ARCHIVED - Transcript, Hearing 6 October 2010

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Volume 1, 6 October 2010





To consider the broadcasting applications listed in Broadcasting Notice of Consultation CRTC 2010-551


Saskatchewan A Room

Saskatoon Inn Hotel & Conference Centre

2002 Airport Drive

Saskatoon, Saskatchewan


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


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.

Canadian Radio-television and

Telecommunications Commission


To consider the broadcasting applications listed in Broadcasting Notice of Consultation CRTC 2010-551


Stephen Simpson   Chairperson

Elizabeth Duncan   Commissioner

Candice Molnar   Commissioner


Cindy Ventura   Secretary

Crystal Hulley   Legal Counsel

Michael Craig   Hearing Manager


Saskatchewan A Room

Saskatoon Inn Hotel & Conference Centre

2002 Airport Drive

Saskatoon, Saskatchewan

October 6, 2010

- iv -





Golden West Broadcasting Ltd.   5 / 28

Fabmar Communications Ltd.   73 / 499



Golden West Broadcasting Ltd.   129 / 875



Humboldt & District Chamber of Commerce   134 / 908

Humboldt & District Hospital Foundation   147 / 983

Mayor Malcolm Eaton - City of Humboldt   153 / 1024



Fabmar Communications Ltd.   163 / 1088

Golden West Broadcasting Ltd.   167 / 1116



Corus Audio & Advertising Services Ltd.   170 / 1136

- vi -


Undertakings can be found at the following paragraphs:

316, 360, and 834

   Saskatoon, Saskatchewan

--- Upon commencing on Wednesday, October 6, 2010 at 0905

1   THE CHAIRPERSON: Good morning. I would like to call this hearing to order, please.

2   My name is Stephen Simpson, I am the CRTC Regional Commissioner for British Columbia and the Yukon and I will be presiding over this hearing for the next two days.

3   Joining me on the Panel are:

4   - my colleague Commissioner Duncan, who represents the Atlantic Region and Nunavut;

5   - to my right is Commissioner Molnar, who is the Regional Commissioner for the great provinces of Saskatchewan and Manitoba.

6   The Commission team assisting us includes Michael Craig, who is the Hearing Manager, over there; and Crystal Hulley is legal; and Cindy Ventura is our Hearing Secretary and most of you know her. Please speak with Ms Ventura if you have any items or questions regarding the proceedings over the next two days and she will be sure to vet your questions and get them into the right hands.

7   At this hearing we will study two applications to operate a new English-language commercial FM radio station in the Humboldt market. These applications are competing for the use of the same frequency.

8   We will study the proposals in light of the cultural, economic and social objectives set out in the Broadcasting Act, as well as the Commission's policies and regulations flowing from it.

9   The Panel will base its decision on several criteria, including the state of competition, the diversity of editorial voices in the Humboldt market and the quality of the individual applications.

10   We will also consider the market's ability to support a new radio station, the financial resources of each applicant and the proposed initiatives for Canadian Content Development.

11   We will also be hearing a television application where we will examine an application by Corus Audio & Advertising Services to operate an English-language specialty television channel that would be known as LOCAL1.

12   Corus has proposed that the new channel would provide local information customized for each community in which it is distributed.

13   So with that done I would now like to invite our Hearing Secretary, Ms Ventura, to explain the procedures that we will be following.

14   Ms Ventura...?

15   THE SECRETARY: Thank you and good morning.

16   Before beginning I would like to go over a few housekeeping matters to ensure the proper conduct of the hearing.

17   When you are in the hearing room we would ask that you please turn off your cell phones, beepers and BlackBerrys as they are an unwelcome distraction and they cause interference on the internal communication systems used by our translators. We would appreciate your co-operation in this regard throughout the hearing.

18   We expect the hearing to take approximately a day and a half. We will also be starting tomorrow morning at 9:00 a.m. We will take a lunch, breaks in the morning and in the afternoon. We will let you know of any schedule changes as they may occur.

19   Room 234 will serve as the examination room where you can examine the public files of the applications being considered at this hearing. As indicated in the Agenda, the telephone number of the examination room is (306) 373-2735.

20   Le service d'interprétation simultanée est disponible durant cette audience. Vous pouvez vous procurer un récepteur auprès du technicien à l'arrière de la salle. L'interprétation anglaise se trouve au canal 3, et l'interprétation française au canal 2.

