get involved in helping directing some of our Canadian Talent Development initiative funding to them as well.

4931 We are going to be live-to-air 84 hours each week. Community access, I think, is guaranteed through our open-line program.

4932 The onus will be on us to have a guest or a topic everyday, and I have no doubt that will become a show case of the access of the community to the station.

4933 We have more than 15 and a half hours a week of news, and a total over 22 and a quarter hours of spoken-word content.

4934 That is 17 and a half per cent of the total broadcast week.

4935 The station will have minimal impact on existing stations in the surrounding areas. And it will benefit Bayshore's long-term business strategy for sure.

4936 Approval would add to the economic growth of Port Elgin. The mayors of both these communities are very excited about these plans.

4937 And there are ten new employees there. That is very significant to this community.

4938 Bayshore has the management experience and also the financial capacity to implement this proposal.

4939 And we sincerely believe this proposal will strengthen our business plan and be a good fit for Port Elgin.

4940 Thank you very kindly.

4941 COMMISSIONER DEMERS: Thank you, ladies and gentlemen.

4942 Thank you, Madam Chair.

4943 MR. CALDWELL: Sorry. I put the mic on. Would it be alright if I...

4944 THE CHAIRPERSON: I will ask the questions and then you can...

4945 MR. CALDWELL: That is fine. Thank you.

4946 THE CHAIRPERSON: ...and perhaps council has some as well and then you can conclude.

4947 If I understand, it is a retransmitter you have in Port Elgin right now. It is exactly what is on the Owen Sound transmitter.

4948 MR. KENTNER: That is correct.

4949 THE CHAIRPERSON: Ms. Shaw, do you know what is the level or the ratio of the revenue you will get from Port Elgin compared to the total of your Owen Sound transmitter?

4950 MRS. SHAW: I broke it out in dollar figures, so it would take me a moment to get it as a percentage.

4951 THE CHAIRPERSON: It is up to you. You do not have to disclose on the public record the exact amount.

4952 If you do not have any problem, go ahead.

4953 That is why I am asking it in percentage or ratio, because...

4954 MRS. SHAW: Could I submit it by the end of the day, is that fair?

4955 THE CHAIRPERSON: Yes. Or do you have a ball-park figure of...

4956 MRS. SHAW: Right now, without it in front of me, I would be guessing.

4957 THE CHAIRPERSON: You don't know.

4958 MRS. SHAW: Yes.

4959 THE CHAIRPERSON: I am just curious about... I gather from the information that you filed subsequent to the applications not being technically mutually exclusive, that you have no problem with making a go of this despite this Blackburn addition and the possibility that we would give a license to both applicants.

4960 That is your position.

4961 MRS. SHAW: That is our position. We have been aware of the Blackburn application for quite some time.

4962 THE CHAIRPERSON: Before.

4963 MRS. SHAW: Yes.

4964 THE CHAIRPERSON: But the other is something new, and both parties have been asked and both have responded that their projections stand as is.

4965 MRS. SHAW: Yes.

4966 THE CHAIRPERSON: It would be interesting to know, in your case, just how much will simply be a replacement of the revenues you will take out of the market since you already operate in Port Elgin.

4967 MRS. SHAW: I am anticipating that just 4.1 per cent of our current advertisers on our AM station would be transferred to this new FM station.

4968 THE CHAIRPERSON: So this would be the number of, let us say, retailers who purchase Owen Sound at the moment.

4969 And that would continue and perhaps increase their budgets.

4970 MRS. SHAW: Yes. The increase in advertising, I have estimated at just over 22 per cent.

4971 THE CHAIRPERSON: That is good enough. I just wanted to see how successful you were with an AM transmitter from Owen Sound on the shore, in the shore communities.

4972 MRS. SHAW: And again, Madam Chair, Kincardine, we are not able, with the topography...

4973 THE CHAIRPERSON: You do not.

4974 MRS. SHAW: ...to service. So that is our biggest growth opportunity.

4975 THE CHAIRPERSON: As well. What is the size of Kincardine in comparison? Is it the larger?

4976 MR. KENTNER: Both are 11,000.

4977 THE CHAIRPERSON: So they are the same, Port Elgin.

4978 So you would be doubling your coverage from a revenue or advertising perspective.

4979 And do you see your Owen Sound programming change dramatically if you had a license instead of a retransmitter?

4980 MR. KENTNER: The programming in Owen Sound will not change on CFOS, no. It is an oldies format. But we have a different format...

