ARCHIVED -  Transcript

 

 

 

 

 

 

 

              TRANSCRIPT OF PROCEEDINGS BEFORE

             THE CANADIAN RADIO‑TELEVISION AND

               TELECOMMUNICATIONS COMMISSION

 

 

 

 

             TRANSCRIPTION DES AUDIENCES DEVANT

              LE CONSEIL DE LA RADIODIFFUSION

           ET DES TÉLÉCOMMUNICATIONS CANADIENNES

 

 

                      SUBJECT / SUJET:

 

 

 

 

 

 

 

Various broadcasting applications /

Diverses demandes de radiodiffusion

 

 

 

 

 

 

 

 

 

 

 

HELD AT:                              TENUE À:

 

Sussex Ballroom                       Salle Sussex

Future Inns Cambridge                 Future Inns Cambridge

700 Hespeler Road                     700, chemin Hespeler

Cambridge, Ontario                    Cambridge (Ontario)

 

October 22, 2008                      Le 22 octobre 2008

 

 

 

 

 

Transcripts

 

In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

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

and staff attending the public hearings, and the Table of

Contents.

 

However, the aforementioned publication is the recorded

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

either of the official languages, depending on the language

spoken by the participant at the public hearing.

 

 

 

 

Transcription

 

Afin de rencontrer les exigences de la Loi sur les langues

officielles, les procès‑verbaux pour le Conseil seront

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

membres et du personnel du CRTC participant à l'audience

publique ainsi que la table des matières.

 

Toutefois, la publication susmentionnée est un compte rendu

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

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

officielles, compte tenu de la langue utilisée par le

participant à l'audience publique.

               Canadian Radio‑television and

               Telecommunications Commission

 

            Conseil de la radiodiffusion et des

               télécommunications canadiennes

 

 

                 Transcript / Transcription

 

 

 

 

 

Various broadcasting applications /

Diverses demandes de radiodiffusion

 

 

 

 

 

 

BEFORE / DEVANT:

 

Michel Arpin                      Chairperson / Président

Rita Cugini                       Commissioner / Conseillère

Elizabeth Duncan                  Commissioner / Conseillère

Peter Menzies                     Commissioner / Conseiller

Stephen Simpson                   Commissioner / Conseiller

 

 

 

ALSO PRESENT / AUSSI PRÉSENTS:

 

Cindy Ventura                     Secretary / Sécretaire

Joe Aguiar                        Hearing Manager /

                                  Gérant de l'audience

Anthony McIntyre                  Legal Counsel

                                  Conseiller Juridique

 

 

 

HELD AT:                          TENUE À:

 

Sussex Ballroom                   Salle Sussex

Future Inns Cambridge             Future Inns Cambridge

700 Hespeler Road                 700, chemin Hespeler

Cambridge, Ontario                Cambridge (Ontario)

 

October 22, 2008                  Le 22 octobre 2008

 

- iv -

 

           TABLE DES MATIÈRES / TABLE OF CONTENTS

 

 

                                                 PAGE / PARA

 

PHASE III (Cont'd)

 

 

INTERVENTION BY / INTERVENTION PAR:

 

London Silverbacks Football Team                  618 / 3666

 

North by Northeast                                624 / 3687

 

London Majors Baseball Corporation                632 / 3722

 

Great Lakes Blues Society                         648 / 3811

 

Ontario Federation of Snowmobile Clubs            659 / 3820

 

Downchild Blues Band                              669 / 3869

 

 

 

PHASE IV

 

 

REPLY BY / RÉPLIQUE PAR:

 

My Broadcasting Corporation                       680 / 3931

 

Frank Torres (OBCI)                               681 / 3939

 

United Christian Broadcasters Canada              684 / 3961

 

Blackburn Radio Inc.                              689 / 3992

 

Evanov Communications Inc. (OBCI)                 696 / 4034

 

Rogers Broadcasting Limited                       697 / 4045

 

CTV Limited                                       699 / 4059

 

Forest City Radio Inc.                            702 / 4080

 

Sound of Faith Broadcasting                       708 / 4118

 

- v -

 

           TABLE DES MATIÈRES / TABLE OF CONTENTS

 

 

                                                 PAGE / PARA

 

PHASE I

 

 

PRESENTATION BY / PRESENTATION PAR:

 

Frank Torres (OBCI)                               719 / 4186

 

Blackburn Radio Inc.                              768 / 4506

 

591989 B.C. Ltd.                                  814 / 4762

 

Guelph Broadcasting Corporation                   859 / 5032

 

 

 

PHASE II

 

 

INTERVENTION BY / INTERVENTION PAR:

 

Guelph Broadcasting Corporation                   909 / 5358

 

 

 

 

 

             Cambridge, Ontario / Cambridge (Ontario)

‑‑‑ Upon resuming on Wednesday, October 22, 2008

    at 0902 / L'audience reprend le mercredi,

    22 octobre 2008 à 0902

3659             THE CHAIRPERSON:  Order, please.  À l'ordre, s'il vous plaît.

3660             Madam Secretary...?

3661             ASSISTANT SECRETARY:  Thank you, Mr. Chairman.

3662             Good morning, everyone.  As a reminder, please turn off your cell phones and beepers and blackberries as it is causing interference with our internal system, please.

3663             We now have the London Silverbacks Football Team, North by Northeast and London Majors Baseball Corporation to appear as a panel and present their intervention.

3664             We will start with the London Silverbacks Football Team.

3665             Please present yourself for the record and you will have 10 minutes to make your presentation.

INTERVENTION

3666             MR. LAZAR:  My name is Alan Lazar and I'm here on behalf of the London Silverbacks Football Team.  We are a men's professional minor league football team located in London, Ontario.  This year we just completed our fifth season of operation.

3667             We take part in the North American Football League, which is the world's largest football league with approximately 130 teams across North America.

3668             We are proud to boast the distinction of being the minor league affiliate to the Toronto Argos.  We had great success.  We just finished an undefeated season and, unfortunately, lost in our third round of the playoffs, as well as winning a championship title in our league last season.

3669             Our team is comprised of adult men aged 18‑plus.  I believe it gives men opportunities to continue competing in football in a way that's pretty much unavailable to them, as well as competing on an international scale.

3670             I believe it adds a lot to the community in that we are involved in a lot of charitable organizations, into a lot of high schools, a lot of children's groups, et cetera.

3671             We believe that after the introduction to pod fm we have been really pleased to see something like this possibly being introduced to the London market, as the hurdle we have faced over the years here in London has been a limited opportunity to be able to contact especially individuals, the younger age groups, especially the high schools and that that we are trying to get into, et cetera.  We pride ourselves on being a family event, good quality football.

3672             We have probably boasted a great number of professional athletes coming into our organization as well as going out of it, and we believe we offer great opportunities for individuals of all ages, but especially the toughest hurdle has been finding any kind of venue to contact, especially there like around 18 to 25 there.

3673             We have two college radio stations in our town, but one of the hurdles in dealing with that has been the fact that the personnel and the personality of the station sometimes changes from semester to semester so there is no consistent venue to market our team.

3674             As well, a lot of the media is so varied within our city in that some of them will focus purely on ‑‑ whether it be major league sports purely that they don't look at any of the local content which makes it really tough for an organization such as ourselves to get the word out there and build our fan base, which has been an interesting thing for us in that last year we were fortunate enough to win a league title and that.

3675             Again, this being the world's largest football league and we play American rules football.  We are just one of three Canadian teams in this league.  What we accomplished was, many would think, pretty significant, yet virtually no media interest, response whatsoever with it, despite our usual continued efforts to always send out media releases to the local media.  It was completely left forgotten.

3676             Coming off of a season like that, here we entered this year, we had a great season as well that we continued the undefeated season here, and yet due to the fact that there is a lack of a good venue for us to be able to get out to our fans, to get out the interest there, we have seen our numbers dwindle, which really from a business point of view has definitely made it challenging to continue improving and providing the opportunities that we are working on.

3677             We believe there that with pod fm it gives us a great avenue to (a) continue to improve our fan base, which has really ‑‑ we have been very fortunate in that the product we provide has been good, that it retains most of the people who come out.  It's been a great percentage of people that when they come out to our game they usually enjoy it and will come back, but it's building upon that and trying to continue to get the word out there has been the biggest hurdle.

3678             So that has been one of the reasons why pod fm has been so appealing to us, as well as the interactive nature of the station we think is a great appeal.

3679             We have seen a lot of demand from the people who have been involved with our team to want to know what's going on with the team, especially when we are on the road.  We are travelling to various places in the States.  Our championship game last year was in Las Vegas, this year it's in Atlanta.  So to try to meet that demand in interest we had to go out and ourselves set up a webcast to allow our fans to be able to stay involved, knowing that unfortunately while we didn't expect to get play‑by‑play from local media or anything like that, but just to keep at least some sort of regular score update, some sort of standing, some sort of something for the people who are interested in our team, because there has been a lack of opportunity to provide that information to our fans.  We have had to take it on ourselves and try and develop the proper website as well as the webcasts, et cetera.

3680             That's where we really believe that when we first were introduced to pod fm that it's a really exciting opportunity, that here our fans will now have a way to be involved, to interact, to possibly hear what's going on with the Silverbacks and even report to other possible fans what's taking place at a Silverbacks game.

3681             I believe the format will help us get out there to potential fans, as well is to make our fans who are already involved and have been diehard being there with us for the last five years there, make them feel validated that there is something going on and that Silverbacks are supported as being London's premier minor league football team.

3682             And that's what we are looking at going forward, is we think it's a really exciting opportunity and we are glad to be here to support that.

3683             Thank you very much.

3684             THE CHAIRPERSON:  Thank you.

3685             ASSISTANT SECRETARY:  Thank you.

3686             North by Northeast, please introduce yourself and you will have 10 minutes to make your presentation.

INTERVENTION

3687             MR. McLEAN:  Great.  Thank you.

3688             My name is Andy McLean.  I am the Managing Director of the North by Northeast Music Festival.  It's also a film festival and a conference based in Toronto.

3689             For those of you who are not familiar with the event, it's our 15th year coming up and we take place this year June 17 to 21 all over the city of Toronto.

3690             It's my pleasure to be here this morning to support the Rogers pod fm application and particularly the pod Road Tour which is the CCD component that we are here and looking at.  I think it's a very exciting development and initiative.

3691             It's very ambitious, but I think it's one of the most important initiatives to help emerging Canadian bands, especially in the current climate, the way the music industry has developed over the past 10, 15 years especially.  I really feel it's time to concentrate on an initiative that is based back on the old‑fashioned idea of getting a band on the road.  So that's where we are going to go with this proposal.

3692             I just wanted to perhaps give a little bit of a background first.  Many of you I'm sure you know the music industry has changed hugely.  North by Northeast was started 15 years ago, I am one of the founding owners.

3693             Because Indy, the word "Indy" has nothing to do with a Molson car race, it's all about being an independent band, being an entrepreneurial band, being a band traditionally, a traditional model for a band or an artist.  When I say "band" I mean performing artist, it could be a singer/songwriter as well, but I will just use the word "band".

3694             They traditionally would wait around and try and write songs and develop their craft and trying get a buzz going and wait for a record company to come and sign them and pluck them out of obscurity and send them into stardom.  This is a system that existed for a long time, unfortunately it doesn't exist really anymore.  For all kinds of reasons that traditional model no longer is relevant.

3695             In fact it's a good thing.  I think there were many bad aspects of that situation, particularly in the '80s and '90s.  As music became more and more corporatized you really were limited as your choices as a musician into how you could connect with your audience.  I mean let's remember what this is all about, it's about an artist with an idea, a musical idea and a concept who wants to connect with an audience.

3696             So what would happen is you really ‑‑ there were two things, you needed to record your music because you can go play for your family and you can try and do a little tour if you can, but most of the time it's restrictive in terms of getting out there.

3697             So you need to record your music, then you need to find a way to distribute it and a record company would fulfil both those roles.  This is the traditional record deal.  The record company was the bank, they would advance to the money, you go out and record your album, they would own most of it and then you would hopefully try and sell some records and make some money that way.

3698             The second thing of course was getting the record distributed.  The record companies controlled all the distribution.  That was a way for you to reach your audience and, if all things lined up, your record is released, the radio of course extremely important in terms of promoting it, your fan base would be built, mostly probably through radio first but also a groundswell, and then you get a chance to go out and play for them.

3699             This would be done with the support of a label called Tour Supports and they would support you in your efforts to go out and play.  Most of the time at a loss because you would still be building your career, but they would try and get you started.  And that's kind of what would happen.

3700             And then all of a sudden I guess the Internet came along and changed all of that.  So the two main reasons ‑‑ and digitization of music as well.  Bands no longer need help really in recording as much.  Everybody can make a recording.  Everybody can get their music up online now and try and build a fan base through social networking and all of that.

3701             Unfortunately, what's missing of course is still an ability to get out there and play in front of a live audience.  So this is what the pod Road Tour is really all about.  It's about authenticity, it's about gaining faith and respect from an audience, earning that respect actually.

3702             The bad side of the other system where you are kind of top‑down and promoted first before you really had earned the right to go out and demand loyalty from an audience, whereas now the Indy route, if we can go back to that, the Indy route is bands preferring to go that route in many ways.  It's a lot harder.  It means that they have to struggle in obscurity for quite a long time.  Certainly they would be able to record their music, get it up on their own website and try and build a fan base.

3703             But some of the good things about a record label obviously was the mass marketing that they could throw and the amount of budget that they could spend to promote an act.

3704             So an independent act now is still faced with a major issue of how do I get my music out to people?  How do I connect with them?  Music in the end it's about going into a live venue and just having that musical experience.  It's an emotional ‑‑ it's an emotional investment on both sides.

3705             So this idea is to take emerging bands ‑‑ take three emerging bands from the London area and give them the opportunity to go out and play a really good tour.

3706             North by Northeast has the expertise and the background in terms of pulling this together.  We have 3,000 submissions from all over the world, about two‑thirds are Canadian.  Every year our team of listeners go through the process of judging all these bands.  We come up with about 500 that showcase.

3707             Regionally we can break out all of the bands that are coming here.  So we can look at all the bands that would come from the 519 London area and we can, through that process of constant listening and weeding out as the strongest bands, we can get to after the end of the festival we can pick three that we think are a pretty good bet, so these bands are going to be going somewhere.

3708             And what this program will do is offer them a top class agent, a top class promoter, a publicist, all of the things that they can't afford, all of the things that they would never be able to do themselves and we can send them out on a 12 day, two or three week tour to some key venues.

3709             And this will be the missing piece.  This is the missing piece between the fan base that they built up online between the records and MP3s that they have sent out themselves.  It's an opportunity for them to really build with their audience and develop that kind of loyalty and authenticity that I think was missing in the past.

3710             So North by Northeast as an organization can provide the credible structure for all this to happen.  You know, we can get them Nickelback's agent to actually book this tour, we have those kind of connections.

3711             It's a kind of dream opportunity for a band.  It's something that is a tremendous payback with the station.  One of the most exciting things also is that while the band is on tour and performing in the old‑fashioned live way, there's a whole new side of the interaction through the website of the radio station.

3712             The savvy kind of 15 to 35s, particularly younger end of that demo, are all looking online.  So they can discover these bounds so they can discover these bands.  They can discover this radio station online and then they can also enjoy what is being put on stage through a live experience.

3713             So the two really go together.  I think that's a really innovative approach to what we are doing.

3714             There is interaction between the bands, they are going to be creating content themselves while they are on the road.  These three acts are going to be blogging, they are going to be making videos, they are going to be sending stuff to the website, and it's a way to have this more personal interaction with the audience within the catchment area of the pod fm reach.

3715             So to me it's got all of the aspects of the old school, going out and just playing, of the era when you had a record company.  We are kind of not being a record company, we are supplying some of the great promotional aspects that they had.  And of course it's all up to date with the Internet, social networking, all of those sides that are working.

3716             So that in the end these three bands are going to come out with more fans, there is no doubt.  I have no doubt about it.  They are going to make more connections, they are going to be able to sell the CDs, sell their downloads, either online or straight off the stage after the gig, and we will put together a tour that will be top class and these bands I think will come out of it a lot further ahead with their career than they would have previously.  So that's why I am here.

3717             Oh, I have two minutes left, but I think I have kind of hit most of the main points and I think I will just stop there and thank you very much for allowing me to make the presentation.

3718             THE CHAIRPERSON:  Thank you, Mr. McLean.

3719             ASSISTANT SECRETARY:  Thank you.

3720             London Majors Baseball Corporation.

3721             Please introduce yourself for the record.  You have 10 minutes.

INTERVENTION

3722             MR. DART:  Hi, my name is Scott Dart.  I am the owner of the London Majors baseball team.  I have owned the team now for five years and, as any sporting business would tell you, the younger that you can get the fans in the better it is for down the road.

3723             For us it's been a little bit of a struggle getting the younger fans out and we have really had to shy away from more media advertising and we have had to go more door to door and to the schools to actually get the participation of the younger kids.

3724             For us, the younger kids represent a huge opportunity for us.  For them to come to the games, we think that we are actually a really good family destination, but we are also a destination for younger kids where there is not a lot to do for the younger generation.  We feel that high calibre baseball that we offer is definitely an entertainment value for that age group.

3725             So one of the things that we have been having a tough time doing is how do we set our goals of strategy with regards to the media.

3726             To this point we haven't had a radio station in London that can hit that younger age group for us.  Right now the way that we see it is, we have to get the younger age group in and not only the 15‑year‑olds to the 20‑year‑olds, but also the older group as well that is, say the 30 to 35 range.  The reason why that age group is so important to us, that's the age where there's a lot of young families.

3727             So that's our secondary target because we figure that if we are offering a good destination for family entertainment, good, clean family entertainment, then we want the families that have the younger kids to bring them because then that will be our future fans as well going forward.

3728             To this point we just haven't had top of mind awareness for our team.  Over the past five years we have really ‑‑ we went from probably under 100 fans again to now we are actually just over 400 and the majority of that segment that we actually have been successful with is the older clientele, the 50 to 65 range.

3729             What we want to do is, we want to make sure that we are going after the demographic that suits our team, and that would be to make it so that the younger kids can start to have our players as role models, mentors, that sort of thing.  At this stage we can't do that using radio at all because they are just not set up right now to handle that age group.

3730             And we have tried in the past actually where we have done some marketing with some of the radio stations.  We have been on some morning programs and stuff like that and it's fantastic for our older groups, but we are not getting any of the kids.  Like when we ask them, you know, how did you hear about our London Majors baseball, it's almost 100 per cent of the time it is from oh, when you guys came out to our school, when you had players come out to our assemblies, that sort of thing.

3731             So nothing has been a success on the radio front, and even on ‑‑ you know, I'm sidetracked here, but even on the paper front as well we haven't had this success for the younger fans that we are looking for.

3732             So for us to be able to build a top of mind awareness for our team, we really need to have that media outlet that we can actually touch that age group and we feel that, you know, in reviewing everything that Rogers is doing for pod fm it actually would be beneficial for us and would be an avenue that we could start to look at strategically is going after, because currently we just don't have that and we are very limited.

3733             The only radio that we do currently where we get steady presence and is coverage is actually a station that's outside of London.  The reason why that happens is because our PA announcer actually works at the radio station.  So I think that if we didn't even have him there, I don't even know if we would get the kind of carry time that we would need to even have just our scores and our updates and what's kind of going on with the team to be that kind of channel for our fans to hear about us.

3734             And that's at the older demographic and it's not even reaching the younger generation, which is what we need.

3735             The second thing that I wanted to mention was, our team itself is actually ‑‑ I'm not sure if anybody here knows what the InterCounty Baseball League is, but our league itself is comprised of young players.  So our youngest player this year was 18 years old and our oldest player was 27.  So it falls right into this category.

3736             And for us, you know, we get the feedback of what's going on with radio and media and stuff like that directly from our players and they even tell us that for them to get what they want, our pregame and that sort of thing, there is no radio stations being played.  And it's directly impacted because it's not the music that they want to hear.  There is no music that they want to listen to being played on a current radio station that we can get.

3737             So every single pregame, after game, every single bit of it is downloaded music so that they can actually get the content that they want.

3738             I think that with the application today for Rogers, I think that would probably change how our players view it as well, and that's who we deal with on a regular basis, and how we interconnect with, you know, what's important to them.  Currently, right now, you know, what we said what type of sound system do you need, there was nothing to do with well, we need this to be able to pick up "X" number of radio stations or anything like that, it was all, you know, we need somewhere to dock our iPod and that was pretty much it.

3739             The other thing as well, like for our updates and that, even though we are getting the word out to our older demographics and they are ‑‑ we do hear it that they do hear us on their radio stations that their preferences are, we are not hearing it from any of our younger fans.

3740             And when we hear about ‑‑ sorry, when we ask them about, you know, do you know where we are in the standings?  Do you know how our players are doing?  None of them know.  They have no idea what position we are in, like whether we are in first place or last place.  And that's important to us.  We really need that kind of recognition so that we can build that connection between our players and between that age group to have our fan base started.

3741             The younger generation is going to be our future fans and we have to keep mining at the younger demographic to be able to build that, because right now it's affecting our revenues and our revenue streams going forward if we are not able to bring in the younger generation to recognize what our program is about, how good of a level this is of baseball, where it fits within the entertainment industry for sports entertainment within the city of London.

3742             That's what we really need to see more of, is a station that can actually do that for us.  And not only us, there are a lot of other teams in the city that they are being missed out on.  You know, they hear about it and stuff like that, they hear about the different teams that are in the city of London, but they are not actually hearing the details of those teams and being able to recognize and do player profiles, that sort of thing, which strategically would fit well with our advertising campaigns going forward.

3743             Because any time that you can build ‑‑ as you guys know, any time you can build the connection between fan and player it's going to make them want to come back and want to come out and be a part of that experience.  And with our location in London and with the amount of success that we have had with the team, now is our opportunity.  Like we have been building to this for five years and this year we unfortunately lost out in the finals in a game seven, but we had 5,000 people at our game, which is capacity crowd.

3744             So we need to be able to latch onto the younger demographics and pull them along to make sure that they become fans going forward, because if not we are missing a whole segment of our fan base that we can't get in touch with, that we can't connect with.  And that's the big thing for us.

3745             I hear about it as well from other people that are associates of mine who have small businesses, the same thing.  Like I have a friend who actually owns ‑‑ he installs blinds and shutters and he can't reach that younger demographic either, which is what he's looking for is the new homeowners.

3746             And we talked about ‑‑ you know, we talked back and forth about how do we attract people to our respective businesses.  And he's in the same mind frame where he can't get that younger group.  You know, they are just getting out, they are just starting off, they are just buying their first new home and they are looking to ‑‑ you know, he wants them to buy blinds and shutters for their house, but he can't reach them.

3747             And that's one of the things that we feel strong ‑‑ why I felt strongly enough to want to come here today to support this, because it's not just one specific group within the city or one specific business or one industry, this covers all of us.  Like we all need to ‑‑ we all need to look at the younger generation and the younger demographics for our businesses to be successful.

3748             For me personally this is a huge opportunity, is to get the younger demographics into the park to see the type of level of baseball that we can offer.

3749             You know, families with young kids, it's an inexpensive night out and it's a way to kind of bring back families back together again and to do stuff together.  We feel that with this we can start to target our marketing and our media towards them so that we can start to get that fan base out to, one, help on the family values side, but, you know, like any business we are also looking to match our revenues with that.

3750             So I want to thank you very much for allowing me to come and speak before you today, but I also want to let you know that I wholeheartedly support this and really feel that this would be a huge benefit for not only us but for a lot of other businesses as well that are targeting the younger demographic.

3751             Thank you.

3752             THE CHAIRPERSON:  Thank you, Mr. Dart.

3753             I'm asking Commissioner Cugini to ask questions to this review.

3754             Thank you.

3755             COMMISSIONER CUGINI:  Thank you very much and good morning to all three of you and for making the trip here to Cambridge to appear before us this morning.

3756             I just have a couple of questions and they are going to be both applicable to you, Mr. Dart and to Mr. Lazar because I am interested in knowing for example in your typical season how many fans do come out to see your games?

3757             MR. LAZAR:  I think this year we were ‑‑ I know that we were definitely down from previous years.  I think this year we were right around 300 to 400, tops, including ‑‑ our last playoff game, I think, possibly topped out at 400.  It has been dropping significantly over the years with lack of exposure.

3758             COMMISSIONER CUGINI:  And you, Mr. Dart?

3759             MR. DART:  For our regular season, not counting the playoffs, our average fan attendance was just over 500, and then, in the playoffs, it kept ramping up until our final game, where we had over 5,000 people.

3760             COMMISSIONER CUGINI:  And not even the community channel in London, or the CTV local television station in London covers your games at all, not even the results?

3761             MR. DART:  They cover the results, but we still don't get it for the younger demographics that are not hearing about us on TV.  I don't know if it is because it's just not something that they listen to ‑‑

3762             COMMISSIONER CUGINI:  I asked about television because you have already mentioned print and radio.

3763             MR. DART:  Yes, absolutely.

3764             On the A‑Channel they do cover us that way, but still not in‑depth; nothing that we are doing for ‑‑ like buying any media time with them or anything like that, because we don't feel that it is going to hit our demographics still.

3765             COMMISSIONER CUGINI:  Mr. Lazar, is it the same for you?

3766             MR. LAZAR:  Yes.  Actually, when it even comes, say, to TV, it is pretty much hit or miss, a great example being ‑‑ I think it was about two weeks ago.  We had finished our final regular season game ‑‑ or our first playoff game.  We called in, as we do every night ‑‑ our games finish, generally, about 10:30 p.m.  We called it in, to get it in for the 11 o'clock news that our game had been played, and the funny comment that was made by the sports person there was, "Oh, you guys were playing tonight?  I forgot about that," and that was it.

3767             Hopefully, that night, something did get on there, but it's really hit or miss whether they are even aware of it, despite the fact that we try to send out one or two media releases to TV, print, or a couple of radio stations.  It's completely hit or miss whether they even pick up on it, and then whether they want to bother reporting it.

3768             COMMISSIONER CUGINI:  If we were to licence the Rogers' application for pod fm, what would be your expectation?

3769             That is, what would you expect Rogers to do for both of your leagues?

3770             MR. DART:  I think the big thing is ‑‑ and we have seen it from the television side.  Rogers covered the majority of our games, and all of the games in the playoffs were covered.

3771             So we would expect that, since we have a good working relationship at a league level, it would continue on the radio side.

3772             One of the other things, in conjunction with what Alan was saying, was that we had a situation last summer ‑‑ and this is going back to the print side ‑‑ where the reporters were on vacation.  We got no coverage whatsoever.  Like, nothing.

3773             And it was at a point where we were actually competing for first place for the league pennant, and they just said, "Everyone is on vacation, so you won't have any coverage whatsoever."

3774             We thought that, for the size of the town we have, there should have been some sort of coverage.

3775             That is where we are missing out on ‑‑ consistency, I guess, is probably the biggest thing.  We need something that is not only going to be, like Alan was saying, hit and miss, we need something consistent.  We can't build our brand on hit and miss.  It really has to be something that is going to be ongoing, and build it into our strategy as well.

3776             If we can't actually get to the demographics that we need, what do we do?  It's back to word of mouth, and word of mouth doesn't really cut it too much, in our minds anyway.

3777             COMMISSIONER CUGINI:  Anything to add, Mr. Lazar?

3778             MR. LAZAR:  I don't have much to add.  I think that expectations are, simply ‑‑ again, as has already been said ‑‑ regular, consistent exposure to the team.

3779             The nice part with a medium like pod fm is the fact that we know that we will be able to get the score out there.  If there are major things happening ‑‑

3780             We had one of our players, mid‑season, signed by the Toronto Argonauts, and nothing got out about that.

3781             We signed another player who had been a Vanier Cup MVP, et cetera, and yet, if it gets out there, it is completely by chance.

3782             The other part, too ‑‑ I think the fun part about pod fm is that it brings an interactive element.  It would allow someone at the game, for example, to contact pod fm and say, "Hey, this is a great thing that's going on."

3783             It helps to really create awareness, and, also, it really gives people a true feel of what these events are about, what is going on, so that people understand that this is a true event, it's a family event, it's a lot of fun, and it really hits that demographic.

3784             Sometimes it is more about the enthusiasm that is caught up by:  "Who else is out there?"  They know that "somebody else in my age group is out there having a great time.  Hey, maybe I should be out there, too."

3785             You miss a lot of that, for example, in the print medium, which may have no interest in what it's covering.

3786             COMMISSIONER CUGINI:  Thank you very much.

3787             Mr. McLean, just a couple of questions for you.

3788             Have you been able to quantify how many artists from the London area have participated in North by Northeast, say, in the last five years?

3789             MR. McLEAN:  I have last year's figures, actually.

3790             COMMISSIONER CUGINI:  Oh, that's good.  You came prepared.

3791             MR. McLEAN:  I believe there were 61 applications that we took from the London area, and we invited 11 acts to actually showcase.  Three of those acts made it onto our top sheet ‑‑ Top 60 ‑‑ which we started this year.

3792             COMMISSIONER CUGINI:  And I do agree with you, there is nothing like live music.

3793             MR. McLEAN:  Well, let's hope not; otherwise, we are all in trouble.

--- Laughter / Rires

3794             COMMISSIONER CUGINI:  What is the concert scene in London?

3795             Are there large venues, medium‑size venues?

3796             MR. McLEAN:  In this proposal, what we have done is put together a list of ‑‑ this would be a university ‑‑ kind of a Frosh Week tour.  We have identified a dozen venues ‑‑ for example, Fanshawe College in London.  We would do Western, obviously, and then there would be other areas in the 519 area ‑‑ Kitchener, Conestoga College.

3797             There is a whole list in the application here of where we would actually send these bands, and they are well‑established campus venues.

3798             We would make sure that the bands going in there would get the best opportunity they could, in terms of production, that we would enhance production in whatever facilities are in there already.

3799             It's a good circuit to be on.  It's the campus circuit.  It is usually quite a step above where they would normally be able to get access.  These bands would be seeing it as a major opportunity to build their audience directly with the student population at universities.

3800             Usually, this kind of thing would be out of their reach, because they would be bands at a higher level.

3801             COMMISSIONER CUGINI:  I saw Teenage Head at my university pub.

3802             That may date me, but it is a fact.

3803             MR. McLEAN:  Frankie Venom, RIP.  Unfortunately, he died.

3804             COMMISSIONER CUGINI:  Yes, I know.

3805             Thank you very much, gentlemen, for your participation this morning.

3806             THE CHAIRPERSON:  Thank you, Messrs. McLean, Lazar and Dart, for your presentation.

3807             We will now move to the next group of intervenors, Madam Secretary.

3808             THE SECRETARY:  Thank you.

3809             I would now call Mr. Dennis Burns, Ontario Federation of Snowmobile Clubs, and the Downchild Blues Band to appear as a panel and present their interventions.

3810             Please introduce yourself for the record.  You will have 10 minutes for your presentation.

INTERVENTION

3811             MR. TAYLOR:  Good morning, Mr. Chair, members of the Commission, and Commission staff.  My name is Earl Taylor.  I am not Dennis Burns.  I am the Executive Director of the Canadian Organization of Campus Activities.  I am here, primarily, in my volunteer role as one of the vice chairs of the Great Lakes Blues Society.

3812             My colleague, Dennis Burns, unfortunately, was unable to attend this hearing at the last minute, so he asked me to read his statement for him.  So, with your permission, I will do that.

3813             I should preface this by saying that many of the comments ‑‑ or most of the comments that Dennis makes in his statement are supported by members of the executive of the Great Lakes Blues Society, which is the blues organization in London, Ontario.

3814             I will start his letter:

"I am providing this letter to be read by one of my fellow Blues Society members in support of the above‑noted application..."

3815             ‑‑ and that is for the DAWG FM blues station in London ‑‑

"...since I am, regrettably, unable to attend due to trial commitments in London today.