21   Interpretation services will be available throughout the duration of this hearing. English interpretation is available on Channel 3 and French interpretation on Channel 2.

22   We would like to remind participants that during their oral presentations they should provide for a reasonable delay for the interpretation, while respecting their allocated presentation time.

23   There is a verbatim transcript of this hearing being taken by the court reporter sitting at the table in front of me. If you have any questions on how to obtain all or part of this transcript, please approach the court reporter during a break. Please note that the full transcript will be made available on the Commission's website shortly after the conclusion of the hearing.

24   Now, Mr. Chair, we will proceed with Item 1 on the Agenda, which is an application by Golden West Broadcasting Ltd. for a broadcasting licence to operate an English-language FM commercial radio programming undertaking in Humboldt.

25   The new station would operate on frequency 107.5 MHz (channel 298C1) with an average effective radiated power (ERP) of 59,000 watts (maximum ERP of 96,000 watts with an effective height of antenna above average terrain of 164.1 metres).

26   Appearing for the applicant is Mr. Lyndon Friesen.

27   Please introduce your colleagues, after which you will have 20 minutes to make your presentation.


28   MR. FRIESEN: Thank you and good morning, Commissioners and staff.

29   I am Lyndon Friesen, President of Golden West Broadcasting.

30   With me today is Elmer Hildebrand, CEO of Golden West Broadcasting; Ken Goldstein, President of Communications Management; Dave Lehman, our Manager of Online Media; and Tim Thibault, Owner/Operator of Humboldt Sign Services in Humboldt.

31   We are pleased to be here today to tell you about the exciting new local FM radio service that we want to bring to Humboldt, Saskatchewan.

32   Golden West continues to be singularly focused on the smaller, more rural markets on the prairies. Local radio is what we do all day, every day, 24/7. Broadcasting is our only business. We understand Saskatchewan and small Saskatchewan towns.

33   Because local radio is what we do, we know Humboldt will reap terrific benefits from a Golden West radio station. We have been here before. In June 2008 Golden West applied to establish an FM radio station for Humboldt, but our application was denied. Now, two and a half years later we still believe passionately that the Humboldt area deserves its own radio station.

34   It's worth mentioning that the last Humboldt hearing it was made clear to us that the Commission expects hard evidence and expert data that supports our revenue calculations, economic impact, audience assessment and even format selection.

35   While intuition and market knowledge have served us exceptionally well, we contracted experts to conduct an economic study and a formal format study. These two studies confirmed what we already knew to be true, that Humboldt does need a Golden West radio station.

36   What you will hear from us today more than addresses the concerns from that original denial in '08 and clearly demonstrates that we will bring Humboldt a complete FM local service.

37   Humboldt is a vibrant, diverse and thriving community that is experiencing growth in almost every sector. What greater testament to the growth of that city than the arrival of that iconic much loved Canadian franchise Tim Hortons. Construction has already started, with the opening slated for later this month.

38   According to Saskatchewan health, in 2009 the City of Humboldt's population grew to 6000, suppressing that of the City of Melfort. Humboldt community leaders have repeatedly stated they fully expect this economic development and growth to continue. Further indicators of this growth, there is a new hospital project, new seniors retirement housing, a new hotel, the addition of a new spray water park, just to name a few. And let's not forget all the potash mining going on in that region.

39   This is the kind of growth that a Golden West radio station and online community portal further enhances. Our commitment to bring local programming to Humboldt is clear, from our staffing levels to the funds we will spend on local programming, $2.1 million over seven years.

40   Local content is what makes local radio viable and is only possible with that level of investment. To us, local programming is the lifeblood of our business.

41   Humboldt will get our unique brand of intensely local community radio service in their own backyard, up to the minute community information and a service providing local businesses, non-profit organizations, emergency services, sports teams, music and cultural arts groups all with a tailor-made promotional vehicle and an ongoing opportunity for countless organizations to have their voices heard.

42   A local radio station is a terrific way to get their message out to the people they need to reach in their community and eliminates the reliance on Saskatoon stations and other out-of-market operators to provide information to and for Humboldt.

43   The people of Humboldt have spoken. It's unmistakable from all the support letters received by both applicants here today that the community wants and needs their own FM station. We were certain of this in '08 and even more so today.

