ARCHIVED -  Transcript

 

 

 

 

 

 

 

TRANSCRIPT OF PROCEEDINGS BEFORE

      THE CANADIAN RADIO‑TELEVISION AND

TELECOMMUNICATIONS COMMISSION

 

 

 

 

TRANSCRIPTION DES AUDIENCES AVANT

  CONSEIL DE LA RADIODIFFUSION

   ET DES TÉLÉCOMMUNICATIONS CANADIENNES

 

 

SUBJECT:

 

 

 

VARIOUS BROADCAST APPLICATIONS /

PLUSIEURS DEMANDES EN RADIODIFFUSION

 

 

 

 

 

 

 

 

 

 

 

 

 

HELD AT:             TENUE À:

 

Fairmont Hotel Vancouver             Fairmont Hotel Vancouver

900 West Georgia Street             900, rue Georgia O.

Vancouver, British Columbia             Vancouver (C.-B.)

 

 

March 4, 2005          Le 4 mars 2005

 

 

 

 

 

Transcripts

 

In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

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

and staff attending the public hearings, and the Table of

Contents.

 

However, the aforementioned publication is the recorded

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

either of the official languages, depending on the language

spoken by the participant at the public hearing.

 

 

 

 

Transcription

 

Afin de rencontrer les exigences de la Loi sur les langues

officielles, les procès‑verbaux pour le Conseil seront

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

membres et du personnel du CRTC participant à l'audience

publique ainsi que la table des matières.

 

Toutefois, la publication susmentionnée est un compte rendu

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

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

officielles, compte tenu de la langue utilisée par le

participant à l'audience publique.

Canadian Radio‑television and

Telecommunications Commission

 

  Conseil de la radiodiffusion et des

télécommunications canadiennes

 

 

Transcript / Transcription

 

 

        

  VARIOUS BROADCAST APPLICATIONS /

PLUSIEURS DEMANDES EN RADIODIFFUSION

        

 

 

 

 

BEFORE / DEVANT:

 

Charles Dalfen          Chairperson / Président

Andrée Wylie          Commissioner / Conseillère

Ronald Williams          Commissioner / Conseillier

Joan Pennefather          Commissioner / Conseillère

Stuart Langford          Commissioner / Conseillier

 

 

ALSO PRESENT / AUSSI PRÉSENTS:

 

Pierre Lebel     Secretary / Secrétaire

 

Alistair Stewart          Legal Counsel /

Conseillers juridiques

 

Joe Aguiar          Hearing Manager /

Gérant de l'audience

 

 

 

HELD AT:          TENUE À:

 

Fairmont Hotel Vancouver          Fairmont Hotel Vancouver

900 West Georgia Street          900, rue Georgia O.

Vancouver, British Columbia          Vancouver (C.-B.)

 

 

March 4, 2005          Le 4 mars 2005

 

TABLE DES MATIÈRES / TABLE OF CONTENTS

 

   PAGE / PARA

 

PHASE I (Cont.)

 

PRESENTATION BY / PRÉSENTATION PAR:

 

NL Broadcasting Ltd.   1310 / 8122

 

 

PHASE II

 

INTERVENTION BY / INTERVENTION PAR:

 

Standard Radio Inc. 1381 / 8440

 

 

PHASE III

 

INTERVENTION BY / INTERVENTION PAR:

 

Jim Pattison Broadcast Group Limited Partnership 1383 / 8467

 

Active Mountain Entertainment 1418 / 8656

 

National Campus Community Radio Association 1423 / 8690

Brant Zwicker

 

Maureen Simpson   1447 / 8816

Grant Porter

 

George Evans 1460 / 8875

Nancy Greene Raine

Leslie Brochu

 

Sarah Nelems   1487 / 8985

Nina Durante

Joanne Gurney

Jolene Landygo

Ron Irving

 

 

PHASE IV

 

REPLY BY / RÉPLIQUE PAR:

 

NL Broadcasting Ltd.   1499 / 9039

 

Evanov Radio Group Incorporated Inc.   1508 / 9072

 

Standard Radio Inc. 1523 / 9143

Vancouver, B.C. / Vancouver (C.‑B.)

‑‑‑ Upon commencing on Friday, March 4, 2005 at 1000 /

    L'audience débute le vendredi 4 mars 2005 à 1000

SEQ 1_0 \* Arabic \r 81148114     THE CHAIRPERSON:  Order, please.  À l'ordre, s'il vous plaît.

SEQ 1_0 \* Arabic \n8115     Good morning, everyone.

SEQ 1_0 \* Arabic \n8116     Mr. Secretary, would you call the first item?

SEQ 1_0 \* Arabic \n8117     MR. LeBEL:  Thank you, Mr. Chairman.

SEQ 1_0 \* Arabic \n8118     Item 12 on the agenda is an application by NL Broadcasting Ltd. for a licence to operate an English‑language commercial FM radio program undertaking in Kamloops.

SEQ 1_0 \* Arabic \n8119     The new station will operate on frequency 103.1 megahertz on channel 276 B1, with an effective radiated power of 5,000 watts.

SEQ 1_0 \* Arabic \n8120     Appearing for the applicant, Mr. Robbie Dunn.  I will ask him to introduce his colleagues.

SEQ 1_0 \* Arabic \n8121     You have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

SEQ 1_0 \* Arabic \n8122     MR. DUNN:  Thank you, Mr. Secretary, and good morning, Mr. Chair, good morning, Madam Vice‑Chair, members of the Commission and the Commission staff.

SEQ 1_0 \* Arabic \n8123     My name is Robbie Dunn.  I am the majority shareholder, as well as the President and General Manager of NL Broadcasting, and we are pleased to appear before you today to present our application for a country FM station to serve our community of Kamloops.

SEQ 1_0 \* Arabic \n8124     Before we start our presentation in brief, I will introduce the panel that you see before you.

SEQ 1_0 \* Arabic \n8125     To my immediate right is Jim Swetlikoe.  With over 28 years of experience in British Columbia, Jim is the Operations Manager of CHNL‑AM, which we often refer to as Radio NL, and CKRV‑FM, which we call "The River" in Kamloops.  Jim is also a shareholder/director in the stations.

SEQ 1_0 \* Arabic \n8126     Jim will hire the program director that will be responsible for the day‑to‑day programming and the other operations of Country 103 FM.

SEQ 1_0 \* Arabic \n8127     To Jim's right is our other Jim, Jim Harrison, the news director of our Kamloops stations since 1974 and also a shareholder‑director.  Jim and our news department are recognized throughout our industry for their professionalism in journalism, including multiple awards from the BCAB and the Jack Webster Award for the best reporting in the province.  Jim will speak to our plans for news and other community features in our programming.

SEQ 1_0 \* Arabic \n8128     To my left is Elizabeth Laird, who is NL's partner in Merritt Broadcasting Ltd. and also the general manager of the Merritt station CJNL for the past ten years.  Elizabeth is one of the few women with a majority ownership position in the radio industry in our country, and we're very proud of that.

SEQ 1_0 \* Arabic \n8129     Elizabeth will discuss our approach to community involvement and the need for a strong partner in Kamloops.

SEQ 1_0 \* Arabic \n8130     In the second row, starting from my left, is Ravinder Dhaliwal, who has been the controller of our company for the past seven years.  Ravinder is active in the local South Asian community; also a member of Rotary.  He will answer any questions about our financial operations.

SEQ 1_0 \* Arabic \n8131     Next to Ravinder is Peter Angle, who is our general sales manager of NL Broadcasting and has been with us for 11 years.  Peter was responsible for developing our revenue projections and will also hire the sales manager for our proposed station.

SEQ 1_0 \* Arabic \n8132     Next to Peter is Joanna Linsangan, who is our promotion and marketing director.  Joanna is a proud graduate of the B.C.I.T. broadcast program, has been active in our industry for a few years, and will be responsible for developing the public face and personality of our country FM.

SEQ 1_0 \* Arabic \n8133     To Joanna's right is Calla Dunn, our head of community relations since 1995, after joining us from a similar position with the head office of the B.C. Lottery Corporation in Kamloops.  She will be responsible for the implementation of our Canadian talent development initiatives.

SEQ 1_0 \* Arabic \n8134     Next to Calla, we are particularly pleased to have with us a life‑long Kamloops resident and rancher, Mike Puhallo.  He's also one of Canada's best‑known cowboy poets.  He's served seven years as the President of the B.C. Cowboy Heritage Society, and is the principal organizer of the Kamloops Cowboy Festival.  He's published five books, recorded three CDs, and been awarded the Queen's Golden Jubilee Medal and the Will Rogers' Gold Medallion for his efforts in keeping western heritage alive.  He will be pleased to answer any questions you may have on the need for a radio station, such as the one we have proposed, that reflects our heritage in the Kamloops area.

SEQ 1_0 \* Arabic \n8135     He'd also be happy to share a little poetry, if you wish, if you haven't enjoyed some of his cowboy poetry.

SEQ 1_0 \* Arabic \n8136     Finally, Dave Coulter, our chief engineer and information technology expert.  Dave was with NL in the early 1980s, under contract with S.W. Davis Technical Service, until he was transferred to take care of their clients in Alberta.  He realized the winters were a little warmer in Kamloops, and fortunately for us, he returned in 1993.  Dave is at the back of the room helping us with some of the PowerPoint presentation that you will see on the screens in front of you.  He was responsible for overseeing the submission of our technical brief.

SEQ 1_0 \* Arabic \n8137     Mr. Chair and Commissioners, this is our panel ‑‑ all talented people with over 150 years of broadcasting experience between us and all deeply involved in the community life of our town, Kamloops.

SEQ 1_0 \* Arabic \n8138     Now, with your permission, we would be pleased to commence our presentation.

SEQ 1_0 \* Arabic \n8139     In our presentation, we will tell you about our hometown, its radio environment, the need for what we have termed "pure country music," and how it will impact the market, as well as our proposals for news, community programs, and Canadian talent development.  Also, you will hear about NL Broadcasting and our commitment to the community we serve.

SEQ 1_0 \* Arabic \n8140     Kamloops is the largest city in British Columbia in area.  The surrounding region is ideal for ranching.  We have a rich history of western lifestyle and the music that accompanies it, country and western.  On the screen, you will see pictures of that lifestyle, reflected by many annual events like colourful First Nations traditional ceremonies, rodeos, a cattle drive that attracts participants from around the world, and a very popular Kamloops Cowboy Festival.

SEQ 1_0 \* Arabic \n8141     For over 40 years, Kamloops had a country music station to reflect the music that underpins our western lifestyle.  In 2001, that station flipped from AM to FM and changed format from pure country to a mix of country and rock.  Then in August of 2003, the country music element completely disappeared.  It was replaced with a variety hits format, with similarities in sound to our FM station, CKRV, and also to our AM station, CHNL.

SEQ 1_0 \* Arabic \n8142     This competitive and strategic move targeted our key audience segments, and the action significantly diminished as well the diversity of listening options in our city.  Local reaction was intense, as country music fans felt abandoned.  We received hundreds of requests to provide a country service.  Fans told us they went to other sources for their favourite music:  radio available on cable, internet, and satellite.

SEQ 1_0 \* Arabic \n8143     As indicated on the chart that you'll see in front of you, the Fall '03 BBM, which followed the loss of country music on local radio, confirmed the anecdotal information.  There were 1,813,000 hours of tuning in Fall '02, when a local country music station was heard in Kamloops; but after the station's format was discontinued, the next survey, in the Fall of '03, reported a drop to 1,420,000 hours ‑‑ a full 20 percent below the previous fall survey, and the hours have remained down at that level in the recently released Fall '04 result.

SEQ 1_0 \* Arabic \n8144     As well, three out‑of‑market country stations, only available on cable and internet, that had not appeared in any previous BBM report, suddenly were showing tuning.

SEQ 1_0 \* Arabic \n8145     To illustrate the point, I happened to be in Calgary last year on my way to the CCM, a convention, and heard the following interview on country station CKRY‑FM ...

‑‑‑ Audio presentation / Présentation audio

SEQ 1_0 \* Arabic \n8146     That call from Kamloops really drove home to me the need for this country service in our hometown.

SEQ 1_0 \* Arabic \n8147     Now to provide you with information on how we'll go about programming the station to bring those listeners back, here's our program director, Jim Swetlikoe.

SEQ 1_0 \* Arabic \n8148     MR. SWETLIKOE:  Thank you, Robbie.  Good morning, Commissioners and Commission staff.

SEQ 1_0 \* Arabic \n8149     Much of the tuning for a country station will come from outside sources, and the duplication of the music on existing stations, we believe, will be minimal.  No more than 4 percent of the songs heard on our station will be played by any other local station.  In fact, we feel that the biggest impact will be on CHNL, our station, because it appeals to approximately the same age group, and many country fans that report they tune to NL for news go elsewhere for their country music.

SEQ 1_0 \* Arabic \n8150     Independent research that we commissioned from the Solutions Research Group verified that enough Kamloops listeners want this music to make this station viable, and this was subsequently reported by research submitted by both Standard and by Newcap.  Clearly, there is a large demand for country music.

SEQ 1_0 \* Arabic \n8151     We also personally visited with thousands of Kamloops citizens to develop our proposal.  Their input, and our knowledge of the market, will mean that our station will sound significantly different from what the other two applicants propose.

SEQ 1_0 \* Arabic \n8152     We envision a broader format, that incorporates the latest songs but will also reflect the western and traditional country music roots in our community.

SEQ 1_0 \* Arabic \n8153     Our station will be known as Country 103 FM, and the logo is on the screen.  The station will deliver a Kamloops brand of radio by broadcasting special features like Spirit of the West, a weekly program on the western lifestyle, produced in Kamloops by local rancher Hugh McLellan.  This show is unique to our application.  It rates very highly with people we interviewed.

SEQ 1_0 \* Arabic \n8154     Country 103 will air country classics during each broadcast day and in block programming on the weekends, a country gospel show on Sundays as well as relevant spoken word features like Country Spotlight that will focus on a different country performer each day, with music and biographical information.

SEQ 1_0 \* Arabic \n8155     After the application was made public, representatives of the Shuswap Nation Tribal Council, an association of Indian bands in our area, contacted us, since our proposed format has historical relevance to their people.  They wish to develop an association with a local company.  Now, we look forward to working with Chief Nathan Matthew, who chairs the tribal council, and Chief Shane Gottfriedson of the Kamloops Indian band on plans to reflect First Nations culture in Country 103's programming.

SEQ 1_0 \* Arabic \n8156     To meet the interests of Kamloops country listeners, Country 103 will play 40 percent Canadian content.  We've also received support from the British Columbia Country Music Association and the Kamloops country nightclub known as Cactus Jack's, ensuring that interviews, airplay, and promotion for local and regional artists, like Jolene Landygo, Kirsten Daniel, Lee Dinwoodie, Lisa Brokop, First Nations' performer Priscilla Worin, and also rising western star Matt Johnson.

SEQ 1_0 \* Arabic \n8157     Country 103 FM will also produce our own weekly program, playing the charted top 20 country songs by Canadian artists, biographical information and interviews.

SEQ 1_0 \* Arabic \n8158     In keeping with our commitment to being live and local, Country 103 FM will be local from its Kamloops studios at least 116 hours each week.

SEQ 1_0 \* Arabic \n8159     Country 103 will have a separate program director, separate announcers, separate newspeople, and separate salespeople.  It will function as its own entity, delivering on the promise to be Kamloops brand of radio.

SEQ 1_0 \* Arabic \n8160     Now, to elaborate on our range of local news and other spoken word features, here's Jim Harrison.

SEQ 1_0 \* Arabic \n8161     MR. HARRISON:  Thank you very much, and good morning to the Commission.

SEQ 1_0 \* Arabic \n8162     At NL Broadcasting, we're very proud of the job we do reporting on the events in our community.  In a city with access to at least nine news voices, we were gratified when the Solutions Research Group study showed that CHNL's news service is the authoritative one that Kamloops residents turn to in times of trouble.

SEQ 1_0 \* Arabic \n8163     Fifty‑five percent of 18 to 64‑year‑olds indicated they listened most to CHNL for updates on the 2003 wildfires; three times more than the next highest station.

SEQ 1_0 \* Arabic \n8164     As Robbie mentioned in the introduction, we're also very proud to have received the Jack Webster Award in 2003 for best radio reporting in B.C.

SEQ 1_0 \* Arabic \n8165     Ninety‑three percent of the core audience to country indicated that hearing news on their favourite radio station was important to them.  Country 103 will meet their needs with a strong, well‑resourced local news package.

SEQ 1_0 \* Arabic \n8166     We propose strong spoken word programming:  News, information, features, and announcer talk in excess of 20 hours weekly.

SEQ 1_0 \* Arabic \n8167     Two full‑time journalist/announcers will be added to our current newsroom of six full‑time people.  One of the new hires will be a dedicated voice to Country 103, acting as its news editor, responsible for searching out stories of particular interest to the country audience, as well as preparing and hosting Country 103 FM morning newscasts.

SEQ 1_0 \* Arabic \n8168     The same person will also prepare a daily special feature on items specifically important to the country audience.  For instance, the impact of the ongoing BSE crisis and First Nations issues, such as land claims.

SEQ 1_0 \* Arabic \n8169     The other person will handle the afternoon drive newscasts for Country 103.

SEQ 1_0 \* Arabic \n8170     Now, as well, the NL newsroom will now be staffed 20 hours a day, seven days a week, unique in Kamloops media.

SEQ 1_0 \* Arabic \n8171     We're more than excited by this possibility to enhance our already strong news team and provide even more extensive coverage to Kamloops listeners.

SEQ 1_0 \* Arabic \n8172     Now, to speak about our relationship with the community of Merritt and the association of CJNL radio to Country 103 FM, I'm pleased to acknowledge Elizabeth Laird.

SEQ 1_0 \* Arabic \n8173     MS. LAIRD:  Thank you, Jim.

SEQ 1_0 \* Arabic \n8174     Good morning, Commissioners.

SEQ 1_0 \* Arabic \n8175     The last few years has seen the loss or reduction of local service in smaller communities in British Columbia, with one notable exception.  Merritt Broadcasting, the licensee of CJNL‑AM, supported by our partner NL Broadcasting, actually has been able to expand our local services.

SEQ 1_0 \* Arabic \n8176     Merritt is a community of only 7,000 people 80 kilometres south of Kamloops.  My partners at NL in Kamloops have continually encouraged us to expand our local programming.  Our biggest leap to date was made in 2003 when we added 22 hours.  We are now a total of 69 hours a week local.

SEQ 1_0 \* Arabic \n8177     In addition, we also broadcast all the games of our junior hockey team and do other programming from special events like our Christmas tree lightup and our Canada Day celebrations.

SEQ 1_0 \* Arabic \n8178     This commitment to being live and local is the foundation of NL's operating philosophy.  In order for the CJNL listeners to continue enjoying our local service, we require a strong partner in Kamloops, and the addition of Country 103 FM will ensure that.

SEQ 1_0 \* Arabic \n8179     We will cooperate with the new station by having our newspeople provide items of interest to them and even more coverage of the Merritt Mountain Music Festival.

SEQ 1_0 \* Arabic \n8180     As well, our city has many other country‑related events, since we are known as the country music capital of Canada.

SEQ 1_0 \* Arabic \n8181     This will deliver the Merritt perspective and activities to a larger audience, reinforcing the bond between the two cities, and promoting travel to our smaller community.

SEQ 1_0 \* Arabic \n8182     I will now ask Peter Angle to talk about the need for Country 103 FM from the advertiser's perspective.

SEQ 1_0 \* Arabic \n8183     MR. ANGLE:  Thank you, Elizabeth, and good morning.

SEQ 1_0 \* Arabic \n8184     NL Broadcasting has been asked by many advertisers to pick up the country format and provide an efficient local advertising vehicle to reach fans of that genre.  In the words of one car dealer, "I need a place to sell my trucks."