4981 THE CHAIRPERSON: Oh, I meant more the spoken-word programming.

4982 Would you then not feel you have to cover the shore communities?

4983 MR. KENTNER: Are you speaking, Madam Chair, of the new station...

4984 THE CHAIRPERSON: Right now, I suspected since you have a transmitter in Port Elgin which comes really from Owen Sound that there would be some change in your Owen Sound...

4985 MR. KENTNER: Madam Chair, that station will go dark.

4986 The Port Elgin repeater will go dark.

4987 THE CHAIRPERSON: No, no. But the Owen Sound transmitter at the moment I suspect you would make an effort to cover these shore communities, which will no longer be necessary if you had coverage, original coverage, right from those communities. It is not that important...

4988 MR. KENTNER: But may I say...

4989 THE CHAIRPERSON: ...I am just curious to see what will happen to your Owen Sound AM as a result.

4990 MR. KENTNER: Yes. We regard our Owen Sound AM, the Heritage AM, as the news voice of the region and as a significant regional news voice.

4991 We would continue to need coverage of those Huron shore communities on those stations. It is very important.

4992 THE CHAIRPERSON: What does it cover, the Owen Sound AM at the moment? How far does it go to the lake shore?

4993 MR. KENTNER: Well, let me explain...

4994 THE CHAIRPERSON: I understand you need the repeater.

4995 MR. KENTNER: Yes. The Owen Sound AM goes all the way from Tobermory, in fact Manitoulin Island down pretty well to Berry.

4996 But it has a distinct problem toward the Southwest because Monroe, Michigan, got engineered on 560 just before our former company got on 560 in Owen Sound.

4997 That required enough protection that it meant that the communities of Port Elgin and Kincardine, which had received CFOS back in the 50's and 60's, or I guess the 50's, lost it.

4998 And that is why we engineered the Port Elgin repeater in the first place in 1978, to fill a hole in the existing coverage of CFOS.

4999 THE CHAIRPERSON: It did go to the shore before...

5000 MR. KENTNER: It did before, but it has not in a long time.

5001 THE CHAIRPERSON: There will, presumably, be a change in your Owen Sound programming, possibly...

5002 MR. KENTNER: We do not foresee that.

5003 THE CHAIRPERSON: No. You would still have programming synergies then between the two.

5004 MR. KENTNER: Yes. Can I suggest, for example, the Bruce Power.

5005 That is a pervasive force. That has an economic impact on our whole region.

5006 And while it is focused on the shoreline, the rings of impact throughout...

5007 THE CHAIRPERSON: It is of importance to Owen Sound.

5008 MR. KENTNER: Yes. Exactly.

5009 THE CHAIRPERSON: You may not cover in Owen Sound any more about an accident in Kincardine however...

5010 MR. KENTNER: Oh, we would.

5011 THE CHAIRPERSON: Oh, you may, of course...

5012 MR. KENTNER: Yes, we would.

5013 THE CHAIRPERSON: ...it is of interest.

5014 So, there will not be much change...

5015 MR. KENTNER: No.

5016 THE CHAIRPERSON: ...you will keep going. Your Owen Sound programming will keep going.

5017 And, both parties appear satisfied that, if the Commission were to license both as well as the Blackburn application, the market can sustain all that.

5018 At least, Bayshore will not be impeded from continuing to operate Owen Sound and the new originating station in the manner projected.

5019 MR. KENTNER: Exactly. Thank you.

5020 THE CHAIRPERSON: Thank you.

5021 Counsel?

5022 MS JONES: I just had a few clarification questions.

5023 First, with respect to the contribution to Canadian Talent Development.

5024 In your application, you had identified $4,400, and $4,400 that means $400 to Canadian Talent Development to FACTOR, $2,000 to a summer school of music, $2,000 to a Port Elgin Big Band Festival and, in your presentation earlier today, you said that there was an additional $2,100.