44   Elmer...?

45   MR. HILDEBRAND: Our original application in 2008 was denied. The pivotal reasons for that denial having more than addressed in this new application.

46   The signal overlap. The original directionality of our signal has been altered to ensure there is no significant overlap or encroachment with the Saskatoon BBM market. This alteration also satisfies the common ownership objection tabled at the time of the hearing and particularly in light of the revised Common Ownership Guidelines released by the Commission in June of 2010.

47   Golden West has extensive long-term experience in the communities of similar or smaller size. Rosetown, Kindersley in Saskatchewan and Boissevain in Manitoba.

48   While we anticipate modest revenue gains in the first few years, from our perspective a market the size of Humboldt is able to sustain its own radio station using economies of scale.

49   Our newest FM station in Drumheller, which went on the air in April of 2009, is a perfect example where revenue achieved in the first year of operation was in line with our original projections.

50   We tend to be conservative in our projections and promises and then we go above and beyond both in developing our audience and in growing our business.

51   As we do in all other markets, we will generate our revenue locally. For many retailers and other local businesses, having access to their own radio station is cost effective and gives them a much-needed local advertising vehicle to reach their customer base.

52   Consider, too, that it takes well over an hour to drive between Humboldt and the nearest centre that has any significant size.

53   To ensure the accuracy of our revenue projections we contracted Communications Management to examine a number of questions relating to the Humboldt radio market, including the definition of market area and a determination of the degree to which Humboldt is a separate market, distinct from Saskatoon and Melfort. The results are summarized in the research notes that accompany the application.

54   I will now ask Ken Goldstein to elaborate.

55   MR. GOLDSTEIN: We began by analysing a study prepared for the Saskatchewan government by two experts at the University of Saskatchewan. The study divided the province into functional economic areas or FEAs.

56   In that study the Humboldt area was defined as being separate and distinct from the FEAs for Saskatoon and for Melfort. We then used the boundaries for the Humboldt area from that study as the starting point for calculating demographic and economic data for the market. In fact, we adjusted the area to make it slightly smaller in order to conform more closely to the contour for the proposed transmitter.

57   As indicated in the research note, there are approximately 22,000 people in the market area and retail sales are estimated at about $200 million.

58   The next step was to estimate the factor for radio advertising as a function of retail trade for the areas of Saskatchewan located outside of Regina and Saskatoon. Using that factor we could then estimate that the potential for radio advertising in the Humboldt market was in the general range of $1.1 to $1.3 million annually.

59   Now, since those estimates were prepared some months ago, the Commission and Statistics Canada have released radio data for 2009 and Statistics Canada and other sources have also released more recent data on population and retail sales. Based on the more recent data, the estimated potential for radio advertising in the Humboldt market still appears to be in the range of $1.1 to $1.3 million.

60   We believe that the Golden West revenue projections for Humboldt are realistic and fit within the estimated potential for the market.

61   Now, in the case of local demand and impact on others, our research note clearly establishes that the trading area is separate from Saskatoon, separate from Melfort, and of course the discussions that people have with local businesses indicate that they feel that way as well.

62   There is, without question, sufficient demand to support the entry of a new Golden West FM station in Humboldt.

63   Now, the application form asks about impact on existing broadcasters. Since there are no existing broadcasters based in Humboldt the literal and precise answer is that none of the projected revenues will come from existing radio broadcasters.

64   However, one intervenor, in both 2008 and 2010, claimed it would suffer losses from the establishment of a new station. We would be prepared to discuss those claims in detail with you at the appropriate time in this hearing, but let us just say that these claims of economic damage are greatly exaggerated. In fact, even that intervenor now admits in 2010 that it overstated the impact claims it made in 2008.

65   MR. FRIESEN: Another element of the 2008 denial dealt with our choice of format. In this application, using both our own market observations and the data collected by Kroeger Media's professional format survey, we will establish a variety hits format.

66   This format will provide more musical diversity, increased opportunity for local editorial voices and, quite simply, more choice. This format has the most appeal to those who go to the radio most to get their news and information. It has the widest appeal to the most residents of Humboldt.

67   In these markets were choice is limited, it is our intention to target a wide core audience. Rather than be exclusive, we deliberately take a broader, more inclusive approach.

68   In order to obtain the most accurate data, the survey we commissioned was a random survey completed between October 24th and 30th of last year. The population statistics are in line with StatsCan's population statistics for the area.