SEQ 1_0 \* Arabic \n8185     To measure the depth of advertiser support for this format, the Mustel Research Group surveyed Kamloops advertisers.  It concludes that advertising budgets would be enhanced rather than move from existing stations to any large degree.  Our revenue forecasts for Country 103 were developed using the Mustel information, the forecast done by Pattison Broadcast Group that accompanied their application to flip to FM in 2001, and our lengthy experience in the market.  We believe our forecast to be the most accurate and realistic of all applicants.

SEQ 1_0 \* Arabic \n8186     Now, selling advertising in our two existing stations is a unique challenge for us.  We face a formal competitor each day in the Pattison company that has five revenue streams compared to our two.  Their sales force offers packaging for advertisers that combines two FM stations, the local TV station, and inserts in two Vancouver television stations.  They also share the same ownership with the largest outdoor advertising company in the market, Pattison Signs.  There are multiple cross‑media promotional and advertising opportunities available to them that are not available to us.

SEQ 1_0 \* Arabic \n8187     Despite the advantages available to Pattison, the presence we have in Kamloops and our fair pricing approach to advertising rates has meant we have attained reasonable success.  But looking to the future, approval of our application also addresses the competitive imbalance.

SEQ 1_0 \* Arabic \n8188     Now, to speak on the ability of the market to sustain a fifth commercial radio station, here is Ravinder Dhaliwal.

SEQ 1_0 \* Arabic \n8189     MR. DHALIWAL:  Good morning, Mr. Chair and Commissioners.

SEQ 1_0 \* Arabic \n8190     We commissioned an independent economic assessment from Benchmark Research.  Their report demonstrates ongoing gradual economic growth for the market and that another station is viable.

SEQ 1_0 \* Arabic \n8191     Let me highlight a few items from that report and also recently released information from the city as they appear on the screen in front of you.

SEQ 1_0 \* Arabic \n8192     Since 1983, when the last licence was issued, the population of the City of Kamloops has grown by 22,000, or one third.  It is expected to continue growing at a rate of 1 percent, reaching a population of nearly 90,000 by the 2010 Winter Olympics.

SEQ 1_0 \* Arabic \n8193     Licensing a fifth commercial station now means that there will be approximately 16,400 persons per station in the market, 1,400 more people than there was for four stations in 1983.

SEQ 1_0 \* Arabic \n8194     In January, the city reported its highest number of valid business licences yet, numbering over 4,600, an increase of 40 percent since the early '90s.  This is projected to be over 5,000 in the next few years.

SEQ 1_0 \* Arabic \n8195     This growth will ensure an expanded retail trade from which radio drives 80 percent of its broadcast revenues.

SEQ 1_0 \* Arabic \n8196     F.P. Market reports retail sales in Kamloops were $1.28 billion in 2003 and are projected to reach nearly $1.37 billion this year, an increase of 6 percent in only two years.  And they will keep growing, with advertising revenues naturally following.

SEQ 1_0 \* Arabic \n8197     Retail sales per household are 37 percent above the national average, accounted for by the large regional population of 130,000 people that utilize Kamloops for their main shopping.

SEQ 1_0 \* Arabic \n8198     And the best is yet to come.  Our local college is being designated full university status this April, immediately creating 150 new jobs.  The student enrolment will double over the next ten years to approximately 16,000, increasing the institution's impact on the City of Kamloops from $182 million to $340 million.

SEQ 1_0 \* Arabic \n8199     NL's business plan is realistic.  Taking into account the synergies and the local credibility available to us, we are confident of the viability of Country 103.

SEQ 1_0 \* Arabic \n8200     Now Calla Dunn will talk about how we will contribute to the development of local talent in our area.

SEQ 1_0 \* Arabic \n8201     MS. DUNN:  Prior to developing our package of CTD initiatives, we held discussions with several local performers to ensure that we would reflect their needs.  Subsequent to our initial filing, further input from the community led us to additional initiatives.  They all will directly benefit local talent in six separate plans.

SEQ 1_0 \* Arabic \n8202     We will spend $178,500 over the course of the licence term, an amount which is appropriate for Kamloops.

SEQ 1_0 \* Arabic \n8203     Solid lyrics are the basis of hit songs.  In collaboration with the university, we will provide local songwriters free professional coaching in our songwriting and voice coaching seminar, headed by Canada's original teen sensation and recording star Terry Black, who resides in Kamloops.

SEQ 1_0 \* Arabic \n8204     Starquest for Mountainfest is a new talent contest which will provide a cash prize and an appearance for the winning local talent at the Merritt Mountain Music Festival.  This event features international and national country music stars and attracts over 120,000 people.

SEQ 1_0 \* Arabic \n8205     We'll hire local performers to provide concerts during the city's Music in the Park series each summer.

SEQ 1_0 \* Arabic \n8206     An Emerging Artist contest winner will be selected at the Kamloops Cowboy Festival, the most successful of its kind in Canada.  This will fund a recording and pressing of a first CD for a western performer, a category mostly overlooked by our radio industry.

SEQ 1_0 \* Arabic \n8207     Country in the City is a free annual concert celebration for fans.  It will bring regional country western and First Nations performers together at a local venue, providing them with exposure, a fee for performing, and an opportunity to sell their CDs.

SEQ 1_0 \* Arabic \n8208     Lastly, we will contribute to the Canadian Country Music Association, with a request that funds be directed to artists in our area.

SEQ 1_0 \* Arabic \n8209     Our discussions with artists, promoters, and fans have made us genuinely excited about developing and bringing more Canadian local and regional country and western music to our city, Kamloops.

SEQ 1_0 \* Arabic \n8210     And now to sum up, Robbie Dunn.

SEQ 1_0 \* Arabic \n8211     MR. DUNN:  NL Broadcasting is a Kamloops broadcaster.  We believe strongly in radio, and we believe strongly in our town of Kamloops.  We're proud to live and work here.  We want to help our community grow and prosper, and we focus on providing excellent service to the citizens of our area.

SEQ 1_0 \* Arabic \n8212     The research conducted by the Solutions Research Group, the awards and recognitions our stations have received, including the 2003 Corporate Citizen of the Year, and over 1,100 letters of support that have been sent to the Commission from a broad spectrum of the Kamloops community, including all elected officials and the nearby First Nations, attest to the acceptance we enjoy and also the responsibility that we have.

SEQ 1_0 \* Arabic \n8213     The people of Kamloops need and want a country music station, one that plays a wide variety of country and western music, one that reflects our heritage and our lifestyle, one operated by a company with a track record of service to our community, one that is owned and accountable locally.  It's evident through the letters of support that people residing in Kamloops and area trust us at NL to meet this goal.

SEQ 1_0 \* Arabic \n8214     The economy of our area has shown steady growth, and that will continue.  NL's realistic business plan and credibility with local advertisers means we will be able to convert the initial interest more dependably into ongoing revenue than any new entrant.  And with support from our AM and FM stations in the city, we can ensure that Country 103's format is never again relinquished.

SEQ 1_0 \* Arabic \n8215     The Jim Pattison Broadcast Group will not face unduly detrimental competition from us.  At present, their multiple media holdings along with experienced local managers, extensive community involvement, and other powerful resources available from their corporation ensure that.  In fact, we could well make the case that licensing NL Broadcasting with this new station will tilt the field a little bit less against us.

SEQ 1_0 \* Arabic \n8216     Mr. Chair, members of the Commission, we need your assistance to face the intense and developing competition for listening time that new technology is bringing upon radio in the form of i‑Pods, the internet, and satellite radio.  We have a strong desire to be part of our community for many years to come, and ratifying our proposed service provides the diversity that will return listeners to Kamloops radio.

SEQ 1_0 \* Arabic \n8217     By granting a licence to NL Broadcasting, you'll meet your goal of maintaining radio industry ownership diversity in our province and our country.

SEQ 1_0 \* Arabic \n8218     We thank you very much for your attention today, and we would be pleased to try and answer any questions that you may wish to ask.

SEQ 1_0 \* Arabic \n8219     THE CHAIRPERSON:  Thank you very much, Mr. Dunn, ladies and gentlemen.  We appreciated your presentation.

SEQ 1_0 \* Arabic \n8220     I have a few questions arising from your application and the presentation today.  To begin with, a little math.  In your application, and I refer you to your supplementary brief, pages 23 and following, particularly page 24, where you indicate that your spoken word commitment will total 9 hours 40 minutes a week, including the news, which you detail on the previous page.  Today you mentioned a number of 20 percent, and as I do the math, that doesn't amount to 20 percent of the week.  So I'm wondering, you said, "news, information, features, and announcer talk in excess of 20 hours weekly" ‑‑ I'm sorry, you said 20 hours weekly.  So I'm trying to reconcile the 9 hours 40 with the 20.

SEQ 1_0 \* Arabic \n8221     MR. DUNN:  Jim Swetlikoe, our operations manager, would be pleased to answer that question for you, Mr. Chairman.

SEQ 1_0 \* Arabic \n8222     MR. SWETLIKOE:  I can provide for the Commission a breakdown of the entire spoken word commitment, but I will attempt to explain it here.  It gets a little confusing.

SEQ 1_0 \* Arabic \n8223     THE CHAIRPERSON:  That might be useful.  You chose not to submit a schedule, so we don't have that.

SEQ 1_0 \* Arabic \n8224     MR. SWETLIKOE:  I'm more than happy to do so.

SEQ 1_0 \* Arabic \n8225     THE CHAIRPERSON:  If you could do that and perhaps the ‑‑ go ahead.  If you can just address the question, that would be helpful.

SEQ 1_0 \* Arabic \n8226     MR. SWETLIKOE:  Sure.  556 minutes of our broadcast week in spoken word will be in news, weather, and sports.  The remaining amount that takes us to 9 hours 40 minutes will be in the area of road reports, community PSAs, stock market reports, the entertainment file feature, the feature "Star Watch," country music news, country spotlight, and a B.C. livestock marketing report, which is done each Friday morning.  That would bring the total to 9 hours 49 minutes.

SEQ 1_0 \* Arabic \n8227     The additional talk is an announcer show prep, which totals 10 hours and 35 minutes, bringing the total spoken word commitment to 20 hours and 24 minutes a week.

SEQ 1_0 \* Arabic \n8228     The total local spoken word would be 19 hours and 22 minutes, the subtraction coming from the announcer show prep involved in American Country Countdown, a syndicated feature, which would run 8 hours a week to total approximately 32 minutes, and 30 minutes per week for Spirit of the West, which is also a Canadian syndicated program that we're going to be airing on the station.  So it would bring down the local spoken word commitment to 19 hours and 22 minutes; the total spoken word commitment to 20 hours and 24 minutes.

SEQ 1_0 \* Arabic \n8229     THE CHAIRPERSON:  Okay.  If you could submit that breakdown, that would be helpful.

SEQ 1_0 \* Arabic \n8230     MR. SWETLIKOE:  Happy to do so.

SEQ 1_0 \* Arabic \n8231     THE CHAIRPERSON:  Now, your primary demographic is 25 to 54, Mr. Dunn; is that correct?

SEQ 1_0 \* Arabic \n8232     MR. DUNN:  I suppose that's the primary demographic as far as most advertisers would look at.  In terms of consumer analysis study that's been done, country format is really referred to as an 18 to 88‑year‑old format, and I know Jim has some information here on the typical profile of a country music listener, if you're interested in hearing that.  That might help delineate the exact listenership prospect a little bit better.

SEQ 1_0 \* Arabic \n8233     MR. SWETLIKOE:  The information I'm about to give you is taken from a Canadian consumer analysis study done by Albright & O'Malley, and profiles the Canadian country music listener.  This survey was done in 2004 ‑‑ the study was done in 2004.

SEQ 1_0 \* Arabic \n8234     The audience composition of men 18‑plus is slightly in excess of 46 percent, women 18‑plus slightly in excess of 53 percent.  25 to 54 age demo makes up about 56 percent of its cumulative.  The strongest demo is in 35‑plus.  18 percent of its tuning hours are done at work.  72 percent, unfortunately, are on the internet every day.  We want to have them spend a little more time with radio.  Men like older and upbeat songs, women like the newer ballads.  In their opinion, it's important that their country music station does reflect good Canadian values.

SEQ 1_0 \* Arabic \n8235     THE CHAIRPERSON:  Okay.  I'll get to the musical format ‑‑ that's helpful ‑‑ in a moment.  But in terms of the spoken word now, 20‑some hours, given what you've just outlined, how do you see the spoken word component of your programming, as distinct from the music, addressing the various components of the demographic?

SEQ 1_0 \* Arabic \n8236     MR. SWETLIKOE:  Perhaps if I first start with the area of news and information, our surveys have told us that it's important that news and information be a part of our radio station.  However, it's also in the survey material that our news and information spoken word content be in very specific areas of its programming.  We believe we've reflected that very well.

SEQ 1_0 \* Arabic \n8237     The remainder of our spoken word content in terms of surveillance material, such as road report information, community PSAs and interviews, we feel are just an obligation that a local broadcaster has to its community.  So that's pretty straightforward.

SEQ 1_0 \* Arabic \n8238     Our entertainment features, or the features that we have surrounding this, are all locally produced; in other words, the country spotlight, country music news and spoken word reflects very much not just the music but the lifestyle.  The two are tied together in our community, very closely.  The B.C. livestock marketing report is pretty obvious.

SEQ 1_0 \* Arabic \n8239     Now, the announcer show prep portion of our spoken word commitment to some degree lies not just in its relevance in terms of the market but also in its delivery.  Maybe I can make a comparison to our sister station CKRV‑FM?

SEQ 1_0 \* Arabic \n8240     CKRV is a hot AC/CHR radio station.  It goes very quickly.  Its spoken word commitment is in the neighbourhood of 14 hours a week, but its delivery is very quick.  It's a station that sometimes we say internally moves faster than the listeners' ears can go.

SEQ 1_0 \* Arabic \n8241     Our vision of Country 103 is more in CHNL's style:  It's conversational, it's across‑the‑table, it must relate to their lifestyle every day.  The people we hire for Country 103, to provide spoken word, will live this lifestyle.  They'll know country music.  We'll be looking for people very specifically knowledgeable about it.

SEQ 1_0 \* Arabic \n8242     THE CHAIRPERSON:  So I guess from what you're saying, is it fair to conclude, that the core or the thrust of your spoken word will appeal to the 25 to 54 demographic rather than the 19‑year‑old or the 87‑year‑old?

SEQ 1_0 \* Arabic \n8243     MR. DUNN:  Typically I would think the strength is going to be in the 35‑plus demographic; 25‑54, I don't know what we're going to get based on the previous country music station that was in the market.  I think you would take a look at that and say that their strength was 35‑plus, and I would anticipate that we would experience the same result.

SEQ 1_0 \* Arabic \n8244     THE CHAIRPERSON:  Thirty‑five plus, meaning plus until 54 or ...

SEQ 1_0 \* Arabic \n8245     MR. DUNN:  Well, I'm getting older, so I hope it's plus for an awful long time.

SEQ 1_0 \* Arabic \n8246     THE CHAIRPERSON:  I guess I'm going by your market research, which seemed to focus on the 25 to 54 ‑‑

SEQ 1_0 \* Arabic \n8247     MR. DUNN:  Yes.  Actually, our Solutions Research Group study focussed on 18 to 64.  We tried to refine that down a little bit to be more in the broader acceptance levels of what national advertisers are looking for.

SEQ 1_0 \* Arabic \n8248     THE CHAIRPERSON:  I'm not sure how much further we can take this, but I guess it's ‑‑ in terms of trying to assess the diversity of the market, perhaps you could do it from that point of view?  Where do you see your spoken word programming fitting in to the market, as it now exists in Kamloops, in attracting an audience that isn't currently listening to Calgary or to other stations?

SEQ 1_0 \* Arabic \n8249     MR. DUNN:  Well, primarily ‑‑ you saw the drop in 20 percent hours of tuning when the country music station was taken out of the market, so primarily it's music‑oriented.

SEQ 1_0 \* Arabic \n8250     I'll ask both Jims to talk on that, because there is a news element to that as well that would be spoken word content; and also in the programming sense where we would be doing interviews with Canadian artists that are Canadian country artists that receive no exposure in our market now.

SEQ 1_0 \* Arabic \n8251     Jim, would you like to talk perhaps on the news angle, first off our ideas for covering items that would not receive coverage on existing stations but would be on Country 103?

SEQ 1_0 \* Arabic \n8252     MR. HARRISON:  Well, as has been indicated, it's our intention to give the Country 103 newsroom its own distinct sound, which is the reason we intend to provide the station with its own dedicated newspeople.  Newspeople will be instructed to consider the interests of the country audience.  As an example, I'll use the federal budget when it was delivered.  NL news would have provided a more fullsome coverage of the budget, all of the details, all of the reaction and so forth.  On The River itself, which has a younger audience, we might focus the budget coverage more on the tax cuts for individuals and on the child care features of it.  For the Country 103 audience, we can see opening that particular coverage by suggesting that agriculture was a word not to be found in the budget or found infrequently in the budget, and here's what it means to you.

SEQ 1_0 \* Arabic \n8253     Apart from that, we will focus more heavily on the ranching community in our area, market conditions, as we've mentioned earlier, the ongoing BSE crisis, and get the local reflection on what that means to the individual rancher, hear from them, hear directly from them, in more detail than we're now providing.  Market conditions, as I mentioned, climate‑related items, as it will impact them; transportation issues; land claims and First Nations; that sort of thing.

SEQ 1_0 \* Arabic \n8254     THE CHAIRPERSON:  Okay.  While you have the microphone, I notice that you highlighted the introduction of a live local evening newscast in your application as a feature.  From the point of view of a station such as yours, that isn't an unusual feature, or are you saying that it is in the Kamloops market?

SEQ 1_0 \* Arabic \n8255     MR. HARRISON:  It is in the Kamloops market, and I believe it's fairly unique to radio in this country, to have live local news throughout the evening.  This configuration, the synergies of three stations, would allow us the resources then to reach that objective.

SEQ 1_0 \* Arabic \n8256     MR. SWETLIKOE:  Just as a point of clarification, just to make sure we're clear, we currently offer news on the hour, every hour, 24 hours a day on CHNL.  The evening newscasts originate with the Corus Radio Network in Vancouver; very much a good regional newscast, no question about it, and which we contribute to on Corus.  Our goal here is to provide complete local newscasts on CHNL.

SEQ 1_0 \* Arabic \n8257     THE CHAIRPERSON:  That's the difference.  Not the element of live on‑the‑hour news but locally based news.  And I guess it takes into account those three stations, so you'll consider it local in each of those markets; is that the idea?

SEQ 1_0 \* Arabic \n8258     MR. SWETLIKOE:  Right.

SEQ 1_0 \* Arabic \n8259     THE CHAIRPERSON:  None of the markets currently have that now, with the addition of this station, to be able to marshal your resources and provide a newscast that will address all three?

SEQ 1_0 \* Arabic \n8260     MR. HARRISON:  That's right.

SEQ 1_0 \* Arabic \n8261     THE CHAIRPERSON:  Moving to the musical format ‑‑ again, without a schedule, and not being an expert in this particular format, you describe both newer and older country music selections in a broad spectrum.  Do you have some sense of the balance between the two, and can you, in words somehow ‑‑ maybe music would be the best way of doing it ‑‑ in words describe the fundamental difference between those two categories?

SEQ 1_0 \* Arabic \n8262     MR. DUNN:  I'll ask Jim to respond to that.  But just to set up a bit of an overview for you, certainly the sound that we're proposing is much more varied, and Mike Puhallo may also want to come in on that and talk about the popularity of the western genre in our area.  It's unique to Kamloops, pretty much.  There are certain pockets of population in Kamloops that do have a very strong western following, and we wish to provide that service.

SEQ 1_0 \* Arabic \n8263     First off, I'll turn it over to Jim here to talk about how we see the music coming together with comparative playlists.

SEQ 1_0 \* Arabic \n8264     MR. SWETLIKOE:  Country 103 would focus more on gold music, particularly from the '70s and '80s.  We would play approximately 50 percent from the new and recurrent categories, and 50 percent would come from those gold categories.  Within that includes the incorporation of western music, to some degree some western swing as well.  We believe that our listeners do feel it's important because it does reflect our lifestyle very well, and I will ask Mike to comment on that.