By way of introduction, my name is Dennis Burns.  I am a lawyer in London, and have been for more than 28 years.  I have been certified by the Law Society of Upper Canada as a specialist in family law since May 1996.

I am also, and have been for some 40 years, an avid blues music fan and a supporter of this genre, the original music of North American popular music.

As a supporter and fan, I am, and have been for more than four years, Vice‑Chairman and Treasurer of the Great Lakes Blues Society.  The mandate of the Great Lakes Blues Society is, for want of a better expression, to keep the blues alive.

We do so by producing and promoting live events, featuring blues artists from Canada, the U.S., and abroad, and also through our 'Blues in the Schools' program, where we bring blues artists to elementary schools in London and the surrounding areas to teach students about blues music, its African roots, and its blending with other North American musical forms, which result in the variety of popular music that we enjoy today.

We do our best to bring the 'Blues in the Schools' program to elementary school students without any cost to the school boards, and never any cost to the students themselves.

All of the students and teachers are left with a greater knowledge and a joy for the blues, music which has uplifted many generations of music fans around the world for many years.

Additionally, as an integral part of our mandate, we raise money for charities, mostly local, grassroots, Canadian-registered organizations, which do not have the kind of high profile required to raise funds on a national, or even regional basis.

On occasion, we have also raised money for international charities during times of extreme need ‑‑ for example, the Tsunami Relief Fund in January 2005, and our 'Blues for Katrina' effort in October 2005, to aid the victims of Hurricane Katrina, which wreaked so much destruction, particularly in New Orleans, and especially amongst the poor.

Over the past four years, I believe we have raised, or helped to raise, well over $50,000 for those in need.  We do this through our events, and with the support of the artists who perform, and the dedicated blues fans who pay generously to attend the events, and then contribute more by participating in silent auctions, raffles and other fundraising activities.

That brings me to this application.  Although blues is undeniably the true original North American music, it suffers from a lack of exposure in the media, most noticeably on the radio.  There are very few, if any, blues stations that are available, except via satellite.

The fans are there, but there is no affordable way for them to connect to the music on a day‑to‑day basis.

I go to Chicago periodically, where you will see many young people attending blues events, whether the venue is a festival or a nightclub.  They enjoy and connect with the music just as much as the more, shall I say, mature fans do.

Blues music spans not only generations, but also many geographical and geopolitical areas.  If you go to the Blues Foundation website, you will see that there are blues societies listed from virtually every corner of the globe.

Blues musicians tour worldwide, and are very warmly received wherever they go.

Music Maker Relief Foundation is a North Carolina charitable organization of which I am proud to be a member.  It is dedicated to preserving blues music and assisting blues musicians.  One of its mottos is 'Preserving music by preserving musicians.'

It accomplishes this by giving grants of money to those who are in need.  It also gets work for these professional musicians through its own record label and through concerts in the U.S.A., France, other European countries, South America, and elsewhere in the world.

Music Maker rocks the Senate and House of Representatives at its annual Congressional Blues Festival, which is held each spring at the Kennedy Plaza in Washington, D.C.  I believe that 2009 will be its sixth annual event.

Music Maker is able to do all of this with donations from people in all walks of life.  There was one donor early in Music Maker's history, when it was a fledgling organization, who dropped off a bank draft for $100,000.

There are many who help, both rich and poor, by donating whatever they can in money or time, but they all have one thing in common, a love of blues music.

There are other organizations like Music Maker, and there are many blues societies that work in the same way, but on a smaller scale.  The point is, those who love and support blues are passionate about the music and the artists who make it.

Blues is woven into the fabric of North American society.  It crosses all boundaries and is colour blind.

While I recall reading a very good article in National Geographic a few years ago about the Blues Highway, I also recall another excellent piece in that publication about the universal language of the blues and its symbolism in different forms to all who play it.

There is not only Mississippi Delta, Hill Country, Chicago and Texas blues, each of which has its own style and tradition, there is also distinctive Canadian ‑‑ East Coast, Quebec, Ontario and Western Canada ‑‑ blues forms.  Each speaks to listeners in a different style, but it is all the blues.

A very wise bluesman named Willie Dixon once said, 'Blues will never die, not as long as people work and play and live and love.'

As has been said often, and by many, blues is truth, but people need to have a chance to be exposed to the art form readily and regularly.  Radio is a medium that can accomplish that.

Here in London we have a very rich blues tradition.  You will, no doubt, hear from colleagues of mine who have been in the blues music business going on 35 years, all due to their love of the music.  You might hear from some of our very accomplished musicians.  You might hear from those who own blues clubs.  You might hear from others like me, who simply have been and continue to be moved by the music.

Whatever you hear will be from the heart.  No one has gotten rich through blues music, in a monetary sense, but many have been immeasurably enriched by it, even those who do not necessarily know it is because, without the blues, there would be no jazz, or rock and roll, or rap, or other popular forms.

However, the genre needs help to continue to grow.  The musicians, especially local artists, need an outlet for their talents.  Fans need the exposure to the music on easily available commercial radio.  Club owners and their staff will, in turn, benefit, as will advertisers and other businesses, and ultimately our blues education program, 'Blues in the Schools', because we cannot make that work without the assistance of local businesses.

I want to thank you for your time and attention to this, and to the application for this broadcast licence.

Sincerely, Dennis Burns, Vice‑Chairman and Treasurer, Great Lakes Blues Society."

3816             Thank you very much.  I am prepared to answer any questions you might have, even though I am not named on the original application.

3817             THE CHAIRPERSON:  Thank you, Mr. Taylor.  We will hear the two other intervenors, and after that we will, surely, have questions for you.

3818             THE SECRETARY:  Thank you.

3819             The Ontario Federation of Snowmobile Clubs.  Please introduce yourself.  You will have 10 minutes to make your presentation.

INTERVENTION

3820             MR. BLAICHER:  My name is John Blaicher, and I am a staff person at the Ontario Federation of Snowmobile Clubs.

3821             I would like to thank the CRTC, first, for allowing our organization to be represented at this hearing and speak in support of Ed Torres' application for two new radio station licences.

3822             Snowmobiling is an iconic Canadian recreation activity, invented by a Canadian, and enjoyed each winter by hundreds of thousands of outdoor enthusiasts, including many Guelph and St. Thomas area residents.

3823             The Ontario Federation of Snowmobile Clubs is a non‑profit, volunteer‑driven organization.  The 235 community service clubs that form the OFSC operate the world's longest integrated recreational trail network.  Believe it or not, it is over 41,000 kilometres in length, which represents more kilometres than there are provincial highways, which many people aren't aware of.

3824             About 2,500 kilometres of these trails are located in an arc around Guelph and St. Thomas, and are easily accessible to area residents.

3825             Economic impact studies confirm that OFSC snowmobile trails generate $1 billion in economic activity annually, primarily in rural and northern Ontario, while also contributing many millions more in tax revenues to government coffers.

3826             These winter‑only trails are operated by community‑based, not‑for‑profit snowmobile clubs, and provide numerous social, recreational and health benefits to countless Ontarians in their home towns.

3827             Moreover, these snowmobile trails provide hundreds of rural communities and their residents with significant winter livelihoods, helping to sustain many families in an otherwise traditionally dormant and difficult season.

3828             The OFSC clubs operate trails directly north of the Guelph and St. Thomas area, on private land, generously donated by local landowners, and many area residents access these trails for their winter recreation.

3829             As local service clubs, snowmobile clubs benefit charity, running numerous events, including our annual Snowarama rides, which have raised over $16 million, to date, to support the Easter Seal Society of Ontario for children with physical disabilities.

3830             Local clubs are also involved in delivering safety education for young snowmobilers through the OFSC driver training program, an authorized program by the Ontario Ministry of Transportation.

3831             To date, almost 6,000 teenagers have graduated from OFSC driver training courses.

3832             Rural values are the foundation of the Ontario Federation of Snowmobile Clubs in small‑town Ontario.  We are all about generous local people, freely sharing their time, efforts, or land, for the greater well‑being of their home communities and fellow residents.

3833             Through our local service clubs and volunteers, the OFSC delivers important safety and environment programs, and we rely extensively on local contacts, especially local radio, to get our messages out, to promote our fundraising and charity events, and to help save lives.

3834             Unfortunately, our ability to reliably and consistently do this varies considerably from town to town and time to time.

3835             To date, no existing broadcasting company has stepped to our plate to help us put together a provincial radio messaging education and information campaign, through multiple station outlets, in various markets ‑‑ no one, that is, except Skywords, Frank and Ed Torres.

3836             The OFSC began to work with Ed and Frank Torres and Skywords several years ago.  Not only have they over-delivered on all their community service efforts on behalf of our clubs and volunteers, in multiple markets, they have approached us, again and again, to get our message out in new ways, and into new markets, where we have previously been unable to find willing radio partners.

3837             Skywords has proved to be an exceptional media partner, that has gone out of its way to serve our non‑profit, volunteer‑based organization in a variety of ways.  We have always been impressed by their willingness to try new ideas, to create innovative opportunities, and to work at the grassroots level.

3838             For example, the OFSC is comprised of 235 community clubs, in 17 districts, and when we asked Skywords to assist Ontarians by developing a much needed radio trail report throughout the winter, Ed and Frank Torres personally attended meetings in most OFSC districts to meet our volunteers and hear what each community needed.

3839             As a result, Skywords has served many rural and northern communities very well by promoting events, delivering safety messaging, and encouraging the snowmobile tourism on which so many of these small snowbelt towns depend each winter.

3840             The point of all of this background is that Ed and Frank Torres have proved to be willing, effective, motivated, and generous partners in assisting the OFSC and its clubs to achieve our community service mandate.

3841             More than any other broadcasting company, Skywords has demonstrated its commitment and ability to growing and improving the benefits of organized snowmobiling for communities throughout snowbelt Ontario.

3842             So when the OFSC learned of the Skywords radio application for a blues radio station in Guelph and St. Thomas, we knew that one result would be new and effective community service access to thousands of listeners who we have not previously been able to reach, either frequently or affordably, through existing radio outlets.

3843             Guelph and St. Thomas has a significant mix of urban and rural, where snowmobiling is integral to its winter recreation opportunities, yet neither local nor area residents are well served with regular news, information, and updates supporting these two regions of the province.  We are confident that this will change dramatically with a new Skywords radio station in the area.

3844             Knowing their passion for radio, their commitment to the experience, and community service, we are especially pleased to support the Skywords' application for a blues radio station in Guelph and St. Thomas.  These two new stations will provide listeners with a music choice that is presently absent from this rapidly growing market, and an opportunity to be involved with, and benefit from, a very community‑minded broadcaster.

3845             There are three tangible ways that they actually have served us over the last number of years that I would like to share with you.

3846             We talked about them helping us in supporting charitable events.  That's one.  But they have really gone to bat to assist us in developing better radio public service messages to drive our volunteer recruitment strategy, because we depend on volunteers to do most of our business, to help us reduce the incidents of snowmobile injury and death in this province, which, at times, may appear to be catastrophic ‑‑ the good news is that they don't happen, for the most part, on our trail system, they happen off our trail ‑‑ and, also, to educate Ontarians about the responsibility they have to use our trails in an environmentally responsible way.

3847             If I could, I would like to give you an example of three public service messages that Skywords has helped us produce.  They have choreographed them, helped us to script them, and actually assisted us in their production.

3848             It may seem like a small gesture, but when you are looking at limited dollars, and trying to outreach and compete amongst many other different messages being played on the air, it really does help to have experts helping you do the job.

3849             The first is a safety message, which is 30 seconds in length.

--- Audio clip / Clip audio

3850             MR. BLAICHER:  The second is a message ‑‑ because we rely on thousands of volunteers to support our business.  In fact, we have over 7,000 dedicated volunteers, representing the 235 snowmobile clubs in the province, and we estimate that the volunteer contingent supports about 265,000 family riders.

3851             Snowmobiling is big business, but we are sometimes challenged to communicate these important messages, and we want to be as environmentally responsible as we can, as stewards of this land, so this is one of the environment messages that will play across a network of stations this winter.

--- Audio clip / Clip audio

3852             MR. BLAICHER:  The last one addresses the need to recruit volunteers.

--- Audio clip / Clip audio

3853             MR. BLAICHER:  Now, we do have a budget and we do invest in radio and television and print advertising to help get our message out.

3854             One of the other things that Skywords, Frank and Ed Torres, has helped us do is to take that budget allotment and, as volunteers to their company, they have contacted each of our radio stations partners, the over 68 radio stations in the province, and have tried to lever or our investment to a higher level.

3855             Their expertise in doing radio and television buys, their connections in the industry and their first‑hand often knowledge of who owns the stations has helped us take our $180,000 annual media budget and lever it to the point that we now are documenting over a half a million in media messaging.

3856             It's just their commitment to try to help an organization who has limited resources by applying their expertise and knowledge and it's been unwavering.  There have been many examples of where we have needed help and we have gone to Ed ‑‑ I know Ed more specifically than Frank ‑‑ and it's always been there.

3857             We just launched a ‑‑

3858             ASSISTANT SECRETARY:  Excuse me, sir.  This is the Hearing Secretary.  You have one minute remaining.

3859             MR. BLAICHER:  Okay.

3860             ASSISTANT SECRETARY:  Please conclude your...

3861             MR. BLAICHER:  Okay.  Thank you.

3862             We just launched a Take a Friend Snowmobiling challenge in hoping that existing snowmobilers could recruit a friend, take them out and by exposing them to the sport maybe recruit a new customer.  So we have launched a contest.  Ed helped us gain some prizes.  He has put up, you know, a Langford canoe that will be one of the prizes.

3863             We had a snowmobile show happen in Toronto only three weeks ago and we wanted to do something for the young kids attending the show so we launched what was called The Incredible Critters Zone so kids could come in and actually learn about the animals they might see on the trail or even some that might be hibernating in the winter.  Ed again stepped to the table and Skywords sponsored that section of the show.

3864             So it's not only their commitment to help us as an organization, lever our dollars better, get better messaging out to the public, but it's also their philanthropic contribution when we have needed help that has impressed us.

3865             So it is time to reward them and to support their application and we are happy to be here to do that.

3866             THE CHAIRPERSON:  Thank you, Mr. Blaicher.

3867             ASSISTANT SECRETARY:  Thank you.

3868             Downchild Blues Band, please introduce yourself for the record and you have 10 minutes for your presentation.

INTERVENTION

3869             MR. JACKSON:  Good morning, ladies and gentlemen.

3870             My name is Chuck Jackson, I'm the singer of the Downtown Blues Band.  We have been together for over 40 years and we have won numerous awards.  We have been nominated or won five Junos, we have won 50 Canadian blues awards and have performed all over the world, Europe and Canada, United States and Central America, and I am very proud to be here to support the blues format radio station in London.

3871             I think it's a wonderful thing.  It certainly gives opportunity for a lot of bands such as ourselves, bands that have been in the business for years and years, and also newer bands starting out to promote their CDs.  It gives an opportunity to promote their performances that are coming up.

3872             I know for sure that when we come to London to have an opportunity to do some advance advertising, to do interviews with some of the DJs, to promote the show that we will be doing would be a great advantage to us and certainly to all the other groups that would be performing also.

3873             Blues music is certainly loved by a whole group of people.  I would like to tell you a story that happened to me one time after a show.  A young girl 19 years old came up to me and said, "Well, Mr. Jackson, Downchild Blues Band, you're really great.  You're a great blues band.  I didn't think I would like it.  You know, I didn't think I would like the blues, but my grandparents have all your records and they made me come."

3874             And I just thought it was quite funny that this young girl came with her grandparents, and her parents were there, so we had three generations of blues lovers that were at the Downchild Blues Band concert that day and she walked away a blues fan, like so many young audiences do, and it helps create a lot of young performers themselves.

3875             We have had the pleasure of playing with a lot of kids now that are 15, 16, 17, in their 20s, playing the blues and being very dedicated to it.

3876             I also, besides being the singer for Downchild, I am the founder and the Artistic Director of the Southside Shuffle Blues and Jazz Festival in Mississauga.  We celebrated our 10th year and this year we actually drew 75,000 people to our five‑day festival.  We had people from all over the world come to the festival.  It just goes to show how widespread the love and dedication of the blues is.

3877             One thing that we do at the festival, too, is also we try to do a show that's called The Junior Jam, it's all children under 18 that perform the blues.  We close our street and have basically a New Orleans type activity going there where people are ‑‑ there are 35 bands, mostly bands from places like Timmins, you know, Sudbury.  We bring in people from all over Ontario to play and showcase their music and sell CDs.

3878             This is great and it would be another great opportunity for festivals to promote on the radio station, which I think would be a great advantage.

3879             Basically, there is a festival going on somewhere in Canada every weekend of the year.  And we played the Blues Festival here in London, Windsor and other areas that would be certainly in the range of the radio station that would be a good advantage for us to promote blues and the festivals that are happening and the individual shows that different performers play at in bars and restaurants and things like that.

3880             So I'm very happy to be here and I just feel it's a wonderful opportunity for all the Canadian blues artists and the chance to have their music played on a 24‑hour format blues station.

3881             So I thank you very much.

3882             THE CHAIRPERSON:  Thank you, Mr. Jackson.

3883             Commissioner Simpson...?

3884             COMMISSIONER SIMPSON:  Thank you very much.

3885             Going back to the relationship that the snowmobile club ‑‑ I'm sorry, I will start with that question first.

3886             Was it you that had made the approach to ‑‑ how did that relationship get started to the point where it is as strong as it is today apparently?

3887             MR. BLAICHER:  Well, we knew that Skywords Radio was delivering important traffic reports across the GTA and on many radio stations across the province and we had the challenge to try and deliver a snowmobile trail condition report so that much of our audience ‑‑ I believe that half of our snowmobile client group lives south of Highway 7 so they don't reside in the north, they have permanent residence in the south but they travel to the north, so it is important to give them good trail condition report information.  That was our first approach.

3888             When we made that call, we found out that Ed and Frank Torres were new recruits to snowmobiling.  They had just bought machines, they were very passionate about it and their enthusiasm for the sport and our need to do a better job in our business created this partnership.  It has really been a marvel.

3889             Like I said, any time we have asked for help, they have been there to help us.

3890             COMMISSIONER SIMPSON:  Thank you.

3891             Mr. Taylor, what is it that drew you to the blues, and your circle of friends?  What do you feel is the common thread that makes you a devotee?

3892             MR. TAYLOR: Well, I  think that blues is clearly the basis of most popular music that we hear today on the radio that buys the CDs and so on.  It is, I suppose, an attraction to the roots of our popular music.

3893             I have been involved with music for many years, not only in London.  Before I'm doing what I do now, I was a nightclub owner in Montréal, I was a music promoter for McGill University, so I have been exposed to popular music for many years, and blues as part of that.  It was a love of the music I think that drew a group of us together in London to form the Great Lakes Blues Society and promote that genre specifically.

3894             COMMISSIONER SIMPSON:  You had mentioned you were in the entertainment and promotion business as a nightclub owner, and others have.  I suppose this question is directed to both yourself and Mr. Jackson.

3895             As promoters, players of blues, what kind of demographic are you seeing turned out?

3896             I was impressed with the 75,000 figure that you drew in Mississauga, but I'm curious if you could give me a cross‑section.  I'm hearing that the blues is for all ages, but I'm just wondering if that is actually what's happening in terms of the kind of fan support you get at the turnstile.

3897             MR. TAYLOR:  Well, I think that the kind of demographic ‑‑ the story that you mentioned, Chuck ‑‑ the key supporters are, I would say, over 40, but we are finding that as we promote to students in London, of both Fanshawe College and the University of Western Ontario, we are seeing more and more of the younger generation discovering that the roots basis of the music that they listen to, all the different genres, that being the blues.  So we are getting some good turnouts from the younger generation.

3898             Also, as Chuck alluded to, we are seeing a lot of very young blues musicians coming out of the woodwork.  I mean we had ‑‑ before each of our general meetings we have local artists do a spotlight set for 45 minutes, and one of those ‑‑ one of those local musicians was a fellow, I don't know, 12 or 14 years old.  I mean he was just a whiz on the guitar, still had a lot of maturing to do, but I mean that's the kind of thing that we are promoting and we are seeing some good results from that.

3899             MR. JACKSON:  I think it's really become almost the contemporary music for the boomers.  You know, the thing about the blues that's happening is we are getting original music.  All the musicians are writing new music so you are getting an opportunity to hear new music instead of hearing oldies and songs that we probably heard a million times.  I think that there is a real need out there for that.

3900             As I was saying earlier, there are so many young musicians getting involved in the blues now.

3901             So obviously I say the core audiences are boomers from 40 to 65, but there are also great ‑‑ it's the kind of music that you can bring your whole family.  You can bring your kids out and have a great time, you know.

3902             People have to realize that, like any kind of music, there is a lot of different styles of blues, there is blues, jump blues, country blues, you know, there is blues that everybody loves to dance to.  You can dance all night to the blues and you can also sit and listen to a single person play guitar and harmonica.  So there's Kansas City blues which has lots of horns and big band arrangement.  So there is a great variety.

3903             COMMISSIONER SIMPSON:  I think I'm hearing you say the blues has been around so long that it's ‑‑ or it is so old it's new again.

3904             MR. JACKSON:  Pretty much, you're right.

3905             COMMISSIONER SIMPSON:  Yes.

3906             The last question.  This is to the genre because radio is a commercial business and as such there is not only the responsibility of the station to its community, to its marketplace, but there is a responsibility in making sure that it's financially successful.

3907             Any of you can weigh in on this, but if you could give me an idea of your perception of whether or not blues is going from the edges to the middle of society's appetite for music and how a broadcaster that chooses to go this route with a programming format like this would be able to resonate with the community.

3908             Because again, as a promoter for example, there is a big difference between mainstream rock 'n roll and the blues because it's a more refined ‑‑ perhaps may be characterized as a more refined music style.

3909             So this is a commercial question, you know:  Can a station like this in your mind get to the core of a community and still be viable?

3910             I know you're not broadcasters ‑‑

3911             MR. TAYLOR:  Yes.

3912             COMMISSIONER SIMPSON:  ‑‑ but you know I'm talking appetite, taste levels and residency in a market.

3913             MR. TAYLOR:  Well, again, as was alluded to earlier, there are so many variations of the blues.  You know, there is blues‑based rock and roll, there is Southern Fried Blues, there is Mississippi Blues.

3914             Our Blues Society tends to be more of a purist.  The music that we promote tends to be more what we call pure blues, but you know in terms of mainstream radio I don't see any problem at all with satisfying a more mainstream audience and not just the blues purists.

3915             MR. JACKSON:  I think one thing that we are seeing is that all the communities across Canada, including the capital in Ottawa, the largest vessel in North America is in Ottawa, the largest blues festival.  It is a five‑day festival.  Communities, if you even look in this area with London and Kitchener and places like Guelph, they all have blues festivals.

3916             You know, we are not seeing country music festivals happening in all these areas, we are not seeing, you know, hard rock concerts outdoors in these festivals.  I can think blues is a music that I think everyone including the communities feel, and the cities behind them, that they can put their money in and they can get people coming out and enjoying it.

3917             COMMISSIONER SIMPSON:  Thank you.

3918             THE CHAIRPERSON:  Gentlemen, thank you for your presentation.

3919             This ends Phase III of the public hearing.  We will now move to ‑‑

‑‑‑ Pause

3920             THE CHAIRPERSON:  I think we are going to take a break.

‑‑‑ Laughter / Rires

‑‑‑ Upon recessing at 1020 / Suspension à 1020

‑‑‑ Upon resuming at 1040 / Reprise à 1040

3921             THE CHAIRPERSON:  Order, please.  À   l'ordre, s'il vous plaît.

3922             Madam Secretary, we are now starting Phase IV of the public hearing.

3923             ASSISTANT SECRETARY:  Mr. Chairman, for the record, before we proceed with Phase IV, I wish to inform you that the applicant Frank Torres has submitted, in response to undertaking, a revised CCD chart and a proposed alternative reallocation of CCD funds.

3924             As well, My Broadcasting Corporation has submitted, in response to undertaking as well, a breakdown of CCD commitment.

3925             Third, also for the record, Rogers Broadcasting Limited has submitted a final projection, including a breakdown web interactive cost and a revised CCD expenditure, in response to undertaking.

3926             These documents will be added to the public record and copies are available in the examination room.

3927             THE CHAIRPERSON:  Thank you.

3928             ASSISTANT SECRETARY:  Now we will proceed to Phase IV in which applicants can reply to all interventions submitted on their application.

3929             Applicants appear in reverse order, so I would now ask My Broadcasting Corporation to come forward.

‑‑‑ Pause

3930             ASSISTANT SECRETARY:  I would ask you to please reintroduce yourself for the record and then you have 10 minutes for this purpose.

REPLY / RÉPLIQUE

3931             MR. POLE:  Thank you.

3932             My name is Jon Pole.  I am the President of My Broadcasting Corporation and to my right is Andrew Dickson, the Vice President of My Broadcasting Corporation.

3933             We would just like to take this opportunity to be brief and have it on record that we would like to show our acknowledgment and our thanks to the close to 1,000 people in the city of St. Thomas who have showed their support for our application and at the same time have it on the record that we would like to thank the Chamber of Commerce in St. Thomas, as well as the City of St. Thomas for their support in our application, and as well thank the Commissioner and the staff of the Commission for their support and taking the time to hear our application.

3934             Thank you.

3935             THE CHAIRPERSON:  Thank you very much, Mr. Pole.

3936             Madam Secretary...?

3937             ASSISTANT SECRETARY:  I will now ask Frank Torres to come forward.

‑‑‑ Pause

3938             ASSISTANT SECRETARY:  I would just ask you to please reintroduce yourself for the record.

REPLY / RÉPLIQUE

3939             MR. E. TORRES:  Yes, good morning.

3940             My name is Ed Torres, I am the President of Skywords and the Chairman of CIDG‑FM.  Beside me is my brother, Frank Torres and Yves Trottier to his left.

3941             Good morning, Mr. Chair, CRTC Commissioners, CRTC staff.  I would like to thank our 670 supporters for this application that supported and the support of blues fans, musicians, venue owners and record labels that have supported us.

3942             Particularly, I would like to thank the supporting intervenors.  I would like to put that on the record.  They took time out of their busy days.

3943             You have just heard from John Blaicher from the OFSC, Earl Taylor representing Great Lakes Blues Society, and Chuck Jackson of the Downchild Blues Band.  We want that to be reflected in the record.

3944             And because there were no interventions opposing our Blues FM application, we would just like to close by a thank you to the CRTC, thank you for hearing this application; thank you to the CRTC staff for their hard work to facilitate this process.

3945             Merci.

3946             THE CHAIRPERSON:  Thank you, Mr. Torres.

3947             I know legal counsel has a question for you.

3948             MR. McINTYRE:  All right.  Thank you, Mr. Chair.

3949             I just have one question of clarification.

3950             In your application you submitted that you would commit to 25 per cent Category 3 and yesterday you said that in fact you would commit to 20 per cent as a COL.

3951             Am I understanding your commitment correctly?

3952             MR. TROTTIER:  Yes, that is correct.

3953             MR. McINTYRE:  I guess my question is:  Would you accept a Commission COL to hold you to that 25 per cent commitment?

3954             MR. TROTTIER:  Yes, we will.

3955             MR. McINTYRE:  Thank you.

3956             THE CHAIRPERSON:  Gentlemen, thank you very much.

3957             Madam Secretary...?

3958             ASSISTANT SECRETARY:  Thank you, Mr. Chairman.

3959             United Christian Broadcasters of Canada, please come forward.

‑‑‑ Pause

3960             ASSISTANT SECRETARY:  Please reintroduce yourself for the record and you have 10 minutes.

REPLY / RÉPLIQUE

3961             MR. HUNT:  Thank you.  Good morning.

3962             My name is James Hunt.  I am the COO all of UCB Canada.

3963             Mr. Chairman, Commissioners, Commission staff, there were six points raised yesterday by Sound of Faith and I will just respond to those quickly.

3964             The first point was:  Why would UCB apply for a station in London where our website, quotes ‑‑ that we would not do this if there was an existing Christian station in the market.

3965             Mr. Elliott quoted the UCB international website, not the UCB Canada one, and he quoted from the website directly and I just want to paraphrase:  to establish Christian ‑‑ the goal is to establish Christian stations where there is an open door and to birth a work in new areas and not adequately covered.

3966             When a group of local business leaders and church leaders asked UCB Canada to come into the London community, to us that constitutes a fairly open door.

3967             The second point there is, this is an area that is not currently adequately covered, which is the very premise of UCB Canada being invited, as well as Sound of Faith's application.  That's what they based their application on.

3968             So I don't see a contradiction in any of the goals on that point.

3969             Point number two, the point was raised regarding a national licence application and not rebroadcasting where there is an existing station.

3970             This has nothing to do with the application that is sitting before you at the moment.  Rebroadcasting was never mentioned in our application or during the hearings.  We have been very clear that this will be a local station for the Christian community in the community employing people from the community.

3971             Point number three, Mr. Elliott mentioned that I had met with Dr. Reid in 2007.  That's true.  Actually, it was Mr. Quinn and myself and it was on the request of Dr. Reid.

3972             The discussion centred around the perceived notion that the CRTC had shown favour regarding UCB Canada's previous applications and he was asking how this was achieved.

3973             What Mr. Elliott did not say ‑‑ and he may well not be aware of it ‑‑ was that Dr. Reid and I met on the 11th of April 2008 at Michael's Grillhouse just off County Road 59 South of Woodstock.  It was at this meeting, which I initiated and requested, that I asked Dr. Reid if Sound of Faith had responded to the call from the CRTC.  He said that they had not.  I suggested to Dr. Reid that maybe we should work together to ensure that the London and surrounding areas get a high‑powered Christian station that can serve the Christian community.  This suggestion was unacceptable to him.

3974             Working with other stations for a common cause is not new to UCB.  In a number of cases the stations we work with are not even affiliated to UCB.  Our name defines who we are, United Christian Broadcasters.

3975             However, the people of London deserve a fair representation in his hearing and that is what we committed to do.

3976             Point number four was raised, and the assumption of Sound of Faith that Mr. Butler was involved in the community leaders asking UCB to make an application on their behalf before you is totally false.

3977             We had a total of three meetings with some of the leaders involved and yet, Mr. Chair, the CRTC received roughly 350 letters of support from London intervenors ‑‑ there were more from others ‑‑ in support of this application without even approaching the church community.

3978             Point five, the second to last one, Mr. Elliott mentioned that in a brief discussion with Mr. Grieve from His Season after UBC Canada's appearing yesterday, that Mr. Grieve would have supported the application if he had known about it.

3979             I obviously can't comment on a discussion I was not part of.  Mr. Grieve was asked to advocate for Canadian Christian artists.

3980             What I do take exception to is calling Mr. Grieve's integrity into question, suggesting that he would side with the group, especially as all Christian broadcasters benefited from Mr. Greaves appearing.  He was asked to present and I'm sure you would agree with me that Mr. Grieve's perspective on Canadian Christian artists, the struggles they face and the Christian broadcasting landscape from an artist's perspective was informative and very helpful.

3981             Mr. Grieve was not coached by us and he responded with integrity and a sensitivity that brings a level of understanding regarding a fledgling industry and I believe his comments would help all Christian radio broadcasters, including Sound of Faith because of his involvement.

3982             Last, Mr. Elliott called into question the statistics we were quoting regarding the London market, saying that only 6 per cent of the Christian population is evangelical.

3983             We are not targeting only the Evangelical segment of the Christian community.  The wider London Christian community is calling to be served by a high‑powered, professionally‑run Christian radio broadcaster.

3984             We work hard and providing balance and integrity for us is important, so we would not align ourselves to only one segment of the Christian community.  Working together, as you saw in the video, is our preferred path.