69   We used a 95 percent confidence level with a plus or minutes 7 percent confidence interval, meaning that we are 95 percent sure our results are accurate within 7 percent.

70   This research demonstrates this format is consistent with the data and reflects the musical tastes of a large segment of the adult radio audience.

71   The general target is 18-54, the core is adults 35-54, almost even between males and females but skewing slightly to female. We expect strong secondary tuning from the 18-34 demo, particularly 25-34.

72   The goal to current ratio would be approximately 80 percent Gold, 20 percent Recurrent and Current. This variety hits format is a terrific alternative to distant out-of-market radio signals, satellite radio, the Internet and, as a result, we will also expect to repatriate listeners who had no alternative but to seek out other sources.

73   In the final analysis, in our world the format is significant, but what is even more essential is bringing intensely local programming to the people of Humboldt.

74   MR. HILDEBRAND: In the matter of Canadian content and emerging artists, in addition to committing to a minimum level of 40 percent Canadian content, we will broadcast a weekly 30-minute made in Saskatchewan program showcasing local musical talent.

75   Going one step further, we will create a special Saskatchewan music category as part of our regular daily music rotation, ensuring that 3 percent of our musical selections feature emerging artists.

76   We commit to $48,000 in over and above contributions over the first license term. After the FACTOR contributions, all remaining funds stay in Humboldt. They will go to the Saskatchewan Music Festival and for a battle of the bands style for an on-air contest, for locally merging musicians.

77   Lyndon...?

78   MR. FRIESEN: Golden West offers extensive shared back room functions like senior management, payroll, new media engineering, technical and IT support. At the same time, Golden West's reputation for hiring local continues unabated, as it will in Humboldt.

79   We anticipate hiring nine local staff, five in management and sales, administration; four in programming, both on-air announcers and news, all of whom will work out of a fully operational studio and offices in Humboldt. Over time, as the radio station becomes established and revenue increases, we expect to add even more staff to conduct local surveillance and seek local content.

80   As a reference point, we launched Drum FM in Drumheller in April of '09 with a staff of nine. That has already grown to 10. Our radio station in Rosetown, near Saskatoon, has a staff of 12.

81   Hiring local creates new local career opportunities and ensures our staff is highly reflective of the cultural diversity and demographic makeup of that community. Local staff have deep roots in the community and they are finely attuned to the current issues and activities, above and below the radar.

82   We will be live-to-air or live-assist for at least 82 hours a week, from 6:00 A to 6:00 P Monday through Friday and 6:00 A to 5:00 P on weekends. Live-assist simply means that an on-air announcer is working on an alternate project in the building while at the same time being able to break in on-air and take phone calls at any moment. This also means we are not reliant on canned or repeat programming from another market.

83   The pulse of the community is its people and content is the cornerstone of keeping the people connected; local news and information, local weather and local surveillance. Out-of-market media covers only extraordinary or tragic events. Day-to-day local activities receive little or no attention.

84   We will report on all the activities that happen locally, regionally, all delivered from a local perspective. We commit to broadcasting a total of 836 minutes of spoken word, of which 347.5 minutes are dedicated to pure news. Everything else is sports, local sports, weather, surveillance and announcer talk, talk that's about Humboldt and area events, interviews with community leaders, promoting local concerts, events and initiatives relating to local organizations. It's really about sharing day-to-day stories about the people of Humboldt, stories only meaningful and relevant to them.

85   Here is just an example of how one of our newscasts will sound.

--- Audio clip

86   MR. FRIESEN: Now, I will ask Dave Lehman, our Manager of Online Media to tell you about the community portal that we will also bring to Humboldt.

87   MR. LEHMAN: We believe that understanding and integrating new media is a critical part of any media company's business plan. A community portal is a natural extension and enhancement of the local news and information that we gather for radio and radio is the ideal and most effective way to continuously drive and build traffic to a website.

88   The website we develop and maintain in each of our markets is termed a community portal because of the singular and deep focus on the community. It's not just a radio station website. The portal is updated throughout the day, including evenings and weekends, focusing only on local news and information that is relevant to the community.

89   News stories include additional information such as photos, video and other multimedia elements. Live weather provides accurate, up-to-the-minute information on changing conditions, forecasts and severe weather warnings.