5025 However, can you direct us as to where we could find this in your financial...

5026 MR. BRIGNELL: Yes, I can.

5027 If you look at 4-1, in our application, which is our financial statement, being a marketer and a promotion director, I made an error and included the other contribution under the promotion area instead of under programming.

5028 So, if you look at the bottom of the line under promotion, you will find that we have some contributions there to local festivals.

5029 Pumpkin Fest in Southhampton-Port Elgin-Saugeen Shores. A contribution there would be -- where am I? At Pumpkin Fest -- $500.

5030 You will also find the Kincardine Scottish Festival and Highland Games with a contribution of $500.

5031 The CFPS Chantry Chinook Fishing Festival. We would contribute $600 to that.

5032 And then, there was a duplication on that, a typo, where we have the Kincardine Scottish Music Festival and then we have it a second time.

5033 And the second one should have been the Saugeen First Nations Pow Wow. And that occurs annually and we would contribute $500 to that.

5034 So that makes up that $2,100 difference you are asking about.

5035 MS JONES: Okay. Thank you.

5036 And I just want you to talk a little bit more about the day-to-day operations of the Port Elgin station with the News Director for the first year or two you said who would be in Owen Sound.

5037 So how would that work for the first couple of years?

5038 MR. KENTNER: Mr. Pave spends a fair amount of time on the road actually and is in Port Elgin often, and as well as he is in other communities in our region.

5039 And, I think that a lot of us will be spending time in the Port Elgin office, which we do spend some time now, to ensure that this new station is launched with all of the resources and management backing that it will need.

5040 And it will be a pleasure to be able to promote people into management roles as it grows into a distinct and strong service.

5041 MS JONES: And lastly, can you talk a little bit more (I know you talked a bit about it) about the nature and types of programming synergies you expect to realize between the two stations, including the computerized operations and the shared audio files.

5042 MR. KENTNER: Certainly. I do not know if anybody else wants to speak to this, but... Go ahead.

5043 MR. BRIGNELL: With today's technology, we have the ability, through a local area network, to connect the two facilities.

5044 And, because we have the main servers and the large, if you will, hardware already located in Owen Sound, we will use that technology to be able to transfer our files back and forth, so that newsrooms will benefit from sharing information.

5045 In other words, if our Port Elgin reporters are digging up a news story that is specific to that area but is of general interest to our other stations, they can share that file.

5046 And vice versa on other regional stories which would be of interest to our Port Elgin and Kincardine listeners, they would be able to share those files.

5047 So it will act as a... from a newsroom and news gathering ability for both services throughout.

5048 As well, our programming ability, as far as putting together our music logs and that kind of thing, we can do, using the facility in Owen Sound, but remoted by the local area network in Port Elgin.

5049 So, today's technology allows us to not have to duplicate the major components, if you will, for each station.

5050 MR. KENTNER: If I may, that really allows you to spend more money on people who are going to be on the air, so that you can be live-to-air more.

5051 MS JONES: Thank you.

5052 These are all my questions, Madam Chair.

5053 THE CHAIRPERSON: Before I hear you, Mr. Caldwell, just how different will these two stations be?

5054 To what extent will it not be turning your AM repeater into an FM station with a greater coverage?

5055 You say your Owen Sound programming is not going to change much. There is going to be a lot of synergies. You will be able to do a lot of things. Shared news, etc.

5056 I think you said there would be -- is it 22 hours of spoken-word programming?

5057 Just how different will it be from the Owen Sound station?

5058 MR. KENTNER: Well, the fundamental opportunity to be really different is with that spoken word, that 22 hours a week.

5059 That is a huge amount of time that we are going to be entirely different.

5060 It means we are going to be running a simultaneous open-line show in two communities that are totally different. Different hosts. Different topics. Different guests. Different, you know, focuses: one on the Lake Huron shore; one on our broad communities...

5061 THE CHAIRPERSON: What about your news component? Just how different will it be from Owen Sound?

5062 MR. KENTNER: I think it will be very different because it will definitely be a local focus.

5063 This is, in our view, the only reason why any number of people in this community will tune a local station will be that there will be much more vital information and surveillance and news for their purposes.

5064 And that is why we have put as much emphasis as we have on that.

5065 But we did bring with us Chris Byrnes, who has been working with Bayshore stations for three years now on our programming and music specifically, and I would...