3985             What we do we strive to do well and we were asked to use our expertise to place an application before you on behalf of a diverse group of London community leaders and I believe we adequately have done that.

3986             Thank you.

3987             THE CHAIRPERSON:  Thank you very much.  Thank you.

3988             We don't have any questions.

3989             MR. HUNT:  Thank you.

3990             ASSISTANT SECRETARY:  Thank you.

3991             I will now invite Blackburn Radio Inc. to come forward.

‑‑‑ Pause

REPLY / RÉPLIQUE

3992             MR. COSTLEY‑WHITE:  Thank you.

3993             Good afternoon, Mr. Chair, Members of the Commission and Commission staff.

3994             My name is Richard Costley‑White and with me in this phase are Ron Dann, the General Manager of the Blackburn stations in Sarnia; Carl Veroba ‑‑ Ron is to my left, Carl to Ron's left, our technical consultant; and Debra McLaughlin of Strategic Inc.

3995             Ron...?

3996             MR. DANN:  We understand that some of the other applicants dispute some of the research numbers that we have presented.  We are confident that the CRTC can interpret the numbers and come to an appropriate conclusion so we won't belabour that.

3997             We had intended to raise one matter in Phase II, however following the Chair's comments to Forest City yesterday we decided the comments would be more appropriate in this phase of the hearing.

3998             In response to a question from the Panel, CTV indicated there was only one frequency available for use in his hearing.  We must beg to differ as we believe there are a number of frequencies that could be used.  In contrast to CTV in response to a similar question, Rogers was clear that they believed there were other options open as well.

3999             We would like to explain why we believe there are opportunities to license more than one private commercial radio station in London and I would like to ask Carl Veroba to explain.

4000             MR. VEROBA:  Thank you, Ron.

4001             Good morning, Chair and Commissioners.

4002             First of all, it's important to note that we originally applied for 91.1 and submitted a technical brief for that frequency.  Our application to Industry Canada was subject to a valid objection from Global Television's Channel 6 service in Paris.

4003             Our consulting engineer, Jim Moltner of Technics, believes that with the careful design of a new transmitter facility and certain guarantees to Global their objection can be overcome, making the use of 91.1 a viable option in London.

4004             The proposed new service on 91.1 would not interfere with Global TV and we are confident that we can provide the necessary guarantees to satisfy them.

4005             Second, there are a number of frequencies that are available to other applicants at this hearing.  In each case only one applicant can use the frequency as it would cause some interference to other stations in the surrounding markets.

4006             Let me take you through these opportunities.

4007             Rogers could use 96.9 by accepting interference to their 96.7 in Kitchener.  This is similar to the application you will hear shortly in the Guelph portion of this hearing.  In that case Corus is applying to convert their AM station in Guelph to 95.7.  Only Corus can use this frequency as it would cause interference to their London station CFPL‑FM.

4008             CTV could use 101.9 by co‑siting and combining that signal with their existing Bob FM on a common antenna to provide a single adjacent service ‑‑ a second adjacent service to BOB FM, which broadcasts on 102.3.  These frequencies would only be available to Rogers or CTV.

4009             There is another frequency that could be used by Blackburn and no other applicant as well, although it is a bit more complicated.  It would depend on your decision regarding the Sound of Faith application to use 99.9.

4010             We are currently operating that same frequency in Sarnia and Sound of Faith has agreed to accept any interference that the Sarnia station would cause.  Our engineers tell us that the Sound of Faith facility might have a difficult time covering the market on 99.9 and it may be possible to upgrade their existing facilities to an A1 protected status on their current frequency of 105.9.

4011             However, the first concern would be get their existing facilities up to full power.  As you heard yesterday, or on Monday, they are operating at only 6 W.

4012             After their appearance on Monday, Ron Dann and I had a short discussion with David MacDonald and Dale Elliott of Sound of Faith and offered Blackburn's technical expertise to get their ailing transmitter up to full operating power.  They expressed interest in such help.

4013             If the Commission does not approve the Sound of Faith application for 99.9, Blackburn believes that we could make use of this frequency in London with interference concessions to and from our own CFGX‑FM in Sarnia.  This would require some re‑engineering in Sarnia, but we would be willing to undertake this.

4014             We have provided you with the summary of the viable FM frequency options for the London market and earlier provided enough copies to the Secretary for all applicants.

4015             MR. DANN:  Thank you, Carl.

4016             We would like to clarify one matter we discussed with Commissioner Simpson.  I'm not sure we were as clear as we needed to be in a question you asked us.

4017             The audience for our proposed format is united by a love of music.  They are light users of radio and they have an eclectic music tastes.  They can be identified by more traditional audience metrics as well.

4018             The key demographic efficiencies for the Triple‑A format are as follows:  57.3 per cent of the audience will be from the group 35 to 54.  While we would draw an 8.3 share of sellable tuning hours among all listeners 12‑plus, we draw 15.5 per cent of the sellable tuning by those 35‑54 and 12.5 per cent from those 25‑54.  The audience does skew slightly female at 55.9 per cent.

4019             Now, here to sum up once again is Richard.

4020             MR. COSTLEY‑WHITE:  Well, first of all, Carl outlined the various frequency options, but we believe we have made a good case for the use of 98.1.

4021             But if you believe that another use would be more appropriate, we believe that you could approve us in part, contingent upon us finding another frequency.

4022             If you decide to provide us with 98.1, we believe that there are options that would allow you to approve in part any other applicant.

4023             Now, I would be remiss if I did not thank a number of people.  Ron Dann and his team have devoted hundreds, if not thousands of hours to writing our application, researching the market, reaching out to people in London for input and in preparing for this hearing.  Thank you very much, Ron, and your team.

4024             Second, I want to thank the many people who took the time to write letters of support for our application.  They came from a wide cross‑section of Londoners and from people who have been served by our other stations in the area.

4025             Community organizations told you of how Blackburn Radio goes above and beyond the call of duty to reflect their communities and their concerns in their programming.

4026             Business leaders told you of the need for new radio choice in London and of our company's credibility to the London community.

4027             Musical artists and their representatives told you of the contribution that our radio stations have made to their careers and of the need for a Triple‑A station that will break the format barriers that keep them from getting the exposure that they deserve.

4028             Finally, we would like to thank you, Commissioners, and your staff for your courtesy and your helpfulness and thorough examination of our application.  It is clear to us that you have done your homework.

4029             Mr. Chair, Members of the Commission, London has been the home of Blackburn Radio since 1922, virtually the inception of the industry.  We have operated media enterprises in London since the middle of the 19th century.  Blackburn is an established brand known for journalistic excellence, community service and business integrity and London.  We would love the opportunity to bring our brand of radio home to London once again.

4030             Thank you.

4031             THE CHAIRPERSON:  Thank you very much, Mr. Costley‑White, Mr. Dann, Madam McLaughlin.  Thank you very much for your presentation.

4032             ASSISTANT SECRETARY:  Thank you.

4033             I will now invite Evanov Communications Inc.

‑‑‑ Pause

REPLY / RÉPLIQUE

4034             MR. EVANOV:  Good morning, Chair, Commissioners and Commission staff.

4035             My name is Paul Evanov, Vice President of Evanov Communications Inc.

4036             I would just like to thank you for the opportunity we have had to present a unique use contemporary radio format to serve London and to thank you for your time over last few days of the hearing.

4037             A special thanks to the Secretary and the Chair for making arrangements for our speaking intervenor, Chad, to be able to speak yesterday so he could get back to Halifax for this morning.

4038             Thank you.

4039             THE CHAIRPERSON:  That's it?

‑‑‑ Laughter / Rires

4040             MR. EVANOV:  That's it.

4041             THE CHAIRPERSON:  Thank you very much.

4042             ASSISTANT SECRETARY:  Thank you.

4043             Rogers Broadcasting Limited, please.

‑‑‑ Pause

4044             ASSISTANT SECRETARY:  Please reintroduce yourself for the record and you have 10 minutes.

REPLY / RÉPLIQUE

4045             MR. SKI:  Thank you very much.

4046             I am Paul Ski, CEO of Rogers Radio.  With me is Susan Wheeler, VP of Regulatory Affairs for Rogers.

4047             Mr. Chair, Members of the Commission and Commission staff, thank you again for the opportunity to appear before you this week to present our proposal for pod fm, a new brand of interactive radio that will respond to the tastes and media habits of London's youth market.

4048             We also sincerely want to thank the many intervenors who took the time to write letters of support for our application, and to Scott, Andy and Adam who came here today to tell you why pod fm is needed in the London market.  Their contribution and interest in this proceeding is evidence of their commitment and desire to have a radio station that appeals to youth and young adult listeners and brings diversity to the London radio market.

4049             The rise of user‑generated content and its integration with more traditional content is one of the most exciting developments to watch in today's media space.

4050             We would like to make just one comment again about frequencies.  You have heard from others and I think you heard our thoughts the other day that there are other frequencies that can be made available.  They can be somewhat difficult and they can be ‑‑ there are cost implications to that, but it can be done.

4051             We think that our application best serves an underserved market in the youth market and that's why we believe that the best use of the frequency is for our application and that's 98.1.

4052             I think the other point on that too, is because we have another radio station broadcasting in Toronto at 98.1 CHFI, we are better able to manage any interference that may take place between our station in Toronto and pod fm.

4053             We would like to thank the staff for their assistance this week.  They have been very helpful to us, and we thank you for the opportunity to reply to the interventions filed in support of our application and we wish you well in your deliberations.

4054             Thank you very much for your time.

4055             THE CHAIRPERSON:  Thank you very much, Mr. Ski.  Thank you very much.

4056             Madam Secretary...?

4057             ASSISTANT SECRETARY:  I will now invite CTV Limited.

‑‑‑ Pause

4058             ASSISTANT SECRETARY:  Please reintroduce yourself for the record.  You have 10 minutes.

REPLY / RÉPLIQUE

4059             MR. GORDON:  Thank you.

4060             For the record, my name is Chris Gordon.  I am joined by my colleagues today Jim Blundell, David Jones and Lenore Gibson.

4061             To start, we would like to take this opportunity to thank the many intervenors that took the time to write to the Commission on our behalf, including overwhelming support from individuals, community organizations, advertisers and artists.

4062             In particular we would like to thank Steve Malison of Fanshawe, as well as Jon Nolan and Bob Toft of the Don Wright Faculty of Music at UWO.  These individuals spoke to the music programs that our CCD funding will support and how their students will gain knowledge and hands‑on experience to support, train, develop and promote Canadian artists.

4063             Before we turn to the key reasons why our application for The CURVE should be approved, I would like to clarify two issues that were raised during our appearance on Monday, that is our airplay commitment toward emerging Canadian artists and the eligibility of certain CCD initiatives.

4064             First, our definition of emerging Canadian artists.

4065             While it was intended that our proposed definition be identical to the CAB's, their definition evolved after we filed our London application.  We confirm that we are prepared to commit to playing 25 per cent emerging Canadian artists using the CAB's definition.

4066             Second, our CCD initiatives.

4067             In the 2006 Commercial Radio Policy the Commission expanded its CCD policy to include a broader list of eligible initiatives.  The policy now provides that contributions should be dedicated to the initiatives that will provide high‑quality audio content for broadcast.  All CCD initiatives must be allocated to support promotion, training and development of Canadian musical and spoken word talent.

4068             The three initiatives that were discussed on Monday are our proposed funding to UWO, H.B. Beal and Fanshawe College.  Based on the Commission's criteria, these initiatives we feel are eligible for funding.

4069             With respect to the Don Wright Faculty of Music, we will provide scholarships to students enrolled in the popular music studies.

4070             In the case of H.B. Beal, we are providing funds through MusiCan for them to purchase musical instruments.

4071             Finally, with respect to Fanshawe, we will help Fanshawe's Music Industry Arts Program to upgrade their studio equipment.  However, should the Commission find that our proposed funding to Fanshawe be an ineligible CCD initiative, we are fully prepared to commit our proposed funding equitably to the other initiatives that we have identified in our application.

4072             We look forward to having the opportunity to build another successful example of local radio doing what it does best, proudly supporting the community it serves.  We know The CURVE will be an exciting addition to the London radio scene.

4073             Thank you for the opportunity to appear before you, and thank you to Commission staff who work so hard before, during and after these proceedings.

4074             Thank you.

4075             THE CHAIRPERSON:  Thank you very much, Mr. Gordon.

4076             We don't have any questions.  Thank you.

4077             MR. GORDON:  Thank you.

4078             THE CHAIRPERSON:  Madam Secretary...?

4079             ASSISTANT SECRETARY:  Forest City Radio Inc., please come forward.

‑‑‑ Pause

REPLY / RÉPLIQUE

4080             MR. KIRK:  Good morning.

4081             I am Doug Kirk, for the record.  I am Chairman and CEO of Forest City Radio and I just want to provide our reply to interventions and some concluding comments on our application for Boomer 98.1.

4082             I want to make three points.

4083             I have just been coached by Mr. Kassay to move the microphone away so I don't keep popping it.

4084             First of all, regarding research, I want to clarify a point raised by Blackburn yesterday.  I think they were clarifying the point as well.

4085             As stated in the Hendershot research, the entire 18 to 64‑year‑old respondent group Triple‑A was the most preferred format style at 31.7 per cent, but it was closely followed by pop oldies at 29.7 per cent.

4086             But when we look further in the report it's clear that pop oldies is the preferred music style for the 35 to 64‑year‑old demographic, which was the main demographic for Boomer 98.1.

4087             We have added a chart in the handout to capsulize that information.  I think it shows clearly the high acceptance of the pop oldies in particularly the 45 to 54 and 55 to 64‑year‑old demos.

4088             That clarifies the point on research.

4089             Regarding technical considerations, there has been considerable questioning of applicants who have presented subsequent to our appearance on Monday and statements have been made about frequencies in London.  We want to provide some additional comments to the Commission on the technical capacity of the market.

4090             There are basically two aspects to the question.

4091             First is the official position, and that's what you need to do with Industry Canada to receive a technical approval of your technical brief that you filed.

4092             Second, a second aspect is the possibilities for the development of additional frequencies in London.

4093             In dealing with the first point, all the commercial applicants have gravitated towards 98.1 from either a downtown or the Television Ontario Tower site.  Industry Canada has approved those technical proposals.

4094             London has what the Industry Canada people and the technical consultants call a Channel 6 problem.  Channel 6, because of its proximity to the FM band ‑‑ it lives right below the FM band from 82 to 86 MHz ‑‑ it precludes the use of FM frequencies below 92 MHz unless you have the approval of the Channel 6 operator in the market.

4095             In this case Global operates Channel 6 from Paris, Ontario and serves this market with that frequency.  So their initial position on the technical aspects for using other frequencies below 92 was no.  That's why several applicants have had to amend and end up on 98.1.

4096             However, Global has recently been cooperative in similar situations.  For example, in Guelph Global has indicated acceptance.  You will hear more about this in the Guelph discussions which follow.  They have been agreeable to use a frequency below 92 in Erin, Ontario to allow spectrum utilization and solve an issue of frequencies in the Guelph market.

4097             Global has also allowed the CBC to use a sub‑92 frequency, 88.1 as a matter of fact, to serve the CBC's new facility in Vancouver.  They have a Channel 6 station in Victoria that has precedence in Vancouver.

4098             So there are two examples where Global has been amenable to working with FM broadcasters.

4099             We have spoken to our technical consultant for Global and understand that Global TV is open to discussions.  They haven't made any commitments, but they are open to discussions relating to the use of FM frequencies below 92 MHz in London, as long as utilization of those frequencies does not impair the coverage of Global TV Channel 6 in the London market.

4100             Successful negotiation of these agreements could result in the creation of at least three usable channels that we know of below 92.  The best one is the 91.1 MHz frequency that was originally applied for by some of the applicants, and there are two other channels that we know of in the 89 MHz area.

4101             In addition, there are a couple of frequencies ‑‑ possibly 94.1 and 107.9 ‑‑ which might be used in London.  Our technical consultant advises that these frequencies are limited in coverage, but with finessing their patterns, antenna systems or antenna transmitter placements, they could possibly provide usable coverage.

4102             I would cite Mr. Veroba's comments just recently regarding some usable adjacent frequencies.

4103             This is all to say ‑‑ and the conclusion I want to leave you with ‑‑ that though there is only one official frequency that has been approved in the technical briefs you have seen for the commercial applications this week, there are several reasonably probable possibilities which could be used to develop new FM channels in the London area.

4104             My third point regards the definition of an independent operator.

4105             Forest City wishes to comment on what defines an independent operator.  We have heard several applicants in Phase I refer to themselves as independent operators.

4106             In our view, the addition of a new, independent operator contributes to the Commission's goals of promoting diversity of ownership and diversity of editorial voices in the market.

4107             How do you get there?  Who is independent?

4108             To be independent, we think, you have to be an operator which has no broadcasting or media activities existing in the market.  This would include radio, television, community television stations, market‑originated publications, or other media.

4109             To us, independent means no other broadcast or related media interests in the market.

4110             In closing, Forest City wishes to thank the scores of supporting intervenors from the London community who have understood and endorsed our vision to provide a new, independent, viable radio service for London.

4111             We particularly wish to thank and acknowledge Jim Scott and David Firth from the Kiwanis Festival of London, who appeared here yesterday before you, and Rob Gloor from Orchestra London for showing excellent and unwavering support for our application.

4112             We look forward to your deliberations, and feel very confident that we can put Boomer 98.1 on the air in London successfully.

4113             I want to thank you personally, Chairman Arpin, Commissioners, and Commission staff, for hearing us out and attending to our application.  Thank you very much.

4114             THE CHAIRPERSON:  Thank you very much, Mr. Kirk.

4115             Madam Secretary.

4116             THE SECRETARY:  Finally, I would invite Sound of Faith Broadcasting to come forward.

4117             I would ask you, please, to reintroduce yourself for the record.  You will have 10 minutes.

REPLY / RÉPLIQUE

4118             MR. MacDONALD:  Good morning, Mr. Chair and members of the Commission.  It is a pleasure to be here before you again.

4119             I am Dave MacDonald, and I am the Coordinator of Applications for Sound of Faith, and also the General Manager of our station in Kitchener.

4120             To my right is Dr. Robert Reid, Chair of our Board.

4121             To my left is Dale Elliott, General Manager of our existing station in London, Grace FM.

4122             If I could, I would like to address a couple of points that have been brought up in this part of the discussion.

4123             First of all, the Blackburn people, Ron Dann, indicated that he had approached us with this plan so that we could remain on 105.9.  While we are very grateful to Mr. Dann and his associates for their offer of assistance, we would still prefer that we would get 99.9, since it would give us wider coverage than trying to expand on 105.9 would, partly due to the fact that we have a protected station in Alymer for which we would have to be putting up directional antennas and that sort of thing.

4124             So, while we appreciate their offer, we certainly would still prefer to see our application approved as it stands.

4125             I would also like, very briefly, to respond to an accusation that Mr. Hunt made that I was questioning Mr. Grieve's integrity by saying that he would have appeared for us.

4126             I have known Mr. Grieve since he was a teenager, appearing as part of the Southern Gospel Quartet.  I have introduced him at many different concerts.  He is a good friend, a close friend, and is a very strong supporter of what we do at Sound of Faith.  I, in no way, intended to question his integrity.  I agree that he, indeed, did present an excellent presentation, and it certainly would have been beneficial to any Christian broadcaster to hear what he had to say.  My comment about him appearing for us only came out because, when I walked in the room and he saw me, he was surprised to see me here and wanted to know why I was here.  When I told him that we had an application, he said, "Oh, I wish I had known about that."

4127             That is where that came from.  I wasn't trying to indicate that he shouldn't be with United Christian Broadcasters, but simply that he would also be very much in support of what we have been doing, and are trying to do in all three of our communities.

4128             I have also been asked to read into the record our commitment regarding balanced programming in London.

4129             We would like to officially commit that we would do six hours of balanced programming per week.  We already do, I think, almost that much.  We have our Jewish program on the air.  We have a man‑in‑the‑street interview program that brings to all people in the community the opportunity to comment on various issues.  We have programs on health and wellness.  We already have several faith groups represented, church groups, of many different denominations, including Baptist and Pentecostal, which are about as opposite as you can get in their outlook.  We are always looking for ways to bring new people on the air.

4130             So we would definitely be prepared at this time to commit to a 6-hour per week balance in our programming.

4131             I would like to turn the microphone over now to Dale Elliott, who did some research ‑‑ and I was in the room with him while he was doing part of it ‑‑ on the interventions that came in through the internet and through other means.  He made some interesting discoveries.

4132             Dale, if you would like to take it over...

4133             MR. ELLIOTT:  Thank you, Dave.

4134             Mr. Chairman and members of the Commission, Sound Faith Broadcasting would like to briefly talk about some of the interesting discoveries that we made while going through the interventions that were filed with regard to UCB's application, as well as our own.

4135             First, we went through all of the support letters that UCB received, and we discovered that a large number of them came from the Belleville and Chatham areas.  We are puzzled as to why these people would support an application for London, since they would not be able to receive the signal.

4136             There were also a large number of form letters in the UCB file, and since there is no address on them it is not possible to determine where they came from, but one line in the letter made us wonder who they were aimed at.  It states:

"Currently I can only receive American Christian stations, and have heard of Christian artists who have been leaving Canada to work in America, because not many stations in Canada will play their music."  (As read)

4137             Surely no one in the London area who is aware of the existence of Grace FM would sign something like this.

4138             In addition, we know of no American Christian station that is available in London.

4139             So we think that the people who signed this letter had no knowledge of the London market at all.

4140             We also did some calculating, and results came forth that were very interesting, as well, to say the least.  There were 92 letters in support of the application that we had made, and, as far as we could gather, approximately 200 on file supporting UCB's application.

4141             In looking at each one individually, we found that roughly half of these were from out of town, as we referred to earlier.  That would leave about 100 letters from this market area, and, of those, only 35 to 40 of them were the misleading form letters, leaving roughly 65 local letters that we thought actually were supporting the application by UCB.

4142             However, as we read through them, we were surprised to find that a number of them, roughly 25 or so, talked about the difficulty in receiving the station and were asking the CRTC to give it more power; therefore, not referring to UCB at all.

4143             "How could this happen?" is our question.  We think that when people went to the CRTC website to intervene on our behalf, they were somewhat confused and saw "United Christian Broadcasters", and clicked on that, thinking that it was us, in fact.

4144             We estimate that UCB support letters are actually around the 40 number, as opposed to 200, or 350, as was referred to earlier, compared to the 92 for Sound of Faith.

4145             If you move those 25 letters that actually refer to us in their intervention from their file to ours, we would end up with about 117 support letters, which is nearly three times the amount that they actually were receiving.

4146             I would note, as well, that we appreciate Mr. James Hunt's supportive letter on our behalf.

4147             Just as a side note, I wonder if we could add all of their supportive letters to ours.

4148             We admit that this is not a scientific survey, but we did have fun looking at all the letters, and it appears that we have strong support from the support base of London.  We know that from our day‑to‑day operations with many of the ministries and churches in the London area.

4149             In closing, I would like to thank the CRTC staff for their help over the past few days.  They have been very helpful.  This is the first time that I have appeared at a CRTC hearing, and the staff made it a very positive experience for me, as well as my colleagues.

4150             I would like to thank the Commissioners, as well.  They were always ready to answer our questions, and they made sure that we understood the rules.

4151             Thank you, also, to you, Chairman, for giving us this opportunity.

4152             We would like to thank, also, each person who intervened on our behalf, as well as those who appeared here for us.

4153             THE CHAIRPERSON:  Thank you.

4154             Would you like to add something?

4155             DR. REID:  I just want to say thank you.  I found the Commissioners and their support staff extremely helpful.  I am very impressed.  Thank you.

4156             THE CHAIRPERSON:  Thank you very much.

4157             Staff made me aware of the mix‑up in the files, and I know that they are reviewing all of the letters that were received for Sound of Faith, as well as for UCB.  We will, surely, come up with the right files at some point in time.

4158             MR. ELLIOTT:  May I just say that we realize it is not completely based on the competition ‑‑ who receives more letters ‑‑ but we did think it was worthy to note that there was a discrepancy.

4159             THE CHAIRPERSON:  No, and I think it was very appropriate to draw our attention to it, and our staff is already taking the time to re‑work the filing.

4160             Commissioner Menzies would like to ask you a question.

4161             COMMISSIONER MENZIES:  I have a question about the offer from Blackburn.  I didn't get a chance to ask them.

4162             Is it your understanding that their offer stands dependent on the outcome of this hearing, or independent of the outcome of this hearing?

4163             It is their offer, but I didn't have a chance to ask them, so I wanted to ask you what was your understanding.

4164             MR. MacDONALD:  My understanding was, I think, that it would be dependent ‑‑

4165             Of course, if we were approved, that would change the landscape and they wouldn't really need to make the offer.

4166             I think it was dependent on the outcome of this hearing.

4167             If we were to be turned down, they would be able to do this for us.  That was my understanding, but it really wasn't put down in terms that were that clear.

4168             I think the intent was that they would like to be able to perhaps expand their Sarnia operation in the future, and if we were to get 99.9, that might restrict their possible expansion plans.

4169             I think that's where they are coming from, but I don't know that for sure, they didn't say that.

4170             From our point of view, 99.9 is a much better frequency than expanding on 105.9 would be, because, as we have already pointed out, we have problems from Detroit already, and from the Alymer station.

4171             So, while we appreciate the offer, I think that 99.9 is still a better solution.  However, I was very interested to hear what Mr. Kirk had to say about the frequencies down lower on the band that Global may be willing to work with.  If there are, indeed, two or three frequencies down there, we would be very interested in that, too, should that become available in the future.

4172             COMMISSIONER MENZIES:  The longer a hearing goes on, the more frequencies become available.

--- Laughter / Rires

4173             MR. MacDONALD:  That's true.

4174             COMMISSIONER MENZIES:  I would just like to point out, too, that we do not think it was divine intervention that caused the fire alarm that gave us more time to gather our thoughts.

--- Laughter / Rires

4175             COMMISSIONER MENZIES:  Thank you.

4176             THE CHAIRPERSON:  Gentlemen, thank you very much.

4177             This completes Phase IV of the London Public Hearing.  We will take a five-minute recess and start with the first application for the Guelph market.

--- Upon recessing at 1130 / Suspension à 1130

--- Upon resuming at 1135 / Reprise à 1135

4178             THE CHAIRPERSON:  Order, please.  We will begin now Phase I of the Guelph portion of this Public Hearing.

4179             Madam Secretary.

4180             THE SECRETARY:  Thank you, Mr. Chairman.

4181             For planning purposes, we would like to inform you that the Commission intends to hear, at least, Phases III and IV tomorrow.

4182             We will now proceed with Item 10, which is an application by Frank Torres, on behalf of a corporation to be incorporated, for a licence to operate an English‑language FM commercial radio programming undertaking in Guelph.

4183             The new station would operate on Frequency 101.5, Channel 268A, with an average effective radiated power of 326 watts, maximum effective radiated power of 1,550 watts, with an effective height of antenna above average terrain of 48.8 metres.

4184             Appearing for the Applicant is Ed Torres.

4185             Please introduce your colleagues.  You will then have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

4186             MR. E. TORRES:  Thank you, and good morning.

4187             Mr. Chair, members of the Commission, and Commission staff, my name is Ed Torres.  I am the President and Co‑Founder of Skywords Radio, and Chairman of CIDG‑FM.

4188             Thank you for hearing our application for a new blues format FM radio licence.

4189             Seated to my right is my brother Frank Torres.  Frank is the Chief Operations Officer at Skywords.

4190             Together, we founded Skywords in 1991, and today it is a national radio company, with offices in several Canadian major markets, including Ottawa, Halifax, Edmonton, and our head office in Markham.

4191             To my left is Robyn Metcalfe.  Robyn is the Vice-President of Programming at Skywords.  She worked in the Guelph market for Corus stations CJOY and CIMJ in the early 2000's.

4192             Robyn is also part owner in this application.

4193             On Frank's right is London resident Greg Simpson.  Greg has extensive radio experience in southwestern Ontario.  He served as Music Director for CJOE, and for 14 years was Music Director at CFPL.  During this time he was twice named Music Director of the Year by the Canadian Music Industry Awards.

4194             If our station is licensed, Greg will serve as Operations Manager of DAWG FM Guelph.

4195             Greg is also the Chairman of the Great Lakes Blues Society.

4196             In the second row, seated directly behind me, is Ron Ford.  Ron is a chartered accountant and the Chief Financial Officer for Skywords.

4197             To the left of Ron is Aubrey Clarke, Director of Business Development at Skywords, and former National Sales Manager.

4198             In the second row, to your far left, is Yves Trottier.  Yves is the former Operations Director at Couleur fm in Gatineau, and has held various PD positions prior to joining Skywords as the General Manager of Quebec Operations.

4199             Finally, beside Yves is Tod Bernard, the General Manager of Eastern Canada Operations for Skywords, and part owner in this application.

4200             MS METCALFE:  On August 26th, the Commission granted this group its first broadcast licence.  Radio Station CIDG-FM will broadcast from the nation's capital, and will be the first all-blues format commercial radio station in North America.

4201             The next stop in our plan to roll out the blues across Canada is here in Guelph.

4202             Our presentation today will illustrate that Guelph can sustain an additional entrant into the market.  We will increase plurality and provide the only independent news voice in Guelph, a counterpoint to the only voice in the market, that of Corus.

4203             We provide a missing, highly desired, extensively researched radio option to listeners in the region.  Our format will help break and launch new Canadian blues artists through commercial airplay of their music on FM airwaves.

4204             We have received over 1,700 letters of support for our blues radio station applications.  There are over 567 supporters for this application alone, including Chuck Jackson, Don Walsh, Downchild Blues Band, Grand River Blues Society, Great Lakes Blues Society, Liz Sandals, MPP Guelph, Karen Farbridge, Mayor of Guelph, and Peter Cartwright, City of Guelph Economic Development, whose letter I quote:

"Guelph City Council has identified, as one of its priorities, the redevelopment of our downtown.  This program is being led through my department, and one of the main action items relates to the creation of supporting cultural opportunities.  It is my opinion that Skyword's proposal would very much complement our objectives."

4205             We have commissioned extensive formal research by Sensus Research, an independent, third party research firm, into the viability of our proposed format in 10 markets across Canada, including Guelph.

4206             To supplement our formal research, we created an online survey at "bluesincanada.com", a website that we own, that has generated hundreds of responses.

4207             Overwhelmingly, we found in our research that blues is the first music choice for 30 to 60 percent of people, and it is almost universally accepted as a second choice.

4208             Guelph has a vibrant blues scene, championed by the Great Lakes and Grand River Blues societies, and is exhibited at the many area blues fests, which attract thousands of festival‑goers to the region every year.

4209             Guelph, also, is a highly desirable market for national advertisers.  The market constantly shows up on RFPs from major agencies.  However, with only two options for these advertisers in the market, agencies and local advertisers are forced to purchase out‑of‑market stations to reach this population.

4210             MR. BERNARD:  The City of Guelph ranked eighth in rate of population growth of major Canadian urban centres in the 2006 census.  Guelph's proximity to the Greater Toronto Area, its strong manufacturing employment base, and employment diversification, along with its strong population growth, show that Guelph is indeed an economically viable southern Ontario market.

4211             Recent findings from the Pembina Institute confirmed Guelph's economic viability in its August 2007 report, titled "The Ontario Community Sustainability Report."  Guelph ranked fifth for sustainability in communities across Ontario.

4212             The report looked at 33 indicators of sustainability, across three categories, including "Smart Growth", "Livability" and "Economic Vitality".

4213             Guelph's strong performance in this study shows that the Guelph region boasts a strong and vibrant economy that is diversified over many sectors.

4214             Recent expansions in Guelph's manufacturing sector are also indicators of Guelph's sustainability and ability to compete in these challenging times.