90   Self-service classified and business director provide service around the clock.

91   All these items quickly become essential services that are an integral part of our audience's daily lives. It is a powerful method of interacting and communicating with the entire community, not just for Golden West, but also city departments and other community groups and organizations.

92   To date we have developed just such a community portal as this in 13 of our markets. We continue to be astounded by the growing traffic to these portals and the extent to which they are woven into the social fabric of each community. Our portals very quickly become the go-to site for up-to-the-minute local news and information.

93   We will develop as a source of exclusively local news, information, resources and entertainment delivered online by the radio station directly to the residents of Humboldt.

94   We feel strongly that a full-service community portal is critical to providing an effective and successful service to the community of Humboldt. Gathering and producing the local content for a community portal takes commitment and an incredible amount of effort and significant financial support, not to mention the cost of maintaining a technical infrastructure.

95   Ultimately success can only be achieved with relentless attention and focus by the feet on the street, the local news reporters, announcers and staff day-in and day-out.

96   Now I will turn things over to Tim Thibault, a Humboldt resident and local business owner.

97   MR. THIBAULT: I own an advertising company in Humboldt and as part of our product line we provide reader boards and mini-billboards in Humboldt and area. To date the competing applicant has had little to no impact on my revenues. My customers regularly comment on the lack of diversity in advertising options, which makes it difficult to organize any sort of strategic campaign.

98   As the Director of the Arts and Culture Society in Humboldt I am actively involved in the performing arts in the region. There has been little support of the kind you would expect from a radio station claiming to have been servicing Humboldt for 40 years.

99   When issuing press releases for upcoming concerts we have never been contacted by the nearest radio station in Melfort to obtain further details or report about the event. The most they have offered was their rate card.

100   In contrast, our local paper provides excellent coverage for the larger all ages show featuring some of Canada's top talent groups like The Stereos who performed in the 2009 Grey Cup half-time show and Acres of Lions who have gone on record saying their Humboldt experience was not only great but legendary.

101   Humboldt's annual two-week music festival encompasses performing arts from the entire region. In reviewing programs dating back 10 years there has been zero involvement from the nearest radio service.

102   As President of Humboldt Cops, the citizens on patrol program, I recognize the need in having access to a local newsroom and on-air personalities, especially on weekends when it is important to relay information to the local residents as quickly as possible.

103   As a former volunteer fire fighter for 10 years, I know firsthand how precious the need is for timely and live coverage, to have continuous updates on local active weather, local states of emergency or detours due to traffic accidents.

104   Golden West has made it clear they are committed to hiring a full complement of local staff and investing considerable dollars in local programming. Humboldt doesn't just want any radio station, they want the right radio station and Golden West will bring the right radio station.

105   MR. FRIESEN: Community and business leaders know a local radio station builds and binds a community together and Humboldt wants this for their community.

106   Elmer...?

107   MR. HILDEBRAND: Humboldt is a perfect fit for our corporate culture. Golden West has built a solid reputation for being committed to the local community and this new FM station and community portal for Humboldt continues that philosophy.

108   Decade after decade we have demonstrated local radio is what we do and have always done. We have a unique ability to successfully create synergies, forge strong local relationships and to grow right along with the community. We are committed to investing in Humboldt now and in future by bringing the community the full-service local radio station they so richly deserve.

109   MR. FRIESEN: That concludes our presentation and we are ready for your questions.

110   THE CHAIRPERSON: Thank you very much, gentlemen, for your presentation.

111   I always knew that Humboldt's most famous export was Glenn Hall. Having grown up in a hockey league that only had eight teams I was always partial to the goalies and I thought he was one of the greatest.

112   But I would also like to share with you that we had the distinct pleasure of visiting Humboldt yesterday and, unbeknownst to any of us, it was named after Baron Friedrich, I believe Heinrich, von Humboldt, which I'm sure is going to make our Chairman very happy.

--- Laughter

113   THE CHAIRPERSON: I just have two quick questions before I turn things over to Commissioner Duncan.

114   How many markets does Golden West operate in where their population base is 6,000 or less?

115   MR. FRIESEN: Offhand it's probably about a half a dozen. In the range of half a dozen. Probably six.

116   MR. HILDEBRAND: Well, we can --

117   MR. FRIESEN: We can count them. Altona.

118   MR. HILDEBRAND: Altona is where we started many years ago and has a population of 3,700 people. Boissevain is about 2,500, Shaunavon is under 6,000, Drumheller is under 6,000. So we have --

119   MR. FRIESEN: Rosetown.

120   MR. HILDEBRAND: Rosetown is very much under 6,000, as is Kindersley.

121   MR. FRIESEN: Kindersley.

122   MR. HILDEBRAND: So we have about half a dozen, seven markets that size.

123   THE CHAIRPERSON: Mr. Thibault, my curiosity. I was very pleasantly surprised to hear that you are operating an advertising company. I presume this is predominately outdoor advertising.