SEQ 1_0 \* Arabic \n8265     I also have prepared a couple of sample flow charts and again can provide it to the Commission, should you desire.

SEQ 1_0 \* Arabic \n8266     THE CHAIRPERSON:  That would be helpful.

SEQ 1_0 \* Arabic \n8267     MR. PUHALLO:  I guess it's my turn.

SEQ 1_0 \* Arabic \n8268     First off, I do want to say that western music is far from dead in Canada or the United States.  Western music and western strut swing are possibly the fastest growing genre of country music in North America today, and the popularity of events, such as the big cowboy gathering at Elko, Nevada and our own Kamloops Cowboy Festival certainly have illustrated that.  We've been on an incredible growth curve over the last nine years with the Kamloops Cowboy Festival.  We started with a half a dozen musicians and poets in a bull sale ring on a Thursday night with a hundred people in the grandstand.  Last year we attracted 4500 people to the Kamloops Cowboy Festival.

SEQ 1_0 \* Arabic \n8269     The popularity of western music is just taking off in an incredible fashion.  Even mainstream artists in the U.S. who have been very successful, like Garth Brooks, have made a point of including at least one western or cowboy song on every album they've put out.  Ian Tyson continues to be a world leader in the field of western music.  If you even look back to the stuff Ian was recording when it was Ian and Sylvia, he was writing and recording western music.  It is basically the folk music of the rural West, as different from mainstream country as the East Coast Celtic music is, and it does cover a fairly wide range, everything from western swing, with its jazz influences, to the Hollywood type harmonies, to the traditional cowboy ballads and, of course, now cowboy poetry has really come to the fore as well.

SEQ 1_0 \* Arabic \n8270     THE CHAIRPERSON:  Thank you.  Now, you use the terms "western" and "cowboy."  Is that to be synonymous with the newer form of country music?  Is it a sub‑category?  You know, we think in ‑‑

SEQ 1_0 \* Arabic \n8271     MR. PUHALLO:  Somewhere, about 40 years ago, one deejay back East said "country" and "western" music in the same sentence, and since then, they've been married.

‑‑‑ Laughter / Rires

SEQ 1_0 \* Arabic \n8272     MR. PUHALLO:  Unfortunately, recently, again, those same Eastern influences have said country music ‑‑ or western music is dead, or similar to country.  Nothing could be further from the truth.  Try and tell that story south of the Red River in Texas, and you'll get lynched.

‑‑‑ Laughter / Rires

SEQ 1_0 \* Arabic \n8273     MR. PHUALLO:  The appetite for western music in the Foothills of Alberta, in the cattle country of British Columbia, is strong and growing.  But it's a continuation of those same traditions that reach all the way back to Robbie Martins and the great western singers of the past.  Bob Wills' western swing is still kept alive together.  I did a show last year with his niece, Dana Wills, who is still doing western swing.  You know, there is no abatement.  It is a growing genre.

SEQ 1_0 \* Arabic \n8274     THE CHAIRPERSON:  I thank you for that.  I'm not trying to pin you down to absolute numbers, but just to give us a sense ‑‑ and I guess back to you, Mr. Dunn ‑‑ of the balance between western music and, I guess, country, can you give us a sense?  Again, we don't have a program schedule, so it's hard to get a feeling for it.  Do you have a sense of the balance and proportions of your musical selections between what you've just heard, cowboy and western and other country ‑‑

SEQ 1_0 \* Arabic \n8275     MR. DUNN:  Jim is the highly detailed person here.  I can give you a bit of an overview.

SEQ 1_0 \* Arabic \n8276     Shows like Spirit of the West.  Hugh McLennan is an old friend of mine.  We worked in country music radio 30 years ago in Calgary, and he now resides in Kamloops and has an outstanding show that features the newer western‑type songs.  We'd be absolutely delighted ‑‑ we have an association with Hugh ‑‑ that we're absolutely looking so much forward to having that show on the air.  It will air twice each week.

SEQ 1_0 \* Arabic \n8277     Another interesting thing that I want to share with the Commission that came out in the letters of support that came in, the number of letters of support that came and mentioned how happy they were that we were going to be carrying Spirit of the West is a real credit to Hugh and the quality of that program.

SEQ 1_0 \* Arabic \n8278     Now, beyond that, our regular daily programming is also going to have that.  Jim has prepared some sample charts, and I don't know if we calculated the exact percentage breakouts there, Jim, but he can give you an example.

SEQ 1_0 \* Arabic \n8279     THE CHAIRPERSON:  No, and I'm not trying to pin you to that.

SEQ 1_0 \* Arabic \n8280     Perhaps, Jim, what you could do is give me a sense, because again I don't have a schedule, of whether you're thinking of a rotation of all this type of music throughout your schedule or whether you're thinking of blocks of the different categories?  Can you help me with that?

SEQ 1_0 \* Arabic \n8281     MR. SWETLIKOE:  Yeah, I think I understand what you're looking for.

SEQ 1_0 \* Arabic \n8282     I think the way to answer it is that we would highlight that music.  In other words, we know, as programmers, that throwing in a western song that doesn't jibe with something that's happening in today's country music might sound harsh.  We understand that.  Any less than playing on a hot AC station, suddenly playing an '80s tune.  You know, if you don't let people know it's something special, it can pop at you and kind of sound out of place.  We want to make sure that happens.

SEQ 1_0 \* Arabic \n8283     So as we broadcast throughout the day, it certainly wouldn't be unusual to do it at least once an hour, plus Spirit of the West, which does it for a total of two hours each week.

SEQ 1_0 \* Arabic \n8284     You know, we understand the importance of western music in our community.  If we look at what Ian Tyson is doing right now ‑‑ he has a top‑selling LP in Canada in western music.  Again, we know it's not dead, and we're certainly not a station, a country station, that wants to ignore it.  We want to envelope it as part of our programming.  But, again, by featuring it ‑‑ I hate to use that word as though it's such a stand‑out ‑‑ but by introducing it correctly and placing it correctly in the hour, we believe it'll be there quite a bit.

SEQ 1_0 \* Arabic \n8285     THE CHAIRPERSON:  I have that information.

SEQ 1_0 \* Arabic \n8286     MR. DUNN:  Mr. Chairman?

SEQ 1_0 \* Arabic \n8287     THE CHAIRPERSON:  Go ahead.

SEQ 1_0 \* Arabic \n8288     MR. DUNN:  One of the stations that I enjoy listening to when I'm in the Seattle area is KMPS.  It's a country music station.  It's actually the number one overall rated 12‑plus share station in Seattle.  A very, obviously, urban market.

SEQ 1_0 \* Arabic \n8289     They have a very interesting way of taking care of that kind of music, even in Seattle.  As Jim was saying, they billboard it.  They're saying:  "KMPS, we're proud to play the history of country."

SEQ 1_0 \* Arabic \n8290     While we may not creatively swipe that in the same way, that's the idea that we have for our programming.

SEQ 1_0 \* Arabic \n8291     MR. SWETLIKOE:  Oh, no, we might swipe it exactly that way.

‑‑‑ Laughter / Rires

SEQ 1_0 \* Arabic \n8292     MR. SWETLIKOE:  I'm not open to swiping the idea, but ...

SEQ 1_0 \* Arabic \n8293     The thing I'd also like to add is, the addition of that music also, I believe, reflects some artists that right now are only being heard on a show like Spirit of the West, and I've had many conversations with Hugh McLennan on this over the years.  People like Butch Falk ‑‑ Butch Falk is a performer out of McClure.  Have you ever heard of Butch Falk?

SEQ 1_0 \* Arabic \n8294     I think that, you know, Matt Johnson, who has received a Rising Star Award in western music, lives in Clearwater, which is only 90 miles to the north and serviced by CHNL.

SEQ 1_0 \* Arabic \n8295     You know, this is music that's not getting an opportunity to be heard.  We also believe in that regional sound of western music, because it's part of our heritage.

SEQ 1_0 \* Arabic \n8296     THE CHAIRPERSON:  Right.  Do you have a way ‑‑ I know you alluded to it briefly, but perhaps you could elaborate on it, on how you would distinguish your sound from the proposal that we have from Standard on a country music station?

SEQ 1_0 \* Arabic \n8297     MR. DUNN:  We can certainly do that, and it is very different.

SEQ 1_0 \* Arabic \n8298     Jim has sample music charts, which perhaps would be best filed rather than going through the detail here, unless you wanted to do that.

SEQ 1_0 \* Arabic \n8299     THE CHAIRPERSON:  No, no, we don't need the detail at this point as much as a general overview from your point of view, as best you can describe it.

SEQ 1_0 \* Arabic \n8300     MR. DUNN:  The general overview is that we would have more programs that would appeal to that particular part of the market.

SEQ 1_0 \* Arabic \n8301     Jim may have some specific ones that he'd wish to touch on there, but certainly we're going to be playing the new country music songs.  We don't want to tell you that it's going to be all balanced the other way, because there is a demand for that too, and we want to make sure that the new artists get their music heard.  But we also want to properly convey the cultural heritage of our area.

SEQ 1_0 \* Arabic \n8302     Jim, did you want to add anything to that?

SEQ 1_0 \* Arabic \n8303     MR. SWETLIKOE:  Well, I do want to say that, you know, based on sample hours and trying to figure out how different the stations will sound is extremely difficult because, you know, to take two hours of a broadcast week and two sample hours out of an application is pretty difficult to do.

SEQ 1_0 \* Arabic \n8304     What we've reviewed is perhaps the sample in terms of airing a balance or ‑‑ you know, that's really all we can really look at.  And it looks as though, in the opposing application, that we would see more new country music, approximately 60 percent, kind of out of that new era, you know, the last couple of years or year or two.  We would have less than that.  We would be more in the 50 percent range.  I believe our music sample will go back farther into the '70s on occasion, as well.  We wouldn't ignore the '70s.  And certainly the '60s and '70s, when it comes to the show Country Classics, we want to go right back and bring that.

SEQ 1_0 \* Arabic \n8305     I caution that to try and compare the two based on just music samples is pretty difficult to do, at least from my perspective.

SEQ 1_0 \* Arabic \n8306     THE CHAIRPERSON:  On the format itself, you, of course, have told us that the format was in the market; it was abandoned less than two years ago.  A number of applicants have considered that an opportunity and have decided they want to apply for the format.  You have your market research, which we've read.  But did you do a separate kind of analysis as to why you thought that the previous presenter of that format gave it up and why it will work now when a decision was made, as recently as a year and a half ago, to give it up?

SEQ 1_0 \* Arabic \n8307     And I appreciate this is beyond the market research, because we have that information, but just your own sense of, you know, a pretty savvy broadcaster getting out of that, and is there a role for it in the market?

SEQ 1_0 \* Arabic \n8308     MR. DUNN:  I can't speak for the Pattison Group, obviously, for their reasons for changing.  I think John Yerxa spoke eloquently to that yesterday and what his research showed.

SEQ 1_0 \* Arabic \n8309     In our particular circumstance, we've been looking for a way to grow our company in the last few years.  At the time that we were looking, there were four diverse formats available in the market, including country, and so we didn't test that particular one.

SEQ 1_0 \* Arabic \n8310     What we did test was new rock and smooth jazz, and what we determined was that there just wasn't significant enough audience there to make the enterprise viable.  And so we kind of went away and let things lie.

SEQ 1_0 \* Arabic \n8311     However, in August of 2003, when the Pattison Group did decide to abandon the country music format, those fans immediately showed their displeasure, and we then said, country is the obvious hole.  And we've all been living there for an awful long time.  We understand the importance of the cultural heritage in our area, the rich demand for country and western music, and all of a sudden, it's not there.  So our research focussed completely on what is the demand for country music, and what levels of country music?  Do people want it out of the current pop music, do they want it out of the '90s, do they want it out of the '60s?  And out of that, we then prepared our programming plan.

SEQ 1_0 \* Arabic \n8312     However, we do note that the other applicants, Newcap in particular, that has subsequently dropped out, but the research that they did provide did indicate that ‑‑ they did test other formats, and clearly country was the format that was missing in the marketplace.  So it reaffirmed what our intuition had already told us.

SEQ 1_0 \* Arabic \n8313     THE CHAIRPERSON:  Thank you.  In your remarks today ‑‑ I think it was Mr. Swetlikoe ‑‑ you mentioned you would be live and local from the Kamloops studio at least 116 hours per week.  That really means you'll have people on the mics throughout that time period, is it?

SEQ 1_0 \* Arabic \n8314     MR. SWETLIKOE:  Our local programming, including voice track, everything will be done locally.  Our midday voice tracking ‑‑ we actually, in our station, call program assist.  The person is there.

SEQ 1_0 \* Arabic \n8315     What we have found that that allows us to do, and very effectively in both of our other stations, is to provide the additional services in a more timely manner.  For example, community interviews and preparation of those.  That's just one example.  There are many others.

SEQ 1_0 \* Arabic \n8316     In the area of production, people able to do other things ‑‑ while never giving up the fact that it's program assist.  It's not just an automation unit that runs.  When we have a breaking story on CHNL, we go, now.

SEQ 1_0 \* Arabic \n8317     THE CHAIRPERSON:  Right.  So with program assist, there isn't a live announcer ‑‑

SEQ 1_0 \* Arabic \n8318     MR. SWETLIKOE:  The announcer is not live on the air, the announcer is there.

SEQ 1_0 \* Arabic \n8319     THE CHAIRPERSON:  So how many hours would you say there will be somebody actually on the mic announcing the program?

SEQ 1_0 \* Arabic \n8320     MR. SWETLIKOE:  Monday through Friday from 6 a.m. to 6 p.m.; Saturday from 6 a.m. to 6 p.m.; and Sunday from 6 a.m. to 6 p.m.

SEQ 1_0 \* Arabic \n8321     THE CHAIRPERSON:  Okay, thank you.

SEQ 1_0 \* Arabic \n8322     On your CTD, you've set it out again very clearly today.  I'll just summarize it, because I think we're pretty clear on, as of November 2, what your revised position is.  Let me just run through it, and you can tell me whether it's correct.

SEQ 1_0 \* Arabic \n8323     $400 per year participating in the CAB/CTD plank, contributing to the Canadian Country Music Association CTD fund; is that correct?

SEQ 1_0 \* Arabic \n8324     MR. DUNN:  Yes.

SEQ 1_0 \* Arabic \n8325     THE CHAIRPERSON:  $4,000 per year for songwriting, recording, and voice coaching; $6,000 per year the Mountainfest Star Quest; $600 per year Music in the Park; and $6,000 per year Kamloops Cowboy Festival Emerging Artists Contest; and then $8,500 a year free public celebration concert.  Have I got that?  We have your descriptions and so on, and that totals twenty ‑‑ what is it per year? ‑‑ twenty five five per year, for a total of $178,500.

SEQ 1_0 \* Arabic \n8326     MR. DUNN:  That's correct, sir.

SEQ 1_0 \* Arabic \n8327     THE CHAIRPERSON:  Because it's clear, I don't have to pursue that, including the description.  So I have that.  Thank you.

SEQ 1_0 \* Arabic \n8328     Regarding cultural diversity.  As you know, our commercial radio policy encourages broadcasters to reflect the cultural diversity of Canada in their programming and employment practices, especially with regard to news, music, and promotion of Canadian artists.

SEQ 1_0 \* Arabic \n8329     I note in your application that you've identified that you expect your daily 90‑second background clips will regularly include features on the various cultural groups in Kamloops.  Are there other ways that you're going to be reflecting diversity as well?

SEQ 1_0 \* Arabic \n8330     MR. DUNN:  Specifically in the news area?

SEQ 1_0 \* Arabic \n8331     THE CHAIRPERSON:  Or overall, in your programming or employment in the station?

SEQ 1_0 \* Arabic \n8332     MR. DUNN:  All right.  I'm happy to touch on all of the points for you.

SEQ 1_0 \* Arabic \n8333     First of all, it comes from a culture that's within our own company.  We read these things in The Globe and Mail called systemic barriers and so on, and to us, they're really just jargon.  We look very much wider for employees to join us in the company.  We've developed an environment, a culture of mutual respect; and at the same time, Ravinder Dhaliwal, who you met earlier, is our controller and human resources person.  Ravinder is the one that's responsible for tracking that and making sure that we have proper diversity within our employees.

SEQ 1_0 \* Arabic \n8334     In terms of our news coverage, I'm particularly proud of the job that we do with the First Nations people.  Jim Harrison is to be credited with that, in our news end.  We maintain regular contact with the chiefs and councils of the nine bands that are in our area, and their views are expressed on a regular basis on issues of any importance to them.  That is one of the reasons that they have submitted letters of support for us.  They see the kind of contact that we already have with them, the fairness that they receive.

SEQ 1_0 \* Arabic \n8335     It's interesting as well that Peter Angle and myself have met with Shane Gottfriedson and his assistant Christy Stewart to discuss plans that they have for this year for the Kamloops Indian band.  The Kamloops Indian band lands are located right across the river from the downtown Kamloops area.  As a side note, they're very proud that the economic impact on Kamloops from their lands is approximately $300 million a year.  They're a main economic generator.  They have somewhere in the vicinity ‑‑ Peter, correct me if I'm wrong ‑‑ 250, 300 employees in that band.  A very prosperous band, doing very well.

SEQ 1_0 \* Arabic \n8336     But one of the things that they still encounter are barriers from the population that's on the south side of the river, and we're working with them to try to break down those barriers.  So that's part of an area that we see Country 103 really being an assist to help encourage people to come on to their lands.

SEQ 1_0 \* Arabic \n8337     They are now providing encouragement for people to come and use the trails that are on some beautiful property that they have.  In that regard, dealing with First Nations, I just might ask Joanna here, who has been also developing some ideas of what we can do with Country 103 to work with the Indian bands in our area and to help them break down those barriers.

SEQ 1_0 \* Arabic \n8338     Joanna, would you like to touch base on that a little bit?

SEQ 1_0 \* Arabic \n8339     MS. LINSANGAN:  Definitely.  Thanks, Robbie.

SEQ 1_0 \* Arabic \n8340     Promotionally, what we hope to do is work with the First Nations, work with the Shuswap Tribal Council and the nine Indian bands.  Every year there are so many events that get promoted on some level, but on Country 103 we could do so much more for them.

SEQ 1_0 \* Arabic \n8341     Take, for example, the Kamloops powwow.  You've seen the picture.  It happens every year, this summer will be their 23rd.  Not only that, the Kamloops Indian band, the Skeetchestn band as well, they hold annual health fairs and rodeos.  The Whispering Pines, Kamloops, and Skeetchestn Indian bands, they hold rodeos every year.

SEQ 1_0 \* Arabic \n8342     What we hope to do is by bringing these events to the forefront, lending our air waves, through promotions, through contesting, we'll be able to garner more community support for these kinds of events.  It's integral, it's part of our community, and I've lived in Kamloops for only two months, and I've seen the impact.  You go down the main street downtown, you see people in cowboy hats.  You don't see that on Robson here, but you see it in Kamloops.  That's what happens.

SEQ 1_0 \* Arabic \n8343     THE CHAIRPERSON:  Thank you.

SEQ 1_0 \* Arabic \n8344     MR. DUNN:  I might just touch on the music element as well.  I believe that's one of the areas of cultural diversity.  Mike Puhallo mentioned that, and some of the western music we did in our initial remarks, Priscilla Warren is one of the artists out of our area, originally from Golden, now lives in Vancouver, that we see working with.  Tom Jackson is a well‑known Prairie Aboriginal artist and creates shows.  They have a show circuit.  We have been talking with Jimmy Thomas, to manage the Mount Paul Centre, which is on the Kamloops Indian band lands, and Jimmy happens to be a friend of Tom Jackson.  We said, "Wouldn't it be great if we could bring in an all‑Aboriginal show that Country 103 could be involved in?"