4215             In March of `07, Denso Manufacturing Canada announced a $64 million U.S. expansion project.  Denso is Toyota's leading parts supplier, but also manufactures parts for other major car makers, including Honda, Fiat, General Motors and Ford.

4216             This expansion project will see the addition of 300 new employees by 2010, and increase the size of the company's facilities by nearly 300 percent.

4217             Similarly, Canadian automobile parts manufacturer Linamar announced in May of `06 a five‑year expansion project, with a value of $1.1 billion, in conjunction with the provincial government, through its Ontario Automotive Investment Strategy Fund.

4218             Linamar, which produces auto parts for the North American and European markets, is expecting the creation of an additional 3,000 jobs with this expansion.

4219             Despite Guelph's high percentage of workforce in the manufacturing sector, the region shows diversification into other work areas, as well ‑‑ 5.7 percent of Guelph's workforce lies in the classification of "Professional, Scientific and Technical Services", 9.8 percent in the retail trade, 8.7 percent in health care and social assistance, and 11.3 percent in educational services.

4220             Clearly, the Guelph region shows diversification of workforce, along with sustained strength in its major employment sector of manufacturing.

4221             These contributing factors add to Guelph's overall economic viability, and are confirmed in the area's Top 5 ranking in the recent sustainability report for communities across Ontario.

4222             MR. FORD:  In light of the fact that the Skywords group has made multiple radio licence applications as part of our national radio network vision and strategy, we would like to outline our financial strength and capacity.

4223             In preparation of our business plan to embark on this national radio network strategy, and prior to making these applications, we reached an agreement with Mr. Joe Dwek and his company to finance the building and start‑up operations of a number of radio stations.

4224             Mr. Dwek, a chartered accountant, whose CA firm performs the annual year end review of Skywords Traffic, is extremely confident of the business acumen of the Skywords group, as shown by his acceptance of the financing arrangement.

4225             Upon the granting of the Ottawa‑Gatineau licence, we began discussions with our corporate commercial bankers to explore the optimal use of our internal resources to fund the new radio station.

4226             Final negotiations are pending, which would enable us to finance the Ottawa‑Gatineau operations without needing to access the third party funds provided by Mr. Dwek and his company.

4227             This further demonstrates our financial strength.

4228             MR. SIMPSON:  I moved to southwestern Ontario 40 years ago this past summer to further my chosen career in broadcasting and music, and, after all that time, consider the area from Toronto to Windsor my stomping grounds.

4229             One of the first things I discovered upon arriving was the diversity of music available not only in my chosen city of London, but all through the region.  In relatively short order, I expanded my pop and rock base to include bluegrass, folk, jazz, classical and, of course, the blues.

4230             Another thing I noticed is that the City of Guelph, which I knew initially as the home of two institutions that friends attended ‑‑ only one was a university ‑‑ was way ahead of the curve in its support of music outside the mainstream.

4231             Over the years I found myself in that city often to attend festivals of various kinds, and continue to make the journey up the 401 even today.  Such longstanding gatherings as The Hillside Festival and other events have always made the trip worthwhile, and during that time I had the pleasure of getting to know many of the city's residents, music lovers all.

4232             It seems that the music loved the most by those who live in and around Guelph is music that represents the roots of all popular music.  The blues, among the root forms, is the most popular of all, and yet mainstream radio continues to offer slight variations on the same two or three tried‑and‑true formats, all representing pop and firmly established rock.

4233             I don't doubt for an instant that their research tells the operators of those radio stations that they are doing the right thing to achieve maximum numbers, and, therefore, high sales figures, but I have always felt that when research is being done, perhaps they have been asking the wrong questions.

4234             It is not a coincidence that the CBC continues to experience extremely high numbers of listeners in the most cosmopolitan of all our cities, Toronto.  People are looking for an alternative to cookie‑cutter radio, and DAWG FM represents the best opportunity for an alternative that one could imagine.

4235             The blues is not niche music, it is the basis of all forms, save a few, currently offered by both pop and rock radio, and holds a pretty strong kinship with country music, as well.

4236             Everybody relates to the blues, and a community like Guelph, with its long history of accepting and seeking that which is not the same as everywhere else, would welcome and support the option of having something to listen to that speaks directly to them.

4237             Having spent my entire adult life in the music and broadcasting industries, I have found that blues fans cross the demographic spectrum.  Young, middle-aged and older music fans are represented at virtually every blues show that I have been involved with over the past 40 years.

4238             The same can be said for life circumstances, with audiences ranging from casual labourers to doctors and lawyers and politicians.

4239             At a typical show in London, where I reside, these diverse age groups and economic strangers share not just the room, but often the same tables, all in the name of the music they have come to see.

4240             The same is true of Guelph, which shares many of the same attributes of London, both in diversity of population and economic balance demographically.

4241             When music can bring people together the way the blues can ‑‑ and let there be no doubt that it does ‑‑ it represents a choice that doesn't immediately stamp the fan as being a hick, a square, a snob, or any other appellation applied to fans of other forms of music.

4242             In general, blues lovers are seen as music lovers, and the opportunity for them to have a station of their own should be recognized and supported here as a nod to diversity on the air, and a way to not exclude the most devoted fans of any kind of music.

4243             MS METCALFE:  Having lived in Guelph, I know firsthand how important the community and locality is to the residents of Guelph.  Working at the radio station in Guelph gave me an opportunity to partner with organizations like the Alzheimer's Society of Guelph and the United Way.  The people of Guelph really like to give back to their own.

4244             Having that knowledge of community and the city itself, I feel that DAWG FM will encompass everything that is important to Guelph residents.  Local news, sports and traffic will be a top priority.

4245             DAWG FM will give back by helping out the Guelph-Wellington Food Bank with food drives, and helping drive business back downtown, with our street‑level studios.

4246             When I worked for the Downtown Board of Guelph, the main action item on our agenda was to get the people of Guelph back downtown and away from the big box stores, to enhance the downtown experience.

4247             These are all things that are important to the City of Guelph and its residents, and I know what they are looking for in a radio station, as well.

4248             DAWG FM will be a positive and enjoyable workplace.  Passion for radio and a team mentality are central to building a community connection, and we will partner with the community to create a radio station that is locally focused.

4249             We like to say that we aren't the big "DAWG" on the block, but we have attitude.  Our radio station will have a brand, and it will have a feel.  The feel is the blues.

4250             We have done some advance work on our brand.  We would like to give you a glimpse into some of the image work we have done for our Ottawa station.  We like to call them "DAWG" tags.

--- Video presentation / Présentation video

4251             MS METCALFE:  I am proud to highlight the fact that our station will be a good corporate citizen, engaged and connected with our community, and environmentally responsible.  Yes, the blues are green.

4252             We take pride in proposing that DAWG FM will be carbon neutral, like our other station.

4253             DAWG FM promotions will be different.  Instead of a week in Mexico on a beach, listeners will win a blues tour of Chicago, Memphis, or New Orleans.

4254             Ratings promotions will see listeners whisked away on a cruise; not just any cruise, it will be a blues cruise ‑‑ bands on every level of the ship, playing into the late hours.

4255             MR. TROTTIER:  DAWG FM is not a specialty radio station, it is a Category 2 that will have success with audience and shares, a blues station with a popular and commercial sound.

4256             DAWG FM will not only attract blues fans, it will also have mainstream appeal, without infringing upon other formats.

4257             Blues music has had a massive influence on a number of genres, and Guelph will be pleasantly surprised at how much music they will recognize at 101.5 on the FM dial.

4258             DAWG FM will play 70 percent Cat 2 songs from the rhythm and blues and blues rock categories.  In Cat 2 we will play blues rock songs from blues artists, like "Flip, Flop and Fly" by the Downchild Blues Band, Colin James' "Into the Mystic", and "Look at Little Sister" by Stevie Ray Vaughan.

4259             We will play pop rock songs with a bluesy rhythm, like "Ain't No Sunshine" from Bill Withers, "Come Running" from Van Morrison, or "You Can Leave Your Hat On" by Joe Cocker.

4260             We will complete the lineup with popular pop/rock songs like "Suzie Q" from CCR, "American Woman" by the Guess Who, and "Fly Like an Eagle" by the Steve Miller Band.

4261             DAWG FM will play, as a Condition of Licence, a minimum of 20 percent of selections from Category 3 blues music, including classics like "Hootchie Kootchie Man", "Let the Good Times Roll", or "Mustang Sally".

4262             Our goal is to play 29 percent of blues music, the maximum that we can.

4263             For the benefit of emerging Canadian artists like JW‑Jones, Amos Garrett and Garrett Mason, 40 percent of all selections will be Canadian content.

4264             MR. F. TORRES:  Market research into the Guelph market was compiled by Sensus Research, and focused on providing an objective and unbiased assessment of this prospected format.

4265             The research points to a number of indicators to suggest that the DAWG format would be warmly received in the Guelph market.  Four in ten Guelph residents would consider listening to a new blues-oriented radio station.  Forty‑one percent of people surveyed answered that they would be likely to listen.

4266             Among this number were 13 percent who stated that they would be very likely to listen to such a station.

4267             Of the people who would be likely to tune to a blues-oriented station, nearly five in ten answered that, in doing so, they would likely increase the total amount of time spent listening to radio, including 19 percent who would be very likely to do so.

4268             This suggests that overall listenership would be augmented, rather than cannibalized from existing stations.

4269             Almost half of the sample was unable to recall any local stations that played a fairly recognizable list of blues artists.  Of those who could, 34 percent could identify just one.  Yet many could name two or more stations that played country, rock and Top 40.

4270             The research further confirms that a key demographic for this station is between the ages of 35 to 54, with secondary demos being 55 to 64 and 18 to 24.

4271             News and information is important to blues listeners.  Forty-six percent responded to the importance of news and information programming on the station.

4272             MR. CLARKE:  Our Canadian Content Development has been carefully designed to provide funding and promotion to Canadian national talent and to nurture the future of musical development in Guelph.

4273             Some of these initiatives include:  FACTOR will receive $15,000 annually, which will go to fund blues genre artists.  This is a substantial investment in musicians that will promote and help launch the careers and the music of emerging Canadian artists.

4274             Canadian Music Week will receive $15,000 annually to start a blues concert series and fund Guelph area blues musicians to attend music industry conferences.

4275             The Grand River Blues Society would receive $7,000 annually to continue their work of promoting and fostering the blues in the Grand River region.

4276             The University of Guelph School of Fine Arts and Music would receive $10,000 per year to support their music programs.

4277             MR. E. TORRES:  We initiated this call because we know this market.  We know that it is served by a single operator.  We have the experience of having worked in the market and for the market.

4278             We have seen advertising dollars, destined for Guelph, instead go to stations in Toronto, Brantford, Kitchener and other markets.  It is time to repatriate those dollars and those listeners who also tune out of market.

4279             The approval of this application will help add competitive balance to the Canadian broadcast system.  While all of the applicants are from mainstream formats at this hearing, our application is the only one that comes from a standalone, single, FM operator.  All of the other applicants have multiple stations, where they can realize economies of scale and synergies from similar operations.

4280             The approval of this application will allow DAWG FM that same economy of scale.  The approval of this application will accrue substantial benefits to the public and the 41 percent of Guelph residents who want to hear this music.

4281             We always like to say that we are the public's best friend, as you know.

4282             We will provide a format that is not currently available on conventional over-the-air radio.  It will repatriate listeners that tune to out‑of‑market stations, or listen to satellite or internet feeds for their desired blues program.

4283             It will benefit the Canadian blues industry, artists, promoters, venues and the like.

4284             Blues have arrived.  Marginalized and restricted by mainstream media, the internet and satellite radio have brought it back to the forefront.  The CRTC recognized this in August of 2008, granting the world's first commercial blues format at CIDG.  This licence allowed us to be first to market with this format.  It is our hope that you will license a second DAWG FM to maximize the efficiencies that other multiple licence holders benefit from, and to keep CIDG‑FM company.

4285             We will leave you with a metaphor, not a "DAWG" one, a hockey one, as we enter another season of hockey.

4286             Skywords is the backstop of our team, the solid, dependable, veteran goalie that we can rely on.  CIDG, our high-scoring centreman, will provide the offence.  We need, then, a couple of wingers and some "D" to play in this league.

4287             Thank you.  We will now take questions.

4288             THE CHAIRPERSON:  Thank you very much.

4289             I would ask Commissioner Menzies to ask the first round of questions.

4290             COMMISSIONER MENZIES:  Good morning, and thank you.

4291             Parts of this will seem a little bit like "Groundhog Day", but I am going to try to move through those questions and get into some other areas.

4292             How much of your local news programming will be local?

4293             MS METCALFE:  We will have 60 percent local, 20 percent regional/national, and 20 percent international.

4294             COMMISSIONER MENZIES:  Thank you.

4295             In your listing of expenses, it is not clear that the over and above is included in the CCD.

4296             Can you clarify that for us?

4297             MR. E. TORRES:  I believe that the CCD chart ‑‑ and I will flip to it.

4298             The total is the $50,000 annually, for a seven-year total of $350,000.

4299             The basic CCD is outlined in a schedule.  The basic CCD remains at $1,000 until Year 7.

4300             The over and above CCD, in that case, is $49,000 through to Year 6, and in Year 7 the over and above is slightly lower, at $48,015.

4301             The total CCD commitment is $50,000 a year.

4302             COMMISSIONER MENZIES:  So that is all included in your listing of expenses.  Thank you.

4303             In the 13.8 hours of spoken word, does that include or exclude your plans for snowmobile reports and farm and agribusiness reports?

4304             MR. E. TORRES:  I believe that we refined the spoken word chart.

4305             Yves...?

4306             MR. TROTTIER:  We don't have the snowmobile reports on that.

4307             It's everything.  It's news, sports, weather, station promos ‑‑ some station promos could be included ‑‑ traffic, "DAWG Days", "Community Cruiser", entertainment, and the business report.

4308             COMMISSIONER MENZIES:  Okay.  So the snowmobile report would be in addition to that?

4309             MR. TROTTIER:  Yes.

4310             MR. E. TORRES:  The snowmobile report will be a seasonal report.  It will only happen in the winter, and this is really annual.

4311             COMMISSIONER MENZIES:  It could last for a few weeks or a few months.

4312             MR. E. TORRES:  Correct.

4313             COMMISSIONER MENZIES:  Thanks.

4314             The DAWG Music Camp, can you give us a bit more information on that, so that we know how it fits the eligibility requirements?

4315             MR. E. TORRES:  Sure.  The DAWG Music Camp is an initiative that we have started.

4316             We partner with the Grand River Blues Society, in this case.  Through the Grand River Blues Society, we find students that are eligible.  Again, they administer the program.  These would be students who are interested in music, and blues music.

4317             So it's a blues education program, and what we do is, we fund the artists that teach, and the instruments that are required, but it is set up and administered through the Grand River Blues Society.

4318             COMMISSIONER MENZIES:  So it is all third party, and they create the budget for it.

4319             MR. E. TORRES:  Yes, and there are two parts to the CCD that involve the Grand River Blues Society.  The first part is a commitment of dollars to the Grand River Blues Society, which will mainly be used for them to promote and produce local music series that are blues genre specific.

4320             The DAWG FM Music Camp is administered by Grand River, but the money will flow directly to the artists, and directly to purchase equipment ‑‑ musical instruments.

4321             COMMISSIONER MENZIES:  Is that separate from or included in your other contributions to the Grand River Blues Society?

4322             MR. E. TORRES:  It's separate.

4323             COMMISSIONER MENZIES:  Just segue through that and do the same thing with the Grand River Blues Society.

4324             MR. E. TORRES:  Again, there are two components to the CCD.  The first is that the cheques would be made out to the Grand River Blues Society, and that is the CCD commitment of $7,000 annually.  That is for them to produce shows, to bring artists to live‑music venues.

4325             Then, there is the DAWG FM Music Camp, which is $3,000 annually.  That is money that, although it is administered by ‑‑

4326             The students are selected by and the program is administered by the Grand River Blues Society, but those payments don't go to the Grand River Blues Society, the payments go directly to the artists involved in the instruction.

4327             COMMISSIONER MENZIES:  And then they pay the Grand River Blues Society for the instruction?

4328             MR. E. TORRES:  No.  The Grand River Blues Society ‑‑ much like Greg's program at the Great Lakes Blues Society, they try to not pass on the costs to the school.

4329             In effect, what we are doing is, we are sponsoring the artist, which normally the Grand River Blues Society would pay for to come in and provide the instruction.

4330             COMMISSIONER MENZIES:  Okay.  Thank you.

4331             And the same for the University of Guelph.

4332             MR. E. TORRES:  The University of Guelph program, again, is directly related to the purchasing of instruments for the University of Guelph.

4333             Again, that is totally administered by them.

4334             COMMISSIONER MENZIES:  Okay.  Thank you.

4335             How much of the programming in Guelph would be local live‑to‑air?

4336             MR. E. TORRES:  As is the case with all of our radio stations, except for the occasional six hours of syndicated programming that we want to keep a window open for, 120 hours would be live‑to‑air.

4337             So 24/7 staffing live‑to‑air.

4338             COMMISSIONER MENZIES:  And that would all be local from the Guelph station, it wouldn't be ‑‑

4339             MR. E. TORRES:  Correct, yes.

4340             COMMISSIONER MENZIES:  Where will you get your syndicated programming from?

4341             MR. E. TORRES:  Our idea is, again, to look at products that are out there.  I think there is one that Dan Aykroyd hosts that might be a fit.

4342             Then, it is certainly our intention, as we ramp up operations in Ottawa, to create some programming that we could syndicate.  That might be something ‑‑

4343             Essentially, it will be up to the General Manager of the Guelph operation, or the Operations Manager and the Program Director there to make those final decisions.

4344             MR. SIMPSON:  I anticipate that if the DAWG network eventually comes into play, Ottawa will be producing for the rest of the network, Guelph will be producing for the rest of the network, London will be producing for the rest of the network, and then, through this method, regional acts from all of the locations where there are DAWG FM stations will be heard across the country, in specialty programming that is created for the network.

4345             COMMISSIONER MENZIES:  How would you do that?

4346             If the grand vision becomes reality at some point and you have a network ‑‑ a blues network in that sense ‑‑ how do you keep regional?  How do you make sure, if you are in the maritimes, that maritimes blues artists are getting exposure across the country, and Vancouver ‑‑ West Coast artists are getting exposure across the network?

4347             MR. SIMPSON:  I don't know if I am the one to answer that question or it should be Yves, but the dedication to all Canadian blues would exist at any DAWG FM station.

4348             The networks that we have built up ‑‑ for example, in the network that I have built up in my years in the industry, I know the people who are recording blues artists all across the country.  I deal with them a lot in my job at Canadian Music Week.

4349             The network is solid, at least from my position.  I am sure that Yves has an equally solid network.

4350             MR. E. TORRES:  What we have seen ‑‑ we have been researching this format for the better part of two years, and what we have found in Canada is that we have a much tighter knit community than in the United States.

4351             In the United States you have your Chicago Blues, which is very different from your New Orleans Blues, and ‑‑ you have probably heard this answer before ‑‑ your West Coast Blues.

4352             In Canada, there are fewer venues to play.

4353             Matt Andersen, who is an East Coast act, played in Trenton six weeks ago, but because he was touring, he played in Ottawa, he played in Cornwall, and he hit a couple of spots in Montreal.

4354             So there is a lot of movement in the genre.  I am sure, if you asked Chuck Jackson, he could tell you about the Yale Hotel and the Blues on White.

4355             He mentioned, actually, that he just played Edmonton, and he was sorry that we didn't get the licence there.  He says that it's a great blues town.

4356             MR. F. TORRES:  I think that the nature of blues music and blues performers ‑‑ I was talking to Jack DeKeyser, and he does over 300 appearances a year, mostly in Canada.

4357             So these acts are touring quite a bit, and if we are able to provide a base like, for instance, our Ottawa‑Gatineau operation, where they know they can come and perform live, it would be very easy for us to represent all of the regions across Canada, because those acts are moving across Canada.

4358             COMMISSIONER MENZIES:  Right, which takes me into another area ‑‑ and you have referred to it a couple of times ‑‑ that the nature of the blues is a fundamental element in all kinds of other music forms.  Blues can be a bit of a shape shifter in that sense.

4359             How do you maintain your identity as a blues station?

4360             You have the 29 percent in terms of categories, but how do you maintain the identity as being blues, and identify people as being specifically blues, when, as you have described yourself, blues is The Rolling Stones, blues is Eric Clapton, blues is Van Morrison, blues is ‑‑

4361             It is sort of everywhere, so how do you take ‑‑

4362             MR. SIMPSON:  I would suggest that you maintain the identity by what you do not play, that the other radio stations play.

4363             COMMISSIONER MENZIES:  Okay.

4364             MR. SIMPSON:  Yes, you will hear The Rolling Stones on other stations.  You will also hear AC/DC, and you are not likely to hear them on DAWG FM.

4365             Yes, you will hear blues‑influenced country on a country station, but you will not hear non‑blues‑influenced country ‑‑

4366             MR. E. TORRES:  It is part of the brand.  I mean, if we tell people that they are listening to a blues station, they may come to it with a pre‑conceived notion.  That's why we have stayed away from "Blues 102" as a handle.

4367             We are going to let them listen to the music, and then, in the IDs, that's where we will reinforce the brand, the fact that:  Hey, this is blues.  You probably didn't realize that you listen to the blues and you like the blues.

4368             We think that it is going to be an education process, but we are committed to it.

4369             COMMISSIONER MENZIES:  Okay.  Back to the application, in terms of technical things, I think you said 29 percent in the presentation, and I had 30 percent written down that you were willing to take on as a COL for subcategory 34, "Jazz and Blues".

4370             MR. TROTTIER:  As we said, we received a Condition of Licence for Ottawa of 20 percent of Cat 3, subcategory 34 music.

4371             To have a Cat 2 radio licence, you have to play a minimum of 70 percent Cat 2 music.  So we will play a minimum of 70 percent Cat 2 music, and our goal is to play 29 percent Cat 3 music.

4372             COMMISSIONER MENZIES:  Okay.  What my question was really getting at was, how will that be dispersed throughout the day?

4373             MR. TROTTIER:  It will be the same 6 to 6, and throughout the day it will be the same percentage.

4374             COMMISSIONER MENZIES:  So it would just flow evenly throughout the day.  So between 7 and 8 in the morning would be the same as between 2 and 3 in the morning?

4375             MR. TROTTIER:  Yes, that's our goal.

4376             COMMISSIONER MENZIES:  Any interest in accepting that as a COL, as well?

4377             MR. TROTTIER:  Yes.

4378             COMMISSIONER MENZIES:  That would be okay?

4379             MR. TROTTIER:  Yes.

4380             COMMISSIONER MENZIES:  Thank you.

4381             In terms of your business plan, it seemed a little optimistic, given the nature of the incumbents in Guelph, that you might get 35 percent of your Year 1 revenues by picking Corus' pockets.

4382             I am open‑minded on it, but I need to know how you came to that conclusion.

4383             MR. CLARKE:  Actually, I took a look at the chart and that was a typo error.  It was supposed to be 35 percent of Year 3.

4384             The numbers were calculated on Year 1, and accidentally ‑‑

4385             COMMISSIONER MENZIES:  I'm sorry, I didn't quite hear you.  Thirty-five percent of ‑‑

4386             MR. CLARKE:  It was supposed to be Year 3 revenues.

4387             It was calculated on Year 1, but it was supposed to be calculated on Year 3 revenues, that whole chart.  It was a typo error.

4388             COMMISSIONER MENZIES:  Okay.  Thank you.

4389             Which out-of-market stations do you think are most likely to lose listeners from Guelph to you?

4390             MR. E. TORRES:  We think that we will likely affect Q-107.  We may affect The Hawk, and we may affect CBC.

4391             But because our format, again, is something that is not currently out there, and appeals to that 35 to 54 demographic that largely is tuning out of radio, as we have heard repeatedly through this proceeding ‑‑ and the research company shows that we really will have negligible impact on market players, in this format, in every market across Canada ‑‑ every market that we have tested.

4392             I mean, anecdotally, I think that we would take some rock listenership, but I don't think it will ‑‑ I think it will have a negligible effect on those stations.

4393             COMMISSIONER MENZIES:  There is no specific area that you have done an analysis on that says you are most likely to get from ‑‑

4394             MR. E. TORRES:  I don't believe so.

4395             Aubrey, I don't think we did a specific analysis of ‑‑

4396             MR. CLARKE:  According to Sensus Research ‑‑ and I don't have the research here in my book, but from what I recall, the research shows that people who like blues listen to a variety of different formats, and from the formats they listen to, it shows that it would be evenly distributed ‑‑ coming over to DAWG FM.

4397             We don't think that we are going to cannibalize any one station, but we believe that we will pull listeners and revenues from a number of stations.

4398             COMMISSIONER MENZIES:  On your research, my read of it was that the research ‑‑ the data that you presented, and collected, was based on a poll of 200 people.

4399             What is the margin of error on 200 people?

4400             MR. F. TORRES:  The margin of error is, plus or minus, 9 percent, and the confidence of the data is 95 percent.

4401             Because we performed a lot of these all across Canada, we had to debate what number would be ‑‑ what survey group ‑‑ what sample group would be adequate.

4402             We found that the difference in margin of error from a 150 to a 200 sample to a 600 or 700 sample is very minimal.  It is only about 2 or 2.5 percent.

4403             We found that the 95 percent reliability factor is quite acceptable to us.

4404             COMMISSIONER MENZIES:  You still get 6.5 percent on a 600 or 700 sample?

4405             To me, just looking at it, if it says that 13 percent of the people would be very likely to listen to the blues, and you have a margin of error of, plus or minus, 9 percent, it could be as low as 4.  It could be as high as 22 on the upside.

4406             I guess all I am asking is for you to affirm your confidence that that's the number you are willing to invest in.

4407             MR. E. TORRES:  We don't have the research representative here, but we asked them this question repeatedly in Vancouver, as well, and, again, what you gain in the sample size is not really material to the end result.

4408             I think also when you are talking about surveys you have to look at the questions, you know, and a lot of the surveys that we see at hearings they ask ‑‑ since we are talking about surveys, they ask which formats are you more likely to listen to?  So they ask questions about rock formats and AC formats.  So they ask a listener a sample of eight or nine ‑‑ they give them an option of eight or nine existing formats that they can choose from and the results always seem to be skewed.

4409             So we didn't ask Would you listen to a blues‑oriented radio station, we asked questions with respect to artists and sound and music tracks.

4410             COMMISSIONER MENZIES:  Okay.  So what did you base your audience share projections on?

4411             MR. E. TORRES:  Again, Aubrey has done most of the leg work on this, but I think he will tell you that it's based on BBM data on all the research.

4412             MR. CLARKE:  Right.

4413             Another research that we are forgetting about is the ground level guerrilla marketing that we did by going into the market and going into the bars and serving the people ourselves, as well as what we get online from bluesincanada.com.  You know, the combination of all of that, along with the survey, BBM data, CBC blues radio shares, a combination of that is what we based our share on.

4414             MR. E. TORRES:  If I might just add on the surveys, because we have done 10 of these surveys in numerous markets across the country we get a very mean average.  We get a good idea of what the mean is.  So, you know, it's not that from sample to sample we are seeing huge variations, so again that may add to your question of size of survey.

4415             But we also look at our Blues in Canada survey has generated over 1,700 responses.  You know, that gives us very valuable data as to what our key demographic is and where they are located.

4416             COMMISSIONER MENZIES:  Okay, thanks.

4417             Do you have any idea how many local advertising dollars are leaving the Guelph area and so what the opportunity is for repatriation, that's advertisers in Guelph who are advertising with stations outside the area?

4418             MR. E. TORRES:  Well, with out of market tuning of 80 per cent, I mean with less respect to the local dollars I would hesitate to guess that it might be as high as 60 per cent of the potential ad budget is not getting spent.

4419             We see this.  The reason why, as we mentioned in our presentation, Guelph shows up on a lot of our national RFPs, right, so if we can just talk about national for a second.  It's with the rate of population growth that it's experiencing, rate of influx of the big box stores and larger retailers, it's a market that's in demand.

4420             And, unfortunately, there are only two options to reach Guelph and if you don't like that rate, then you have to go you have to buy spill stations and you have to buy the Toronto stations, you have to buy Brantford and Kitchener.

4421             Aubrey, I don't...

4422             MR. CLARKE:  Yes.  Also, I mean on Skywords we sell a lot of advertising across the country and many times when advertising agencies come to us we sell them out of market stations in order to hit the residents in Guelph.  So we know that there are a lot of dollars that are being missed.

4423             COMMISSIONER MENZIES:  Okay.

4424             Have you  taken a look at your business plan in light of ‑‑ I mean this was filed some time ago, before the current economic turmoil.  Have you had a chance to review it and does it still hold up?  And, if so, why?

4425             MR. E. TORRES:  The numbers in the financial plan again are based on our experience in the market, the trends that we have seen, the spot rate that we know that the market sells at.

4426             Again, we took a conservative approach, so revenue figures from 648 to, at the upper echelon.  When you compare it to the other applicants in these proceedings, we are actually the most conservative in terms of our projections.

4427             Now, with all of our applications, yes.  Will we have to revise them downward because of current economic trends?  I think that is probably prudent.  There are some things that are going to ‑‑ you know, that the recent economic turmoil is going to affect and manufacturing is one of them.

4428             Because the dollar yesterday was at $.82 and we know that that has a direct proportional impact to manufacturing.  So we think the Ontario economy will start to march in lockstep with that dollar as it comes down.

4429             So it's hard to predict of course what the next 24 months, 12 months are going to bring, but we think that these predictions, these projections, will hold up.

4430             COMMISSIONER MENZIES:  Well, the good news for manufacturing is that the dollar is below $.80 today.

4431             MR. E. TORRES:  There you go.

4432             COMMISSIONER MENZIES:  The last thing I wanted to touch on was, you talk about having an objective, a sort of key objective in this of they speak about launching new Canadian blues artists.

4433             How would you measure your success in that area?  You have a licence for Ottawa now for instance, I mean what ‑‑ having goals is always a good thing, but having measurable goals is an even better thing.  You do it with finances and that sort of stuff.

4434             How would you measure your success in launching new Canadian blues artists?

4435             MR. E. TORRES:  That's a good question and I will maybe throw that one around the table as well.

4436             I think that we haven't got a measurement tool or a yardstick yet, but I certainly ‑‑ part of what we do, we are going to very closely track our CCD.  We are going to give you detailed accounting on what that money does and where it goes and what kind of success we have had with it.

4437             So in terms of success, we have already had what I would deem some success.  We were asked to judge an emerging blues artist contest in Ottawa for the Ottawa Blues Society.

4438             So in terms of success we think that ‑‑ the Ottawa Blues Society wasn't going to hold that contest, they were kind of buoyed by the licence that was granted.  They decided at the last minute to hold that contest, they asked us to judge it, so I think that we are already having some success.

4439             But there will be yardsticks and there will be things that we quantify to the CRTC in our annual reporting.

4440             MR. F. TORRES:  I think also we have already seen some intangibles that, you know, really boost the morale of this entire process and this team.

4441             We were at the Vancouver hearings and one of our intervenors was a blues performer who was a great performer, had a very well produced a CD that he claimed couldn't get airplay on any of the radio stations locally, and at those hearings one of the applicant said:  Give me his CD and I will play it.  And he has been played since then.

4442             Again, do we have a yardstick to measure that at this point?  No, but we thought that we had already launched our first emerging artist before we even held a licence.  It's those types of small victories that we think we will be able to quantify en masse when we are licensed.

4443             MR. E. TORRES:  Robyn...?

4444             MS METCALFE:  And I think because it's a new format and a new radio station it's going to be baby steps, if you will, by seeing, I think first off, getting new blues artists in the market, getting them on our radio show, playing their CDs, seeing the excitement and excitement for that, and then getting patrons to go to their shows and seeing their shows increase, seeing them get more gigs across Canada.  I think it is going to be like a step‑by‑step process how we can measure that.