124   MR. THIBAULT: Predominantly, yes.

125   THE CHAIRPERSON: How long have you been operating this business?

126   MR. THIBAULT: Since '05.

127   THE CHAIRPERSON: Yes, okay.

128   Thank you very much.

129   MR. HILDEBRAND: Mr. Chair, since you are inserting into the process here Glenn Hall, a long-time NHL goalkeeper, I need to insert here that I was a goalkeeper in the Southeastern Manitoba Hockey League so I relate to that.

130   THE CHAIRPERSON: You have stopped a few pucks in your time, Elmer.

131   MR. HILDEBRAND: Yes. I got hit in the head too often.

--- Laughter

132   THE CHAIRPERSON: Thank you very much.

133   I would like to turn things over to Commissioner Duncan. Thank you.

134   COMMISSIONER DUNCAN: Welcome and it's nice to see everybody again.

135   We certainly did enjoy our trip to Humboldt. It certainly did underscore the distance between Saskatoon for one and Humboldt, but it was a very nice visit and we were disappointed to miss Tim Hortons. That's a reason to come back, right.

136   But I'm going to start first of all with the local programming. Your application has provided us with a lot of detail so these are more just for clarification.

137   But you were mentioning, and you mentioned again today, about the 82 hours live-to-air weekly and I'm assuming the remainder will be voice tracked?

138   MR. FRIESEN: Much of the late evening hours and overnight are voice tracked.

139   COMMISSIONER DUNCAN: And from your comments this morning, it's all done in-house.

140   MR. FRIESEN: It's all done in house.

141   COMMISSIONER DUNCAN: All done in-house. All right.

142   So I'm sure that you know that FM undertakings serving more than one radio station are required by condition of licence to refrain from soliciting or accepting local ads when they have less than 42 hours of local programming per weekend. That's, as I say, in communities with more than one station.

143   If we only license one station in Humboldt it would be a single station market and that condition wouldn't apply.

144   You are proposing to do 126 hours a week of local programming. What level of programming would you be prepared to commit to by condition of licence?

145   MR. FRIESEN: To the 126 hours.

146   COMMISSIONER DUNCAN: By condition of licence?

147   MR. FRIESEN: Yes.

148   COMMISSIONER DUNCAN: Okay. Thank you very much.

149   First of all I would just like to have just sort of a general conversation with you, actually with you explaining to me, if you would, about how the Humboldt market will be better served in terms of musical diversity by out-of-market stations.

150   I will start by saying that yesterday on the car radio we had a lot of luck finding country stations, country music, but I don't think we had a lot of luck finding much else. But anyway, so we are wondering how your proposed format will bring musical diversity to that market from what they are already receiving. We heard country, but the reports show that there is many more stations going in Humboldt and a large variety of formats.

151   MR. FRIESEN: You know, I think most of the Saskatoon radio stations are heard well in Humboldt and so while there is a fair bit of diversity coming out of the Saskatoon market very little of that -- and again, musically, as I said in our oral presentation, music is very important, but what's really important is the rest that we wrap around it. That's, I think, what's interesting and what's useful and important to Humboldt.

152   The musical format that we chose deals with a very broad range of audience. It's not narrow. It's not selected to -- those kind of formats are available and I think most of them are out-of-town tuning, as I said in my oral presentation.

153   This will be a broad format of music well-known to all of us, both playing a lot of Gold music and some current and we think that's going to have broad appeal.


155   I know that you operate three stations in Saskatoon and so I would like to understand how your existing stations in Saskatoon will be impacted if you receive the licence for Humboldt.

156   MR. HILDEBRAND: I think we should point out that the three stations in Saskatoon are not Golden West stations, they are stations that are outside the Golden West family, though they are in my family. So they would not be in any way impacted. So the process would not be overlapping at all.