5066 Perhaps you might like to hear from him how we will be different musically from our other stations.

5067 THE CHAIRPERSON: Musically as well. What is your BBM? What is the listening to the Owen Sound station, to the repeater?

5068 MR. KENTNER: If you are looking for the figures for the Huron shore, yes...

5069 THE CHAIRPERSON: I know that you said only maybe some four and some per cent of your revenues come from it, but...

5070 MRS. SHAW: Unfortunately, BBM lumps us together as CFOS plus, so we cannot determine the number.

5071 THE CHAIRPERSON: You do not know.

5072 MRS. SHAW: No.

5073 MR. KENTNER: But here is an important thing for you to perhaps get on the record is that fully 50 per cent of the listening in this market is actually to out-of-market services.

5074 There are, I believe it is 19 signals from seven metro areas outside of our area representing I think it is 12 different owners.

5075 And that is where 50 per cent of the listening is going.

5076 Now we have I think it is a 12 share for CFOS in the market. And I think our Country 93 has a 16 share in this market.

5077 But we feel that there is a tremendous opportunity for a local station that provides strong local service to become much more important to people who are listening out of market at this time.

5078 MRS. SHAW: Yes. Something you wanted to add.

5079 My question was just some assurance that, considering your presence in the market and the fact that you have a repeater and that, when we asked "Will you cover Kincardine on the Owen Sound transmitter anyway?", there is presumably the possibility that it will be an FM frequency used for simply changing an AM repeater into an FM and not being a totally local station.

5080 MR. KENTNER: And, Madam Chair, that is why there is 22 hours of local...

5081 THE CHAIRPERSON: Yes, and my question was just how different are these hours going to be from what you transmit on your Owen Sound transmitter.

5082 MR. KENTNER: We believe very different.

5083 MR. BYRNES: If I could add to that, Commissioner, the music is going to be very different as well.

5084 Currently, CFOS is an oldies radio station. And therefore, the music coming on the repeater is an oldies format.

5085 We conducted research in this area and that information was filed with the Commission. That was conducted by Solutions research in the spring of 2003.

5086 And we tested eight different music styles to determine what would be the most appropriate format.

5087 And the information that came back was clearly a mix of oldies and soft rock, which we have called middle of the road.

5088 So the music really will be quite different on this FM radio station.

5089 Yes, there will still be some of the oldies artists that has been currently heard such as The Beetles and The Beach Boys and The Supremes.

5090 But we will mix that with some of the soft rock artists of today such as Céline Dion, Elton John and Phil Collins.

5091 And, of course, include some of the great Canadian superstars as well: Brian Adams, Céline Dion, Sarah McLauchlin.

5092 So it really is going to be a different sound musically.

5093 I think the Commission should feel quite comfortable that, if they listened to the oldies station in Owen Sound, that now only musically will this new FM station, should it be granted, sound different.

5094 So the music will be different. The announcers will be different. And also the news at 22 hours, the news and spoken word.

5095 It is going to be a different radio station.

5096 THE CHAIRPERSON: Thank you.

5097 Legal counsel has another question. We are still waiting to hear from you, Mr. Caldwell.

--- Laughter / Rires

5098 MS JONES: Just further clarifications on the additional amount for the Canadian talent development that you proposed.

5099 I noticed that the amounts, the $2,100 is for year one, two, three, but year four to seven, there are additional amounts.

5100 So, if the Commission was to accept these amounts as acceptable initiatives, you would be prepared to accept the additional amounts?

5101 MR. KENTNER: We would indeed.

5102 MS. JONES: Thank you.

5103 THE CHAIRPERSON: Mr. Caldwell.

5104 MR. CALDWELL: Madam Chair, thank you very much, and Commissioners, thank you.

5105 I just want to say that Bayshore is now 65 years old and, frankly, is very substantially appreciated in this area.

5106 We are also substantially experienced.

5107 Financially, the organization is stable, to say the very least.

5108 And, as a company, we are ready to invest and reinvest in this area.

5109 Going back to Howard Fleming, when he started the station, it was constantly invest.

5110 Bill Hawkins came and was owner for some 20 years. He continued to reinvest in this market.

5111 And Doug Caldwell has continued to the same. And we are very interested in expanding this.

5112 I think it was pointed out several times, I hear this morning, geography and topography are one of our handicaps in this shoreline.