4445             MR. CLARKE:  All right.

4446             I personally spoke to Chase Parsons at Chris Smith Management who manages Nelly Furtado, they manage Tamia, they manage Jarvis Church, they manage Jacksoul and a number of Canadian artists.  Their artists have a lot of blues songs in their repertoire that they don't release because there is no outlet to release them, and when I told them about what we were endeavouring to do he was excited because he knew that his artist would have a way to release these songs as well, too.

4447             So I mean that's the way that we can measure success, by these current artists that are out there starting to release their blues music because there is a venue to release it.

4448             MR. BERNARD:  We also saw a great example of the effectiveness of, again, stations that are willing to play emerging artists in helping their careers.

4449             Just yesterday in Phase III the young musician from the east coast who supported the Evanov application, I think the question, to paraphrase, was asked, you know:  Previous to getting airplay on the Evanov station there, how many stations were you aware of where you had exposure in Canada?  I think it was essentially zero.  The young man couldn't get airplay in Halifax and when he subsequently did on the Evanov station the question was then asked:  Well, what happened?  And he quickly answered "Well, you know, I'm now being played on 15 stations across the country."

4450             So it was tangible evidence again of how stations that are willing to work hard for emerging artists can definitely accelerate those careers and in a very short period of time see those careers change for the better.

4451             COMMISSIONER MENZIES:  Just sort of one more question ‑‑ there might be another one, but one more question.  How do you envision your corporate structure working so that while you can take advantage of a national brand, you can still have a vibrant local identity?

4452             MR. E. TORRES:  I think that that's ‑‑ I mean there's a lot of broadcasters that do a very good job of that right now.  We would take our lead from them.  When you look at an easy rock brand or a BEAR or a Q brand, those are well‑established radio formats, they do a great job of producing local content, covering their local areas.  So a brand can be national and still provide a very much‑needed local service.

4453             I mean, we are very strong believers because our background is spoken word ‑‑ and we have said this a number of times also, but news and information is central to what a radio station does and the radio stations that do a good job of covering their local communities are the stations that are successful.

4454             COMMISSIONER MENZIES:  Okay.  Thank you.

4455             That concludes my questions.

4456             THE CHAIRPERSON:  Thank you.

4457             Commissioner Cugini...?

4458             COMMISSIONER CUGINI:  Thank you, Mr. Chair.

4459             I just want to follow up on the discussion you had with Commissioner Menzies and that is ‑‑ and we have talked about this before at previous hearings, but it goes directly to the distinctiveness of your sound.

4460             Obviously research is conducted and it's conducted on the basis of what is available in the market and what is not available in the market.  But you have no control over what other applicants do in the same proceeding, so my question is this ‑‑ a phrase we all love to use:  If the Commission, in its wisdom, were to license you and one of the other two classic rock/new rock applicants, would you survive and what effect would it have on your business plan?

4461             MR. E. TORRES:  I believe absolutely we would survive.  I think in terms of numbers an easy answer might be it might have a 10 to 15 per cent effect on the overall business plan.  I don't think it would be substantially more.

4462             Again, we need to repatriate the dollars to the market that are going out of the market.  Because we have the national sales team we know where those dollars are already because we have worked in the market and for the market.  Again, that gives us an advantage we think over someone else.

4463             But sure, I'm not really pulling that number out of the air, we have been asked this question before, in particular with the classic rock.

4464             If you look at who is listening to radio in Guelph, I mean you have Q107 in there ranked in the top six.  We think that adding another rock format, you are still going to have Q107 in there in the top six.  Listeners to Q107 are not going to leave Q107 to listen to a local rock station.  Some of them are, but most of them are going to stick around.

4465             So when we look at the neighbouring markets of St. Catherine's and Hamilton, those two in specific, Q107 still pulls an equal amount of share of rock listeners from those markets.

4466             You know, the promotions ‑‑ and Robyn, we have talked about this before, the promotions are going to be better because Q107 has resources that a Guelph local station is not going to have.  The personalities are going to be the personalities that you have grown up with.  John Derringer has been at Q I think for close to 20 ‑‑ 20 years.  I think when we started Skywords and we were on Q he was the afternoon host.  So we don't think that those listeners are necessarily going to leave Q107.

4467             You know, our listeners are going to come from the great disenfranchised that are leaving radio.  Some of them are going to come from rock stations because we are playing tracks now that are different, so you are not going to hear Hotel California on our radio station.  We think that those tracks burned, but still we hear them in the rock marketplace every day.

4468             COMMISSIONER CUGINI:  Would the licensing of you and a classic rock/new rock station present a different challenge in terms of appealing to retail advertisers in particular in the market because both of you will be hitting the ground running, probably around the same time?  What is your pitch going to be to the local Toyota dealer who says "I'm all confused.  I'm all confused.  I already get that guy, you know, on this station, or I could get that guy on this new station and he may not be as well versed in music as you are."

4469             So how do you explain the difference to him and why he should perhaps advertise on both?

4470             MR. E. TORRES:  And I guess ‑‑ and I will ask Aubrey to expand on this, but I think we take in that CD that you saw yesterday and we say we are a blues station but here is the music that we are going to play.  It's a little bit different than what you are used to, but it is still going to be very mainstream.  And this is a demographic that it appeals to, it is 35 to 54 and here is our research.

4471             Aubrey, you are the professional...

4472             MR. CLARKE:  Right.

4473             It's also a lifestyle of the people who are listening to the blues music versus the lifestyle of people who are listening to, let's say, a classic rock or a rock station.  You know, we sell a lifestyle as opposed to music format.  So, you know, I have to give them a picture of maybe a Commissioner Cugini for instance that might be listening to the blues.

4474             So that's how we sell.  We sell to people as opposed to the music.

4475             Also, John Blaicher was here from the OFSC earlier and he spoke about us partnering with OFSC and us handling their media for them as well.

4476             That's an advantage at Skywords that we have.  There are a number of clients that we help them with their media so we already know where some of our revenue is coming from because we sort of control that revenue, you know, ahead of time.

4477             COMMISSIONER CUGINI:  I'm not sure flattery alone will get you a licence, but thank you.

--- Laughter / Rires

4478             COMMISSIONER CUGINI:  Thank you, Mr. Chairman.

4479             THE CHAIRPERSON:  Thank you very much.

4480             Legal counsel...?

4481             MR. McINTYRE:  Thank you, Mr. Chair.

4482             I have just one point of clarification and it will be very ‑‑ it will sound very familiar to you guys.  Just a question about the Category 3 commitment.

4483             In the application you committed to 30 per cent and today you submitted 20 per cent.

4484             Is that correct?

4485             MR. TROTTIER:  Yes.

4486             MR. McINTYRE:  My follow up question is:  If we were to impose a 30 per cent requirement, would you accept that as a COL?

4487             MR. E. TORRES:  No, I don't believe we could accept a 30 per cent just because to be a Cat. 2 station we would need a buffer between the Cat. 2 and the Cat. 3.

4488             So we would be willing to accept 25 per cent, but we would prefer a 20 per cent condition of licence.

4489             MR. McINTYRE:  Thank you.

4490             I just have the one undertaking to read into the record, confirmation of financing availability by October 30th.

4491             MR. E. TORRES:  Yes, we undertake to provide that.

4492             MR. McINTYRE:  Thank you.

4493             THE CHAIRPERSON:  Thank you very much.

‑‑‑ Off microphone / Sans microphone

4494             THE CHAIRPERSON:  Thank you very much.  It's not recorded, ladies and gentlemen.

4495             So we will break for 90 minutes.  We will proceed again with the next item at 2 o'clock.

4496             Thank you.

‑‑‑ Upon recessing at 1230 / Suspension à 1230

‑‑‑ Upon resuming at 1407 / Reprise à 1407

4497             THE CHAIRPERSON:  Order, please.

4498             Madam Secretary...?

4499             ASSISTANT SECRETARY:  Thank you, Mr. Chairman.

4500             Before we start, I wish to inform you for the record that the applicant United Christian Broadcasters have submitted responses to undertakings for the London market:  One, a revised financial assumption with explanation of depreciation; as well as the breakdown on spoken word and balanced programming; and, finally, a clarification on CDD initiatives.

4501             Those documents will be added to the public record and copies are available in the examination room.

4502             We will now proceed with Item 11, which is an application by Blackburn Radio Inc. for a licence to operate an English‑language FM commercial radio programming undertaking in Guelph.

4503             The new station would operate on frequency 101.5, Channel 268A, with an average effective radiated power of 132 W, maximum effective radiated power of 500 W, with effective height of antenna above average terrain of 40 m.

4504             Appearing for the applicant is Mr. Richard Costley‑White.

4505             Please introduce your colleagues and you will have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

4506             MR. COSTLEY‑WHITE:  Thank you very much.

4507             Good afternoon, Mr. Chair, Members of the Commission and CRTC staff.

4508             My name is Richard Costley‑White.  I'm sitting over here at this end this time.  I am the owner, Chair and Chief Executive Officer of Blackburn Radio Inc.

4509             Today we are presenting the second of our applications for a new FM service in southwestern Ontario.  Before we begin our presentation I wish to present the members of our team.

4510             To my right is John Weese, General Manager for the Wingham‑based radio stations and a long‑time media executive for Blackburn beginning in 1990.  John has 28 years in the media industry.  John put together our application and will quarterback our responses in the question period.

4511             To John's right is Justin Oliphant, the Program Director of The BULL, Blackburn's rock station in the Wingham.  While Justin is one of this industries youngest Program Directors, he is now entering his fourth year at the helm and has eight years of media experience in various capacities at various stations.

4512             To Justin's right is Gina Lorentz.  Gina is the Program Director for our Wingham‑based The ONE FM.  In the past she served as News Director for 570 news in Kitchener and in 2004 she accepted an Edward R. Murrow Award for best newscast in New York.  Gina provided valuable guidance in developing our proposals for news and information.

4513             Next to Gina is Andrew Campbell.  Andrew is the Agricultural Director and Farm Reporter for our CKNX stations.  With the large footprint of the University of Guelph in the Guelph market, Andrew will provide valuable direction and strength to our coverage of agricultural business, academic and science and technology issues.  Andrew will also host a weekly agri‑lifestyle program entitled "Farm Out".

4514             To Andrew's right is Joan Moore.  Joan is our specialist in the area of community marketing.  We are eager to tell you more about community marketing later in this presentation.

4515             In the second row, just behind me, are colleagues who are available to provide expertise and, if necessary, clarification.

4516             Starting from my right is Peter Doering of Peter Doering Consultants Inc. who conducted our format research.  Peter has 37 years of experience in market research.

4517             To his left is Rob Enders our Director of Engineering who can address any technical issues.  Rob has over 20 years of industry experience and came to Blackburn 10 years ago from Q107 in Toronto.

4518             Next to Rob is our Promotions Coordinator David McTeague.  David recently came to us from FLOW in Toronto and he specializes in creating and executing listener support initiatives, including live on‑location broadcasts, hosting and emceeing of community events and general contests and promotions.

4519             David is also responsible for content development and website management in Wingham.  He will play a lead role in developing The DUKE's web presence.

4520             Next to David is Blackburn Radios Canadian Content Development Coordinator and long‑time radio executive Walter Ploegman.  Walter will speak to the specifics of our $280,000 pledge for Canadian Content Development.

4521             Finally, beside Walter is Jason Ploegman who is Blackburn's emerging technology point person.  Jason has been particularly involved in developing a web strategy for our company, including the construction of websites to accommodate local and emerging artists in our southwestern Ontario properties.

4522             Earlier in these hearings I appeared with our London team to present our application for an adult album alternative station.  Today our proposal is to bring local competition for the first time to Guelph radio with a broad‑based rock format that serves the large demographic that must listen to out of market radio to meet its needs, men from 18 to 54.

4523             While the two formats we are proposing may seem quite different, what they have in common is the Blackburn approach based on strong and independent local management and strong local service, anchored in large news departments and community service initiatives.

4524             At the same time, our stations benefit from back office synergies, the experience of our team in putting successful local stations on air and access to news and programming resources of other nearby stations.

4525             With autonomous locally‑based station management, 101.5 The DUKE will be an enthusiastic partner for the City of Guelph.  Our staff will embrace the opportunity to contribute to local events and causes.

4526             Blackburn Radio has forged this relationship and role in our other radio stations, radio service communities and we will extend it to Guelph.  Not only is it a way of being that we can all take pride in, it is also in our business interest.  We ask you to choose Blackburn Radio Inc. to provide an exciting new radio service for Guelph.

4527             To present our plans for Guelph more specifically, I am pleased to hand off to John Weese.

4528             MR. WEESE:  Thank you, Richard.

4529             Good afternoon, Mr. Chair and Commissioners.

4530             When the Commission issued its call for applications for Guelph, our first job was to determine whether there was a frequency that could serve the city adequately.  I can assure you that was a big challenge.  In fact, we only found one relatively low power frequency that covers the city, and it only covers the city.

4531             Whoever is awarded this licence will not be able to depend on revenues from an extended market.  They will have to live on revenues from Guelph in competition with a two‑station combo with heritage stations and deep pockets.

4532             To be viable we had to do our homework to be sure that the market could support a new entrant and to be sure that we choose the right format that will reach the largest unserved need.  We knew that in this market it was not a niche format that was needed, but rather an unserved mainstream format.  I can assure you that we have done our homework on Guelph.  We have camped out, tuned in, researched, surveyed and engaged in numerous conversations with a wide variety of stakeholders.  This was done to first determine the need and viability and, secondly, to understand how to best fit the bill.

4533             Here is what we have learned.  Most startling were the results of the fall '07 BBM analysis adults 18‑plus.  In Guelph, 80 per cent of all listening is lost to out of market radio stations.  The analysis underscored a dire need to address out of market turning.

4534             Males, particularly those aged 18 to 54, are grossly underserved by the existing in‑market choices in the City of Guelph.  This fact is underscored that 87 per cent of male tuning is out of market radio.

4535             Guelph's radio advertising sales are underdeveloped as well.  Using the Financial Post's markets retail sales data as a factor, we estimate the radio potential for Guelph CMA could be as high as $5.8 million.  Currently we estimate that $4.5 million is being extracted and as much as 2 million of these radio dollars going out of the market to neighbouring radio groups.

4536             The 2008 population estimate for the City of Guelph is 124,700, yet the city is only served by one local private radio operator with one AM station and one FM station.  By comparison, the Belleville/Quinte CMA is approximately 100,000 people and it is served with five commercial radio stations and two operators.  Similarly, Kingston, Ontario, with the CMA of about the same as Guelph's, has six FM stations and three competing operators.

4537             Moreover, retail sales in Guelph are projected to grow at a much higher rate than in those other two markets.

4538             Despite the recent bad news emanating south of the border which is causing a slowdown in our economy, the Guelph Economic Development Corporation projects continued growth for our local economy.  More precisely , in a letter dated as recently as October 10th, David Corks, Downtown Economic Development Manager for the City of Guelph, indicated that the Guelph economy is poised for continued growth with three major directions:  downtown revitalization, business park land sales and the agri‑business sector.

4539             It's clear to us that the Guelph marketplace is ripe and ready to welcome a new radio service and a new player.  Considering the outstanding need to address unserved males, our gut told us that a rock‑based format would be the best fit.  However, our experience told us to verify our impressions with a third‑party research organization that would provide us with reliable and dispassionate answers.

4540             We turned to Peter Doering Consultants Inc. and they tested seven different formats and conducted 300 telephone interviews.  The results of the research clearly pointed to two leading formats, classic rock and the other was a blend of classic rock and new rock.  Our choice is the blended format of classic rock and new rock.

4541             To explain how we intend to bring this format to life, here is Justin Oliphant.

4542             MR. OLIPHANT:  Thanks, John.

4543             Good afternoon, Commissioners.

4544             As the Program Director of The BULL in Wingham I can't imagine anyone being happier with the format research results than myself.  Rock, well, rocks.  And knowing firsthand how exciting, fun and successful this format can be, especially in markets where a local rocker doesn't exist is especially true.

4545             Blackburn has already had the experience of launching new broad‑based rock stations in markets as different as Wingham with The BULL and in Windsor with The Rock.  In both cases the station launched a competitive success.  And our rock station in Sarnia K106.3 dominates its market despite the competition from nearby Michigan.

4546             BBM and the Doering research were loud and clear, Guelph is hungry for a rock station to call its own.  Guelph listeners love both classic rock and newer rock that's compatible and right now they are not being served by local radio.  I met Guelph listeners during a visit to the market, while they want rock they are tired of rock stations that refer to Toronto, London or Cambridge, they want to hear about events in their own city.

4547             The DUKE promises to deliver their favourites, the Tragically Hip, Led Zeppelin, The Who, Neil Young, AC/DC, Rush and the Rolling Stones will do most of the heavy lifting, while newer releases from the Foo Fighters, Theory of a Deadman, Linkin Park and Three Days Grace will enhance the playlist.

4548             We have committed to 40 per cent Canadian content played evenly throughout our broadcast day and, finally, artists like Matt Mays and El Torpedo, Finger Eleven, Mobile, Sam Roberts and City in Colour will have a platform in Guelph.

4549             In addition to being the home for Canada's biggest and brightest stars, The DUKE will devote 5 per cent of weekly spins to emerging Canadian talent such as Die Mannequin, My Darkest Days, Floor Thirteen and Age of Daze.

4550             Our website, 1015theduke.com, will complement our on‑air support for new and emerging artists with a number of initiatives, including a month long look at an emerging band.

4551             A station nicknamed The DUKE has no choice other than to be cool.  Our presentation style will reflect this.  Our features will underscore this style.

4552             The Royal Flush will feature five of the biggest songs from some of our biggest featured artists.

4553             DUKE It out is a contest where listeners choose a winner between two classic artists.

4554             The DUKE Has Stones says it all, songs from the world's most legendary rock band the Rolling Stones.

4555             Then there is Farm Out, a most unique programming feature intended for the enjoyment of Guelph's wagon full of aggis.  Farm Out, hosted by Blackburn Farm Broadcaster Andrew Campbell, is a lifestyle program, a cool show for young students and professionals in agricultural sciences, as well as residents who need to know how the food gets from the field to their plate.  Music, discussions, phone‑ins and a lot of fun.

4556             Here is a short sample of Farm Out.

‑‑‑ Audio clip / Clip audio

4557             MR. OLIPHANT:  An important aspect of The DUKE's programming is getting it right in the news department.

4558             To speak of our commitment in news coverage and information here is Gina Lorentz.

4559             MS LORENTZ:  Thanks, Justin.

4560             Make no mistake, while The DUKE is a music intense rock station we believe our audience deserves to be well‑informed with solid news coverage, especially on the local beat.  This is the Blackburn Radio way.

4561             The DUKE's newsroom will contain four staff on the ground with the ability to seek resources from other Blackburn radio stations when required in the event of emergencies, if specific expertise is required, or if there is a regional commonality with a story.

4562             As mentioned in the London presentation, we already have a news sharing system in place that provides access to a larger range of stories, while leaving the choice of news up to the local station.

4563             Our morning and afternoon drive shifts will offer news packages at both the top and bottom of the hour and a regular news schedule for midday evenings and weekends.  In all, 81 newscasts each week.  We will provide over 6 1/2 hours of newscasts, of which 3 hours and 38 minutes will be pure news.

4564             1015theduke.com will provide expanded access to news stories.  The website will also allow Guelph listeners access to stories from our other stations to hot links.

4565             Considering our male‑oriented demo, The DUKE will also need to be strong on sports, with a lot of reporting on both the local scene, including coverage of the Guelph Storm of OHL, as well as covering the pro circuits.  We will provide over 2 1/4 hours of sports reporting each week as part of our newscasts.

4566             In addition, we expect that each week during hockey season we will invite a Storm player or coach to come onto our morning show for a brief interview.

4567             We will also provide a number of other spoken word features, including community announcements, an evening talk show and Andrew's Farm Out program, in all, over 13 1/2 hours of spoken word each week.

4568             Our local focus also includes our commitment to community marketing.

4569             To touch on this important area of our business plan is Joan Moore.

4570             MS MOORE:  Thank you, Gina.

4571             While many radio stations provide free mentions, discounted commercial rates or provide an emcee for an event, Blackburn Radio has significantly raised the bar with a whole new level of service for these important stakeholders.

4572             As a community marketing representative and working in a department purely dedicated to serving not‑for‑profit clients, we offer a consultative full market approach.  This includes off‑site meetings, event planning advice, creative copy, scheduling, on‑air interviews and on‑air mention program ticket giveaways and on‑air community calendar, a live report of the event, and often we are happy to emcee that event as well.  We call all of this community marketing and it has proven to be a win‑win proposition and a viable function of our business.

4573             Our CKNX radio operation out of Wingham helped to raise millions of dollars for organizations in Midwestern Ontario.

4574             For example, this past weekend we held our annual Healthcare Heroes Radiothon at CKNX in Wingham.  In the past seven years we have raised in excess of $4 million for 15 hospitals in our coverage area.

4575             Our promotion of Relay For Life assisted the region's Cancer Society in raising over a half a million dollars.

4576             Community marketing will be an important community service cornerstone to The DUKE.

4577             Sometimes this kind of outreach also results in programming features.  I am pleased that our contact with the Wellington‑Dufferin‑Guelph Health Unit has resulted in their agreement to partner with us on a weekly health feature.  We expect to run that once a week in the morning program.

4578             Then there is our Canadian Content Development commitment, in excess of $280,000.

4579             With the details on this is Blackburn CCD Steward Walter Ploegman.

4580             MR. W. PLOEGMAN:  Thank you, Joan.

4581             Good afternoon Members of the Commission.

4582             Blackburn's commitment in this area is underscored by my role as a manager of this investment and process.  In Guelph, after researching the needs and interviewing several individuals of qualifying recipients of CCD monies, we have determined that the following best fit the Commission's CCD criteria.

4583             We will invest $12,000 annually in our all Canadian rock music event called the DUKE's Battle Royale.  The winning and high placing entries will earn funding for studio and production time, as well as exposure.  But they will also get much more.  Of course they will be featured on The DUKE both on‑air and through 1015theduke.com.

4584             I have a particular role to be an ambassador for the artists we champion in each market by making sure the other rock stations in our company consider them for airplay and support as well.

4585             All of our stations have agreed that the winners will be featured in their Indie spotlight programs.  This means exposure in Windsor, Chatham, Sarnia and Wingham.  And vice versa, The DUKE will support the artists our stations in these other markets discover.

4586             In our London presentation I told you about our emerging talent contest.  The winner of the Battle Royale would participate in that initiative as well, if we are fortunate enough to be awarded both licences.

4587             Additionally, we will provide $70,000 to the Guelph Arts Council who will utilize these funds to assist numerous music programs in the City of Guelph.

4588             Guelph's premier venue for the performing arts The River Run Centre will receive $70,000 to fund exciting new showcases featuring new and emerging Canadian artists.

4589             In all, including our commitment to FACTOR, we intend to invest $280,000 in Canadian content contributions over the course of our first license period.  This is over and above our basic commitment.

4590             In regards to programming of Canadian content on air, we are committed to 40 per cent of evenly scheduled Canadian content, including a minimum 5 per cent of all spins coming from new and emerging Canadian talent.  These artists will be heard throughout the program schedule and will also be featured in our weekly program The DUKE Debuts.

4591             Here to sum up is John Weese.

4592             MR. WEESE:  Thank you, Walter.

4593             We ask the Commission to grant Blackburn Radio a licence so that we can positively enhance the experience of living in Guelph and also to bring to life the excitement of The DUKE.

4594             We would like to underscore some of the following points.

4595             For starters, Guelph is underserved with few stations and no local competition.  Consequently, Guelph listeners truly overwhelmingly tune out of the market to out market radio.  Guelph men listen to out of market to an even greater extent.

4596             Research that looked at seven different formats led us to a conclusion that was pretty obvious, the largest unserved format is rock.

4597             Despite the city only signal and entry against a strong competitor with two local stations and regional stations that enter the market, we believe we can provide a strong alternative.

4598             Our success has always been started with local service and we made substantial commitments to news and other local programming for Guelph.  We propose the largest commitment to news staff and to hours of news of any of the new applicants.

4599             The expertise and resources of our other stations in southwestern Ontario will allow us to put a high‑quality station on the air at a reasonable cost.  Given the level of competition and the weakness of the signal the maximum resources must go to programming and local reflection and the minimum possible to back office costs.  We have launched successful rock formats in Windsor, Sarnia, Chatham and Wingham and we know how to do it.  Our stations are successful and contribute to the communities and to Canadian artists.

4600             We would like to leave you with this audio sample introducing The DUKE.

‑‑‑ Audio clip / Clip audio

4601             MR. WEESE:  Thank you for your attention and we welcome your questions.

4602             THE CHAIRPERSON:  Thank you, Mr. Weese.

4603             I'm introducing our Commissioner Simpson.

4604             COMMISSIONER SIMPSON:  Hello.  Thank you very much.  Thank you for shaking up these hearings a bit.

‑‑‑ Laughter / Rires

4605             COMMISSIONER SIMPSON:  We were talking about the need to do that every once in awhile and you came through with flying colours.

4606             I'm not sure where I want to start because I have so many questions.  I think I'm going to try and start wide and go narrow later on.  If I get too deep I can always bail out at a certain point.

4607             Let's start with programming.  Your market analysis has shown you that this is a market that by its basic demographic and its population could probably stand another radio station or two for sure and in looking at what's available now incumbently there seems to be a lot of opportunity.

4608             I guess my first impression that I would like to comment on is that because you have this white demographic I find it interesting that you chose to take all of it.  You know, it's a pretty broad demographic when you are talking 18 to 54.

4609             I know you have a core audience in there somewhere, but when you start moving out to the edges of that range you start getting into taste levels and interest levels that go beyond ‑‑ you know, it's hard to find a sweet spot is what I'm getting at.

4610             So who would like to talk first about the boldness of this idea of going for a broad demo with new rock at one end and existing rock at the other and why you think it's going to work?

4611             MR. WEESE:  Okay.  Commissioner Simpson, I will provide the headwind for this.

4612             There are two people that I would like to talk to, our researcher, Peter Doering who did a lot of the research and he can certainly talk about where he began and where he narrowed it down to, and then warming up in the bullpen is Justin Oliphant and he will address how we are going to satisfying that demo.

4613             So I would like to call on Peter Doering to comment.

4614             MR. DOERING:  Thank you, John.

4615             We looked at the profile of people who are most likely to listen to a classic rock/new rock station and although it is a broad base from 18 to 54 in fact you actually get about a fifth of the audience in the 18‑24 segment, another fifth 25 to 34, another fifth 35 to 44 and another fifth 45 to 54, with a little higher than a fifth in each and then about 13 per cent above 55.  So really the music category appeals to a broad range.

4616             MR. OLIPHANT:  We have already launched a station similar to this in Wingham with The BULL to immediate success.  This station was already on in businesses, already on in garages, already on in cars while we were still testing.

4617             I have seen personally the same kind of excitement in the eyes of residents of Guelph.  Guelphites need a local rocker.  I went down on a weekend and visited the Wal‑Mart parking lots, the Home Depot parking lots.  I was hanging out in front of the mall and walking down the streets and harassing just about anybody that would listen and saying "Would you listen to a local rocker" and they said "Yes, but it has to be two things, it has to be local ‑‑ and I already alluded to that of my opening remarks.  They don't want to hear about London, they don't want to hear about Cambridge, they don't want to hear about Hamilton and Toronto ‑‑ and it has to play what I want."  And I said "Well, what do you want?"

4618             So I played them a bunch of different montages of music, new stuff from the Foo Fighters, Linkin Park, Nickelback.  They loved it.  Metallica, Motley Crue, AC/DC.  They loved it.  Led Zeppelin, the Stones, the Beatles.  They loved it.  Bob Dylan, the Byrds.  They loved it.  So we said let's build a local rock station for the locals.  This is a made in Guelph product made for the people of Guelph.  They want a broad rocker, we have done it before, we have made it win and we could do it again in Guelph.

4619             COMMISSIONER SIMPSON:  How long has The BULL been in this format?

4620             MR. OLIPHANT:  Since April 1, 2005.

4621             COMMISSIONER SIMPSON:  And the book is telling you that you are on the right track?

4622             MR. WEESE:  Yes, absolutely it is.  We started off with a lot more share than we anticipated.

4623             The conditions there in that market are a little bit different than we are here so we don't have huge share expectations here.  In fact, I think year one share is 7 per cent.  What we discovered with The BULL is that our year one share was closer to 18 in a neighbouring market and competed at about a 12 share in our home market.

4624             COMMISSIONER SIMPSON:  Nice segue.

4625             Speaking of share, you are coming out of the gate with a 7 per cent share, growing to 8.  Now, is this projection based on the fact that there are so few incumbents in the market or that you really feel that you are going to be able to get that away listener back to a local radio station?

4626             MR. WEESE:  Right.  I'm going to ask Peter Doering to comment exactly on where he arrived at that figure and maybe provide some words of that figure.

4627             It was quite apparent to us that there was a real hunger for a rock station in the market and so when we discovered through the research that it was 7 per cent we were pleasantly not surprised when we got that.

4628             But Peter, if you want to comment on how you arrived at that?

4629             MR. DOERING:  Yes.  Thanks, John.

4630             I have found over the years that the most indicative question of predicting share for a radio station, or in fact any product or service, is the percent who indicate they are very likely to do something.  We found in this study that 22 per cent of the people in Guelph indicated they would be very likely to listen to a classic rock/new rock station.

4631             Now, we don't use a 22 per cent because that is based on 100 per cent awareness and a whole bunch of factors, so we found that if you discount that by about a third, which gives you the 7 per cent estimate, that is likely where you are going to start with your share.

4632             That has proven to be the case a number of times with a number of different product categories.  And then hope to build that up to 10 or 11 per cent over time.

4633             COMMISSIONER SIMPSON:  Moving over to the marketing of the format, there is going to be no doubt because again there are few incumbents to deal with in terms of differentiating yourself.

4634             Advertisers like to buy to a little bit tighter demographic.  Have you got any plans to segment your marketing?  Give me a top‑down view as to how you are going to take the station to local advertisers and to the national rep houses, perhaps on the basis of what you have been doing at The BULL.

4635             MR. WEESE:  Oh, okay.  Very good.

4636             We always found that our best success came from first building the product and so ‑‑ and you will see in our numbers, too, that we start off what I think is rather conservative numbers because we believe we have to build the audience first.

4637             It has been many, many years since they last put on a new radio station in Guelph and so there is a tremendous amount of out of market tuning and particularly in the area of rock.  Male needs have been somewhat served by Q107, Y108, KoolFM and a number of rock stations.

4638             So in the area of national advertising, for example when you look at our figures, we have very modest expectations of gaining national business.  So we have to earn our stripes in programming and we have to build them an audience and we have to build the share and we have to do that before we can go down to Toronto and some of the national agencies and with a straight face ask them to invest money.

4639             Locally the same is true, we have to get on the radar screen in Guelph and we have to be able to grab their attention and we have to get their excitement and hook them with our programming before we can offer a marketing case that we believe will satisfy their needs.

4640             The question, or I think the challenge is how do we cut through that and what sort of marketing efforts can we do to grab their attention and to get on that radar screen?

4641             There are a couple of people that I would like to ask to talk about that.  One is Justin, our programmer, and also our Programming Coordinator David McTeague who is with us today too, to talk about some of the initiatives we have to cut through that.

4642             Justin, if you would start...?

4643             MR. OLIPHANT:  Absolutely.

4644             And with all due respect to the out‑of‑market stations, they are just that, they are out of market.  They have become heritage by default.

4645             With a local rocker in Guelph ‑‑ and again, if I start sounding like a broken record feel free to move the needle.