SEQ 1_0 \* Arabic \n8345     Mike, did you want to talk any more about some of those particular types of shows?

SEQ 1_0 \* Arabic \n8346     MR. PUHALLO:  Well, I would like to say that, both from the Indian bands and the western events community around Kamloops, which are really one and the same ‑‑ around Kamloops, we're not afraid to say Indian cowboy, and the fact is that, for most of my life, half of the cowboys I knew were Indians and half the Indians I knew were cowboys.

‑‑‑ Laughter / Rires

SEQ 1_0 \* Arabic \n8347     MR. PUHALLO:  That hasn't changed.  When you're producing rodeos, western heritage events, like the Cowboy Festival, you need a country music outlet to advertise those events on and coordinate with as a marketing partner, and that's been sadly missing in the local market.

SEQ 1_0 \* Arabic \n8348     Just speaking from the experience with the Kamloops Cowboy Festival, we have a total of 47 sponsors.  Those sponsors that sponsor our cowboy festival want to be able to advertise on a country music station.  That's not available to them right now.

SEQ 1_0 \* Arabic \n8349     MR. DUNN:  Do you have any further questions, sir, on diversity?

SEQ 1_0 \* Arabic \n8350     THE CHAIRPERSON:  No, you've answered my questions.  Thank you, Mr. Dunn.

SEQ 1_0 \* Arabic \n8351     I want to turn to the ability of the market to sustain a new station, an area that I know you've covered both in your presentation and in today's oral remarks.  You've heard the other applicants being questioned on the fact that the market is sub‑par regarding profit levels and so on.

SEQ 1_0 \* Arabic \n8352     I would like to be a little specific in asking you the question.  If you could turn to your supplementary brief at page 31.  I assume, since this was filed in '04, that it's a little dated, and you can certainly update it.  But if you look at the top paragraph, you say that, based on retail sales and radio's share of retail sales, that this represented a $6.9 million market.

SEQ 1_0 \* Arabic \n8353     Now, as you know, the actual market in Kamloops for '04 was $6.291 million and, in fact, declined from the previous year of $6.363 million.  So you're starting with a base there that is lower than what you had projected out, and I wonder how you would react to the impact of the lower dollars in the market in terms of the absorbability of a new station.

SEQ 1_0 \* Arabic \n8354     MR. DUNN:  As you're well aware, there are two owners in the market, so we don't get to see that information.  So it was our best guess, based on ‑‑

SEQ 1_0 \* Arabic \n8355     THE CHAIRPERSON:  Well, this is public, from our financial summaries in the entire market.  So this is not ‑‑ we have the individual ones, but these are the market totals which are in our financials.

SEQ 1_0 \* Arabic \n8356     MR. DUNN:  I know the question was asked yesterday on PBIT.  Would you like me to perhaps shed some light on that?

SEQ 1_0 \* Arabic \n8357     THE CHAIRPERSON:  Sure.  Kamloops has a different reporting requirement, in that the stations are not over 4 million ‑‑ I think 4 million is the threshold there to provide different reporting requirements.  It's unfortunate the other applicants don't get to see the market reporting.

SEQ 1_0 \* Arabic \n8358     In our particular case, the PBIT that we report on the annual return would be significantly lower because of monies that we move to an associated company for tax reasons.  If you take a look at our general and administration expense as a percentage of revenue, it's about 25 percent higher than the industry averages.  Therefore, our profit margins are about 25 percent lower.  Based on the numbers that Commissioner Langford shared yesterday, we did a very quick and rough calculation based on our estimate for the market, and if we add back in the monies that we transfer to the associated company, we feel that the market would then come up to about a 17 percent PBIT, not knowing exactly what the Pattison people do in terms of their allocations.

SEQ 1_0 \* Arabic \n8359     THE CHAIRPERSON:  And on that basis, you're comfortable with the absorbability of the market?

SEQ 1_0 \* Arabic \n8360     MR. DUNN:  We're excited.  We have filed with you, on a confidential basis, the forecasts that we have for our existing two stations, given the impact of this new entrant into the market.  If we were to be able to provide it, because of the local synergies that we can provide, we are more than comfortable with the ability of the market to sustain a very viable operation here.

SEQ 1_0 \* Arabic \n8361     THE CHAIRPERSON:  Right.  On page 33, you indicate that there will be a natural growth in radio revenues of approximately 200,000 for the existing stations, from the '03 to '06 period.  Is that on track as far as you know?

SEQ 1_0 \* Arabic \n8362     MR. DUNN:  Our stations this year are doing fine.  Like any company that has ‑‑ in markets of our size, where about 80% of our revenues come from local advertisers, and where our style of selling is not based on GRPs and cost per rating points and all those other wonderful things that BBM turns out and tries to confuse local advertisers with ‑‑ you know, what local advertisers really want to know is, "How are you going to sell my product?"  They're not interested in how many GRPs we've got and what our cost per point is and all that kind of thing.

SEQ 1_0 \* Arabic \n8363     What we have done there is ‑‑ and, first of all, what we are subject to is a change in people.  In this past year, for example, we, unfortunately, lost two very high‑performing salespeople, but encouraged them, because they were going out to start their own business.  To us, that's pretty exciting.  They're now doing very well, almost a year later, and we still work with them and have a very good relationship with them.  It's one of the things that we try to foster within our employees, that they do the best that they possibly can for themselves.

SEQ 1_0 \* Arabic \n8364     At the same time, we've also been working to identify advertisers that would be new to radio because they can't get a country music station, such as the one that we have proposed, to provide a service for them.

SEQ 1_0 \* Arabic \n8365     I might just reflect back here to Peter Angle, our sales manager, who has done some work on that and has identified some of those kind of advertisers.

SEQ 1_0 \* Arabic \n8366     Peter, would you like to touch on that?

SEQ 1_0 \* Arabic \n8367     MR. ANGLE:  Well, I'll touch on a couple of areas, Mr. Chair.

SEQ 1_0 \* Arabic \n8368     First off, I just want to take off a little bit on the selling style and also the current one that we look to employ with Country 103.

SEQ 1_0 \* Arabic \n8369     As you heard in our opening remarks, our intent is to have a separate sales force, and that comes from experience that we currently have operating two stations in the marketplace with one sales force and the challenges that we face with that.  Quite frankly, we don't believe that's the best route, to have one sales force selling multiple products.  This gives us the opportunity to do it right.

SEQ 1_0 \* Arabic \n8370     The other thing is that, I think with this particular ‑‑ and with any format, for that fact ‑‑ country is a very unique genre, and you've heard a lot of the detail and the passion that obviously Mike has expressed for the type of music and the understanding of it.

SEQ 1_0 \* Arabic \n8371     What our customers expect from us being in the marketplace is that our salespeople, first and foremost, have to have a very good understanding of the format and better have a very good grasp of how to be able to use and market their products on our particular radio station.  In that vein, I think it's important that we distinguish that and our selling styles.

SEQ 1_0 \* Arabic \n8372     As far as the market impact is concerned, you know, we took a real hard look at that, and obviously that's a factor that we've identified.  But we've also identified, as you've heard from Mike here as well too, there are several advertisers that are out there that don't have an avenue for it.  We've heard from Cactus Jack's, in our opening remark, which is a country western bar in town here.  Obviously, there's no avenue for them to go.  But there's others.

SEQ 1_0 \* Arabic \n8373     I was, you know, laughing yesterday when people said, "Well, who are they?"  And I started throwing out names like Horse Barn and Cowboy Coffee, and they started laughing, "You're making those names up."  I said, "No, I'm not."  Those are businesses within our community that are not advertising on radio right now that see an opportunity with this new station.

SEQ 1_0 \* Arabic \n8374     THE CHAIRPERSON:  I guess the simple focus is that, in your impact analysis that you've done on pages 33 and 34, a major chunk of your projected first‑year revenues is growth, is $200,000 growth, and if the trend is that we're not seeing that growth, based on the period that you've covered and the trend in the market, then a major chunk of that impact then shifts to existing stations, because you do have other sources as well.  Perhaps you could just comment on that?  And if that $200,000 growth isn't there in the market, what do we do?

SEQ 1_0 \* Arabic \n8375     MR. DUNN:  Well, we're confident on the $200,000 in growth.  We've done some calculations on how many advertisers it would take in order to achieve that.  We're very comfortable with the number of people that aren't using radio right now that do want to reach that country audience.

SEQ 1_0 \* Arabic \n8376     Interestingly enough, if you look at the Mustel Research, which I'm sure you have, you know, advertisers will increase their budgets to reach this particular market, because it is a specific niche market.

SEQ 1_0 \* Arabic \n8377     I happened to be walking out from Rotary ‑‑ this is an anecdotal piece for you ‑‑ this past Monday, leaving my Rotary club and walking out with one of the car dealers that's a member of our club, and he says, "What's the big fuss over all this, you know, the station and so on?"  And I said, "Well, you know, that's part of the game," and tried to give a non‑answer to him.  And his response back to me was, "Well, look.  I'm interested in selling trucks.  And if that station is going to deliver more sales to me, I'm going to increase my advertising budget to go on that station."

SEQ 1_0 \* Arabic \n8378     So what I hear from that is, that's going to have no impact on any of the other stations in the market, and that comes from a very large advertiser.

SEQ 1_0 \* Arabic \n8379     So we see not only that kind of thing happening, but we also see the types of advertisers that Peter has enumerated that don't use radio right now, but are looking for a country music venue in order to get them.

SEQ 1_0 \* Arabic \n8380     THE CHAIRPERSON:  To press the limits of your confidence, what if the Commission were to license two stations out of this proceeding; would you be able to proceed in those circumstances?

SEQ 1_0 \* Arabic \n8381     MR. DUNN:  Well, that's a difficult question, and we've wrestled with that one.  The obvious gut feeling is, you know, the market just can't support two stations at this time, and we base that on the population growth.  The last time that a station was licensed was 1983.  In that period of time, up till now, the market that is grown by about one third or 22,000 people, and about 1,400 more people per station available now than there was in 1983, when that station was licensed.

SEQ 1_0 \* Arabic \n8382     However, if there was to be another station licensed, it would reduce it down below the 1980s level.  I know the experience that we went through in the 1980s with having three players in the market.  It led to an awful lot of undue, overly competitive competition, in my opinion, with the end result that the stand‑alone FM lost significant millions and subsequently decided to sell to us because they felt that was the better thing for the marketplace.

SEQ 1_0 \* Arabic \n8383     I notice that Mr. Arnish, in his comments by intervention representing the Jim Pattison Company group, and also in remarks that he made at the CRTC hearing, when they were applying for a new station in Red Deer, talked about the solidity of the market, the calmness of the market, the good service that could be provided with two ownership groups in the marketplace.  So those kinds of things keep ringing in my head as we have evaluated this.

SEQ 1_0 \* Arabic \n8384     At the same time, if PBIT becomes a very crucial issue for you, you know, with our rough calculation, you know, if you were to add another station to the market, probably the 17 percent or 18 percent PBIT level that is there now would be reasonable to accept one more station into the marketplace, but to add two, I think we'd be challenging that PBIT level and probably knocking it down quite a bit because then we're going to get into undue price competition and price wars, and that could, in fact, result in a lessening of revenues in the marketplace.

SEQ 1_0 \* Arabic \n8385     THE CHAIRPERSON:  Thank you.  You mentioned earlier, in your previous response, also in reference to PBITs, that you had associated companies that were involved somehow in the financial picture?  Could you elaborate on that?

SEQ 1_0 \* Arabic \n8386     MR. DUNN:  I'll turn that over to Ravinder, perhaps, for a response on that?  He looks after our full accounting and controlling of the company, and it's the same shareholders, I will tell you that, that are in both companies, and Rav can give you a little bit more detail on how exactly that works.

SEQ 1_0 \* Arabic \n8387     MR. DHALIWAL:  Mr. Chair, can I just get clarification on that question first?  I missed part of it.

SEQ 1_0 \* Arabic \n8388     THE CHAIRPERSON:  Well, the question arises from the response that Mr. Dunn gave when we were discussing PBITs, and he said that PBIT isn't always ‑‑ I think, to paraphrase him, and correct me if I'm wrong, Mr. Dunn ‑‑ it may not be the best reflection of the financial status of the company because there are affiliated companies that are involved in financial transactions that might affect PBIT, so I guess it's for you to elaborate on that.

SEQ 1_0 \* Arabic \n8389     MR. DHALIWAL:  I can do that, yes.

SEQ 1_0 \* Arabic \n8390     In the CRTC requirements for an AM/FM combination in one market, if your levels of revenues are below ‑‑ and your staff can attest to this ‑‑ $4 million in sales, we're only required to report to a certain level.  In that level, there is no clarification for intracompany directors' fees, dividends, or anything that get moved from one company to the other.

SEQ 1_0 \* Arabic \n8391     That's where the confusion, I believe, is, is that if we were reporting on the second level, those numbers would have shown up separately, and they would have been pulled out of the reports and show that the PBIT was actually closer to the 16.9 or 17 percent.

SEQ 1_0 \* Arabic \n8392     So they're related companies.  The one company that we have is a management company which offers the staff, the payroll, and for tax purposes, we move everything into one company; and therefore, the numbers that show on our NL Broadcasting, which is the broadcasting side of the company, are definitely skewed down.

SEQ 1_0 \* Arabic \n8393     THE CHAIRPERSON:  That may be a discussion for another day.  Thank you for that clarification.

‑‑‑ Laughter / Rires

SEQ 1_0 \* Arabic \n8394     THE CHAIRPERSON:  Thank you.  Finally, I would just ask you, Mr. Dunn, whether you have anything to add?  If I haven't asked you the questions to set up the answers that you wanted to give, then please ‑‑

‑‑‑ Laughter / Rires

SEQ 1_0 \* Arabic \n8395     MR. DUNN:  Well, that's a nice way of phrasing it.  We had to think hard on many of your questions, congratulations, and we appreciate the questioning as well.

SEQ 1_0 \* Arabic \n8396     This is a proud moment for us, it's a proud day.  As you well know, we don't appear before you every week or every time there's a licence call because we are a Kamloops broadcaster, and that's the area that we're most proud to serve.  It's our hometown.

SEQ 1_0 \* Arabic \n8397     I may just finish off by talking about some reasons that we feel that NL broadcasting is the best one to receive this licence.

SEQ 1_0 \* Arabic \n8398     As you know, the Commission has stated there are four criteria for evaluating the licence applications, and that you would decide the relative weight in each circumstance.

SEQ 1_0 \* Arabic \n8399     At the risk of being accused of some bias here, it's our sincere belief that we fulfil these criteria better than the other applicants, and I'll take a few moments to explain why.

SEQ 1_0 \* Arabic \n8400     The market can sustain a new station, particularly when it has the local operational synergies that we bring.  Most of the studies show that our AM station, CHNL, will be the one most affected by a new station.  We can withstand a transfer of some revenue to our own station, Country 103, but the impact of a new entrant will definitely impact and hurt CHNL.

SEQ 1_0 \* Arabic \n8401     Licensing NL brings a competitive balance to the market that has not existed for some time.  Our competitor, Pattison Broadcasting, has five revenue streams, with two FM stations, a local television station, and the capacity to insert commercials into the programs of two other TV stations.

SEQ 1_0 \* Arabic \n8402     Third, we offer a strength in news service, to ensure sustained and meaningful editorial difference.  Our commitments to news, including a separate news editor for Country 103, and a newsroom staffed 20 hours every day, are significantly higher than our competitors.

SEQ 1_0 \* Arabic \n8403     There are now nine ‑‑ eleven other independent news voices available in the market, so we are well‑served by diversity.

SEQ 1_0 \* Arabic \n8404     Fourth, the quality of our application enjoys four superior components.  We propose a realistic business plan based upon our lengthy experience in the market and an ongoing commitment to a broad‑based country western format.  This format is confirmed by many sources as the one that's most in demand.

SEQ 1_0 \* Arabic \n8405     We propose to surpass the regulatory requirement for Canadian content with 40 percent.  Our strategic alliances with the B.C. Country Music Association and Cactus Jack's Nightclub ensure extensive exposure for regional acts.

SEQ 1_0 \* Arabic \n8406     We propose innovative, locally originated, locally oriented Canadian talent development initiatives, far ahead of others in our area and very realistic for Kamloops.

SEQ 1_0 \* Arabic \n8407     Last, but most important, we'll profile more local reflection.  Our track record, as evidenced by the over 1,100 letters written in support of NL, confirms our commitment to Kamloops.

SEQ 1_0 \* Arabic \n8408     We propose more spoken word than any other applicant.  We propose more locally originated broadcasting than the others.  We propose a newsroom open the whole broadcast week.  And we propose features and a musical format more adapted to the western heritage of Kamloops.

SEQ 1_0 \* Arabic \n8409     Mr. Chairman and members of the Commission, we triggered this call because our friends, our neighbours, our clients, our listeners told us they felt betrayed by the loss of country, and they encouraged us to return it.  You'll be strengthening the local ownership status in Canadian radio by initialling NL Broadcasting this new FM licence.

SEQ 1_0 \* Arabic \n8410     We know that if we had merely asked for a conversion of CHNL to the FM band, we would probably not have had the call for competing applications.  But moving to the FM band would still have left unsatisfied people.  Either we would have dropped NL's format, and abandoned the many people who can only receive AM in the terrain that we have around our area, or we would not have met the demand for country.

SEQ 1_0 \* Arabic \n8411     What we did is we chose to extend service, not maintain the status quo.

SEQ 1_0 \* Arabic \n8412     We thank you for the opportunity today.

SEQ 1_0 \* Arabic \n8413     THE CHAIRPERSON:  Thank you.

SEQ 1_0 \* Arabic \n8414     Commissioner Williams?

SEQ 1_0 \* Arabic \n8415     COMMISSIONER WILLIAMS:  Good morning, Mr. Dunn.

SEQ 1_0 \* Arabic \n8416     MR. DUNN:  Good morning.

SEQ 1_0 \* Arabic \n8417     COMMISSIONER WILLIAMS:  We've had a long week here.

SEQ 1_0 \* Arabic \n8418     MR. DUNN:  Yes, you have.

SEQ 1_0 \* Arabic \n8419     COMMISSIONER WILLIAMS:  And we've heard a lot of serious propositions, and yours is the last of the ones that we're hearing today.

SEQ 1_0 \* Arabic \n8420     I was going to take advantage of your generous offer to have a small sampling of this cowboy poetry that you so generously offered a little earlier, if your group can indulge us.

SEQ 1_0 \* Arabic \n8421     MR. DUNN:  Thank you.  Well, that would be very nice, and, Mike, are you going to do "Man in the Moon"?

SEQ 1_0 \* Arabic \n8422     MR. PUHALLO:  Yes, I can.

SEQ 1_0 \* Arabic \n8423     MR. DUNN:  Mike will set this up for you.  You know, there's a stereotypical thing here that happens with cowboy poetry and western music, and we don't buy into that.  Here's one of the reasons why.  When you see the level to which this cowboy poetry has risen, and I don't mean that, Mike, in the pun sense, in the way that it's gone.  He may be too bashful to tell you this, but this is a poem that he created that is read to the NASA astronauts that go off into space from Cape Canaveral, and we're extremely proud of Mike in Kamloops and for what he's accomplished, and I hope you enjoy this poem.

SEQ 1_0 \* Arabic \n8424     MR. PUHALLO:  Okay.  I did kind of run away from home to be a cowboy when I was 16 and went to work for Douglas Lake Cattle Company, and that was the summer of 1969, when the first man landed on the moon.  As Robbie mentioned, this poem has been posted on a NASA web site and read at a NASA launch, but it wasn't at Cape Canaveral, it was Andrews Air Force Base in California.  Anyway, the Clementine mission was the only lunar mission launched in 1994, which was the 25th anniversary year of when the first man landed on the moon, so that's when they read it at that launch.