5113 And one of the reasons that that repeater was granted to us 25 years ago is the hills and dales and valleys are very hard to reach with an AM signal.

5114 And as it has been mentioned here, Kincardine is virtually impossible because of the dip for us to get into, whereas this FM will allow us to do that and give those people some decent service.

5115 With the plant mid-way between the two towns, or if you combine Saugeen Shores and Kincardine, about half the people living in each area, that is a vital focus point that these people deserve much better coverage than we have been able to do from Owen Sound.

5116 Just to go on, I think we will be a very important voice in the community.

5117 And, one of the things that we have prided ourselves on is that local radio is really the glue in many communities that they need to prosper.

5118 Because, if you look at those local advertisers, they are very interested in hitting the market where people travel up and down the Blue Water Highway, that is Highway 21 by the way.

5119 We are very proud of our contribution, of our donations of time and money, of the fundraising that we have done for many organizations and institutions.

5120 We really are aimed at giving back, whether it is the First Nations Pow Wow, as we have worked on and contributed, whether it is the underwater park at Tobermory, whether it is Wiarton Willie, local radio really plays a big part.

5121 And, by the way, these people have built this presentation. They have worked very, very hard at it.

5122 But we have also turned to experts like Michael and Chris here to help us with the research and study of the economy and the outlook for the economy.

5123 We have also looked at the potential and existing audience i.e., what do they want, what do they need.

5124 And, of course, we have had a good look at the competition.

5125 So the market is small. Therefore, our appeal must be to a very broad spectrum of lifestyle groups and hence Chris's expertise in this area.

5126 I am reminded one of the founders of CFOS, by the way, was Ralf Snelgrove. And he used to always say to me: "You know, in small towns, it is hard to get rich because everybody is watching."

5127 And then, he would add: "And listening, if you are doing a good job."

5128 And I think that really applies to what we are doing. We are very aware of it.

5129 Ross has alluded to... Our problem is not so much people like Wingham, but we have 19, as Ross mentioned, rated out-of-market stations beaming into this area at various times of the day, etc.

5130 It is from those people that we see we are going to win over, you might say, new listeners, listeners who will listen to local content.

5131 And boy, we are going to be strong on that local content because the Lake Huron shore is very different from the Georgian Bay shore.

5132 Let me just mention. The Walker water problem was something that we were having to cover from Owen Sound.

5133 With this station, we can do a much better job of keeping aware.

5134 The weather you have heard about, the highways, etc.

5135 So, the competition is not just Cooper and McCarthy.

5136 We think the Bayshore proposal is frankly the best use of this spectrum, of this frequency.

5137 And, frankly, Cooper and McCarthy have agreed with us in that call and we have got that issue resolved.

5138 So, Commissioners, I thank you very much.

5139 Madam Chair, I thank you very much, for listening to us so carefully.

5140 THE CHAIRPERSON: Sixty-five is a surprising age to start strolling the beach.

--- Laughter / Rires

5141 MR. CALDWELL: But it still could be fun.

5142 THE CHAIRPERSON: Yes. Thank you very much, ladies and gentlemen.

5143 Mr. Secretary, please.

5144 MR. LEBEL: Thank you, Madam Chair.

5145 Both applicants indicated they would not participate in phase two and three, so this concludes the consideration of those two items.

5146 But, before you pull the plus, Madam Chair, I would like to indicate that there are a number of non-appearing applications on the agenda of this public hearing.

5147 Interventions were received for some of these applications.

5148 The panel will also consider these applications. And decisions will be issued at a later date.

5149 And this, Madam Chair, does complete the agenda of this public hearing.

5150 Thank you.

5151 THE CHAIRPERSON: Thank you.

5152 Before closing, I certainly wish to thank all the participants, those who appeared earlier in the week, for their cooperation.

5153 And, of course, thanks to my colleagues for their support.

5154 And to our staff for their hard work.

5155 And to the stenographer for keeping our words on the pages of the transcript.

5156 This hearing is now adjourned.

--- Whereupon the hearing adjourned at 1204 /

L'audience est ajournée à 1204.

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