4646             With a local rocker in Guelph it is going to cause a lot of buzz right off the hop because there is a pent‑up demand.  As I have said before, I have seen it in their eyes, they really want this and they need it to be local.

4647             The programming is going to be just that, the greatest rock 'n roll that they have grown up with and that their kids are starting to grow up with, too.  The amazing thing is that the children are now listening to the same music that dad and mom grew up with, Jumpin' Jack flash by the Stones, Revolution by the Beatles, Hells Bells by AC/DC.  They love that old sound.  They love that classic sound.  And they are bringing with them these new hoard of rockers like Nickelback and Buckcherry and Theory of a Dead Man and The Trews and mom and dad are starting to get turned onto it too, they are saying "Hey, that reminds me a lot of the first time I listened to Ramble On by Led Zeppelin".

4648             That broad demographic of music, the 2000 plus songs, is something that you very rarely see on rock stations' plates anymore.  We have trimmed it down so much that the waters are becoming very diluted.  You know, Highway to Hell, all the time; Hotel California, all the time.  AC/DC went more than three singles deep on a lot of records and there are some great "B" sides that have never been played on the airwaves until The DUKE arrives.

4649             The Eagles did more than just Hotel California and the Long Run.  Those tunes haven't hit the airwaves until The DUKE arrives.

4650             That is how we are going to crack the market with our programming and deal with the out of market tuning and we also have a very great combat when we hit the streets.

4651             To talk more about that I would like to pass it over to David McTeague.

4652             MR. McTEAGUE:  Hello, Panel.

4653             Our marketing promotions plan, it begins with generating and regenerating local business with the ability to support it.  That comes with local promotions, things like The DUKE and the Guelph Storm Shut out Hunger at this as Sleeman Centre, a food drive to raise awareness for people in need.

4654             Publicity stunts, the Goof on the Roof where we put the jock on the roof of the Stone Road Mall to raise awareness about the need for jackets and people in need, partnered with the Salvation Army.

4655             Of course, with a lot of out of market tuning we need to have promotions that are ratings driven so we have something called the Royal Road Trips where we send listeners for a three night stay to Kansas City to see the Toronto Blue Jays take on the Kansas City Royals.  How about we send them over to Los Angeles to see the Toronto Maple Leafs take on the Los Angeles Kings.  And of course musically to see Queen live in concert with Paul Rogers.

4656             The next thing we have is viral marketing.  We know there is a big pent‑up demand for this and we have a lot of ideas to pass along our marketing message creatively.  Joan earlier talked about our community outreach with our planned involvement in community affairs and support.

4657             Finally, our website which is supported by three pillars of listener support, community support and artist support.

4658             COMMISSIONER SIMPSON:  Thank you.

4659             Mr. Oliphant, if you are successful with this you may have redefined the term "family programming".

‑‑‑ Laughter / Rires

4660             COMMISSIONER SIMPSON:  Thank you very much.

4661             I think what I hear you saying is that you are going to go in with more of a programming and promotional approach, you are going to do the full meal deal with an advertiser to win them as opposed to just relying on demographic marketing.  I think I understand that.

4662             Mr. Weese, may I just go back to you had mentioned something I was going to ask you about with respect to your pro forma.  To say that it was a conservative ‑‑ I'm looking at some figures our staff had pulled with respect to dollars per percentage point of audience.

4663             Your pro forma was extremely conservative compared to even what the market is doing now.  I think it was one share point being equivalent to about $172,000.

4664             MR. WEESE:  Right.

4665             COMMISSIONER SIMPSON:  You know, the market, as you probably know, is clocking in at about $210,000 and some of your competitive proponents are feeling they can extract up to $230,000 per percentage point.  That's a pretty big spread.

4666             I mean I ask you this:  Why do you feel that you are going ‑‑ if you are going to come out of the gate with such a high share of market, why do you feel that your revenue projections should be as conservative as they are?

4667             MR. WEESE:  Again, a bit of that is based on our past experience.

4668             The Bull's tuning far out‑polled the dollars that fell behind it, and it took us a while to get our legs.

4669             What we discovered here ‑‑ and I don't think we have it wrong.  I think, from our experience ‑‑ when we introduced a rock format up in midwestern Ontario, there wasn't a local rock format there before.  So it took awhile to convince advertisers, who traditionally have advertised on family radio stations, and AM radio stations, and AC radio stations ‑‑ they knew what all of that was about.  It was a little bit of a longer sales pitch to convince them that going on a rock station, which can, at times, be a bit irreverent, with music that is a bit foreign to their ears, especially in lyrics, was a wise investment.

4670             It wasn't as easy as just going and pulling the low-bearing fruit from our other stations and trying to put it on a radio station, we had to go out and develop advertising customers.

4671             And we suggest that, in this market, that is going to be the case, because our dollars are going to come from within Guelph.  They are not going to come from outside the market.  The signal doesn't allow it to do that, so our dollars are going to have to come from within the city.

4672             People who have had, as radio choices, the two Corus stations here, getting them to make the leap to a rock station ‑‑ I think it is going to take us a while to get our legs.

4673             I did the same procedure as the staff did in determining dollars per share point.  My dollars are a little bit different, but what I have is that we are very conservative in Year 1, as we try to get our legs.  However, if you look at our Year 3, it looks to me like we are bang on.  We estimate that the market will be worth $172,000 per share, and by Year 5 we are going to have 10 percent of the share.  So we are calling for 1.7, and our Year 5 is calling for 1.7.

4674             I think we are very close in how we are approaching it.  We are going to get to the market, we are just saying that we are going to start a little bit more conservatively.

4675             COMMISSIONER SIMPSON:  But it seems to me, from what you are telling me, that it will be a little bit more of a challenge to sell the market, because this is not what they are used to ‑‑ advertisers I mean.

4676             You, obviously, are convinced that this is the route to go, because you are not really turning the corner until Year 4, unless you have a pleasant surprise.

4677             MR. WEESE:  Right.

4678             COMMISSIONER SIMPSON:  Moving over to another part of the programming for a second, in your supplementary brief to us, with respect to emerging artists, you had a cautionary note concerning the 5 percent spin of emerging artists.

4679             I would like you to talk to me a bit more, so that I understand it, and the Commission, in terms of what you meant by saying that you don't control the output of emerging artists, and the method by which they appear doesn't happen on a weekly basis, it could be on a monthly basis, and you wanted a little bit wider tolerance in that regard, and, also, to not have this as a Condition of Licence.

4680             Is that not correct?

4681             MR. WEESE:  Okay.  I don't recall reading in the brief exactly those words.

4682             I can tell you that it is important for us ‑‑ we are not anti‑emerging artists by any means.

4683             And 5 percent, when you factor the amount of spins, is quite a bit of spins.  I did the math on it, and it is something like 6 hours a week of emerging artist music when you factor the spins.

4684             COMMISSIONER SIMPSON:  Yes.

4685             MR. WEESE:  What is important to us is that we stay on format, that we deliver what we promise as far as programming is concerned.

4686             I think we made a very solid commitment to Canadian content of 40 percent, and not just 40 percent, but 40 percent evenly played throughout the broadcast week.

4687             Emerging artists are something that we certainly welcome, and would love to create forums for.

4688             To tell us a little bit about it ‑‑ Justin, if you wouldn't mind talking about some of the exciting plans that we have with emerging artists.

4689             MR. OLIPHANT:  Absolutely.

4690             We have mentioned the fact that they will be getting a month‑long feature on our website, which is great.  It's amazing exposure.  It's a tool that everybody uses now, and to be able to find your favourite band, that is just breaking the scene on the streets of Winnipeg, only a click away at "101.5theduke.com" is fantastic.

4691             To hear their music on The Duke's airwaves is even greater.

4692             A band out of Winnipeg right now, which we are featuring heavy on The Bull ‑‑ and I have since passed down to the Program Directors in Windsor, in Chatham and in Sarnia ‑‑ is a band called "Floor Thirteen", an exceptional sound.  You don't see them being played across a lot of the airwaves in Canadian rock radio.  Why?  Your guess is as good as mine.

4693             Bands like Age of Daze, Wide Open Throttle out of Stratford ‑‑ we started getting requests out of nowhere, before this music was even in our hands, so I had to do some researching online, doing the MySpace thing, finding these bands ‑‑ finding their music.

4694             Programmers don't always have that kind of time.  We want these bands to be able to solicit their music to us.  Get the records out.  Get them in the hands of music directors and program directors across the country.

4695             They have a good sound, and have since found a home on The Bull's airwaves, and will no doubt, once we launch a station in Guelph, find a home on The Duke's airwaves.

4696             A band out of London, Bob Noxious, was virtually unknown in midwestern Ontario until they dropped a single off ‑‑ personally, I might add ‑‑ to my desk.  I gave it a listen.  I promised the guys one of the feature spins on one of the many features that we have on the station, and it has since become the most requested band on our station, above AC/DC.

4697             And the band has gone from playing 300‑person venues in London ‑‑ every time they come up to midwestern Ontario they are packing arena floors ‑‑ 1,000 people ‑‑ and instead of making $300 in London, they are somehow bringing home $3,500 a show up in our neck of the woods.

4698             That doesn't necessarily mean that that is going to happen everywhere in Canada, but if you can help some of these artists make a few extra bucks in different markets by giving them the exposure, not necessarily that they need, but for the hard work they have put into it that they deserve, that's what The Duke is there for.

4699             COMMISSIONER SIMPSON:  Mr. Weese, thanks to our new E-hearing software, which I am becoming a huge fan of ‑‑ on page 26 of your supplementary brief, at Item 10, "Emerging Artists", you say:

"We understand that the commitments to providing exposure for emerging artists are an important part of a radio station's contribution to meeting the goals of the Broadcasting Act...

   At the same time, the Commission recognized the difficulty in developing common requirements for all stations, stating in paragraph 90 of the new policy:  `It would be difficult to apply either an incentive or a quota system fairly to stations operating in different formats, because the playing of music by emerging Canadian artists is not appropriate."

4700             Essentially, it was replaying a dictum of ours, and you were going on to basically make the case that because you are providing such a broadly based format ‑‑ on the following page you said:

"While we are committed to meeting these proposals..."

-- this is Item 3, "Condition of Licence":

"...we are not sure that it is appropriate to create a specific Condition of Licence.  The Commission noted in the Commercial Radio Policy that it was concerned about the potential effects of imposing additional regulations..."

4701             In essence, you were asking:

"We are not particularly concerned about a weekly requirement, since we do not control the ebb and flow of releases by emerging artists.  If the Commission were to impose a Condition of Licence in this regard, we would urge it to look at a longer period than a single week, or even a month."

4702             I am just wondering ‑‑

4703             MR. WEESE:  Okay.

4704             COMMISSIONER SIMPSON:  There were two pages related to that, and, obviously, it was telling me that, although you felt that you were able to meet the intent, it might be a stretch ‑‑

4705             I was getting some cautionary notes here, and I was wondering why.

4706             MR. WEESE:  I think it was just a case of making sure that we honour the commitment and that we don't handcuff ourselves to going off a format.

4707             There may be occasions where we may want to, on a monthly basis perhaps, offer a program or an event, an on‑air programming event, to highlight emerging artists under the definition, rather than to be forced to necessarily squeeze them into airplay on a consistent basis, which may take us a bit off format.

4708             COMMISSIONER SIMPSON:  Again, because you are in new territory.

4709             Yes, I understand.

4710             I will leave it to our legal counsel to put the question to you regarding conditions of licence in content.

4711             MR. WEESE:  Fair enough.

4712             COMMISSIONER SIMPSON:  I am from this area originally, and I know that Guelph is quite an ag town, and I am intrigued by the enthusiasm with which you are approaching some type of relationship with the University of Guelph.  Rock and roll farming is quite a concept.

4713             I would like you to elaborate a bit more on what you see as a relationship with the University of Guelph.

4714             You said that it was the intention of The Duke not to take advantage of, but to optimize the reputation of the university, in terms of being able to take what it knows about the community and the interests of agriculture and get it on the air.

4715             Now, you have given us an example of that, but, to me, it seems that it is more than just a recognition of the interests of agriculture, it sounds to me like you are intending on bringing a lot of that content into some kind of "loose news that you can use" kind of format.

4716             Is that correct?

4717             MR. WEESE:  I wouldn't mind starting off on that question.

4718             I am going to ask Andrew Campbell, who is our Farm News Director out of Wingham, who is going to be the host of "Farm Out", which is part of our intentions, to explain what that is all about.

4719             We recognize that the University of Guelph is not only producing agricultural news and information that we can include in our newscasts, which would be items of interest to our entire audience, but we also recognize that the university is the second leading employer in the community, and, in addition to that, they also are on the social consciousness, and provide that social consciousness for the City of Guelph.

4720             When we were down here and camped out and tuned in, and did all of the things that we did in our due diligence in this market, we were close to some students at the University of Guelph, and we certainly did our homework on the university, and believe that it will have a great influence on how we behave in the market.

4721             To talk more specifically about "Farm Out" and our farm initiatives, and "Today's Farming", and all of that stuff, here is Andrew Campbell.

4722             MR. CAMPBELL:  Thanks, John.  "All of that stuff" being farming, I guess.

4723             With the University of Guelph, right now, I have a wonderful relationship with the university on our AM station, based in Wingham.  Their agriculture communication provides me with weekly features that we air, talking about some of the research they are doing at the University of Guelph, some of the activities going on.  It is just a great opportunity for those students to be able to provide the information, both as a learning curve for them, because this is the industry they want to be in, as well as getting the airplay for us and informing our listeners.

4724             We could bring somewhat of an approach like that with some of these connections, with some of these programs, through regular newscasts.

4725             As John mentioned, it is the second leading employer ‑‑ close to 4,000 people, I think, and that doesn't count the thousands and thousands of students.

4726             There is a lot of interest for what is going on at the university.

4727             "Farm Out" will also bring a component to that.  The idea, in my mind anyway, is to have a guest host that comes in with me every week, and a lot of that will come from the university.  They are known for their agricultural research around the world, so for them to come in, and to bring student researchers in, as well, and have them sit down with me and talk, in plain language, about ‑‑ What are you doing?  What will this do for farmers?  What will it do for the regular consumer?

4728             The university is developing car parts made out of soybean, something that every one of us will use at one point.

4729             The Escape that we just got has foam seats made out of soybeans, all coming from the University of Guelph.

4730             So we will use "Farm Out" as a tool for that, and then, also, all of the farm organizations ‑‑ there are hundreds of farm organizations in the country, and a lot of them have their headquarters based in Guelph.  We can use them, as well, to tie in that whole agricultural relationship, using "Farm Out", and then, obviously, using me as a resource to get those connections into the general news.

4731             COMMISSIONER SIMPSON:  Thank you.

4732             Now, if we could just figure out how to make soybeans out of car parts, we would have the problem solved.

--- Laughter / Rires

4733             COMMISSIONER SIMPSON:  As promised, I started off extremely wide, and I am down to my last question, which is a detail question to do with Canadian Content Development.

4734             With respect to the "Battle of the Bands" project, I believe there was a proposal that involved recording studio time as part of the prize package for the winning band.

4735             Is that correct?

4736             MR. WEESE:  Yes.

4737             Walter Ploegman is our CCD steward.  He is sitting right behind me, and he can provide you with a much better answer.

4738             COMMISSIONER SIMPSON:  If I may, Walter, my question is specific to the use of the facilities.  Is the intent to make money available for the winner to record at a recording studio other than your own facilities, or were you planning on using your facilities?

4739             MR. W. PLOEGMAN:  This would be for the artist to receive funds to get a recording done.  This is not anything to do with our studio facilities.

4740             COMMISSIONER SIMPSON:  I had a very specific question, and I thank you.

4741             Anyone else?

4742             THE CHAIRPERSON:  Thank you very much, Mr. Simpson.  Those are our questions, and legal counsel will conclude.

4743             MR. McINTYRE:  Thank you, Mr. Chair.

4744             Just one question, to follow up on Commissioner Simpson's question relating to emerging artists.  Maybe you could state your position on the possibility of a COL relating to the percentage of programming for emerging artists.

4745             MR. WEESE:  Is the question, would we consider a percentage on emerging artists, the 5 percent?

4746             MR. McINTYRE:  Yes.

4747             MR. WEESE:  Yes, we would.

4748             MR. McINTYRE:  Thank you.  That was my only question.

4749             Just to read it into the record, there is an undertaking to provide updated financial confirmation for October 30th.

4750             MR. WEESE:  We will do that.

4751             MR. McINTYRE:  Thank you.

4752             THE CHAIRPERSON:  Ladies and gentlemen, thank you very much for your presentation.

4753             We will take a 10-minute break, and resume at 10 past 3.

4754             Thank you.

4755             MR. WEESE:  Thank you.

--- Upon recessing at 1500 / Suspension à 1500

--- Upon resuming at 1515 / Reprise à 1515

4756             THE CHAIRPERSON:  Order, please.

4757             Madam Secretary.

4758             THE SECRETARY:  Thank you, Mr. Chairman.  We will now proceed with Item 12, an application by 591989 B.C. Ltd. to convert the English‑language commercial radio station CJOY Guelph from the AM band to the FM band.

4759             The new station would operate on Frequency 95.7, Channel 239B, with an average effective radiated power of 11,000 watts, maximum effective radiated power of 30,000 watts, with an effective height of antenna above average terrain of 53.7 metres.

4760             Appearing for the Applicant is Chris Pandoff.

4761             Please introduce your colleagues.  Then you will have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

4762             MR. PANDOFF:  Thank you.  Good afternoon, Mr. Chair, Commissioners, and Commission staff.  My name is Chris Pandoff, and I am Vice‑President of Radio for Corus Radio Ontario.

4763             To my right today is Cheryl Bechtel, Vice‑President and Comptroller for Corus Radio, and to my left, Guus Hazelaar, General Manager for Guelph.  Guus has been the General Manager of the station for 14 years, and is a long‑time resident, who attended the University of Guelph.

4764             We won't ask Guus to tell us when he graduated, but suffice it to say that he knows the market like no one else in this particular hearing room.

4765             To Guus' left we have Jack Hoepnner, who is the National Director for Engineering for Corus Radio.

4766             I should also mention that John Cassaday, who recently assumed operating responsibility for Corus Radio, did want to appear with us today in support of this particular application.  Unfortunately, he is unable to do so because of the Corus Board meetings which are taking place this week.

4767             As the Commission is well aware, Corus Entertainment is a company which is publicly traded on both the Toronto and New York stock exchanges.  As such, the dates for our Board meetings are set more than a year in advance.

4768             In addition, this particular Board meeting is being held to deal with our company's year end.

4769             Mr. Cassaday sends his regrets.

4770             Mr. Chair and Commissioners, we are delighted to present this application to convert CJOY Guelph to the FM band.

4771             This is not an application for a new radio station, but simply to continue a longstanding service to the community.

4772             CJOY went on the air in 1948 as Guelph's first homegrown radio station.  It remains to this day the only commercial AM station licensed to serve Guelph.

4773             For the past 60 years, CJOY has been the voice of Guelph, with a focus on local reflection and outstanding service to the community.  It is a distinguished heritage that Corus Radio is very proud of.

4774             We intend to continue building on CJOY's record of community service, but to do so requires that we take steps to remain competitive in today's communications environment.

4775             Conversion to the FM band is the key to ensuring that CJOY can maintain its central role in serving the residents of Guelph.

4776             What are the factors that led us to conclude that CJOY must move to the FM band in order to remain competitive?

4777             We submit that there are five key points to consider.

4778             First, as the Commission is well aware, there is a general trend of tuning away from the AM band to the FM band.  The Commission's 2008 Communications Monitoring Report shows that, in an average week, the tuning share of Canadian AM radio has steadily declined from over 28 percent in 1999 to just 20 percent in 2007.

4779             The tuning share of FM, on the other hand, increased from 66 percent to 73.5 percent over the same period.

4780             Moving to the FM band will give CJOY the platform it needs to attract new listeners not presently tuning to the AM band, while sustaining its current AM radio audience.

4781             Second, and of critical importance to understanding the dynamics of the Guelph radio market, is the reality that CJOY must compete against more than 40 out‑of‑market radio stations that achieve a measurable tuning in Guelph.

4782             According to the Fall 2007 BBM survey, CJOY garnered a 7.8 percent share of the Guelph radio audience.  Contrast this to the fact that over 80 percent of Guelph listening is captured by out‑of‑market stations, more than 30 of which are broadcast on the FM band.

4783             It is imperative that CJOY establish its own presence on the FM band, so that it can properly compete with the cumulative impact of tuning to these out‑of‑market radio stations.

4784             More importantly, CJOY has a very long history of serving the Guelph community by providing a comprehensive news and information service, being the go-to source for community events, and, of course, being the lifeline during emergencies and in times of crisis.  In order to preserve and continue the station's exemplary community service, it is critical that the conversion to the FM band be authorized.

4785             Third, as shown in the financial projections that we filed with our application, continuing operation on the AM band is not a viable option from an economic point of view.  We project that continuing the status quo as an AM station would result in a negative net income situation, starting in the current fiscal year, with increasing losses in subsequent years.

4786             This represents a continuation of the downward revenue and profitability trends that have been apparent over the past several years.

4787             Conversion to the FM band would give us an opportunity to increase revenues and reverse these trends, thereby ensuring CJOY's long‑term survival in the Guelph market.

4788             Fourth, we filed this application to convert CJOY to the FM band in response to the Commission's call for applications for new commercial radio stations to serve Guelph.  The expectation that the Commission will license one or more new radio stations on the FM band in Guelph as a result of the present process further highlights the urgency of converting CJOY to the FM band at this time.

4789             The fifth factor is that our proposal represents a very efficient use of the FM spectrum that only Corus can offer.

4790             MR. HAZELAAR:  The City of Guelph is part of a highly concentrated region that starts in the western suburbs of metropolitan Toronto and ends outside of London.  This region has an expanding population, and the so‑called Golden Horseshoe area is the centre of a large segment of Canada's population and economic base.

4791             The region is bisected, roughly, by the Niagara Escarpment, which creates a natural barrier between cities such as Hamilton and Brantford in the south, and Kitchener and Guelph to the northwest.

4792             One of the consequences of the escarpment is the differences in weather.  It can be snowing on one side, not on the other.

4793             It is geography, industrial development and educational institutions that have fostered the distinctiveness of the market such as Guelph.  We have a major university, major industries, and also a unique history to the cities around us.

4794             Our plan to convert to FM is to ensure competitive parity with any new entrants who may be licensed in Guelph.  CJOY must not be isolated as the only commercial AM station in the market.

4795             With regard to CJOY's programming plans as an FM station, Corus Radio will keep its current oldies format.  The greatest hits of the Royal City will continue to offer musical selections of the seventies and eighties.

4796             As such, we are requesting that the current Condition of Licence that grants CJOY an exception to the percentage of Canadian content, otherwise required under the Radio Regulations, be included in the new FM licence.

4797             CJOY is the community's lifeline to information.  CJOY will continue to broadcast its current high level of news and information programming.  We broadcast 109 locally produced newscasts and 53 locally produced sportscasts each week, and these will be maintained.

4798             We will continue our strong emphasis on local weather information and developments, given the wide variations experienced in the region's weather, and we will continue to broadcast all home and away games of the Guelph Storm Junior "A" Hockey Team.

4799             Furthermore, conversion to the FM band will allow us not only to maintain, but to increase the resources dedicated to local reflection.  Specifically, we will be able to hire an additional announcer, and pay half the salary of a new staff position for promotions.

4800             The latter position would be shared with our sister station in Guelph, CIMJ‑FM.

4801             MS BECHTEL:  Corus Radio is particularly proud of CJOY's outstanding track record, established over 60 years of strong community involvement, and support for local organizations and events.  Our focus on the promotion and coverage of a multitude of community events, meetings and charitable activities will continue with the conversion to the FM band.

4802             A few examples of our support for the local community illustrate our commitment to promoting Guelph as a great place to live, work and play.

4803             CJOY is a platinum sponsor of the Guelph YM‑YWCA "Women of Distinction" event, as well as the platinum sponsor of the Guelph "Quality Awards", an annual event honouring contributions by individuals and businesses in the city.

4804             CJOY sponsors the annual Poor Boys' Luncheon, raising funds for ARC Industries, an organization which provides meaningful employment to local residents with developmental disabilities.

4805             CJOY is a primary sponsor of Guelph's Firefighters' Annual Fifties and Sixties Dance, held to raise money for charity.

4806             Each hour, Monday to Friday, from 6 a.m. to midnight, CJOY broadcasts "Community Calendar" announcements to raise community awareness about forthcoming events.  This amounts to some 100 regularly scheduled community event announcements each week.

4807             Finally, CJOY provides a significant number of PSAs and on-air interview opportunities for a number of local organizations to promote their activities, community goals and fundraising initiatives.  Between March 2007 and February 2008, CJOY donated airtime valued at approximately $210,000 for PSAs of this nature.

4808             MR. HAZELAAR:  Clear evidence of our solid track record of community involvement has been demonstrated by the 30 interventions we have received in support of this application.  The intervenors include the Mayor of the City of Guelph, and a wide variety of community organizations.

4809             Corus Radio is delighted with these supporting interventions.  They represent tangible recognition of CJOY's support for the community.  They confirm the commitment we have to the City of Guelph, a level of commitment that will only be enhanced with the conversion of CJOY to the FM band.

4810             In addition to our continuing emphasis on local reflection and community involvement in Guelph, approval of this application will allow us to take the additional measures to further benefit the community.

4811             Specifically, we will increase our CCD contributions over and above the required basic amount by $10,000 per year, for a total investment of $70,000 over the seven-year licence term.

4812             Eighty percent of this increased CCD contribution will be directed to the Kiwanis Music Festival of Guelph, an annual showcase of young talent that we currently support with a portion of our basic CCD contributions.

4813             The additional contributions that we propose will provide monetary awards for festival winners, sponsorship moneys for the festival concert, and support for the festival endowment fund, to ensure the ongoing viability of the event.

4814             The balance of the CCD over and above contribution will be directed to FACTOR.

4815             In a broader sense, CJOY has always taken a special interest in promoting both the importance of music and music participation to the young people of Guelph.

4816             For example, CJOY works with two separate organizations, the Edward Johnson Music Foundation and the Guelph Youth Music Centre, on their individual campaigns, providing support through regularly scheduled, fully produced PSAs, valued at $35,000.

4817             These important investments by CJOY demonstrate the significant contribution to both music and the community that this station has made over the years.

4818             MR. PANDOFF:  Turning to the technical details of our application, we believe that our proposal for the conversion of CJOY to the FM band is innovative and an efficient use of spectrum usage from a point of view.  It makes use of the Frequency 95.7 MHz, which is not otherwise available to any other applicant other than Corus Radio.  This is because the use of this particular frequency in Guelph causes significant short-spacing concerns with a number of stations, including Corus‑owned radio stations.

4819             However, Corus Radio has been able to successfully deal with these short‑spacing concerns, and, more importantly, 95.7 MHz is the only FM frequency that allows CJOY to replicate its existing AM coverage in the market.

4820             Our proposal to use 95.7 is, therefore, a win‑win situation.  We achieve our coverage objective of substantially duplicating the coverage of CJOY's existing AM operation, something that is not feasible with any other frequency.  At the same time, approval of our application has no impact on the ability of the Commission to approve a new service on 101.5 MHz, as our proposal is not technically mutually exclusive with any other applicant.

4821             In these circumstances, the Commission can examine our application for CJOY and take a decision on its merits, since there are no negative implications with respect to the licensing of any other applicant.

4822             First, and perhaps most importantly, we submit that the residents of Guelph will be the ultimate beneficiaries of our innovative proposal.  They will be assured of continued access to a local radio station focused on the community.  They will benefit from our enhanced level of service and CCD contributions, and all without any technical limitation on the ability of the Commission to license a new entrant as it sees fit.

4823             Mr. Chair and Commissioners, that completes our presentation.  We are convinced that the merits of our application fully justify approval of the conversion of CJOY to the FM band.  Our plan is good for the community, it is good for radio, it is an efficient use of spectrum, and, hence, in the public interest.

4824             Thank you for your attention.  We would be pleased to answer any questions.

4825             THE CHAIRPERSON:  Thank you very much, Mr. Pandoff.

4826             I would ask Commissioner Cugini to start the questioning.

4827             COMMISSIONER CUGINI:  Thank you.

4828             Good afternoon, Mr. Pandoff, and to your colleagues.  I am glad to see that your oral presentation touched upon the four areas of your application that I would particularly like to speak to you about this afternoon.  They are:  the exception to the Common Ownership Policy, your format, your spoken word commitment, and finally, your business plan.

4829             We know that in the Guelph market, currently, your signals from Hamilton and Cambridge are well received in this market.  In fact, we do have a share of tuning from the Guelph market to those radio stations.

4830             Now, in your oral presentation you said that we should continue the exception to the Common Ownership Policy, but some would characterize it as being completely exempt from the Common Ownership Policy.

4831             Would you care to comment?

4832             MR. PANDOFF:  Sure.  In fact, it is certainly an important question and a very complex question.

4833             I do have a statement, and because the response is quite detailed, we have taken the liberty of providing the Hearing Secretary with a written copy of the response, along with a map that shows the coverage contours of our stations in the Guelph area.

4834             With your agreement, I would request that the Secretary provide you with the written copy of the response and the coverage map at this time.

4835             COMMISSIONER CUGINI:  There is no executive summary?

--- Laughter / Rires

4836             MR. PANDOFF:  No.  Actually, I am going to read all five pages.

4837             Corus understands that the question as to whether or not the CJOY application complies with the Common Ownership Policy has been raised because the following four Corus‑owned stations have a 3 millivolt contour in the vicinity of Guelph:  our existing station CIMJ‑FM, and our new CJOY‑FM, both licensed to serve Guelph, plus two other Corus stations in nearby markets, CJDV‑FM in Cambridge, and CING in Hamilton.

4838             Our response to this question has two parts.  One, we fundamentally believe that our application to convert CJOY to the FM band complies with the ownership policy as it pertains to Guelph.

4839             Two, even if the Commission should conclude that an exception to the Common Ownership Policy is required in order to approve the conversion of CJOY to the FM band, the unique circumstances of this application fully justify such an exception.

4840             In this context we firmly believe that approval would not result in a precedent that would open the door to exceptions in other markets.

4841             Let me explain the first part of our response concerning the applicability of the Common Ownership Policy in Guelph.

4842             This policy states that:  "In markets with less than eight commercial stations operating in a given language, a person may be permitted to own or control as many as three stations operating in that language, with a maximum of two stations in any one frequency band."

4843             Under the Commission's Radio Regulations the term "market" is defined as follows:

"In the case of an FM station, the FM 3 millivolt contour or the central area, as defined by the Bureau of Broadcast Measurement, whichever is smaller."

4844             Of the four stations that I just mentioned, only two are in fact licensed as Guelph stations:  CIMJ-FM and CJOY.

4845             The other two stations are licensed to serve nearby markets, Hamilton and Cambridge, but they are potentially captured under the policy because they both place a 3 millivolt contour into the Guelph area.

4846             We believe that there are a number of relevant factors to consider in analyzing this situation in more detail.

4847             First of all, Guelph is part of the Golden Horseshoe area of southern Ontario, an area that extends from Oshawa, around Lake Ontario, to Niagara Falls.  It is the single most densely populated region in all of Canada, with just over 25 percent of Canada's entire population, and 75 percent of the Ontario population.

4848             In such an urban agglomeration, individual markets are inevitably located in very close proximity to one another.  This makes it almost impossible from a technical point of view for a given station to properly serve its own market without its signal spilling into neighbouring markets.

4849             We have already referred to the fact that there are over 40 out-of-market stations that achieve a measurable share of listening audience in Guelph due to this factor.

4850             In that environment, then, let's look at the Corus station in Cambridge, CJDV‑FM.

4851             Cambridge is part of the Kitchener‑Waterloo central BBM market area.  Similarly, Guelph and Hamilton each have their own respective central BBM market areas.