SEQ 1_0 \* Arabic \n8425     "The Man in the Moon.":

"I laid on my back in the cool damp grass about an hour or more just beyond the light of a coal oil lamp that shone from the bunkhouse door.  Old Drake came by nearly tripped on me and asked, `Mikey, what are you doin'?'  I said `Hush up, Jack, and sit a spell'  `I'm waiting for the man on the moon!'  You see I had my radio there an' history was in the makin'.  There were things going on in the clear night sky that would set your head to shaking.  A few at a time the rest of the crew came out to join us there Til' ten cowboys lay in the cool damp grass and stared up through the clear night air.  Well, that old transistor crackled with static at times it was damned hard to hear.  But the rising moon was so big and bright Man, I've never seen it so near.  Them folks on the radio chattered on so about this lunar landing, an' most of it was technical junk, beyond my understanding.  Then we heard that spaceman say something about one small step for man, we all hung close to the radio to listen the best we can.  Now a lot of that broadcast was lost to us Between static and the coyotes tune, but we caught enough to know darn well a man was on the moon.  Now a cowboy can't stay up that late the morning comes too soon. so we drank to his health and each in turn said `Good night' to the man in the moon.  But it must have been late when I found my bunk I slept in til nearly four and it was my turn to jingle the horses and knock on the old cooks door.  By the time I had the jingles done and ran those ponies in.  Dawn was a breakin in the eastern sky, and the moon was pale and thin.  No time to think about space men now, just grab breakfast and leave on a trot; there's a gather to make and cows to move before the sun gets hot.  A lot of summers have come and gone since that one at Douglas Lake, but none that did so much to mold the kind of man I'd make.  It was a season full of adventure there's lots of memories there, like when Darwin's horse pitched him in the creek or the time Red roped the bear. but by far my fondest memory of a summer that ended too soon was ten cowboys sprawled in the cool damp grass, Jes' watching the man in the moon."

‑‑‑ Applause / Applaudissements

SEQ 1_0 \* Arabic \n8426     THE CHAIRPERSON:  One small step for you; a giant step for the CRTC.

‑‑‑ Laughter / Rires

SEQ 1_0 \* Arabic \n8427     THE CHAIRPERSON:  Thank you very much.

SEQ 1_0 \* Arabic \n8428     Counsel?  It seems anticlimactic, but there you go.

‑‑‑ Laughter / Rires

SEQ 1_0 \* Arabic \n8429     MR. STEWART:  Just for the record, just to confirm that you would be willing to accept your CTD commitments as condition of licence?

SEQ 1_0 \* Arabic \n8430     MR. DUNN:  Not only accept it, we're excited to do it.  We see the value of the Canadian country artists, the number that are in our area, and we're more than delighted to do 40 percent.

SEQ 1_0 \* Arabic \n8431     MR. STEWART:  Thank you very much.

SEQ 1_0 \* Arabic \n8432     Thank you, Mr. Chairman.

SEQ 1_0 \* Arabic \n8433     THE CHAIRPERSON:  Thank you very much, Mr. Dunn, ladies and gentlemen.

SEQ 1_0 \* Arabic \n8434     Mr. Secretary?

SEQ 1_0 \* Arabic \n8435     MR. LeBEL:  Thank you, Mr. Chairman.

SEQ 1_0 \* Arabic \n8436     That does conclude Phase I

SEQ 1_0 \* Arabic \n8437     We shall now start Phase II, in which we will ask the applicants, in the same order, to intervene on competing applications.

SEQ 1_0 \* Arabic \n8438     The first to do so will be Standard Radio Incorporated.

‑‑‑ Pause

SEQ 1_0 \* Arabic \n8439     THE CHAIRPERSON:  Mr. Shafer, whenever you're ready.

INTERVENTION

SEQ 1_0 \* Arabic \n8440     MR. SHAFER:  Thank you, Mr. Chairman.

SEQ 1_0 \* Arabic \n8441     My name is Don Shafer, Vice‑President and General Manager of Standard's radio stations and TV stations in the Interior of B.C.

SEQ 1_0 \* Arabic \n8442     Standard Radio believes the record of the public hearing will provide the Commission with all its needs on the merits or demerits of each application.  Accordingly, Standard Radio waives its right to intervene at this time.

SEQ 1_0 \* Arabic \n8443     Thank you.

SEQ 1_0 \* Arabic \n8444     THE CHAIRPERSON:  Thanks very much.

SEQ 1_0 \* Arabic \n8445     Mr. Secretary.

SEQ 1_0 \* Arabic \n8446     MR. LeBEL:  Thank you, Mr. Chairman.

SEQ 1_0 \* Arabic \n8447     I will now ask Evanov Radio Group Incorporated to intervene at this time.

SEQ 1_0 \* Arabic \n8448     MR. EVANOV:  Good morning.  The Evanov Radio Group has no intervention to file.

SEQ 1_0 \* Arabic \n8449     THE CHAIRPERSON:  Thank you.  How are you feeling this morning, Mr. Evanov?

SEQ 1_0 \* Arabic \n8450     MR. EVANOV:  A little bit better, a little bit better.  It's coming along.

SEQ 1_0 \* Arabic \n8451     THE CHAIRPERSON:  Good.

SEQ 1_0 \* Arabic \n8452     MR. EVANOV:  Actually, aside from everything else, what we remembered last night, as we left, was it was a year ago we were in Halifax, on March the third.  Not that it was the Ides of March, that's a bit later, but it was Mr. Williams' birthday then, and also, I have a daughter who also has a birthday, because she phoned me last night ‑‑ we phoned her, it was her birthday, too.  I can't remember, but I think that it was the Chair's birthday around that time as well.

SEQ 1_0 \* Arabic \n8453     COMMISSIONER WILLIAMS:  Today is David Colville's birthday.

SEQ 1_0 \* Arabic \n8454     MR. EVANOV:  David Colville's.  So everybody was wishing everybody a happy birthday.

SEQ 1_0 \* Arabic \n8455     THE CHAIRPERSON:  We try and get Commissioner Williams on a hearing during his birthday every year.

SEQ 1_0 \* Arabic \n8456     MR. EVANOV:  Always, yeah.  Tie him up, tie him up.  Thank you.

‑‑‑ Laughter / Rires

SEQ 1_0 \* Arabic \n8457     THE CHAIRPERSON:  Thank you.

SEQ 1_0 \* Arabic \n8458     Mr. Secretary?

SEQ 1_0 \* Arabic \n8459     MR. LeBEL:  Thank you, Mr. Chairman.  I will now ask NL Broadcasting Ltd. to intervene at this time.

SEQ 1_0 \* Arabic \n8460     MR. DUNN:  Mr. Chair and Madam Vice‑Chair, members of the Commission and staff, I think we covered our points that we wish to sell.  An old mentor of mine said, "If you've got something to sell, sell it.  If you don't, keep your mouth shut."

SEQ 1_0 \* Arabic \n8461     So I think we'll follow his good advice here today.  Thank you very much for your time.

SEQ 1_0 \* Arabic \n8462     THE CHAIRPERSON:  Thank you.

SEQ 1_0 \* Arabic \n8463     Mr. Secretary?

SEQ 1_0 \* Arabic \n8464     MR. LeBEL:  Thank you, Mr. Chairman.  That does complete Phase II.

SEQ 1_0 \* Arabic \n8465     We will now begin Phase III, which are the third party intervenors, and the first to appear will be the Jim Pattison Broadcast Group Limited Partnership.

SEQ 1_0 \* Arabic \n8466     I would like to indicate, for example, that number 3 listed in the agenda, Barbara Chrystal, will not be appearing in the public hearing.

INTERVENTION

SEQ 1_0 \* Arabic \n8467     MR. ARNISH:  Good morning, Mr. Chairman, Madam Vice‑Chairman, Commissioners, and Commission staff.

SEQ 1_0 \* Arabic \n8468     Before commencing, Mr. Chairman, I would like to take this opportunity to introduce our panel.

SEQ 1_0 \* Arabic \n8469     To my far right is Bruce Davis of our Kelowna operations.  Beside Bruce is Doug Collins, from our Kamloops operations.  To my left is our legal counsel, Chris Weafer; and next to Chris is Liane Partridge of Target Broadcast Sales.

SEQ 1_0 \* Arabic \n8470     My name is Rick Arnish.  I reside in Kamloops, and I'm President of the Jim Pattison Broadcast Group.

SEQ 1_0 \* Arabic \n8471     The Jim Pattison Broadcast Group appreciates the opportunity to appear before the Commission to answer any questions it may have in relation to its letter filed February 3rd, 2005, opposing the applications of Standard Radio Inc., Newcap Inc., Evanov Radio Group Inc., and NL Broadcasting Ltd. for a new FM licence to service Kamloops, B.C.

SEQ 1_0 \* Arabic \n8472     In these comments, we will, (a), highlight the primary points made in our February 3rd written submission opposing these applications, and, (b), respond to the Letter of Standard addressed to the Commission on February 14th, 2005, which responded to our letter.

SEQ 1_0 \* Arabic \n8473     We must comment on the withdrawal of the application by Newcap for a licence to service Kamloops.  While we have had no dialogue with Newcap and the reasons for the withdrawal of their application, it's a reasonable assumption that Newcap was not optimistic of the prospects of success of the Kamloops station.

SEQ 1_0 \* Arabic \n8474     To summarize our written intervention, the Jim Pattison Broadcast Group is headquartered in Kamloops, B.C.  We know the market extremely well and are proud to base our Western Canadian broadcast operations in Kamloops.

SEQ 1_0 \* Arabic \n8475     We have appreciated the opportunity the Commission has entrusted us with to develop our properties in Western Canada and become a responsible regional and important contributor to our local communities.

SEQ 1_0 \* Arabic \n8476     We fundamentally believe in the principle of serving our communities.  We also believe that in order to properly service our communities, a reasonable level of profitability has to be achieved.  In operating secondary markets, this can be a challenge, and the Commission must be extremely cautious in overlicensing secondary markets if it wishes to maintain the level of community service and programming commitments that stations provide in that market.

SEQ 1_0 \* Arabic \n8477     By "community service" I mean locally in terms of local service, news and information programming, and "community service" in terms of the objectives of the Broadcasting Act in supporting local and regional artists.

SEQ 1_0 \* Arabic \n8478     It was a fundamental point of our intervention that the market of Kamloops cannot support a fifth station.  We have focussed on the population of Kamloops as a key indicator of the ability to support a new station.  We have focussed on the comparison between Kelowna, with a population of 142,705 in its BBM Fall Central Region 2004 versus Kamloops with a population of 79,000 in its BBM Fall Central Region 2004, as being a significant enough difference to evidence the fact that a fifth station will significantly negatively impact the radio market in Kamloops.

SEQ 1_0 \* Arabic \n8479     The market research conducted in the applications is no match for the real experience of operators in the market in terms of assessing the viability of a fifth station in Kamloops.  As indicated in the years 2003‑2004, the net revenues of our Kamloops radio stations were reduced.  While we are great believers in the Kamloops economy and are significant supporters of Kamloops, the reality is our experience in the past year was negative.  As the Commission is aware, the reported market PBIT in Kamloops in 2003‑2004 has been grim.

SEQ 1_0 \* Arabic \n8480     We would highlight our experience with a country music format in Kamloops that, notwithstanding the significant reach of our rebroadcasters, which enabled us to spread the country music format to a broader population base than what is proposed by the three FM applicants remaining in this proceeding, we were unable to achieve an acceptable level of success to justify continuing with that format in the market.  As a result, we had to change formats.

SEQ 1_0 \* Arabic \n8481     We have a significant concern that if either of the remaining applicants are approved, that they will have the same experience and will switch to a more general format, thereby causing even further significant harm to the incumbent stations.  We will not be able to maintain our present levels of employment and service in the Kamloops market if a fifth station is licensed.  This is exactly what occurred when a fifth licence was issued in Kelowna in 1995, and there's no reason to expect the same would not occur in Kamloops.

SEQ 1_0 \* Arabic \n8482     In our written submission, we have highlighted that the situation in Kamloops is very similar to the situation the commission dealt with in Broadcasting Decision CRTC 200‑4117, wherein the Commission did not allow the entrant of an additional radio station in that market because the entry of Newcap or Rogers would increase competition in this radio market to a level that would be unduly detrimental to existing radio stations.

SEQ 1_0 \* Arabic \n8483     Of course, the Commission did approve the addition of a new station in Red Deer, Alberta, in that decision, enabling a leveling of the playing field so that the two private radio operators in that market each had two stations.  That situation already exists in Kamloops.

SEQ 1_0 \* Arabic \n8484     Mr. Chairman, in concluding on the highlights of our opposing intervention, we note that a number of advertisers in the Kamloops market oppose the application and have indicated that their use of media will be affected by approval of this application.  As well, they have concerns with regard to the level of service in the market should an additional radio station be licensed to serve Kamloops.  We submit that significant weight should be given to the intervention letters opposing these applications from 18 local businesses.

SEQ 1_0 \* Arabic \n8485     I would now like to comment on the reply letter of Standard dated February 14th.

SEQ 1_0 \* Arabic \n8486     As mentioned, 18 local businesses filed intervention letters opposing the applications of Standard, Evanov, and NL Broadcasting.  In paragraph 2 of Standard's reply letter, they indicated that a number of the businesses which filed interventions were owned by Jim Pattison.  This statement is factually incorrect.

SEQ 1_0 \* Arabic \n8487     River Shore Chrysler Jeep, Kamloops Kia, and Kamloops Mazda are not owned by Jim Pattison Industries, nor are Kamloops Harley‑Davidson, Raymond James Limited, Arby's, Orange Fat Track Outfitters Limited, Skateboard Supplies, Lavender Lingerie, Fratelli Foods, Source Adult Video, Anderson Sewing Centre, Country‑Wide Home Furnishings, nor Stereo Warehouse.

SEQ 1_0 \* Arabic \n8488     It's common in proceedings for new broadcast licences to generate support from media buyers and advertisers, as it is easy to sell the concept of more is better.  It's rare to see opposition, such as we see here, and the concern raised in those letters should be given significant weight by the Commission in their assessment of this market.

SEQ 1_0 \* Arabic \n8489     On page 4 of its letter, Standard makes reference to the Kamloops Official Community Plan which anticipates a regional population growth from 120,000 to 160,000.  These population estimates are misleading.  The applications by Standard, Evanov, and NL Broadcasting are not to provide a regional service; rather, it is for a specific local service, the footprint of which will cover the Kamloops CMA.

SEQ 1_0 \* Arabic \n8490     Standard's own information is that this population is approximately 72,000, based on 2001 Stats Canada information.  Even relying on the BBM's Fall Central Region 2004 numbers, which Standard relies on at pages 6 and 7 of its reply letter, shows a 2004 population for Kamloops of 79,270.  That is the population base with which this fifth licence would be attempting to generate appropriate levels of revenue from.

SEQ 1_0 \* Arabic \n8491     At pages 5 through 7 of its reply, Standard attempts to rebut our submission that the population of Kamloops cannot support a fifth licence by attempting to provide examples of markets comparable in size to Kamloops with five radio stations.  The BBM's Fall Central Region 2004 population for Kamloops, as I said, is 79,270.  Fredericton, New Brunswick, with a BBM's Fall Central Region 2004 population of 90,676, has five stations, one of which is a Christian station which, as a condition of licence, is not entitled to pursue commercial revenues.  Of the four remaining stations, one is a French language station.

SEQ 1_0 \* Arabic \n8492     In Saint John, New Brunswick, the BBM's Fall Central Region 2004 population is 108,000.  Approximately 30,000 more than the population of Kamloops.  That market, with 30,000 more people than Kamloops, has five English‑language stations and a sixth station, which is a Christian, non‑commercial station.

SEQ 1_0 \* Arabic \n8493     The last example relied on by Standard is Lethbridge, Alberta, with a BBM Fall Central Region 2004 population of 61,569.  Again, we see four commercial English‑language stations, plus one Christian non‑commercial station.  It's also worthy of note that one of the four Lethbridge stations, CJBZ‑FM, Classic Hits, Taber‑Lethbridge, services a broader market than the Lethbridge population base.

SEQ 1_0 \* Arabic \n8494     None of the examples put forward by Standard indicate that any English‑language of the similar size of Kamloops supports five profitable commercial radio stations.

SEQ 1_0 \* Arabic \n8495     At page 8 of Standard's reply letter, they indicate that the estimated population for Kamloops for 2005 is 91,800.  At pages 6 and 7 of Standard's reply, they utilize BBM's Fall Central Region 2004 population.  The variety of uses of sources of population is misleading.  We submit that the Commission should rely on BBM's Fall Central Region 2004 population numbers as the best population base with which to compare.

SEQ 1_0 \* Arabic \n8496     Paragraph 31 of Standard's reply very clearly confirms the impact of overlicensing a market.  While it is true that Kelowna underperforms when compared to some markets, one only needs to examine pricing and inventory management by all stations to determine that each group was its own worst enemy.

SEQ 1_0 \* Arabic \n8497     Kelowna is still selling discounted rates, cheaper CPMs compared to other markets, and it falls short with markets of similar size according to the TRAM report.  That is a situation which has existed in Kelowna ever since a fifth station was licensed in a market that proved unable to support it.

SEQ 1_0 \* Arabic \n8498     The comments by Evanov Broadcasting yesterday before the Commission, that they would introduce a $22 60‑second rate in the market, this would have devastating effects on market pricing integrity.

SEQ 1_0 \* Arabic \n8499     If one assesses reduction of service in a local radio market based on increased networking and programming, reduction of local presence in the market, and reduction in size of local newsrooms, we find it hard to believe that Standard, as it states at page 8 of its reply, "has not heard of significant reduction in service in the market."

SEQ 1_0 \* Arabic \n8500     Clearly, Kelowna and surrounding market stations experienced reductions in service as a result of Kelowna not being able to support five stations.  We do not wish to see that situation repeated in Kamloops.

SEQ 1_0 \* Arabic \n8501     As an example, since a fifth licence was issued in Kelowna in 1995, our newsroom has gone from nine full‑time and two part‑time newspeople, plus two dedicated talk show hosts, to four full‑time and one part‑time newsperson.  It's our understanding that the newsrooms operated by other stations in the market may also have been significantly reduced.  These reductions clearly resulted in the reduction of local service.

SEQ 1_0 \* Arabic \n8502     Standard has submitted in its reply at page 9 that media buyers support the addition of a new station in Kamloops.  It's our experience that media buyers generally support new additions in a market because they can drive the cost of the market down.  This happened in Kelowna, and it will happen in Kamloops.

SEQ 1_0 \* Arabic \n8503     Finally, in commenting on our new material filed by Standard, we note that at page 6 of the economic study in the new evidence filed by Standard, they highlight a very important point that relates to the Highland Valley copper mine located near Kamloops.  That mine is scheduled for production closure in the year 2009.  That mine employs approximately 700 people in high‑paying positions in the Kamloops area.  That mine will close, in all probability, within the licence term of any new licence issued by the Commission.  The impact on Kamloops of that closure cannot be overstated.

SEQ 1_0 \* Arabic \n8504     To assist the Commission in understanding that impact, we attach an excerpt from the socioeconomic impact statement prepared in May of 2003 and commissioned by Highland Valley Copper entitled "Summary of Kamloops Impacts."

SEQ 1_0 \* Arabic \n8505     We submit that the approval of a new licence to service the Kamloops market will have a significant negative impact on our operations in that market.  It will impact our profitability and will result in a corresponding reduction in the level of service in the market.

SEQ 1_0 \* Arabic \n8506     This concern was highlighted when the reported grim PBIT of the Kamloops market at 9.53 percent in 2003 and 8.02 percent in 2004 were discussed yesterday.  These amounts are amounts at less than half the national average.

SEQ 1_0 \* Arabic \n8507     Mr. Chairman and members of the Commission, while our stations are exceeding the market PBIT average in Kamloops, they are, as a combination, under the national average.  Based on the information provided yesterday, it is clear a competitor station must be well below the national average.  The introduction of a new station to Kamloops would not magically create new revenues in the market to solve this problem, as asserted by the applicants; it would exacerbate the problem.