4852             At the time Corus had acquired CKBT‑FM in Kitchener, along with CJZZ‑FM in Winnipeg, from Canwest, the Commission noted that:  "CKBT and CJZZ could now benefit from synergies available through other Corus stations currently operating in the Cambridge and Winnipeg markets."

4853             This is from Broadcast Decision 2007‑215.

4854             When Canwest was originally approved for CKBT‑FM in Decision 2003‑152, the Commission noted that:  "Five commercial radio stations currently serve the Kitchener‑Waterloo area.  As mentioned above, Rogers operates two of these stations.  Of the others, two are licensed to CHUM Limited, and one is owned by Corus Entertainment."

4855             The point is simply this, that the Commission has always considered that CJDV‑FM serves the Kitchener‑Waterloo market and not the Guelph market.

4856             We would also like to correct an error in the coverage map that the Commission sent to Corus in a letter dated October 16th, when it raised the possibility of a common ownership issue in Guelph.

4857             The location of CJDV's FM 3 millivolt contour, as shown on the Commission's map, is incorrect.  It appears that the contour for CJDV used by the Commission staff is a proposed contour that had been included in a previous application to increase the power of CJDV‑FM.  However, this power increase was subsequently denied by the Commission in Decision 2006‑261.

4858             The correct contour for CJDV is included in the map prepared by our engineering consultants, D.E.M. Allen & Associates, which we have provided with the written copy of this response.

4859             As you can see from the map, the 3 millivolt contour does not extend into the City of Guelph.  It does overlap a small portion of the BBM‑defined Guelph market area, but only in the southwest corner, and outside of the City of Guelph.

4860             To summarize, CJDV‑FM is licensed to serve Kitchener‑Waterloo, it's 3 millivolt contour does not reach the City of Guelph, and there is only minimal overlap with the broader Guelph market, as defined by BBM.

4861             Both Guelph and Kitchener‑Waterloo have defined and separate BBM markets.

4862             Further, the Commission has also identified which stations operate in these defined markets, and CJDV only operates in one defined BBM market, namely, Kitchener‑Waterloo.

4863             Accordingly, Corus firmly believes that the Commission should not consider CJDV as operating in the Guelph market for the purposes of applying its Common Ownership Policy.

4864             Turning now to CING‑FM in Hamilton, the Commission itself made a very relevant determination in its Decision 2000‑222, which approved the acquisition by Corus of WIC Premium Corporation and, among other holdings, WIC Radio's holdings, including CING‑FM.

4865             During the hearing of that application, an intervenor raised an issue related to the ownership of CING by Corus and potential non‑compliance with the Common Ownership Policy in Toronto.  The Commission's assessment of this issue included the following statement at paragraph 18 of the decision:

"Even though a portion of CING's audience is in Toronto, it is treated as a Hamilton‑Burlington station by the Bureau of Broadcast Measurement.  More importantly, in the Commission's view, CING‑FM is licensed as a Burlington station and is appropriately considered as such for the purposes of the policy (i.e., the Common Ownership Policy noted above)."

4866             Moreover, at paragraph 16 of the same decision, the Commission confirmed that the WIC transaction was fully consistent with the Common Ownership Policy.

4867             Since the time of that decision CING‑FM has undergone a technical amendment and is now licensed as a Hamilton station, but we submit that the fundamental principle remains valid, and that is to say that CING‑FM is licensed as a Hamilton station.  It should not be considered as a station serving Guelph for the purpose of applying the Common Ownership Policy in Guelph.

4868             Concerning the actual coverage of the station, the map provided by Commission staff shows that CING's theoretical 3 millivolt contour passes roughly through the centre of the City of Guelph, and encompasses about half of the Guelph central market, as defined by BBM.

4869             The "Predict" estimate for CING‑FM is included on the map we have provided.  It shows that the realistic coverage of CING, in fact, falls short of the City of Guelph, although it does continue to overlap to a certain degree with the southern part of the broader BBM‑defined market area.

4870             Our engineering consultants looked into the possibility of amending CING's technical parameters to further reduce its coverage in the direction of Guelph to eliminate any lingering concern that it might be able to serve the Guelph market.  Unfortunately, such a technical revision is not feasible, since it would compromise CING's coverage of its own market.

4871             Nevertheless, given the Commission's own policy determination in 2000 that CING should be seen as serving only its licensed market, not adjacent markets, and taking into account a realistic assessment of the station's actual coverage in the Guelph market, Corus submits that CING Hamilton would also not be considered as serving the Guelph market for the purposes of applying the Common Ownership Policy.

4872             Corus has been operating CJOY and CIMJ in Guelph, plus the two other stations we have just discussed, since our acquisition of WIC in 2000.  If there was an issue with the Common Ownership Policy which would otherwise allow Corus to operate a maximum of three stations serving the Guelph market, not four, it would have been raised at that time.

4873             The fact that the Commission confirmed in Decision 2000‑222 that there were no issues with compliance with the Common Ownership Policy at that time is a strong indicator that there is no issue with the switch of CJOY to the FM band today.

4874             Taking all of these factors into account, we believe that the conclusion to the first part of our response is clear:  the switch of CJOY to the FM band raises no issues with respect to our compliance with the Common Ownership Policy in Guelph.

4875             Turning now to Part 2 of our response, we acknowledge that, notwithstanding the rationale we have just outlined, the Commission could, nevertheless, conclude that the radio Common Ownership Policy does come into play in Guelph with this particular application.

4876             If so, then we would submit that an exception to the policy is fully justified, based on the unique and compelling circumstances of the application.

4877             In this context, it is important, first, for all of us to understand that the Common Ownership Policy was put in place in 1998 to provide safeguards in respect of two very important underlying issues, namely, preserving the availability of distinct news voices in a community, and maintaining an appropriate level of competition within a market.

4878             We are convinced that the approval of this application has zero negative impact in either of these underlying concerns.

4879             Let us look at the facts.

4880             CJOY is an existing station in the Guelph market, competing with more than 40 out‑of‑market stations for an audience.

4881             We have outlined our rationale for switching to FM, but the key point for the purpose of this discussion is that we are able to use a frequency that cannot be used by any other applicant.

4882             Approval of the CJOY application in no way compromises the ability of the Commission to license one or more new entrants to serve Guelph, providing additional diversity of local voices over and above the numerous out‑of‑market stations that already exist.

4883             In summary, approval of the CJOY conversion to FM does not reduce existing diversity of voices, nor does it limit, in any way, a potential increase of diversity through the licensing of other applicants.

4884             Similarly, with respect to the potential impact on the level of competition within the market, approval of this application has no impact.

4885             The station already exists, it is only switching frequency bands.  The fact that it is using a frequency that cannot be used by any other applicant means that the ability of the Commission to increase competition in Guelph through the licensing of one or more new entrants is not compromised.

4886             Finally, we still have the reality of 80 percent of the audience share in Guelph going to out‑of‑market stations.

4887             For these reasons, we submit that the underlying concerns of the Common Ownership Policy, namely, diversity of voices and maintenance of the competitive market, are not affected in any way by the approval of CJOY conversion to the FM band.

4888             In other words, applying a rigid interpretation to the policy and denying CJOY the application for that reason would achieve no public policy purpose.

4889             On the other hand, we strongly believe that there is a very compelling public policy reason why the approval of CJOY's switch to FM is fully justified, even if the Commission concludes that to do so would necessitate an exception to the Common Ownership Policy.

4890             Simply put, the long‑term viability of CJOY is at stake.  We have detailed this in our written application and in our opening remarks, but it bears repeating:  Given the competitive realities of the Guelph market, the general shift in tuning from AM to FM, and the likelihood of the Commission licensing one or more new entrants in Guelph on the FM band, we are convinced that CJOY must move to the FM band to ensure its survival.

4891             The financial projections that we filed with our application show that, if CJOY is forced to continue operation as an AM station, it will be in a loss position starting in 2009, with increasing losses, year over year, after that.

4892             In total, we project cumulative losses ‑‑ after tax losses ‑‑ of $877,000 over the next seven years under the status quo scenario.

4893             Moreover, it should be emphasized that these AM projections have not factored in the financial consequences resulting from the potential licensing of a new entrant in Guelph.

4894             If the Commission licences a new competitor in Guelph, while denying CJOY's conversion to the FM band, then losses going forward will be even higher than the forecast in our application, and the viability of CJOY will be placed in jeopardy even sooner.

4895             We believe that it is in no one's interest to allow a situation to develop that would allow a heritage station such as CJOY, a station that has served the Guelph market with distinction for over 60 years, to simply wither away, yet that is exactly the prospect that we face in this application if it is denied.

4896             We strongly believe that when one considers all of the relevant factors of the Guelph market and this application, the need to ensure the long‑term viability of a heritage station provides a compelling public interest rationale that outweighs the need for technical compliance with the Common Ownership Policy, particularly when there is no impact on the underlying issues associated with that policy.

4897             The narrow set of circumstances that would be inherent in such an approval, the need to preserve the viability of a heritage AM station, the simple conversion of an existing AM station to the FM band, the use of a frequency that no other applicant can use, the absence of any impact on the potential licensing of new entrants, the absence of any impact on diversity of voices, and the absence of any impact on competition in the market means that the approval of this application, even if it requires an exception to the Common Ownership Policy, will not serve as a broad precedent for exceptions to the Common Ownership Policy in other situations.

4898             That completes our response to this issue.  We thank you for the opportunity to respond in detail.

4899             THE CHAIRPERSON:  Thank you very much, Mr. Pandoff.

4900             Obviously, what you are asking for here ‑‑ and you have clearly stated it ‑‑ is a revision of the Common Ownership Policy.  This is a decision that has to be made by the full Commission.  We, as a panel, cannot adjudicate on your request, the way you have introduced it.

4901             We appreciate that you have done it for the record, but we would surely have to go to another type of process, if, at the end of the day, we were to conclude that a need to review the Common Ownership Policy was warranted.

4902             MR. PANDOFF:  I understand.

4903             THE CHAIRPERSON:  All right.  I will return the floor to Commissioner Cugini.

4904             COMMISSIONER CUGINI:  Thank you.  I can see why you didn't include that response in your oral presentation.

--- Laughter / Rires

4905             COMMISSIONER CUGINI:  Just to close the circle, I am going to ask you a couple of more questions.

4906             Do either CING or CJDV, or both, program to the Guelph market, and do they garner any revenue from the market?

4907             MR. PANDOFF:  Neither of them program directly at the market.  Each of those two stations, respectively, concentrates on their local markets.

4908             There are advertisers who do advertise on either of the two stations, but who are looking for the opportunity to attract audience either from their market into Guelph, or, in the case of Country 95, CING, it would be category‑specific advertisers, who are looking to buy a country station.  The only one available is the one in Hamilton, or the one in Kitchener owned by Rogers.

4909             So with the exception of, literally, a handful of advertisers, we really do not, or cannot monetize the spill that goes into that market.

4910             COMMISSIONER CUGINI:  Thank you.  Like I say, it was just to complete that circle.

4911             MR. PANDOFF:  Sure.

4912             COMMISSIONER CUGINI:  We will move on to programming, which will include both the format and the spoken word.

4913             I do note that throughout your application, and this afternoon, you repeated that you are going to stay with the oldies format.  Will that be true regardless of what else we license, if we do license something else for the Guelph market?

4914             You know what the other applicants have proposed.  Both the blues application, as well as the classic rock application could eat some of your lunch, or maybe you don't think they will.

4915             I just want your reaction to the question.

4916             MR. PANDOFF:  Competition, certainly, is a way of life for all of us in the radio industry, and we do have, by most measures, as an AM music station, a successful operation, albeit it is moving toward a negative cash flow position.

4917             As a result of that, we have what we feel to be a really strong core group of audience, and a terrific brand in the market, to be able to convert to the FM band.  So we are really not approaching this from the standpoint of a competitive decision between either another applicant or ourselves, it is more the long‑term survival of an AM station to gravitate to the FM band.

4918             I don't know if there is anything that Guus would want to add to that.

4919             MR. HAZELAAR:  No, I believe that would sum it up, really.  We are simply looking to take the format we currently have and put it on the FM band.  We feel it is a strong format in the marketplace.  We do feel that we have done very well with it on the AM band, but we are seeing the declines that Chris has mentioned.

4920             COMMISSIONER CUGINI:  So you don't anticipate adding artists to your playlist who currently aren't there, or decreasing the amount of spoken word programming that is on your AM station for an FM audience?

4921             There is nothing ‑‑ no tweaking like that in your plans?

4922             MR. HAZELAAR:  No, we don't plan to do that at all.  As a matter of fact, the figures that we have given you are very much the figures that we currently produce on our AM station.

4923             COMMISSIONER CUGINI:  So the level of spoken word programming that you have committed to is a reflection of what you are currently ‑‑ is a mirror of what you are currently doing on your AM station.

4924             MR. HAZELAAR:  Yes.

4925             COMMISSIONER CUGINI:  By the same token, therefore, there won't be an increase of spoken word programming if the conversion to FM is approved.

4926             MR. HAZELAAR:  We don't plan to have an increase in spoken word.  The area that does not show up, necessarily, in this item is the fact that we do 68 home and away games for the Guelph Storm Hockey Team, and that amounts to 187 hours for a season.  We would like to go longer if we hit the playoffs a couple of times, but that basically is the season we look at.

4927             MR. PANDOFF:  If I could add something to that, that is typically not the case for FM music stations.  They tend to stay away from play‑by‑play.  But because this station was sort of founded in being a highly locally focused station, carrying play‑by‑play for the Guelph Storm, particularly with that audience, is a good thing to continue to do.

4928             COMMISSIONER CUGINI:  By the same token, your commitment of 60 hours of live‑to‑air programming, and 66 hours of automated programming, that is what you currently provide on the AM station?

4929             MR. HAZELAAR:  That is what we currently provide, yes.

4930             COMMISSIONER CUGINI:  And will continue to do so ‑‑

4931             MR. HAZELAAR:  And we will continue to do so.

4932             COMMISSIONER CUGINI:  -- on FM.

4933             In your oral presentation you said that "it will allow us not only to maintain, but to increase the resources dedicated to local reflection," and that you will hire an additional announcer and pay half of the salary of a new staff position for promotions.

4934             Is that the only measure of incrementality?

4935             MR. PANDOFF:  In terms of ‑‑

4936             COMMISSIONER CUGINI:  In terms of the conversion from AM to FM.

4937             Or, would you have to do this even if you stayed on AM?

4938             MR. PANDOFF:  No.  Usually what happens is the reverse, the more mature a station becomes on the AM band, the less live programming and the fewer people that populate it.

4939             So, in fact, what going to the FM band allows us to do is increase the employed population on the station by turning around the financial returns on the radio station.

4940             In terms of live‑to‑tape programming, or voicetracking, conceivably, down the road, as the station puts itself back into ‑‑ reaching to a younger audience, and competing effectively with the FMs, we would probably add more live programming.

4941             COMMISSIONER CUGINI:  In terms of the average listener, what are the changes they are going to be able to hear, once the conversion is complete?

4942             MR. PANDOFF:  Other than the sound quality on FM, virtually none.

4943             We are going to add a few more eighties songs to round out the gold, but in terms of the announcer staff ‑‑ Guus ‑‑ most of the people who have been there will continue to stay.

4944             MR. HAZELAAR:  We have a longstanding staff with the station.  Our morning show host has been there 20 years.  Our News Director has been there 34 years.  Our afternoon drive person has been there 20 years, plus another stint seven years earlier.  And our midday announcer has been with this company, in various capacities, for about 27 years, as well.

4945             We don't plan on changing them.  We feel that we have a very strong programming element to give to the community, and we don't really plan on changing any of that.

4946             COMMISSIONER CUGINI:  Again this afternoon you said that our own communications monitoring report shows that, in an average week, the tuning share of Canadian AM radio has steadily declined from 28 percent in 1999 to just over 20 percent in 2007.

4947             But when I look at your audience share projections ‑‑ you give us your actual audience share from 2001 to 2007, and then your forecast ‑‑ there is not much difference.

4948             MR. PANDOFF:  Actually, CJOY has been able to ‑‑ verses other comparable AMs across the country, has been able to hold its audience decline at a slower rate than, typically, AM stations across the country.

4949             I think the hidden danger in what you are looking at in terms of raw numbers is the continual greying of the audience outside of demographics that allow us to monetize the radio station.

4950             If you look at the composition of that audience on the AM band, there is a much higher percentage of people who are retired, and aging, outside of the traditional 25 to 65 demographic.

4951             That is the real hidden danger behind it.

4952             COMMISSIONER CUGINI:  If I am hearing you correctly, although you had an 8 percent share in 2007, going forward, for the next seven years, you are not convinced that you can maintain that?

4953             MR. PANDOFF:  On the AM band?

4954             COMMISSIONER CUGINI:  Yes.

4955             MR. PANDOFF:  No.

4956             COMMISSIONER CUGINI:  By how much do you think it might decline?

4957             Would it decline at the same levels as the average, do you think, or higher?

4958             MR. PANDOFF:  Probably at a faster rate versus the last five years of the station's history on five years going forward.  It, at some point, will catch the national average of decline, as the population ages and fewer younger people go onto the AM band.

4959             COMMISSIONER CUGINI:  When I look at your financial projections, they do paint a rather grim picture, but one thing I want to understand is ‑‑ your total operating expenses would increase by 14.5 percent over seven years, and your revenue would increase by 51.6 percent.  Is that typical for AM to FM conversions?

4960             MR. PANDOFF:  Our company hasn't had a five‑year window in which we have converted a music AM to a music FM to be able to provide definitive data.  The expectation, though, is that comparable FMs, and the amount of FMs that we do operate around the country, have been growing in the last five years at that particular rate, especially if they provide a really strong programming format that the audience responds to.

4961             All things being equal, the correlation between audience size, ratings ‑‑ however you determine that ‑‑ and revenue is more than a 1:1, and it is clear that moving to the FM band ‑‑ when you look at all of the stations across the country, the FMs, by and large, are more successful.  There is more audience to capture share already on the FM band.

4962             COMMISSIONER CUGINI:  My extremely learned and experienced colleague Mr. Arpin always says that it is much more expensive to operate an AM station than it is an FM station.

4963             MR. PANDOFF:  True.

4964             COMMISSIONER CUGINI:  So why the increase of almost 15 percent in your operating expenses?  What factors did you take into consideration in coming up with those numbers?

4965             MR. HAZELAAR:  There are a few elements that we have involved in the increase in expenses, some coming from programming, in terms of the additional people that we would be hiring.  They would play a role in the increased expenses.

4966             In terms of revenues, we would also show some increase in copyright fees, and the normal things that are associated with sales.

4967             We are proposing a somewhat more aggressive promotion operation within the marketplace.

4968             There are some natural increases that would flow.  There are normal pay increases that would flow to the staff of the station.

4969             Those are areas that would create some increases for us in the expense area.

4970             COMMISSIONER CUGINI:  One of the things I didn't calculate last night ‑‑ is the ratio between national and local expected to stay the same, in terms of advertising revenues?

4971             MR. HAZELAAR:  Yes, I would think that it is going to be relatively close.

4972             National fluctuates significantly.  We have no way of controlling national dollars.  We do some history tracking on it, but it is something that is basically out of our control, as opposed to the local dollars and the ratios.

4973             They should stay relatively the same.

4974             CJOY's national revenues, of course, have been lower than our FM, for example, but I would say that what you would see on a regular national basis across Ontario, or parts of southern Ontario, should be reflected on the CJOY numbers, as well.

4975             MR. PANDOFF:  The one thing I would add to that, Commissioner Cugini, is that ‑‑ we talked about the spill of other stations into the market.  What advertisers are increasingly trying to do is to capture the exposure they get from non‑originating signals into other markets to save money in those markets.

4976             It happens more often in large transactional advertisers, mostly at the national level.

4977             So, if anything, a non‑metro market is at the risk of having its national decline as advertisers try to get more out of their budgets.

4978             COMMISSIONER CUGINI:  Thank you.

4979             As experienced operators in the Guelph market, if we were to approve your conversion, how many other licences do you think the Guelph market could sustain?

4980             MR. PANDOFF:  As I said earlier, we are here, really, to appeal to the Commission with regard to the continuation of an AM station's future.  Whatever the Commission would decide, we are not prepared to make an opinion on that at this point.

4981             We do recognize that it was important that we had the opportunity to present.

4982             The one thing I would say is that, were you to grant us the change and license two other applicants in the market, essentially we would have four FMs in the market, and the one thing I would remind you of is that the radio revenue in this market is just under $4 million.  So those four radio stations would compete for that pool of dollars.

4983             COMMISSIONER CUGINI:  Thank you very much for your presentation this afternoon.

4984             Mr. Chairman, those are my questions.

4985             THE CHAIRPERSON:  Thank you very much, Commissioner Cugini.

4986             I don't know if you had a chance to look at other applications.  While they do recognize that ‑‑ at least one of them made the statement that it is just under $4 million, they are making the assumption that the total market value is closer to $6 million.  So there is money in the market that is still untapped.

4987             I apologize to the Manager of CJOY.  I am telling his boss that there is still money left in the market, and he hasn't solicited it.

--- Laughter / Rires

4988             MR. HAZELAAR:  We're missing something, are we?  Okay.

4989             THE CHAIRPERSON:  Here, I have a list.

--- Laughter / Rires

4990             THE CHAIRPERSON:  How much, do you think, is the Guelph market capacity regarding available dollars for radio advertising?

4991             MR. PANDOFF:  Certainly, when you contrast this market and you look at its population size relative to other markets, even in Ontario, quite often the number of broadcasters has an impact, in terms of the overall radio revenue, because you have people out developing business.

4992             What we don't know is, we don't have anecdotal or even specific data on where that extra $2 million would come from.  Perhaps some of the other applicants have information or surveillance that tells them that other stations are taking it.

4993             I can only guess at the number.  I know what we do, or don't do, in this market.

4994             I am sufficiently convinced that Guus and his team, after being here 40-some-odd years, are getting most everything in the market.  At least, I would hope that would be the case, although we will meet privately later.

--- Laughter / Rires

4995             THE CHAIRPERSON:  All right.

4996             Commissioner Duncan.

4997             COMMISSIONER DUNCAN:  I would like to talk about the live versus automated programming, the number of hours.

4998             I notice that the other applicants ‑‑ the Torres group is proposing 126 hours live, Blackburn 90 hours live, and Guelph Broadcasting, that we are going to hear next, shows 99 hours.

4999             I am wondering why you are satisfied with only 60 hours live, which is less than half, and, if I were a listener to your station, how that would impact me as compared to some of these other scenarios where the live is a much higher percentage.

5000             MR. HAZELAAR:  I think what I would look at is, when we say "live" and "not live" ‑‑ there are periods Saturday and Sunday mornings, for example, where we do not run live programs.

5001             I would venture to say that the taped program, or the voicetracked program that we have on Saturday morning would rival any other program in the area.  It is extremely well produced.

5002             We have noted in our brief, as well, that on Sunday morning, from 6:30 a.m. until 9:00 a.m., we run religious programming.

5003             During that period, while it is not live, it is fully news covered.  We do cover our surveillance and our news material during that period.  It is monitored by the people we have on our FM side.

5004             So there are many times when ‑‑ particularly in winter, for example.  A Sunday afternoon game, obviously, would be live.  A Friday night game, obviously, would be live.

5005             So we do bring that in, but what we look at are those areas where ‑‑ when we voicetrack, we voicetrack as though it was live, and we do present material.  So even those times when we are not live on a Saturday, our vehicle is out covering events all over the marketplace, and filing reports on those events.

5006             So there is a live component, even though we don't have an announcer necessarily.

5007             COMMISSIONER DUNCAN:  You mean that this coverage, some of it is live ‑‑

5008             MR. HAZELAAR:  Yes.

5009             COMMISSIONER DUNCAN:  -- through that day?

5010             MR. HAZELAAR:  Yes, it is.

5011             COMMISSIONER DUNCAN:  So they interrupt, as it were, your taped programming.

5012             MR. HAZELAAR:  Yes.

5013             COMMISSIONER DUNCAN:  Is religious programming similar to the coverage of hockey, in the respect that it is not normal to an FM service, or is religious programming often broadcast on FM?

5014             MR. PANDOFF:  Rarely.  Most times religious broadcasting ends up in Canada on the AM band on Sunday mornings, primarily because of its ability to generate revenue and have little cost attached to it.

5015             Again, with CJOY's position in the market as a local heritage station, it would just not make good broadcasting sense to change that.

5016             COMMISSIONER DUNCAN:  I understand that.

5017             Thank you very much, those are my questions.

5018             THE CHAIRPERSON:  Legal counsel?

5019             MR. McINTYRE:  Thank you, Mr. Chair.

5020             I just would like to ask the Applicant to provide confirmation of the availability of financing for the new undertaking by October 30th.

5021             MR. PANDOFF:  Yes.  Actually, we will file that on Friday of this week.  Our annual report is being released tomorrow to the public markets.

5022             MR. McINTYRE:  Great.  Thank you.

5023             THE CHAIRPERSON:  Thank you very much for your presentation.

5024             We will take a 15-minute break, and then we will hear the last Applicant for the Guelph market.

--- Upon recessing at 1608 / Suspension à 1608

--- Upon resuming at 1635 / Reprise à 1635

5025             THE CHAIRPERSON:  Order, please.

5026             Madam Secretary.

5027             THE SECRETARY:  Thank you, Mr. Chairman.

5028             We will now proceed with Item 13, which is an application by Guelph Broadcasting Corporation for a licence to operate an English‑language FM commercial radio programming undertaking in Guelph.

5029             The new station would operate on Frequency 101.5, Channel 268A, with an average effective radiated power of 132 watts, maximum effective radiated power of 500 watts, with an effective height of antenna above average terrain of 40 metres.

5030             Appearing for the Applicant is Mr. Doug Kirk.

5031             Please introduce your colleagues.  Then you will have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

5032             MR. KIRK:  Thank you, Madam Secretary.

5033             Good afternoon, again, Vice‑Chairman and Hearing Chairman Arpin, Commissioners Cugini, Simpson, Duncan and Menzies, Commission staff, and ladies and gentlemen ‑‑ or the three or four people who are left in the room.

5034             I am Doug Kirk, Chairman and CEO of Guelph Broadcasting Corporation.  This is a new company, which is proposing an exciting new radio station for Guelph.

5035             My company, Durham Radio, currently operates four stations in Hamilton and Oshawa, and is looking forward to this opportunity of expanding to Guelph, and possibly London.

5036             As mentioned to you earlier this week, I have been a passionate participant in the business for over 30 years, a station owner for over 20, and I am here to continue to build and grow.

5037             As mentioned earlier, as part of my personal commitment to the industry, I have recently taken on the President's role of running the Ontario Association of Broadcasters.

5038             Before we share the highlights of our application, let me take a moment to introduce our panel again to you.

5039             To my right, your left, is Dean Sinclair.  Dean is President and General Manager, proposed, for Guelph Broadcasting Corporation.  He is a 30‑year experienced broadcaster, a long‑time resident of southwestern Ontario, and a previous general manager of Corus' multi-station clusters in both Hamilton and London.

5040             To my left, your right, is Steve Kassay, Vice-President of Programming and Operations of the four Durham Radio stations in Oshawa and Hamilton.

5041             To Steve's left is Andrew Forsyth, our Programming Consultant.  Durham Radio stations have had the advantage of working with Andrew and his expertise for over 15 years.

5042             Behind me is my associate of many years, John Wright, who is controlling shareholder of K‑ROCK in Kingston and KIX Country in Kingston.  John will invest and serve as a director of Guelph Broadcasting.

5043             Dr. Liesa Norman is a proposed director.  She was unable to make this hearing.  She is an accomplished musician from Vancouver, but because of performance commitments, could not make it.

5044             Liesa, with her husband and partners, will own one-third of Guelph Broadcasting.

5045             This Applicant is headed by me.  Mr. Sinclair and I will make the day‑to‑day operating decisions relating to the station.  Along with Dean and me, the Board will include Mr. Kassay, Mr. Wright, and representatives of our investor partners.

5046             I will have the casting vote on the Board, to control the Board of the corporation.

5047             Guelph Broadcasting Corporation brings together the operating expertise and background of Durham Radio, along with Mr. Sinclair, and combines that with the experience and counsel of Mr. Wright.

5048             Guelph is a great place to start a new radio station.  It is a prosperous and industrious community.  It is close to Hamilton, Toronto, and Kitchener‑Waterloo.  As such, it has participated in the growth of Ontario's Golden Horseshoe over the past couple of decades.

5049             In addition to the highly skilled industrial base underlying Guelph's economy ‑‑ and the manufacturing base provides 25 percent of Guelph's employment ‑‑ the city is home to a large university, the University of Guelph, and to Co‑operators Insurance.  The economy is well balanced.

5050             ROCK 101 will be a very different radio station compared to the existing Guelph stations, and unique in comparison to the stations being proposed by the other applicants.

5051             Guelph Broadcasting brings a strong combination of broadcasting experience and expertise, based on successful radio operations in southern Ontario.

5052             This team brings practical knowledge of the Guelph region and its radio landscape, from many years of operating in the area, in Oshawa, Hamilton and London.

5053             Earning a licence in Guelph will give our group the opportunity to expand, to become a larger regional operator, and will be based on the success of operating stations in both Hamilton and Oshawa.

5054             I will now turn it over to Dean Sinclair to describe what we call ROCK 101.

5055             MR. SINCLAIR:  Thank you, Doug.

5056             ROCK 101 is anchored by mainstream rock music, with an emphasis on local news and information, and a unique plan for new artists, in a package targeting adults 25 to 54 years of age.

5057             Our application meets the needs of the Guelph marketplace.  Approval of our application will offer diversity of ownership in what is now a one‑owner market, offer a distinct editorial voice, stimulate tuning to local radio and increase the utility of the media, offer a comprehensive CCD plan that will foster new and emerging artists, offer a music format that fulfils the demands of the 25 to 54‑year‑old audience, and repatriate tuning and revenue from out‑of‑market stations.

5058             The Guelph CMA population growth is projected at 2 percent annually until the year 2013, higher than the Ontario average.

5059             Retail sales are projected to grow by 7.25 percent annually, which is above the Ontario average.

5060             The radio revenue forecast shows that retail sales in Guelph are more than able to sustain an additional radio service.

5061             MR. FORSYTH:  As you can tell, we are pretty excited about the prospects of putting a mainstream rock station on the air to specifically serve Guelph.  This is a format we love and have made a great success for listeners in Oshawa and Kingston.

5062             It is locally oriented rock, community‑based radio, powered by today's best artists and classic songs that stand the test of time.

5063             The entire thrust of ROCK 101 is targeted at adults 25 to 54, and, more directly, the core of 35 to 44.

5064             Our criteria for ROCK 101 is that the music, spoken word, feature programming, promotions and lifestyle events ‑‑ everything that ROCK 101 does ‑‑ must address this key group of 35 to 44‑year‑olds before anything else.

5065             ROCK 101 is more than just great rock music, and Steve Kassay will talk about our compelling spoken word plan shortly.  But before we get there, let me spend a few moments outlining the musical focus of the station and the reasons that we believe Guelph needs ROCK 101.

5066             Guelph is served by a campus station and a cluster of FM Hot AC, and an Oldies on AM, operated by Corus.  The commercial stations are well respected and generate just under 20 percent of tuning in the market, as you have already heard.  Almost half of the out‑of‑market tuning goes to Toronto, with the balance going to Kitchener‑Waterloo, Hamilton, and even St. Catharines.

5067             Finding a format that would provide diversity, repatriate the audience, fill a void in the market, and be commercially viable was the question we presented to Hendershot Research.

5068             Five non‑originating formats were tested:  country, adult hits, smooth jazz, rock, and adult contemporary.

5069             The results of the study show that mainstream rock is the format with the largest and broadest appeal, and also the preferred musical style that would draw the largest frequency of tuning.

5070             Fully 41 percent of the respondents, and over half of the pivotal 35 to 44‑year‑old group, said that they would listen often or very often to a station that plays mainstream rock.

5071             Over 75 percent of the respondents indicated that the format was very appealing or somewhat appealing.  That is not surprising, as this is the feedback we get in Oshawa and Kingston.

5072             We also looked at a BDS duplication study to see if the music proposed for ROCK 101 is readily available on the market stations, and what impact that proposed playlist would have on the incumbent FM service.

5073             Based on a 30-day study, BDS found that only 4 percent of the songs were duplicated.  This means that there is a lot of rock not getting any exposure in Guelph.  ROCK 101 will inject a new musical genre to the market and have no negative impact on the present operations.

5074             Okay, that's a lot of talk.  What is ROCK 101 musically?  Well, it's this.

--- Audio clip / Clip audio

5075             MR. FORSYTH:  ROCK 101 is music that matters, great music from artists like Gord Downie and the Tragically Hip, Canadian icons who receive no airplay on Guelph radio, Pink Floyd, Rush, The Rolling Stones ‑‑ artists and songs that have shaped the common language of generations of Canadians.

5076             ROCK 101 will be an energetic, spontaneous and passionate mix of the world's greatest rock and roll ‑‑ The Beatles, Jimmy Hendrix, BTO, Eric Clapton, Nirvana, The Band, Red Hot Chili Peppers, U2, Guess Who, Arcade Fire, and State of Shock.  ROCK 101 will bring five decades of rock to Guelph.

5077             Passion is the underlying theme as we target adults 25 to 54, offering the classic and new rock music they crave.  New music is vital to ROCK 101.

5078             Research results substantiate our experience in the markets where we currently program rock formats.  Interest in new music is strong, with more than 70 percent of Guelph survey respondents indicating that new music is either very or somewhat important.  ROCK 101 has a strong commitment to new and emerging artists.

5079             We play outstanding Canadian music and work hard in Oshawa and Kingston to help new artists, and we will employ the same philosophy in Guelph.

5080             In a few minutes Dean will describe the CCD program that will accompany the airplay for upcoming musicians.  We have a strong commitment to Canadian content and emerging artists, with a minimum of 40 percent Canadian content weekly, 40 percent Monday to Friday, 6 a.m. to 6 p.m., and 20 percent of Canadian airplay.  That is 8 percent of all airplay from emerging artists.

5081             We are successful at establishing strong local radio brands, investing in our programming, adding context, entertainment and enlightenment.

5082             ROCK 101 will be a powerful radio station, providing an exciting city with a service that demands and deserves a good rock station.

5083             MR. KASSAY:  As Andrew has described, ROCK 101 will appeal to adults age 25 to 54 who can't find the music that they prefer to hear on a local service.  But music is just the springboard.  We are going to augment the music with local information and news programming for those who live in Guelph.

5084             As an experienced rock programmer and a huge fan of rock, I am really excited about the fact that ROCK 101 will broadcast over 21 hours of spoken word programming each week.  Effective spoken word is the cornerstone that brings character, depth, relevance, and a defining edge to the radio.  Local, immediate and interactive is what makes us different from all of the other media.

5085             Just to simplify something that we believe is really vital, we have broken down the spoken word into three banners:  music and entertainment, news and information, and lifestyle.

5086             Music and entertainment defines a station's personality and, in turn, it defines its value to those who listen to ROCK 101.

5087             Our credo is to ensure that the on‑air talent present an experience that brings the listener, the music and the artists together, on the basis of a shared passion for music.

5088             Our presentation will tell the ongoing story of the musical emotion that has shaped and continues to shape our lives.

5089             ROCK 101 will have a team of knowledgeable and experienced on‑air hosts, whose primary role will be to engage the listener.  You will hear interviews with new and established artists.  We will promote the local music scene.  We will share our passion for music, for entertainment, and for community, through compelling and interactive delivery and presentation.

5090             This interactivity includes an intensive online presence, as well ‑‑ concert listings, complete with links, so you can purchase tickets; sample downloads of new and emerging music; Rock'ommended new albums to discover; online voting; multiple audio streams, including the on‑air ROCK 101 audio stream; and, of course, audience‑driven alternatives.

5091             We will mesh classic tastes with new music on ROCK 101's "New Rock at 9", "Emerging 101", "Deep Tracks 101" and the "New Rock Challenge".

5092             We know through our research that news is important to our target demo, 25 to 54‑year‑olds, in Guelph, so to complete the loop, news and information on ROCK 101 has to communicate with the audience on their terms.  This is very different from what is heard on the radio in Guelph today.  Our unique presentation makes this part of the ROCK 101 experience.

5093             ROCK 101 news will present more than 9 hours of news and information weekly, with pure news accounting for over 3.5 hours a week.  Whether we are talking about the future of the Hanlon Expressway, or recent revelations of a $340,000 compensation package to a former city official, Guelph native Chris Bard's official appointment last week as the new leader of the Snowbirds, or the awarding of Ontario's Medal for Good Citizenship to a Guelph resident, ROCK 101 news commits to have local stories, delivered in context, and on time.

5094             We will devote 75 percent of news airtime to stories of a local nature, and will introduce a distinct news voice to the area and the residents, and, in doing so, will increase the choice and diversity of editorial opinion available to residents of Guelph.

5095             As someone who talks to and listens to listeners who contact me from time to time, from any of our stations across southern Ontario, with their thoughts, their comments and their input, I know how important local information can be.  That's why we know that ROCK 101 needs to provide spoken word content that addresses life in Guelph, information about the community, its lifestyle, its ecology, its industry, its diversity, its perspectives, and its local interests.

5096             ROCK 101's foremost commitment, of course, is to the community, and we will do that through our unique ROCK 101 community initiative.  Every day we will share important community information about local events and local organizations.  We will open our doors to local non‑profit groups and bring their information to life with prime time show interviews, online opportunities, online listings, on‑air announcements, and on‑site station visits regularly scheduled throughout the year to promote events and their messages.

5097             ROCK 101 "Around Guelph", for instance, will air three times daily.  In addition to the breakfast show interviews that will be integral to the programming, these will fill an important aspect of our programming strategy:  to be relevant and meaningful to residents of Guelph.

5098             From fundraisers to fun events, ROCK 101 will be proud to be an accessible, proactive and reliable community partner.

5099             MR. SINCLAIR:  Approval of Guelph Broadcasting Corporation's application will have a significant benefit for musical talent in Guelph.  ROCK 101 has committed to over $312,000 in direct cash during the first licence term.  In addition to the $88,000 committed to FACTOR, ROCK 101 will undertake two local Guelph initiatives, targeted at the development and promotion of new and emerging local talent.

5100             Specifically, these projects include the ROCK 101 talent search and MusiCounts.

5101             ROCK 101 is pleased to partner up with MusiCounts through CARAS, the Canadian Academy of Recording Arts and Sciences.  Through their partnership with Canada's music industry, the media and business, MusiCounts' mission is to make sure that young Canadians have access to a comprehensive music program through the school system.

5102             MusiCounts includes Band Aid, as well as scholarships and music education initiatives.

5103             ROCK 101 will spend $105,000 on these projects, designated through MusiCounts, for Guelph schools.

5104             ROCK 101 will also commit $119,000 in direct funds to develop and stage the ROCK 101 talent search.  The winner will receive funding for a studio demo, and a chance to perform onstage, in connection with the annual Hillside Festival in Guelph.

5105             MR. KIRK:  Thanks, Dean.

5106             We believe that the partners of this application are uniquely well positioned and ready to introduce a successful new radio station to Guelph.

5107             Over 80 percent of the tuning, as you have heard, is to stations outside the market.  As a result, we calculate that Guelph radio revenue underperforms comparable markets by at least $2 million.

5108             Approval of this application will, first, repatriate out‑of‑market tuning and revenues by providing Guelph listeners with a new local radio service in a distinctive format.

5109             ROCK 101 will increase musical diversity and choice provided by the local stations.

5110             The research that we have tabled shows that rock is clearly the most popular non‑originated format in Guelph.

5111             We will super‑serve Guelph residents with over 21 hours of spoken word programming each week.

5112             We will provide substantial new support for Canadian Content Development for new and emerging Canadian talent, with direct cash contributions to FACTOR and our local talent initiatives, totalling $41,000 in the first year, and over $312,000 over the first term of licence.

5113             We will directly contribute to ownership and editorial diversity in Guelph by allowing a strong, energetic and successful regional independent broadcaster to enter the market.

5114             Our proposed format will provide a unique product in the Guelph market.  It will be broad enough ‑‑ it absolutely ‑‑ I want to stress that ‑‑ it absolutely must be broad enough to generate a large enough audience to be valuable to local advertisers.  In that way it can generate the revenues needed to fulfil its business plan.

5115             To conclude, Guelph Broadcasting's proposal will add diversity in ownership, music choices and news to the market, we will make material contributions to the music community, and, most importantly, we will offer a format which is big enough to be viable, based on the small signal available in this market.

5116             We ask you for approval of our application to establish ROCK 101 to serve Guelph.

5117             Thank you very much.  We will take your questions.

5118             THE CHAIRPERSON:  Thank you, Mr. Kirk.

5119             My first question goes directly to the oral presentation.  It is only a matter of, not necessarily clarification, but better understanding.

5120             In your oral presentation, Mr. Kassay, under the section called "Engagement", referred to the Snowbirds, saying, "Guelph native Chris Bard's official appointment last week as the new Snowbirds leader..."

5121             Are the Guelph Snowbirds the same type of Snowbirds that we know in Quebec, those who leave at this time of the year and come back at the end of April?

--- Laughter / Rires

5122             MR. KIRK:  I don't think they can afford it any more.

--- Laughter / Rires

5123             MR. KASSAY:  If they fly in CT‑114 Tutors, yes.

5124             MR. FORSYTH:  Which were manufactured in Quebec.

5125             THE CHAIRPERSON:  It is interesting, because these people are not necessarily the audience that you are directly catering to.  You are talking about the Snowbirds here, but they are much older than the audience you are aiming at.

5126             You are, more or less, aiming at their children.

5127             MR. KASSAY:  To clarify, the Snowbirds reference is to Canada's aerial demonstration team.

5128             THE CHAIRPERSON:  Oh, those are the ones you are talking about.

5129             Because the Quebec ones are the elderly, who leave every winter to go to Florida.

5130             MR. KIRK:  They forward their mail to Fort Lauderdale.

5131             THE CHAIRPERSON:  Exactly.  Okay, that's clear.

5132             This question is for Mr. Forsyth.  You introduced us to your music sample.  Was it the same music sample that was used by Hendershot to do their marketing study?

5133             MR. FORSYTH:  The sample we used would have been somewhat shorter, but would have had the same components.  It would have had the same mix of styles.

5134             THE CHAIRPERSON:  Today you are not the sole applicant that is aiming for new rock, classic rock and ‑‑ well, ROCK 101, as you have just described it.  Could you describe for us the distinction that you see between your application and the one we heard just before you from Blackburn?

5135             MR. KIRK:  I will start, and I will let our music experts embellish the answer.

5136             I think that both applications are broadly based on the same genre of music.  We call it a broad‑based rock station.  The foundation of that is classic rock.  Added into that is some new rock.

5137             So it's not narrowly defined to an older demographic, which would be a pure classic rock station.  It can blend in and bring in some of the younger demos in the thirties.

5138             It's a format that, I think ‑‑ and I can't speak to Blackburn and its exact composition, but it is a similar format to what they have used.  It is a format that we use on CKGE‑FM in Oshawa.  It is a format that is similar to John's station in Kingston, Ontario.

5139             So it is not as narrow as you might get in some of the major markets, where it is pure classic rock or pure new rock in Toronto, for example.

5140             I will stop now and let the experts give you a bit better feel for it.

5141             MR. KASSAY:  While I understand your question, you, of course, have the benefit of having heard theirs in its entirety, as well as our presentation.

5142             Ours is very strategically targeted at 35 to 44 adults.  Twenty-five to 54 is the broad target.  Ours is defined as talking to mature adults, aged 35 to 44, as the absolute core.

5143             I recognize that as a distinct difference.

5144             THE CHAIRPERSON:  To use the standard introduction that the Commission sometimes uses, if, in its wisdom, the Commission were to grant more than one licence to Guelph, I suspect that you would not be recommending that we grant you and Blackburn a licence.

5145             MR. KIRK:  I  think there would be a high degree of duplication between the two proposals and one of them was probably sufficient to launch in the market on the first run.

5146             If I may, I don't know if Andrew wanted to talk any more about the music at all.

5147             I just wanted to add to your point that the type of music formulation delivers exactly the type of audience that we are proposing for Guelph in the Oshawa market for example.  It peaks in the 35‑44 area.

5148             THE CHAIRPERSON:  As you are saying, you already have the experience of the format, you know the type of audience that you will get and you are aiming at that specific audience.

5149             MR. KIRK:  Correct.

5150             MR. FORSYTH:  I was going to only add to that by saying that one of the points I brought up in the presentation was the core is 35‑44.

5151             So again, the concept ‑‑ I can't speak to the Blackburn application particularly or how they are going to execute what they have on paper, but certainly the experience with Mr. Kirk's radio station and with Mr. Wright's radio station, where particularly in Kingston there is a lot of competition as an independent operator with both Corus and CHUM, a lot of American signals coming into the market, we knew from day one it was going to be very important to have that broad 25‑54‑year‑old format, not only musically but also in the content that Steve spoke about.

5152             It's very important that the content is also focused on 35‑44.  Before everything else, if you don't have that core you end up skewing too young.  If you skew to the university student audience as opposed to necessarily ‑‑ you do yourself a disservice and, frankly, you do the campus station a disservice as well and you are not doing your advertisers any good either.

5153             But I think the key to this is the fact that everything comes out of 35‑44 and that has been the success for both the other stations.

5154             MR. WRIGHT:  If I could add a comment there?

5155             One of the most wonderful blessings that we have with a rock format is that the music carries itself right from 18 through to 60, so even though we focus our spoken word and we focus our news on that adult group in the middle, we still end up with very, very strong ratings in the ‑‑ actually from the late teens right through 18 to 24, 18 to 34.  It is a very broad format.

5156             THE CHAIRPERSON:  Thank you.  Thank you for the clarification.

5157             Let's talk about spoken word.

5158             In the reply that you gave to the Commission through a deficiency letter ‑‑ particularly I'm referring to the reply you gave to question 7 ‑‑ you included a table which shows the assignment of the programming staff.

5159             The table indicates that your news personnel will not only do news but will also be involved in the production and the broadcast of lifestyle programming.  So are all the staff members that are indicated on that list.

5160             How will the assignment of staff be done regarding between news and lifestyle programming?

5161             MR. KIRK:  I will turn the question to Steve Kassay who has operated and designed these programs, the actual staffing grid.

5162             So, Steve...?

5163             MR. KASSAY:  Thanks, Doug.

5164             THE CHAIRPERSON:  Can you by the same token describe what will be those?  I guess they are going to be features, because you have an hour and 37 minutes over the week.  So you are talking here 30 to 90 second features spread over in the programming grid I would suspect.

5165             MR. KASSAY:  Yes.  Yes, we do throughout the week.

5166             Thank you.

5167             THE CHAIRPERSON:  So could you describe also what will be the content of those lifestyle features?

5168             MR. KASSAY:  Absolutely.

5169             Well, what we find in radio today is nobody does just one thing anymore, staff is responsible for a primary role and usually some other duties and contributions to our programming.

5170             Our news, you would note on the grid in the deficiency reply you referred to, that one of the newspeople also serves an admin role ‑‑

5171             THE CHAIRPERSON:  Yes.

5172             MR. KASSAY:  ‑‑ naturally as a news director.

5173             THE CHAIRPERSON:  That's what I concluded.

5174             MR. KASSAY:  Typically ‑‑ typically that person is the more experienced and is in charge of the daily lineup and assignments for the third person, the reporter.  So once the busy morning run is done some attention is turned to supporting other things.

5175             You asked about the lifestyle features such as the environment feature ROCK 101's Mother Earth, business features, talking about finances, these are the types of things that are produced on a daily basis.

5176             The news director currently does commentaries as well.  That happens after 9 o'clock when they are in the admin role and a production role, and it's the same with the other staff who will come in at a certain time of day but not begin on air until later in the afternoon.  Those earlier hours are spent with production and research.

5177             That's how we accomplish generating all these features in‑house, not having the need to go outside to obtain them, and all locally generated by our staff, points of contact are close, we can stay much more coordinated that way.

5178             THE CHAIRPERSON:  At the end of the day who makes the assignment of the feature, because all the staff in the programming division, including the newspeople, are doing lifestyle programming.  So somebody has to act as the coordinator of those lifestyle.  Is it the news director?  Is it the program director?

5179             MR. KASSAY:  It is the program director.

5180             THE CHAIRPERSON:  It is the program director ‑‑

5181             MR. KASSAY:  Yes.

5182             THE CHAIRPERSON:  ‑‑ who makes the assignment.

5183             When it does enter into conflict with the news director, who makes the final decision?

5184             MR. KASSAY:  The program director or the news director will ‑‑ I was going to add ‑‑ will do this together.

5185             THE CHAIRPERSON:  Yes.

5186             MR. KASSAY:  It has to work.

5187             THE CHAIRPERSON:  Okay.

5188             MR. KASSAY:  We have a philosophy too, that, you know, in the end the goal is to generate the product we need with the quality and attention that our own philosophy demands.  It's done together until we achieve resolution.  If we need to lock the door, we shall.

5189             THE CHAIRPERSON:  I note in your submission that you have stated that you will be broadcasting up to 8 hours and 9 1/2 minutes of news, so that's a lot of news for a staff of the size that you are contemplating on one end.  On top of that, you are asking them to do lifestyle programming.

5190             Are you doing that already in some of your other stations?

5191             MR. KASSAY:  We are to a degree.  Our other stations have other demands.

5192             For instance, we carry, in Oshawa, Oshawa Generals hockey.  So it happens that some duties that we would propose to you here that we would be asking staff in Guelph to do aren't duplicated there because we have the hockey angle to take care of.  The extra things some of those people do are actually play by plays, colour commentaries and in period features because, frankly, we pride ourselves on the intermission features.  We just happen to think they are head and shoulders above the rest because we actually think hard and use their news skills to gather relevant stories for intermission pieces.

5193             THE CHAIRPERSON:  Will you be sharing programming with the Oshawa Station?

5194             MR. KASSAY:  We will be sharing ideas and experience, we won't be sharing any produced pieces, only in that the people working in the markets aren't in touch with each other's markets and local work produces the best local results.

5195             THE CHAIRPERSON:  So if I'm hearing you well, I'm taking the Oshawa rock station, you are doing the same ‑‑ the newscasters are also doing lifestyle features and it works?

5196             MR. KASSAY:  There they are doing mostly sporting features.

5197             THE CHAIRPERSON:  Sporting features.

5198             MR. KASSAY:  And it works.

5199             THE CHAIRPERSON:  Yes.  And it works, yes.

5200             MR. KASSAY:  We must be ‑‑ it's a local approach that were taking, absolutely.

5201             THE CHAIRPERSON:  You adapt yourself to the market where you are.

5202             MR. KASSAY:  We must, yes.

5203             MR. FORSYTH:  If I just may add to that?

5204             I work with Steve and Doug on the Oshawa Station.  I don't go out to the station as often as I probably should they remind me, but I do spend time and I have helped John's station in Kingston as they have gone through some organizational changes and it's to just use that buzzword that's there now and that is that everybody multi‑tasks.

5205             It is sort of a requirement within certainly the radio industry now that not only do you have to have, if you are an on‑air personality, a great personality, a good voice, all of the old standard things, you have to be able to talk to the audience, you have to be able to edit, you have to be able to do your own research, which of course these days is a lot easier with the internet, et cetera.  You have to be able to go and talk to the audience, you have to be engaged in many different things.

5206             So again, as Steve has already said, when you have a program director who can allocate these things out and it's scheduled out, it becomes part of the day to day fabric of what the person does at the radio station.  It is actually, frankly, coming from the old school.  A lot more exciting, we do a lot more interesting things.

5207             MR. KASSAY:  I will add that there is, to answer your question, a program we will share, it's locally produced, and that is the Beatles Universe Music Program that is produced by an in‑house colleague.

5208             We also take advantage ‑‑ we also take advantage of people's strengths.  There is a staff member who loves NASCAR.  Personally, I don't get it but he does, so he's the one that produces a feature not me because he knows.  He knows about NASCAR, he produces NASCAR.

5209             The one who attends all the concerts and just never misses a show is the one responsible for making sure the concert calendar is up to date.  Why?  That's where the strength lies.  It's prudent to use it.

5210             THE CHAIRPERSON:  And I will say, are those lifestyle programs preproduced or are they live?

5211             MR. KASSAY:  They are preproduced.

5212             THE CHAIRPERSON:  They are preproduced.

5213             That brings me to, your stations will be staffed all day long or are you using voice track or any other type of automation?

5214             MR. KASSAY:  We do employ an automation system and we will employ one in Guelph.  We are live all day throughout the week.  Voice tracks are a component of radio these days for most stations, however, in our plan, and the strategic plan has ‑‑ I'm just trying to do the math.

5215             What was it?  99 hours a week is our commitment to the community for live radio.

5216             THE CHAIRPERSON:  Live radio.

5217             MR. KASSAY:  Minimum.

5218             THE CHAIRPERSON:  So it means that from 6:00 in the morning to, say, around 8:00 at night Monday to Friday and then over the weekend...

5219             MR. KASSAY:  Typically you would find the weekend evenings prerecorded ‑‑

5220             THE CHAIRPERSON:  Are prerecorded.

5221             MR. KASSAY:  Same day.  Much with the features too, they are done, many of them, same day.

5222             THE CHAIRPERSON:  Are the features repeated or are they only broadcast once?

5223             MR. KASSAY:  It varies.  Some are ‑‑ our community features are done distinctly, because if it plays three times a day there is one for the morning, there is one for the midday, there is one for the evening.

5224             Frankly, I demand fresh cuts for each because in our area, in Oshawa for instance ‑‑ Hamilton as well ‑‑ there is so much going on that it deserves an update.  Otherwise it's ‑‑ we won't deliver stale information.  We try to be as current as we possibly can.  Frankly, the audience demands it.  I do take those calls from people and I hear if something didn't go exactly right.

5225             THE CHAIRPERSON:  I had a question regarding your CCD, but I think you already answered it in the case of London application so I will guess the answer is the same.

5226             Just for the record....  It has to do with MusiCounts.

5227             MR. KIRK:  MusiCounts, yes.

5228             THE CHAIRPERSON:  Yes.

5229             MR. KIRK:  Okay.  We can just quickly review the ‑‑

5230             THE CHAIRPERSON:  Okay.

5231             MR. SINCLAIR:  I'm sorry, Mr. Chairman, what would the question be?

5232             THE CHAIRPERSON:  The question is, from our own standpoint we want to make sure that the scholarship that you are contemplating are meeting the criteria of CCD.

5233             MR. SINCLAIR:  Yes.

5234             THE CHAIRPERSON:  I think that question was asked to you during your appearance for London and I think you provided us with a reply saying that MusiCounts replaces MusiCan and they administer various programs and you will be contributing towards MusiCounts who will then provide the scholarship.

5235             MR. SINCLAIR:  That's correct.

5236             THE CHAIRPERSON:  So you don't have a personal relationship with the recipient?

5237             MR. SINCLAIR:  No, we don't.

5238             THE CHAIRPERSON:  That's what we wanted to know.

5239             Some questions regarding the economics of your proposal.

5240             On page 8 of your supplementary brief you provided us with a revenue forecast for the years 2008, 2010 and 2013 and in order to make that forecast you did use two different databases, at least that's what I understood, one being TRAM, the second being CAB because there was no available financial data made public by the Commission.

5241             I was wondering when you say that you used TRAM, did you use only the ‑‑ it's all the TRAM numbers or was it specific to Ontario?

5242             And the same for the CAB?  What is the CAB database by the way, maybe to start with before going to how you choose your criteria?

5243             MR. KIRK:  Sure.

5244             The whole idea was to try and ‑‑ because we didn't have any specific data on Guelph.

5245             THE CHAIRPERSON: Yes.

5246             MR. KIRK:  It was trying to scale it and related to other metrics that you can get on a national basis.

5247             I will let Andrew talk to you about the specific methodology we used to get those numbers, but it was to try and prove the total size of the market.

5248             THE CHAIRPERSON:  Yes.

5249             MR. FORSYTH:  To answer the first part of your question, Mr. Chairman, in both the case of TRAM and CAB it would have been for the national figures that were available.  The CAB ‑‑ so the TRAM figure or the TRAM Report, as you know ‑‑

5250             THE CHAIRPERSON:  Yes.

5251             MR. FORSYTH:  So that was the national.  It didn't look at just Ontario, it was for the total.

5252             The CAB figure a ratio if you like, that .35 per cent, came from a paper that they filed actually with the Commission on the Radio Policy when they spoke about small markets and they did an entire study of Canada and radio revenue.  So it was some historical data they had.

5253             The number that they have come up with as their national figure was .35.  So we used those two numbers as we felt very good benchmarks.

5254             THE CHAIRPERSON:  As a range and you choose to keep ‑‑

5255             MR. FORSYTH:  Take the lower.

5256             THE CHAIRPERSON: ‑‑ the lower one to make your financial assumptions.

5257             MR. FORSYTH:  That is correct, sir.

5258             THE CHAIRPERSON:  You are stating in making your own projection, you said ‑‑ I don't want to say that ‑‑ you are estimating that there is about $2 million of untapped revenues.  I will read it.

"We estimate a significant gap of over $2 million between the market potential and the actual current market revenues."  (As read)

5259             That's part of your submission.

5260             Now, you said in your oral presentation that obviously you are of the view that part of that money is going towards other markets.

5261             Now, the other markets are significant markets, Toronto and Milton.  Do you have evidence that the Toronto stations are soliciting in Guelph?

5262             MR. KIRK:  It's anecdotal.  We don't have a specific number.

5263             THE CHAIRPERSON:  Or other station.

5264             My question, I will just focused it on Toronto, I could have added Hamilton as well and to some extent even Kitchener‑Waterloo which is much bigger than Guelph.

5265             Do you have evidence that the radio stations in these markets are soliciting advertising in Guelph?

5266             MR. KIRK:  The quick answer is yes, there are Guelph advertisers that have been identified on Kitchener stations, on Hamilton and Toronto stations.  These are retail type of accounts.

5267             For example, in the country format there is a country establishment in the north end of Guelph and they use a Hamilton radio station because there is no country station in Guelph.

5268             There are other account relationships that have been identified that use Kitchener stations, people who might be in the soft AC.

5269             So I don't know the specific numbers, but you know that there are a lot of accounts, but by specific account how much they are spending, but they are obviously significant.  They are on the air virtually all the time with out of market stations.

5270             THE CHAIRPERSON:  I see, okay.

5271             Generally speaking, the big radio stations ‑‑ the stations in the big markets, they may from time to time send a salesman once a year to try to, during a slow month like July, send some people around the country to get whatever they could get.

5272             MR. KIRK:  I can assure you operating a station in Oshawa that that happens.

‑‑‑ Laughter / Rires

5273             MR. WRIGHT:  Mr. Chair, some out of market stations too, if they happen to have some available inventory will design packages to go into these other markets and try and get some revenue from those other markets.  So they recognize that they may be a bigger market and their rates may be too high for the smaller market, but they will adjust that for the special community package.

5274             MR. KIRK:  If I may just add, in our year 2 projection that we filed we assume 40 per cent of that year 2 revenue will be repatriation from out of market.

5275             THE CHAIRPERSON:  Yes.

5276             MR. KIRK:  You can't cover all the formats, but certainly by increasing the utility of radio in the market and getting into very format‑specific type of accounts that are using out of market, that would be ‑‑ you might call it low hanging fruit to repatriate to the market.

5277             THE CHAIRPERSON:  Yes.

5278             I note that in looking at your Appendix 7.4 where in effect you are saying that you are expecting that 40 per cent of your year 2 revenues will be coming from those out of market radio stations.

5279             In the same table I note that you haven't forecasted any revenues coming from the existing stations.

5280             MR. WRIGHT:  I believe we have forecasted 20 per cent coming from ‑‑

‑‑‑ Pause

5281             THE CHAIRPERSON:  I will have to find that.

5282             MR. WRIGHT:  One of the things that we discovered when we launched in Kingston as well is that there is certainly an uplift in the market, you know in the year ‑‑ in the year of launch and a couple of years afterwards.

5283             As an example, in Kingston a market that was maybe a little low on the expenditures, the advertising expenditures, we launched in 2001 and 2002 saw a 20 per cent increase in revenues and 2003 saw an additional 20 per cent increase in revenues.

5284             THE CHAIRPERSON:  But mainly through increased spending by the advertiser rather than money shifting from one to the other.

5285             MR. KIRK:  Oh absolutely.

5286             By adding the third station in the market and a new company you will ‑‑ I don't know specifically how many radio salespeople the Corus cluster has, it's probably maybe 10 or 12, we would have at least half that, maybe more.  So you are almost ‑‑ you are adding 40, 50, 60 per cent to the number of people working the market and with a distinct product there are a whole group of advertisers there that really didn't have a very specific vehicle to use in the market.

5287             So it really is quite a good synergy to walk into the market and be able to lift the market sales as well as repatriate sales in that specific format that are going out of market.

5288             THE CHAIRPERSON:  I know that the staff of the Commission are saying ‑‑ maybe you could provide us with your comments, but they seem to feel that you are pretty optimistic in fairly quickly reaching the level of revenues that you are forecasting.

5289             What had been your assumption to really be able to raise that much money so quickly?

5290             MR. KIRK:  I will start the answer and let everyone else embellish it a bit.

5291             First and foremost, Guelph is a significant size market, it is a population of in excess of 120,000 people, it has been growing quickly and, as demonstrated by the national kind of averages is we believe substantially underperforming in terms of generation of local revenue and by repatriating that audience and putting the new entity in the market it will lift the whole market.  That's why you can pick up revenues reasonably quickly.

5292             Some of it is already being spent out of the market, that is bringing it back in.  And also just increasing the utility of radio on a local signal is a very quick start to build revenue.

5293             I think John commented on the startup of KROC has a new entity in Kingston lifted the market quite dramatically and was very successful in a very short time to bring that.

5294             This is a very, very good format.  It is a desirable format.  There are lots of people from our experience that want to use rock stations to reach their markets.  So with the amount of tuning that is going out of the market to the rock format we think it is a very deep and rich mine to open up in this market.

5295             Anyone...?

5296             MR. WRIGHT:  I think this is in keeping with the kinds of results we had when we launched in Kingston and it was a more competitive marketplace.  So when we look at Guelph we think that there is ample opportunity to achieve those results.

5297             We are certainly forecasting an underachievement in revenue share from our audience share.  We realize that we are not going to.  It always does take a bit of time to get the traction on the sales side.  So when we launch we are going to achieve an audience share that we won't match in revenue for year 1, but we are confident that the $1.2 million is achievable and we have done it before.  So I think we are pretty confident that we can do it again in this environment.

5298             THE CHAIRPERSON:  Thank you, Mr. Wright.

5299             MR. KIRK:  Just if I ‑‑

5300             THE CHAIRPERSON:  Yes...?

5301             MR. KIRK:  If I may, just a comparison for example to Blackburn.

5302             I think their year 7 revenue was just over $2 million and we are about 2.3 $million, so it's not a dramatic difference at that point.

5303             THE CHAIRPERSON:  But it's a quicker start.

5304             MR. KIRK:  Yes.

5305             THE CHAIRPERSON:  But based on your own experience, as Mr. Wright just stated.