SEQ 1_0 \* Arabic \n8508     A new station would further cannibalize hard‑earned market share in a difficult market to a level further below the national average and would clearly do more significant harm to the other two‑station combo in Kamloops, NL Broadcasting.

SEQ 1_0 \* Arabic \n8509     As for NL Broadcasting, based on the information provided yesterday in the market PBIT, we are shocked that they would be seeking an additional licence from the Commission in the face of an inability to report acceptable levels of profitability in a four‑station market.  To reward them with an additional licence given that situation makes no sense from a market perspective.  More importantly, from a policy perspective, we submit it would be an inappropriate precedent for the Commission to set.

SEQ 1_0 \* Arabic \n8510     The addition of a new statement for NL will serve only to increase inventory at reduced cost again, further cannibalizing the profitability of the Kamloops market.

SEQ 1_0 \* Arabic \n8511     In closing, Mr. Chairman and members of the Commission, we thank you for the opportunity to express our views this morning, and we look forward to any questions that you may have.

SEQ 1_0 \* Arabic \n8512     THE CHAIRPERSON:  Thank you, Mr. Arnish.

SEQ 1_0 \* Arabic \n8513     Commissioner Pennefather.

SEQ 1_0 \* Arabic \n8514     COMMISSIONER PENNEFATHER:  Thank you, Mr. Chairman.

SEQ 1_0 \* Arabic \n8515     Good morning, everyone.

SEQ 1_0 \* Arabic \n8516     Just a clarification, Mr. Arnish.  You, at paragraph 16 this morning, challenge Standard's estimated population for 2005's 91,800.  What is your comment on the estimates provided by NL this morning on population growth for Kamloops?

SEQ 1_0 \* Arabic \n8517     MR. ARNISH:  We have certainly, in the City of Kamloops, seen very little growth over the last 10 to 15 years.  Mr. Dunn made mention of the economic viability of the marketplace going back to the early '80s.  And if I can digress for a moment, I would like to go back to the late '70s, early '80s ‑‑ I've lived in Kamloops all my life.  I wasn't born in Kamloops but I've lived there since I was 6 months old.  So I've seen the boom‑and‑bust cycles in the city.  But it was in the early '80s when Kamloops, being an economic resource‑based community, was thriving.  The prognosticators in British Columbia were predicting that by the early 1990s, Kamloops would have a population of 100,000 people.

SEQ 1_0 \* Arabic \n8518     In June of 1981, the economy in British Columbia basically crashed, and the population of Kamloops lost 10,000 people.

SEQ 1_0 \* Arabic \n8519     We, today, are only getting back at the 79,000 or 80,000 population mark to what it was back in the 1980s.  The indications that we get from the City of Kamloops is that the population base will only increase per annum by about 1.25 percent, which basically is about 950 to 1,000 people.

SEQ 1_0 \* Arabic \n8520     COMMISSIONER PENNEFATHER:  So even with 2010, you don't see that that ‑‑ you do see some acceleration, some increase, but do you not see that that would add to the increase and be a little more optimistic than what you're predicting going forward?

SEQ 1_0 \* Arabic \n8521     MR. ARNISH:  Well, we're like our competitors in Kamloops, we're great community boosters, both of us.  We want to see Kamloops grow and prosper.  But even in the last ten years, which is more current, the Interior of British Columbia has suffered drastically by a serious economic turn‑down.

SEQ 1_0 \* Arabic \n8522     We've had, and it's still ongoing, the softwood lumber dispute in the Interior of British Columbia, which has impacted the economy; the beetle forestry problem, where the pine beetle and the fir beetle is basically eating up the forests in the Interior of British Columbia, is impacting the economy.  The economic situation in the Interior of British Columbia, the previous 10 or 11 years, was very, very serious.  And a lot of people left cities like Kamloops and basically went to a province like Alberta or Ontario to seek employment.

SEQ 1_0 \* Arabic \n8523     The 2010 Winter Olympics, we're all positive about that.  We think that's great for the Province of British Columbia.  As an economic generator, we believe that most of the economic benefit is going to be in the Lower Mainland, the Squamish‑Whistler corridor.  I think that tradespeople from Kamloops perhaps will leave the city, as they will other cities in the Interior, to come and work in the Lower Mainland and in Squamish and in Whistler, building the new facilities for the Winter Games.

SEQ 1_0 \* Arabic \n8524     It's going to be a big benefit to British Columbia, but it's going to be an even bigger benefit to the Lower Mainland.  We are going to get some spin‑off, but it's not going to be great, in my opinion.

SEQ 1_0 \* Arabic \n8525     COMMISSIONER PENNEFATHER:  Hence your grim picture, grim presentation this morning.

SEQ 1_0 \* Arabic \n8526     You were here yesterday for the discussion with Mr. Evanov?

SEQ 1_0 \* Arabic \n8527     MR. ARNISH:  Yes.

SEQ 1_0 \* Arabic \n8528     COMMISSIONER PENNEFATHER:  He raised the concept of new player, third player, in the Kamloops market as stimulating, perhaps, change, as enhancing advertising budgets, and, in fact, I think NL made that same concept this morning in their remarks.  Advertising budgets would be enhanced rather than moved.

SEQ 1_0 \* Arabic \n8529     Do you have comment on that, and that concept that Mr. Evanov raised yesterday?  Because it's obvious we have a balancing act here.  There is the picture that you're presenting on the economic side; there's also the matter of diversity of news voices in the market.

SEQ 1_0 \* Arabic \n8530     So as we look at this, can you give us some comment on that concept of, perhaps there would be a stimulation if things got shaken up a bit and a new player was in the market?

SEQ 1_0 \* Arabic \n8531     MR. ARNISH:  I kind of chuckled at Mr. Evanov's shaking‑up comment yesterday.

SEQ 1_0 \* Arabic \n8532     COMMISSIONER PENNEFATHER:  The sandbox.

SEQ 1_0 \* Arabic \n8533     MR. ARNISH:  And the sandbox.

SEQ 1_0 \* Arabic \n8534     I think our competitor would agree with the statement that we shake up the market in Kamloops, in the electronic media ‑‑ in radio in particular ‑‑ all the time.

SEQ 1_0 \* Arabic \n8535     NL Broadcasting is a very worthy competitor.  They contribute a lot to the community of Kamloops, as we do.  Basically, we really keep each other on our toes.

SEQ 1_0 \* Arabic \n8536     When Evanov Incorporated talked about shaking up the Kamloops market, I think the market has been shaken up over the last ten to twelve years.  Mr. Dunn pointed out this morning that they were able to purchase the standalone FM back in the early '90s.  They have changed the format on that radio station on a couple of occasions.  We certainly have done that on one of our radio stations as well.  We, as you know, applied, and received from the Commission, approval to convert our AM station to FM, and created a new format that, in our opinion at the end of the day, didn't work for us.  But the market is certainly well‑served and is evolving and changing all the time.

SEQ 1_0 \* Arabic \n8537     There are four distinct formats in Kamloops.  I don't want anyone here to think that there isn't.  NL Broadcasting has basically a greatest hits format, geared to a 35‑plus audience.  Our CIFM Radio is a rock radio station, geared to males, 25 to 54 and beyond; the other FM station that we own, CKBZ, is a classic hits station geared to females 25 to 54; and CHNL's FM station, CKRB‑FM, is a hot hits station that is targeted toward teens and young adults 18 to 34 years of age.

SEQ 1_0 \* Arabic \n8538     So the market certainly, as I say, is changing and evolving all the time.  It certainly is not status quo.  I would say that neither of the licensees in Kamloops are taking things for granted.  We can't because we challenge each other every day.

SEQ 1_0 \* Arabic \n8539     COMMISSIONER PENNEFATHER:  One final point then, so that I'm clear.  You do see, then, some growth in this market for radio advertising?

SEQ 1_0 \* Arabic \n8540     MR. ARNISH:  Well, I think there's always going to be growth in the marketplace.  I guess we could use the parallel of Kelowna versus Kamloops.  Kelowna certainly has a lot more detail.  The City of Kelowna, as we've indicated, and as you're aware, has grown.  It's the big growth centre in the Interior of British Columbia.  It's one of the largest, fastest growing centres in Canada, and there's lots more retail in Kelowna than there is in Kamloops.

SEQ 1_0 \* Arabic \n8541     I took the opportunity to drive around Kelowna recently, just to really see what was going on in the community.  Then I came back, and last weekend, knowing we were coming to the hearing, I took a nice long drive around our city.  If you drive into Kamloops, you don't see the same growth that's going on that you see down here in the Lower Mainland or you would see in a market the size of Kelowna.  It's just not happening.

SEQ 1_0 \* Arabic \n8542     There are always businesses coming and going.  It's an evolution as well.  Businesses open; they are successful.  If they're not, they shut their doors, they file for bankruptcy, or they leave the market.

SEQ 1_0 \* Arabic \n8543     Here's a prime example.  San Stores of Canada, they're in bankruptcy protection right now, but they're closing a number of their stores across the country.  And it was just announced here last week.  And this is a discount department store, as you are aware.  They're closing this 10,000 square foot store in Kamloops because the market can't support the store.

SEQ 1_0 \* Arabic \n8544     COMMISSIONER PENNEFATHER:  Are you talking about Kamloops?

SEQ 1_0 \* Arabic \n8545     MR. ARNISH:  I'm talking about Kamloops.  And there really isn't a lot of new retail.  We did a check with the malls as well, just to see what the vacancy rates were in the malls in Kamloops, and I'm going to turn that over to Mr. Collins and let him give you a breakdown of some of the economic activities in Kamloops.

SEQ 1_0 \* Arabic \n8546     Doug?

SEQ 1_0 \* Arabic \n8547     MR. COLLINS:  Thank you, Madam Commissioner.

SEQ 1_0 \* Arabic \n8548     There are four major shopping malls in Kamloops.  One of them, the predominant shopping mall, is 98 percent full.  Another mall has about 50 percent occupancy at the present time.  A third mall has about 60 percent occupancy, and they have gone to a non‑retail component within their confines in order to boost up occupation.  They've added a community service sector with an addition of a satellite YM‑YWCA operation, to try to take advantage of occupancy of space.

SEQ 1_0 \* Arabic \n8549     The fourth mall, the oldest mall in the City of Kamloops, has just recently, in the past few years, changed their whole style of occupancy and have attracted medical clients and that sort of thing because of the declining retail opportunities.  So they've changed their style drastically to try to stay alive.

SEQ 1_0 \* Arabic \n8550     So right now, there is a substantial amount of available retail space in the City of Kamloops.

SEQ 1_0 \* Arabic \n8551     MR. ARNISH:  Madam Commissioner, if I could just add on to that as well?

SEQ 1_0 \* Arabic \n8552     I think it's really important for us to talk about the economy in Kamloops, and recently we had a discussion with Venture Kamloops, and Venture Kamloops has been brought up by some of the applicants here before you in Vancouver.

SEQ 1_0 \* Arabic \n8553     We had a good discussion with Venture Kamloops, which is the economic development arm for the city, and M.J. Cousins of that economic development office says, well, last year was a bit of a turn‑around year, and there is interest in the City of Kamloops.  There really is nothing huge that is on the horizon, from their viewpoint, for the local economy.  They don't see any large manufacturing plants coming into Kamloops that are going to set up shop that are going to employ 200, 300, 400 people in high paying jobs.

SEQ 1_0 \* Arabic \n8554     And we're very concerned about the situation at Highland Valley Copper.  That mine's been a godsend to Kamloops for the last 25 to 30 years.  They had at one time 1,100 or 1,200 employees, and the mine, as we mention, is definitely going to close down over the next five or six years, or sooner, perhaps, if the price of copper dips below 80 cents U.S. a pound.

SEQ 1_0 \* Arabic \n8555     It's not only the jobs at Highland Valley Copper that we're concerned about disappearing from the Kamloops market, but it's all the regional drops and the indirect jobs that now benefit by Highland Valley Copper being in close proximity to Kamloops.

SEQ 1_0 \* Arabic \n8556     The statistics from the school board, School District No. 73, talks about enrolment figures and staff changes.  They indicate that in the past eight years, the district has lost more than 2,700 students and 122 teaching positions.

SEQ 1_0 \* Arabic \n8557     I'd like to talk about housing starts in Kamloops as well, if I may?

SEQ 1_0 \* Arabic \n8558     COMMISSIONER PENNEFATHER:  I think I've got the picture, Mr. Arnish.  It's not quite as shiny as the picture we had this morning.

SEQ 1_0 \* Arabic \n8559     MR. ARNISH:  No, and, you know ‑‑

SEQ 1_0 \* Arabic \n8560     COMMISSIONER PENNEFATHER:  I understand your point, and I think what I was concerned about was, as opposed to a comparative analysis, which you did quite a bit of, that we had your understanding of the Kamloops situation.  As you said, we're looking at this local service.

SEQ 1_0 \* Arabic \n8561     Thank you very much.

SEQ 1_0 \* Arabic \n8562     THE CHAIRPERSON:  Mr. Langford?

SEQ 1_0 \* Arabic \n8563     COMMISSIONER LANGFORD:  I just wanted to ask you about something you said in reply to my colleague, Commissioner Pennefather.

SEQ 1_0 \* Arabic \n8564     You were talking about the flip of CFJC to FM, and it's now CKBZ‑FM.  And I think, if I wrote down what you said, you said, "We converted that to a format that, in our opinion, didn't work for us."

SEQ 1_0 \* Arabic \n8565     Is that a fair transcription of what you said?

SEQ 1_0 \* Arabic \n8566     MR. ARNISH:  Yes.

SEQ 1_0 \* Arabic \n8567     COMMISSIONER LANGFORD:  So my question is:  Are you going to go back to country with that?

SEQ 1_0 \* Arabic \n8568     MR. ARNISH:  Good question.  After hearing what we've heard from some of the applicants here today, I guess you'd have to sort of think about that.

SEQ 1_0 \* Arabic \n8569     No, we have no intention of going back to country music in Kamloops.  We were the operator that, over the years, over the last 40 years, were in country music.  I have a country music library at home.  Probably a third of my CD collection, and I still have an album collection at home, is country music.  I love country music.  But I love rock music.  I love classical music.  And I love adult standards as well.

SEQ 1_0 \* Arabic \n8570     But we played country music for 40 years.  We decided, in the early 2000s, that we would apply to the Commission to convert our AM station to FM because of the economic plight that our AM station was in at the time.  And we felt, going to FM, there would be a big enough demand there that we could certainly make the station break even or be somewhat profitable.  But that didn't happen.

SEQ 1_0 \* Arabic \n8571     Mr. Yerxa yesterday said, on behalf of the Standard group, that country music is cyclical ‑‑ as I guess all formats are.  And he said it's at the bottom end of the cycle.  Well, we don't see it, in our opinion, that country music is going to come roaring back over the next long period of time.

SEQ 1_0 \* Arabic \n8572     Our concern for licensing another station in Kamloops is the fact that it is a central market radio station.  It's not going to reach to the outlying areas.  We have rebroadcasters, and we had rebroadcasters for the country station in eight other markets throughout the Kamloops region, of population bases as big as Merritt to smaller ones that had 5,000 and 6,000 people, that shop in the Kamloops market.  Well, none of the applicants in front of you have applied to have rebroads to cover the outlying areas.

SEQ 1_0 \* Arabic \n8573     For the most part, the two country applicants, they're talking about reaching out to the community.  Well, their community, in our opinion, respectful opinion to the applicants, is in the outlying areas outside the City of Kamloops.  We service those people, and I believe we service them very, very well.  But at the end of the day, we couldn't get the advertising community, both from a local retail basis and regional and national advertising, to buy the country market in Kamloops.

SEQ 1_0 \* Arabic \n8574     It is a tough market.  Yes, there is a lot of people ‑‑ and we'll readily admit, there was a lot of people upset at us last year or a year and a half ago when we decided to leave the country music format.  Let me tell you, we had a lot of soul‑searching, a lot of sleepless nights before we made that decision, but we made the decision because we felt that it was the best decision for our business.  There's nothing precluding any of the applicants, if you do licence one of them, going to an adult standards format or a country format, finding out they have the same problem we had, and then going to another populist format, which is not going to be in the best interests of the market, in our opinion.  It will really decimate the market going forward.

SEQ 1_0 \* Arabic \n8575     COMMISSIONER LANGFORD:  But you're not going back to country?

SEQ 1_0 \* Arabic \n8576     MR. ARNISH:  No, we're not.

SEQ 1_0 \* Arabic \n8577     COMMISSIONER LANGFORD:  Thank you very much.  That's my question.

SEQ 1_0 \* Arabic \n8578     THE CHAIRPERSON:  Thank you.  Just two questions.

SEQ 1_0 \* Arabic \n8579     One, paragraph 12 of your presentation today, where you deal with the 18 local businesses, and Standard's contention that a number of them are owned by Jim Pattison, and then you say, "This statement is factually incorrect."  And then you list a number of individual companies that aren't owned by Pattison.

SEQ 1_0 \* Arabic \n8580     Would it be a fair summary of the next few lines to say, none of the 18 companies is owned by Jim Pattison or Jim Pattison Industries.

SEQ 1_0 \* Arabic \n8581     MR. ARNISH:  I would say, yes, that is correct, Mr. Chairman, other than one.  One of our food stores in Kamloops sent in an intervention, and it was Save‑On Foods, which is owned by Jim Pattison Industries.  But all the other ones are definitely independent businesspeople in Kamloops.

SEQ 1_0 \* Arabic \n8582     THE CHAIRPERSON:  So isn't one a number?

SEQ 1_0 \* Arabic \n8583     MR. ARNISH:  Well, I guess maybe it is.  But what we're saying here is, they've quoted these companies, particularly the three car dealers, as being owned by Jim Pattison Industries, which is factually incorrect, and we just wanted to make sure that you had that clarification.

SEQ 1_0 \* Arabic \n8584     THE CHAIRPERSON:  That's why the question.  So, in effect, what you're saying is one of the 18 is owned by Jim Pattison ‑‑

SEQ 1_0 \* Arabic \n8585     MR. ARNISH:  But not in this list that's here.

SEQ 1_0 \* Arabic \n8586     THE CHAIRPERSON:  No, but this is only ‑‑ what? ‑‑ 13 or 14.

SEQ 1_0 \* Arabic \n8587     MR. ARNISH:  Yeah, a portion of them.  But these were the ones that were in the Standard intervention.

SEQ 1_0 \* Arabic \n8588     THE CHAIRPERSON:  So which ones in the Standard intervention aren't here?  I haven't got the list with me.  And are all of those owned by Jim Pattison?

SEQ 1_0 \* Arabic \n8589     MR. ARNISH:  No, they're not.  I can submit a list, if counsel would like that, or if you'd like that as well.

SEQ 1_0 \* Arabic \n8590     For the record, I'll read off all the 18 interventions that the Commission does have on file that are opposing a licensing of a fifth radio station in Kamloops ‑‑

SEQ 1_0 \* Arabic \n8591     THE CHAIRPERSON:  That's not necessary.  The question is, read only the companies on that list that are owned by Jim Pattison or Jim Pattison ‑‑

SEQ 1_0 \* Arabic \n8592     MR. ARNISH:  None of those are.

SEQ 1_0 \* Arabic \n8593     THE CHAIRPERSON:  None of those are?

SEQ 1_0 \* Arabic \n8594     MR. ARNISH:  No.

SEQ 1_0 \* Arabic \n8595     THE CHAIRPERSON:  Okay.  So just one of his companies submitted an intervention ‑‑

SEQ 1_0 \* Arabic \n8596     MR. ARNISH:  That is correct.  That's correct, Mr. Chair.

SEQ 1_0 \* Arabic \n8597     THE CHAIRPERSON:  The other question is, paragraphs 22 and following on grim PBIT and so forth, were you present for the discussion with the controller of NL, Mr. Dhaliwal?

SEQ 1_0 \* Arabic \n8598     MR. ARNISH:  Yes, I was.

SEQ 1_0 \* Arabic \n8599     THE CHAIRPERSON:  Is your own filing of returns with the Commission done in a way that also does not include $4 million of revenue?

SEQ 1_0 \* Arabic \n8600     MR. ARNISH:  In markets where that is, that is the case as well, but it doesn't relate to all stations.

SEQ 1_0 \* Arabic \n8601     THE CHAIRPERSON:  So it does not relate to Kamloops?  So your numbers, your revenue ‑‑

SEQ 1_0 \* Arabic \n8602     MR. ARNISH:  It does relate to one of our stations in Kamloops.

SEQ 1_0 \* Arabic \n8603     THE CHAIRPERSON:  I see.  So we don't have the full ‑‑ in our financial summaries, we don't have your full revenues either.

SEQ 1_0 \* Arabic \n8604     MR. ARNISH:  Yes, you'd have our full revenues.

SEQ 1_0 \* Arabic \n8605     THE CHAIRPERSON:  So what is missing?

SEQ 1_0 \* Arabic \n8606     MR. ARNISH:  From our perspective, I guess, in Kamloops, there would be a management fee charged to one of our FM stations, where the other stations, there isn't.

SEQ 1_0 \* Arabic \n8607     THE CHAIRPERSON:  Right.  But that would tend to make the PBIT higher, wouldn't it, if it's an expense that you're not reporting?

SEQ 1_0 \* Arabic \n8608     MR. ARNISH:  Yes, that's true, as it would be in the case of NL Broadcasting too.

SEQ 1_0 \* Arabic \n8609     THE CHAIRPERSON:  Right.  But my impression, and they can clarify it in reply, was that there was a portion of revenues not being included and, hence, PBIT levels were lower than they actually were in fact.

SEQ 1_0 \* Arabic \n8610     MR. ARNISH:  That's true.

SEQ 1_0 \* Arabic \n8611     THE CHAIRPERSON:  So my question is, are all the revenues for both your Kamloops stations reported to us and included in our financial summaries?

SEQ 1_0 \* Arabic \n8612     MR. ARNISH:  Yes, that's correct.

SEQ 1_0 \* Arabic \n8613     THE CHAIRPERSON:  Okay.  So I guess your PBITs ‑‑ well, I'm still trying to work that through to the PBITs then.  You're saying that there might be certain expenses not included.

SEQ 1_0 \* Arabic \n8614     MR. ARNISH:  No.

SEQ 1_0 \* Arabic \n8615     THE CHAIRPERSON:  You're not saying that?

SEQ 1_0 \* Arabic \n8616     MR. ARNISH:  No.  I mean, the revenues that you have from us in Kamloops are actual revenues for our radio stations and our television station.

SEQ 1_0 \* Arabic \n8617     THE CHAIRPERSON:  Mr. Weafer.

SEQ 1_0 \* Arabic \n8618     MR. WEAFER:  Mr. Chairman, just to see if we can clarify?

SEQ 1_0 \* Arabic \n8619     The Pattison stations in Kamloops do report all their revenues and all their expenses for their AM and FM combo.  There is no management fee deducted or added either way to their radio stations in that market.

SEQ 1_0 \* Arabic \n8620     They were surprised by the comments this morning, and they look forward to the follow‑up on that to understand exactly how that is impacting the reported PBIT because it's not entirely clear to them what the implications are of what was said by NL this morning.  We just don't know.  It was a surprise to us.  We'd like to hear how that dialogue unfolds.

SEQ 1_0 \* Arabic \n8621     But the Kamloops stations of Jim Pattison Industries do report complete revenues and expenses for their AM and FM operations.  There is no management expense added or deducted from those revenues.

SEQ 1_0 \* Arabic \n8622     THE CHAIRPERSON:  Okay.  I have that information then on the record.

SEQ 1_0 \* Arabic \n8623     I assume, Mr. Arnish, you're satisfied with that answer.  But you did not, just before Mr. Weafer took the mic, did not seem surprised in respect of other markets with regard to Pattison.  I'm not trying to probe into other markets, but this did not appear to you to be something that came out of the blue, the testimony of Mr. Dhaliwal.

SEQ 1_0 \* Arabic \n8624     What I'm taking from this, and correct me if I'm wrong, is it doesn't apply in Kamloops, and I guess one question is why, if it does apply in other markets.  If it does not apply in other markets, then make sure you get that on the record.

SEQ 1_0 \* Arabic \n8625     MR. ARNISH:  I think in the case of other markets, when we had other entities that now come under the umbrella of Jim Pattison Broadcast Group Ltd., there was ‑‑ and I haven't got the information in front of me, but I certainly would be pleased to table it with the Commission, if you so desire ‑‑ there was some management fees paid over the years through the other entities that now have been brought into Jim Pattison Broadcast Group Ltd., and unfortunately, I don't have that material with me.

SEQ 1_0 \* Arabic \n8626     THE CHAIRPERSON:  We may want to clarify reporting generally for all the radio companies ‑‑

SEQ 1_0 \* Arabic \n8627     MR. ARNISH:  That would be fine, Mr. Chair.

SEQ 1_0 \* Arabic \n8628     THE CHAIRPERSON:  But in Kamloops, Mr. Weafer's statement is what we're taking away from this, that what you see is what you get in the financials.  Thank you.

SEQ 1_0 \* Arabic \n8629     Commissioner Wiley?

SEQ 1_0 \* Arabic \n8630     COMMISSIONER WYLIE:  Mr. Arnish, are your two stations operated in the same building here?

SEQ 1_0 \* Arabic \n8631     MR. ARNISH:  Yes, they are, ma'am.

SEQ 1_0 \* Arabic \n8632     COMMISSIONER WYLIE:  They're two FMs right now.

SEQ 1_0 \* Arabic \n8633     MR. ARNISH:  That's correct.

SEQ 1_0 \* Arabic \n8634     COMMISSIONER WYLIE:  So would you share also tower accommodation?

SEQ 1_0 \* Arabic \n8635     MR. ARNISH:  Yes, that's correct.  And we lease space to our competitor as well, just like other companies do as well.

SEQ 1_0 \* Arabic \n8636     COMMISSIONER WYLIE:  So between the AM and the FM, would there be room for putting more expenses where you're making more money, with the overhead and so on?  Is that what you were referring to?

SEQ 1_0 \* Arabic \n8637     MR. ARNISH:  Well, it could be, but we don't do that.

SEQ 1_0 \* Arabic \n8638     COMMISSIONER WYLIE:  No.  But there would be room for spreading the overhead ‑‑ let's say the cost of the building, et cetera, in an allocation that could be related to revenues rather than half and half.

SEQ 1_0 \* Arabic \n8639     MR. ARNISH:  It could be, but we don't do it that way.  We follow the GAAP rules.

SEQ 1_0 \* Arabic \n8640     COMMISSIONER WYLIE:  Thank you.

SEQ 1_0 \* Arabic \n8641     THE CHAIRPERSON:  Thank you.  Commissioner Langford.

SEQ 1_0 \* Arabic \n8642     COMMISSIONER LANGFORD:  Sir, just one more question.  On the first question that Chairman Dalfen brought up with regard to the 18 local businesses on page 5 of your presentation this morning and you say they're not owned by Jim Pattison.  But are they owned in some way that Pattison or Pattison Industries or one of Pattison's companies or one of Pattison's uncles or somebody might have ‑‑

‑‑‑ Laughter / Rires

SEQ 1_0 \* Arabic \n8643     COMMISSIONER LANGFORD:  ‑‑ well, a special relationship with any of these things?  Ownership is one thing; a hunk of the action is another.

SEQ 1_0 \* Arabic \n8644     MR. ARNISH:  That's a fair question, but, no.  Mr. Pattison himself or none of the companies of all the companies that we mentioned today have anything to do directly or indirectly with those companies at all.  There's no ownership issue there at all.

SEQ 1_0 \* Arabic \n8645     COMMISSIONER LANGFORD:  Total arm's length all the way?

SEQ 1_0 \* Arabic \n8646     MR. ARNISH:  Absolutely.

SEQ 1_0 \* Arabic \n8647     COMMISSIONER LANGFORD:  Thank you very much.

SEQ 1_0 \* Arabic \n8648     MR. ARNISH:  You're welcome.

SEQ 1_0 \* Arabic \n8649     COMMISSIONER LANGFORD:  That is my final question.

SEQ 1_0 \* Arabic \n8650     THE CHAIRPERSON:  Thank you very much, gentlemen.

SEQ 1_0 \* Arabic \n8651     Mr. Secretary?

SEQ 1_0 \* Arabic \n8652     MR. LeBEL:  Thank you, Mr. Chairman.

SEQ 1_0 \* Arabic \n8653     The next appearing intervention will be presented by Diana Kelly, President of Active Mountain Entertainment.

‑‑‑ Pause

SEQ 1_0 \* Arabic \n8654     MS. KELLY:  Hi.

SEQ 1_0 \* Arabic \n8655     THE CHAIRPERSON:  Please.

INTERVENTION

SEQ 1_0 \* Arabic \n8656     MS. KELLY:  I'm sorry.  My name is Diana Kelly, I'm the President of Active Mountain Entertainment Corp.  We produce a major festival in Merritt, British Columbia, annually, the Merritt Mountain Music Festival.  It's totally country.

SEQ 1_0 \* Arabic \n8657     I would like to suggest that there has been a sad lack in a major market of our vicinity by not having country music.

SEQ 1_0 \* Arabic \n8658     The format is very important to growing talent.  Mountainfest has provided an asset to the community of the Interior of B.C., Thompson‑Okanagan region.  We bring approximately 135,000 people per annum to this event.

SEQ 1_0 \* Arabic \n8659     I'm a little nervous, sorry.

SEQ 1_0 \* Arabic \n8660     THE CHAIRPERSON:  Please relax.

SEQ 1_0 \* Arabic \n8661     MS. KELLY:  What I would like to say is, I want to intervene on behalf of the country music format.  That is an essential loss that we have suffered and we're working through, albeit that the country demographic has gone down in age.  That is a good thing.  That is a good thing.  And my sense of this is that we are missing that format in that market.

SEQ 1_0 \* Arabic \n8662     What I'd like to suggest is that I am aware that there are benefits by both companies that have their applications in to the festival.  But the most important thing here is that it grows country music talent.

SEQ 1_0 \* Arabic \n8663     At Mountainfest, we have what I call a little big stage.  Last year, we presented 27 new Canadian country music talents between the ages of 9 and 19.  I think it's very important that these things continue, and I really feel that I am, sadly, as a marketer, lacking the benefit of the station format in the Interior market.  Eighty‑five percent of our clients come from the Lower Mainland, Vancouver Island, Washington State.  The rest come from the Interior of British Columbia.  And I think that that's very vital to continue that road.

SEQ 1_0 \* Arabic \n8664     I don't know what else to say.

SEQ 1_0 \* Arabic \n8665     THE CHAIRPERSON:  You made yourself very clear.

SEQ 1_0 \* Arabic \n8666     MS. KELLY:  Thank you.

SEQ 1_0 \* Arabic \n8667     THE CHAIRPERSON:  Commissioner Langford?

SEQ 1_0 \* Arabic \n8668     COMMISSIONER LANGFORD:  I just want to have a quick discussion about love with you.

‑‑‑ Laughter / Rires

SEQ 1_0 \* Arabic \n8669     MS. KELLY:  Yeah?  I know.

SEQ 1_0 \* Arabic \n8670     COMMISSIONER LANGFORD:  Some people love chocolate and they just can't believe other people don't.

SEQ 1_0 \* Arabic \n8671     MS. KELLY:  Yes.

SEQ 1_0 \* Arabic \n8672     COMMISSIONER LANGFORD:  And some people love Mozart, and they just can't believe anybody listens to Bach.  And some people love collecting barbed wire, for goodness' sake.  Antiques; and other people want nothing but Danish modern.

SEQ 1_0 \* Arabic \n8673     I think what we heard here from the Pattison group is, though they acknowledge the fact that they were practically lynched when they took country off and a lot of people love it, they can't seem to make a business case out of it.

SEQ 1_0 \* Arabic \n8674     So I'd kind of ask you to try to put the toughest look on your face you can and set aside, for a moment, the incredible annual popularity of your festival, which everybody knows is just wonderful, but it's not all year long, and is there enough of a love of country music in your area to make a business case all year long, 365 days a year?

SEQ 1_0 \* Arabic \n8675     MS. KELLY:  Okay.

SEQ 1_0 \* Arabic \n8676     COMMISSIONER LANGFORD:  'Cause there is for chocolate, we know that for sure.

SEQ 1_0 \* Arabic \n8677     MS. KELLY:  I'm in agreement.  Music is music.  What we're finding is that country has an awful lot of roots.  It goes an awful long way.  I love Paul McCartney.  I mean ‑‑

SEQ 1_0 \* Arabic \n8678     COMMISSIONER LANGFORD:  So does my wife, and it bothers me.

‑‑‑ Laughter / Rires

SEQ 1_0 \* Arabic \n8679     MS. KELLY:  What we delved into is a million dollar business as well.  It's taken us 13 years to bring this prospect to the Province of B.C.  This is something that ‑‑ yes, country is of the heart.  You're correct in saying that.

SEQ 1_0 \* Arabic \n8680     I'm not saying that other music genres don't work, because they do.  What I'm suggesting to you is that this format is sadly lacking there.

SEQ 1_0 \* Arabic \n8681     I market with all radio stations.  There is a need for this.  Mountainfest has been successful for a couple of things:  Country music first and the feel, the love of it.  And you want me to take the love out of it?  I can't.

SEQ 1_0 \* Arabic \n8682     As a business, I struggled.  Ups and downs.  There are everything ‑‑ up and down.  But we've worked through it, and I believe, honestly, that this is a market that is there.

SEQ 1_0 \* Arabic \n8683     Thank you, sir.

SEQ 1_0 \* Arabic \n8684     COMMISSIONER LANGFORD:  Thank you very much.

SEQ 1_0 \* Arabic \n8685     That's my question.

SEQ 1_0 \* Arabic \n8686     THE CHAIRPERSON:  Thank you very much.

SEQ 1_0 \* Arabic \n8687     MS. KELLY:  You're welcome.

SEQ 1_0 \* Arabic \n8688     THE CHAIRPERSON:  Mr. Secretary, next item.

SEQ 1_0 \* Arabic \n8689     MR. LeBEL:  Thank you, Mr. Chairman.  The next two appearing interventions will be presented by the National Campus Community Radio Association and by Mr. Brant Zwicker.

‑‑‑ Pause

INTERVENTION

SEQ 1_0 \* Arabic \n8690     MS. ZALTZ:  Good morning.  My name is Freya Zaltz, and I'm President of the National Campus and Community Radio Association or NCRA.

SEQ 1_0 \* Arabic \n8691     Vice‑President Robert Schmidt submitted our intervention letter concerning the application of Evanov Radio Group Incorporated, but he's in Winnipeg, so I'm here in his place.

SEQ 1_0 \* Arabic \n8692     The National Campus and Community Radio Association, or the NCRA, is a not‑for‑profit organization committed to volunteer‑based community and campus radio broadcasting in Canada.  The NCRA works to advance the role and increase the effectiveness of community access broadcasting in Canada.  It provides information and networking services to its members, representing the interests of the sector, and promoting public awareness and appreciation for community and campus radio.

SEQ 1_0 \* Arabic \n8693     The NCRA filed a letter on February 2nd, 2005, to the CRTC concerning the application of Evanov Radio Group.  Although we are not opposed in principle to this applicant receiving a broadcasting licence in the Kamloops area, we do have serious concerns with their choice of frequency, which is 92.5 FM, and the impact it will have on CFBX, a low‑power community‑based campus radio station in Kamloops.

SEQ 1_0 \* Arabic \n8694     CFBX is a member station of the NCRA.  The station is a success story when it comes to current community radio regulations.  Starting with a successful student referendum at the University College of the Cariboo in 1997, showing nearly 90 percent support, CFBX began broadcasting at 92.5 FM in early 2001, thanks to the new category of developmental licence established by the CRTC.

SEQ 1_0 \* Arabic \n8695     This route was taken because it provided a very fast, low‑cost option for a community to establish a radio station.  CFBX was the first campus developmental licence granted in Canada, the third developmental licence of any sort in the country, and the first campus FM licence in the B.C. Interior.

SEQ 1_0 \* Arabic \n8696     Since their developmental phase ended, they have graduated to full broadcasting licence, still at 92.5 FM, though at the time of application, they could not afford to increase their power beyond their current 4.9 watts.

SEQ 1_0 \* Arabic \n8697     As one of the first licensees in this category, CFBX set an example for communities across the country and offered a blueprint of how a community could create a viable radio station under the new streamlined process.

SEQ 1_0 \* Arabic \n8698     Despite having few resources, they have accomplished an enormous amount since 2001 in terms of structural development, building a loyal audience, and raising community awareness of, and substantial support for, the service they provide.

SEQ 1_0 \* Arabic \n8699     The station has been planning to apply for a Class A protected frequency for some time, but setting aside funds for this project is extremely difficult for a volunteer‑driven, not‑for‑profit organization, such as CFBX.  Due to the considerable research and expenses required by such a project, it can take a long time for a community station to realize this goal.

SEQ 1_0 \* Arabic \n8700     CFBX has spent the last several years raising funds and conducting research for this purpose, and it was their goal to complete fund‑raising and receive a power upgrade before the expiry date of their current broadcasting licence in 2010, and they were optimistic that they would not be displaced from their frequency before achieving their goal.

SEQ 1_0 \* Arabic \n8701     While CFBX is broadcasting at an unprotected frequency, I would like to correct the statement made by Evanov President Bill Evanov in written communication, that:

SEQ 1_0 \* Arabic \n8702     "The frequencies or place on the dial for the community and college stations are considered temporary assignments and are limited to 50 watts or less."

SEQ 1_0 \* Arabic \n8703     First, community and colleges stations are not limited to 50 watts or less, rather, only those with developmental or low‑power licences are limited to 50 watts or less.  A substantial number of campus and community stations across Canada also broadcast at levels above 50 watts, and therefore have protected frequencies.  Some of these stations applied for their broadcasting licences prior to the establishment of the developmental licence category; others have successfully applied for power upgrades after first receiving a developmental or a low‑power licence.  All of these stations required years of development work and fund‑raising by dedicated volunteers in order to apply for and receive any licence, low‑ or high‑power, and these stations continue to struggle, no matter what sort of licence they hold.

SEQ 1_0 \* Arabic \n8704     Second, while low‑power frequencies may be unprotected, I suggest that for those stations with these frequencies, the long‑term goal is to become successful and permanent fixtures in their local communities and to eventually apply for a power increase when finances permit.  CFBX would have done so long ago if their financial situation had allowed it.

SEQ 1_0 \* Arabic \n8705     I doubt there is a single low‑power community access station in Canada that intends to exist only temporarily.  Stations whose volunteers and staff go to the extraordinary lengths to build a station with minimal resources deserve recognition and support for their efforts and assistance so that they can continue to serve their communities and realize their goal to acquire a protected frequency.

SEQ 1_0 \* Arabic \n8706     The NCRA feels that community‑based radio stations, such as CFBX, should be regarded as a legitimate and essential contribution to Canadian broadcasting and supported accordingly.  CFBX may be small, but they are not temporary or insignificant by any means, and it is important to recognize what would be lost by the community if they could not continue to exist.

SEQ 1_0 \* Arabic \n8707     Station manager Brant Zwicker will speak after me, and he will provide more detail about the background and history of CFBX, their programming content, and local artist development initiatives, and the station's relationship to the Kamloops community.

SEQ 1_0 \* Arabic \n8708     The issue here is not whether Evanov Radio Group can legally apply for the frequency currently occupied by CFBX, because they certainly can.  We are aware that with a low‑power licence, CFBX cannot expect a protected frequency.  But the issues are whether this is the best frequency for Evanov Radio Group's proposed new station, considering the multitude of additional open frequencies in the Kamloops area and whether the hardship that will no doubt be incurred by CFBX, if they are granted the use of 92.5 FM, could be avoided.

SEQ 1_0 \* Arabic \n8709     If, due to geographical and technical considerations 92.5 is the best frequency for Evanov's new station and if their application is approved, an additional issue is whether the CRTC supports community access radio to the extent that it will take measures to ensure that the displaced station can continue to exist.

SEQ 1_0 \* Arabic \n8710     Evanov Radio Group has said:

SEQ 1_0 \* Arabic \n8711     "The 4.9‑watt CFBX‑FM is currently operating on 92.5 may not be the best use of the frequency."

SEQ 1_0 \* Arabic \n8712     And:

SEQ 1_0 \* Arabic \n8713     "A low‑power operation could be easily accommodated on a frequency such as 107.9 and others that may not be suitable for commercial undertakings due to NAVCOM issues."

SEQ 1_0 \* Arabic \n8714     These statements may be correct, and we are allowing for that possibility.  Our main concern is Evanov Radio Group's statement that:

SEQ 1_0 \* Arabic \n8715     "These issues would not affect CFBX‑FM in any material way."

SEQ 1_0 \* Arabic \n8716     In fact, these issues would affect CFBX in substantial material ways, and I will outline those here.

SEQ 1_0 \* Arabic \n8717     First, if displaced from their frequency, CFBX would have to submit a new application to obtain a new frequency.  This, as we know, takes time, many staff and volunteer hours, and money.  If the new Evanov Radio Group station receives approval and begins broadcasting as soon as its licence takes effect, CFBX may not be able to complete, submit, and receive approval for a new application by that time, which would lead to a period in which CFBX would not be broadcasting at all.  Not only would they now have to deal with the requirements of a new licence application, they would also have to deal with a possible loss of revenue and listenership during this time, and an extensive public relations advertising campaign to re‑establish their listenership at their new frequency.

SEQ 1_0 \* Arabic \n8718     Since CFBX has already been preparing to submit an application for increased power, it would not be sensible for them to go through the application process twice, once to move to a new low‑power, unprotected frequency, leaving them vulnerable to being displaced again; and then again to increase the power and gain frequency protection.

SEQ 1_0 \* Arabic \n8719     So if Evanov Radio Group's application is approved at 92.5 and CFBX has to move frequencies, it would make the most sense for them to pursue both a new and protected frequency at the same time.

SEQ 1_0 \* Arabic \n8720     As I have explained, this process will require substantial time, resources, and money, with which I hope they will receive assistance.  In fact, the potential costs are staggering to a station in CFBX's position, and while they have been preparing, they are not in a position to cover any of the necessary costs immediately, and would be disappointed and further disadvantaged if they were forced to go off the air while dealing with this new unexpected hurdle.

SEQ 1_0 \* Arabic \n8721     Aside from the costs of an engineering brief, a new high‑power antennae and transmitter, and the installation of this new equipment, which could be as much as $40,000, the station will also incur costs associated with producing all new promotional materials and signage to reflect their new frequency, so that their audience will be able to find them on the radio dial.

SEQ 1_0 \* Arabic \n8722     These costs may seem fairly insignificant to a commercial radio group, but they are potentially crippling to any not‑for‑profit, volunteer‑driven organization that often struggles just to cover their basic operating costs.

SEQ 1_0 \* Arabic \n8723     To give you an example of the scale we're dealing with, if the total cost reached $50,000, that would equal half of the total annual budget for CFBX.

SEQ 1_0 \* Arabic \n8724     The NCRA believes that the three‑pillar broadcasting policy for Canada, as described in the Broadcasting Act, is in part enacted and fulfilled by the efforts of campus and community broadcasters.  These small stations epitomize many of the defining aspects of the Act in both mandate and legislation.  We feel strongly that not‑for‑profit community access radio stations at all power levels are providing an essential community service not provided by commercial stations, including providing direct air time to multicultural, Francophone, and Aboriginal groups; promoting Canadian and local talent; and offering highly diverse programs, not heard elsewhere on the radio dial.

SEQ 1_0 \* Arabic \n8725     MR. LeBEL:  Excuse me, Ms. Zaltz.  Your time has expired.

SEQ 1_0 \* Arabic \n8726     THE CHAIRPERSON:  Mr. Zwicker, are you going to be taking the full ten minutes for your presentation?

SEQ 1_0 \* Arabic \n8727     MR. ZWICKER:  Probably not, no.

SEQ 1_0 \* Arabic \n8728     THE CHAIRPERSON:  Okay.  Then why don't you finish off.

SEQ 1_0 \* Arabic \n8729     Do you mind if she eats into your time?

SEQ 1_0 \* Arabic \n8730     MR. ZWICKER:  No.

SEQ 1_0 \* Arabic \n8731     MS. ZALTZ:  Thank you.

SEQ 1_0 \* Arabic \n8732     Jeopardizing the continued existence of stations like CFBX in effect jeopardizes the legislated mandate for the Canadian broadcasting spectrum.  It is necessary to address the role of community and campus stations, such as CFBX, in the spectrum, and the need to support these stations.

SEQ 1_0 \* Arabic \n8733     The Evanov Radio Group has indicated that they are:

SEQ 1_0 \* Arabic \n8734     "... willing to commit to devote our resources and expertise, both financial and technical, to help the campus station relocate on the dial without any undue hardship or loss of service to its listeners.  It is our intention and commitment to support CFBX in whatever situation should arise."

SEQ 1_0 \* Arabic \n8735     They also promise:

SEQ 1_0 \* Arabic \n8736     "If 92.5 FM is eventually selected as the appropriate frequency by the regulators, we will underwrite the technical costs and provide technical assistance to CFBX‑FM in relocating it to another available frequency.  This is a commitment we have already given directly to CFBX‑FM and to the CRTC itself, which we are happy to repeat."

SEQ 1_0 \* Arabic \n8737     The NCRA does not have any problem with Evanov Radio Group broadcasting in Kamloops, but if they're granted a licence to broadcast at 92.5 FM, we would ask that their commitment be upheld to ensure that CFBX is able to cover all costs required to move to a new protected frequency, including those required to notify the community of this change.

SEQ 1_0 \* Arabic \n8738     We also ask that adequate time be given for this to occur prior to Evanov Radio Group commencing their broadcast at 92.5 FM, so that CFBX is not forced to endure service interruptions.

SEQ 1_0 \* Arabic \n8739     The CRTC has indicated in the past that it recognizes the importance of independent community‑based and student‑oriented radio stations, and now the CRTC needs to protect them.  There must be a mechanism in place to prevent unprotected secondary stations from the effects of large commercial applicants who could leave unprotected low‑power community stations without a frequency at all or, as we have seen in other locations, whose high‑power signals could interfere with low‑power community stations located nearby on the FM dial.

SEQ 1_0 \* Arabic \n8740     This protection could be accomplished by a one‑time donation to be made by a commercial station on acquiring a licence or amending a licence to increase power in any market.  This donation should be made to any not‑for‑profit community access station whose signal is displaced by a new commercial broadcaster or affected by a commercial broadcaster's power increase.

SEQ 1_0 \* Arabic \n8741     The NCRA would also like to remind the CRTC of our continued desire to see the creation and implementation of a CRTC‑mandated commercial radio fee that supports small not‑for‑profit stations, and we would like to stress the importance of developing a constructive relationship between for‑profit and not‑for‑profit radio stations, which requires that for‑profit stations understand and recognize the important role of campus and community radio stations in providing diversity in the Canadian broadcasting system.

SEQ 1_0 \* Arabic \n8742     In closing, I ask the Commission to consider CFBX's request for support in the interests of their community listenership and irreplaceable service.  I also ask the Commission to consider the creation of mechanisms to protect not‑for‑profit community access stations from the adverse effects of commercial stations' growth and development in the interests of a diverse multicultural and strong Canadian broadcasting system.

SEQ 1_0 \* Arabic \n8743     Thank you very much for your time.

SEQ 1_0 \* Arabic \n8744     MR. ZWICKER:  Good morning, Mr. Chairman, Commissioners, and Commission staff.  My name is Brant Zwicker, and I thank you for this opportunity to address the panel.

SEQ 1_0 \* Arabic \n8745     I guess I'll edit on the fly here, as I may have lost a little bit of time.

SEQ 1_0 \* Arabic \n8746     I currently manage campus radio station CFBX 92.5 at the University College of the Cariboo in Kamloops, British Columbia.  This is the institution that on April 1st officially becomes B.C.'s newest university, Thompson Rivers University.

SEQ 1_0 \* Arabic \n8747     I was hired by the school's student society in early 1998 with the goal of building a campus FM station from the ground up.  Over the next two years, we were involved in every aspect of creation of the non‑profit radio operation, renovations to the radio house, acquisition and refurbishing of used equipment, studio construction and wiring, development of a volunteer roster, and so on.  I did spearhead that project, but a huge vote of gratitude is owed to many, many people and organizations:  The school itself, dozens of student and community volunteers, and in particular, Dave Coulter of NL Broadcasting, who did most of the studio wiring for us, are but a few of the people, and that's for their time, equipment expertise, and old‑fashioned blood, sweat, and tears.

SEQ 1_0 \* Arabic \n8748     In early 2000 we commenced closed circuit, and I applied for the country's first campus developmental licence.  That was successful, and the FM phase was launched at 92.5 on April 2nd, 2001.

SEQ 1_0 \* Arabic \n8749     In the years since, we have applied for and received a full campus licence, provided the local community with a great deal of creative programming, helped to bridge the gap between campus and city, and given local listeners a true alternative that's complementary, not adversarial, to the private and CBC outlets in the city.

SEQ 1_0 \* Arabic \n8750     The one thing we have not managed to date, of course, is to increase our transmitter output beyond the original developmental level of 5 watts.  That's something that's due solely to the challenges of fund‑raising.  Naturally, this is something we want to do and have always intended to do in order to provide improved reception in the market to reach ever more listeners, and simply to protect ourselves and our position on the dial.

SEQ 1_0 \* Arabic \n8751     Fund‑raising is almost complete, after well over a year's hard work, and we have initiated a study on one of several tower sites in which we might be able to co‑locate.  Depending on which site we engage, we will apply for an increase in power in the range of 150 to 500 watts, possibly more.

SEQ 1_0 \* Arabic \n8752     CFBX, like most campus community stations in Canada, specializes in providing alternative programming, musical and spoken, in the marketplace.  The Kamloops station has approximately 95 active volunteers hosting shows every week.  About 120 in total, including substitutes and trainees.  These volunteers consist of students, high school and post‑secondary, university staff and faculty, and community members from every walk of life.  Their ages range from 17 to 77.

SEQ 1_0 \* Arabic \n8753     Our programming consists of, essentially, virtually everything our commercial counterparts do not provide.

SEQ 1_0 \* Arabic \n8754     On the musical side, we feature international programs from as many as ten different cultures and languages, jazz, classical, blues, folk, punk, stick, and many, many more.

SEQ 1_0 \* Arabic \n8755     Our spoken word shows consist of topics ranging from addictions to spirituality.  Almost all of it is locally produced.

SEQ 1_0 \* Arabic \n8756     Although its overall philosophy resembles that of other Canadian campus community stations, CFBX is quite unique, and I daresay, fairly good at what it does.  It certainly is distinct in the local market, and though our total audience does not rival that of any private broadcaster, of course, almost all of the feedback we've had has been positive, even passionate.

SEQ 1_0 \* Arabic \n8757     The "X" has always been a strong supporter of local talent, musical and otherwise.  One of the station's crowning achievements in this area was the creation of "Focus," a fund‑raising CD of local musicians that had two goals:  To raise money for the station's power increase, and to promote these local artists in the city and at other campus and community stations right across Canada.

SEQ 1_0 \* Arabic \n8758     Can I get a quick time check?

SEQ 1_0 \* Arabic \n8759     MR. LeBEL:  You still have two and a half minutes.

SEQ 1_0 \* Arabic \n8760     MR. ZWICKER:  Thank you.  I'll go double speed.

SEQ 1_0 \* Arabic \n8761     When the official CRTC announcement of December 22nd, 2004, indicated that one of the applicants for a new Kamloops licence would be pursuing our unprotected frequency, we were taken by surprise and quite dismayed, both by the pursuit itself and the way in which it was initiated, without any apparent concern for us or the Kamloops market.  That applicant, of course, is the Evanov Radio Group, ERG, and I'm here today to protest this action.

SEQ 1_0 \* Arabic \n8762     We at 92.5 do not oppose the licensing procedure as a whole because we do not compete with commercial stations.  My sole concern is the Evanov Group's decision to assume our frequency, and I have more than 880 e‑mail carbon copies in my inbox from CFBX supporters who concur.

SEQ 1_0 \* Arabic \n8763     We have been aware since the start of our project that as a station generating low power, CFBX is unprotected from the kind of acquisition that the ERG is proposing.  However, there can be little doubt that numerous other frequency options exist on the FM dial in Kamloops.  There are currently fewer than ten FM operations in the city right now, and all three of the original applicants for this new licence made different choices.  I know, for example, that NL Broadcasting was advised that 92.5 was unprotected, therefore available.  The company immediately rejected that option and chose to apply for 103.1, as you know, instead.

SEQ 1_0 \* Arabic \n8764     It is likely that that same opportunity was presented to both Standard and Newcap, but I strongly suspect that they too had major concerns about engaging in this kind of unnecessary action.

SEQ 1_0 \* Arabic \n8765     It must be pointed out that the ERG made absolutely no attempt to contact us regarding its frequency plans prior to the CRTC announcement, even in the weeks after.  It was not until their plans made headlines in the local newspaper that the company began to backpedal and engage in damage control.

SEQ 1_0 \* Arabic \n8766     I think I'm just about out of time, so I'll add one quick quote from one of our letter‑writers.  Dr. Jeff McLaughlin, university professor of philosophy who had interest in communication issues and business ethics says:

SEQ 1_0 \* Arabic \n8767     "The way that the ERG has handled themselves is unfortunate but also unsatisfactory and should be met not only with a rejection but also with a reprimand, reminding them that the good of the community is one of the primary aims of extending radio frequency privileges, not rights.  Clearly the behaviour of this company shows that they wish to put their own wants above all others, including the needs of their potential listeners."

SEQ 1_0 \* Arabic \n8768     In conclusion, I urge the panel either to render a decision unfavourable to the ERG or, should you award the licence to the group, to insist that ‑‑ or request that it seek a frequency other than 92.5.  If it should come to the point where we are indeed forced to find a new home on the FM dial, I would request that the Commission require the ERG to honour precedent and its own written commitment and compensate CFBX for all costs associated with a frequency move and the power increase that will be necessary to protect it from further issues of this kind.

SEQ 1_0 \* Arabic \n8769     Thank you very much.

SEQ 1_0 \* Arabic \n8770     THE CHAIRPERSON:  Thank you very much, and thank you for respecting the time.

SEQ 1_0 \* Arabic \n8771     Mr. Zwicker, in the response of the Evanov Group, of course they indicate that if the CRTC approves their application, they will work with us and Industry Canada to determine the actual frequency to be used so as to minimize any impact on your station; and if they are awarded 92.5, then they will underwrite the technical costs and provide technical assistance to you in relocating to another available frequency.  So you think that's a reasonable position for them to take at this stage?

SEQ 1_0 \* Arabic \n8772     MR. ZWICKER:  Yes.  I think the concern is there would be an extreme amount of hardship for us and, of course, costs.  And as long as that is covered, we would certainly ‑‑ quite frankly, I would prefer to stay at 92.5 and pay for our own power increase than to move and have somebody do it for us.

SEQ 1_0 \* Arabic \n8773     THE CHAIRPERSON:  What do you reckon the cost of that power increase, all in, will be to you, as your current frequency?

SEQ 1_0 \* Arabic \n8774     MR. ZWICKER:  We're probably looking at the range ‑‑ well, including, you know, all the signage and all that sort of auxiliary stuff, easily $40,000.

SEQ 1_0 \* Arabic \n8775     THE CHAIRPERSON:  Forty thousand.

SEQ 1_0 \* Arabic \n8776     MR. ZWICKER:  Easily.

SEQ 1_0 \* Arabic \n8777     THE CHAIRPERSON:  That's the figure that Ms Zaltz ‑‑

SEQ 1_0 \* Arabic \n8778     MR. ZWICKER:  Correct.

SEQ 1_0 \* Arabic \n8779     THE CHAIRPERSON:  So you would rather pay the $40,000 and stay where you are rather than have them move you to another frequency and to pay all ‑‑

SEQ 1_0 \* Arabic \n8780     MR. ZWICKER:  Yes, I mean ‑‑ yeah, because we wouldn't have a lot of the auxiliary costs, obviously, if we stayed where we were, right?  We would just have the transmitter and that sort of thing.  We'd probably try and cut some corners here and there too, but ...

SEQ 1_0 \* Arabic \n8781     Yes.  I would prefer that, yes.

SEQ 1_0 \* Arabic \n8782     THE CHAIRPERSON:  But you haven't started the negotiations with Mr. Evanov on ‑‑

SEQ 1_0 \* Arabic \n8783     MR. ZWICKER:  No.

SEQ 1_0 \* Arabic \n8784     THE CHAIRPERSON:  ‑‑ itemizing those costs?  I know what your goal is.  I note Ms. Zaltz talks about protective frequency, and I think in your remarks you talked about the frequency move and power increase.  None of that is covered in the Evanov response, and we'll hear from them in reply as to what they are prepared to cover, so you know the contours.

SEQ 1_0 \* Arabic \n8785     So your answer is that you think it's a reasonable position for them to take, even though your preference would be to stay at 92.5.

SEQ 1_0 \* Arabic \n8786     MR. ZWICKER:  Yes, correct.

SEQ 1_0 \* Arabic \n8787     THE CHAIRPERSON:  Thank you very much.

SEQ 1_0 \* Arabic \n8788     Commissioner Wiley?

SEQ 1_0 \* Arabic \n8789     COMMISSIONER WYLIE:  Since this reply was filed, Ms. Zaltz, has NCRA or the station itself ‑‑ you, the station manager ‑‑ have you had any contacts with the Evanov Group to try to focus or perhaps get them to be more precise about what they are prepared to underwrite?  Has there been other communication since early in the year when the reply was made to the Commission and a copy sent to both of you ‑‑ well, to Mr. Schmidt, who, Ms. Zaltz, you represent today?  Has there been further talk of doing them?

SEQ 1_0 \* Arabic \n8790     MR. ZWICKER:  No, there hasn't.  There was initially, shortly after ‑‑ it was around the 6th of January or so, after this hit the newspaper, the Evanov Group requested a meeting with our board.  This was late on Thursday.

SEQ 1_0 \* Arabic \n8791     COMMISSIONER WYLIE:  Yes, I read that, yes.

SEQ 1_0 \* Arabic \n8792     MR. ZWICKER:  And I tried ‑‑ I have nine volunteer board members, and I was not able to pull it together for that.

SEQ 1_0 \* Arabic \n8793     COMMISSIONER WYLIE:  But even without putting your board together, have either of you spoken to them since?

SEQ 1_0 \* Arabic \n8794     MR. ZWICKER:  Not since, no.

SEQ 1_0 \* Arabic \n8795     COMMISSIONER WYLIE:  Not since this morning?

SEQ 1_0 \* Arabic \n8796     MR. ZWICKER:  No.

SEQ 1_0 \* Arabic \n8797     COMMISSIONER WYLIE:  To try to see how far they're prepared to go to help?

SEQ 1_0 \* Arabic \n8798     MR. ZWICKER:  No.

SEQ 1_0 \* Arabic \n8799     COMMISSIONER WYLIE:  Could it not be possibly ‑‑ I understand the problem with changing frequency.  It is an unprotected frequency, and some of it is Industry Canada on the decision ‑‑ our decisions always state that it's unprotected and therefore vulnerable.

SEQ 1_0 \* Arabic \n8800     Is it not possible that if you should ‑‑ in case they are licensed on that, to establish some relationship with them that could get you an improvement in your situation, both now and for the future, at their expense, if there was cooperation between the two of you?