157   COMMISSIONER DUNCAN: So no economies of scale with those systems?

158   MR. HILDEBRAND: Not with Saskatoon, no --


160   MR. HILDEBRAND: -- because that's a separate entity. They operate on their own.

161   The synergies would he would be with Rosetown, Kindersley, Moose Jaw, Weyburn, Estevan, Swift Current, Shaunavon and all of those places there. That's where the Saskatchewan synergy would really, really take place, in the rural non-metropolitan areas.


163   MR. HILDEBRAND: When I say non-metropolitan, outside of Regina and Saskatoon.


165   So how would you anticipate -- I would be interesting to hear, then, your comment -- how the revenues of CJWW, which I understand offers country, news and talk format, will be impacted given the emphasis your new station is going to place on local news and information.

166   MR. HILDEBRAND: I don't expect that it will have an impact on the revenues of the Saskatoon radio stations, because the Saskatoon radio stations basically generate the revenue out of Saskatoon. The Humboldt operation will generate the revenue from Humboldt and surrounding area.

167   COMMISSIONER DUNCAN: So I had a similar question with regards to CJMK. So what you are saying is that those stations don't solicit or generate revenue from Humboldt market?

168   MR. HILDEBRAND: Not as a rule, no.


170   The advertising rates in smaller markets like Humboldt, would they be significantly lower than rates in Saskatoon?

171   MR. HILDEBRAND: For sure.

172   COMMISSIONER DUNCAN: What percentage lower? How much lower do you think they would be?

173   MR. HILDEBRAND: I'm only guessing now because I don't --


175   MR. HILDEBRAND: -- think I have the data with me, but they would probably be in the area of a third of what they would be in major markets and in some cases less, because in prime time in major markets the rates are significantly higher than they would be in smaller markets.

176   COMMISSIONER DUNCAN: So the rates would be a third? Not a third less, but a third?

177   MR. HILDEBRAND: Right.


179   So do you think, then, that there will be an incentive for Saskatoon businesses to place advertising on the Humboldt station?

180   MR. HILDEBRAND: I don't see why. I mean, again, our whole process in Humboldt will be to serve Humboldt and we would expect to generate some regional advertising, advertisers that sort of want to cover the entire province, but we wouldn't anticipate, nor have we budgeted, any revenue from Saskatoon businesses to advertise in Humboldt.

181   COMMISSIONER DUNCAN: Okay. So you then won't be directing any marketing activities to that market?

182   MR. HILDEBRAND: None at all.


184   MR. HILDEBRAND: I might add, in some of our markets, you know the smaller markets, we work toward trying to keep the business there.

185   The example I use in southern Manitoba, we have a number of large centres in the U.S., shopping malls who want to advertise on our smaller stations in southern Manitoba inviting people to go shop in Grand Forks and Fargo, and we turn that business down because we feel as a local radio station we want our listeners to spend their money in our local communities, not to go and spend it outside of the market.


187   MR. HILDEBRAND: That's sort of our basic philosophy.

188   COMMISSIONER DUNCAN: Very credible. Thanks.

189   This is sort of a longer question, but just bear with me, I'm sure you are going to be familiar.

190   In its supplementary brief Fabmar indicates it:

"... expects a new station serving Humboldt and surrounding areas would reduce the local sales revenue of its Melfort stations by 15 percent and reduce its regional and national business by 20 percent." (As read)

191   They go on to state:

"These losses would jeopardize..."

192   And I'm quoting:

"These losses would jeopardize our ability to maintain the current level and quality of local and regional programming." (As read)

193   In your application you have indicated that in year two you expect from existing radio stations -- and you mentioned it this morning -- to generate no revenue. Advertisers currently not on radio to generate 80 percent of your revenue, increased spending by current advertisers 10 percent and other media 10 percent.

194   It's quite different perspectives from both parties so I'm just wondering how you would reconcile these two positions.

195   MR. FRIESEN: You know, I may get Ken to help us with some of the math but, you know, we operate in these kind of proximities in other places in the province. Estevan and Weyburn are about the same distance apart. We treat them and we know that they are two distinct separate markets. There is some crossover maybe, but they are distinct, separate markets.

196   And, you know, our sense from spending the time we have in Melfort and Humboldt, we also realize that those are two separate markets and there is enough room for both of us to exist without encroaching or impeding on the other's position is our view. We have just not seen that. We have not experienced that in other places.

197   So while the numbers can be -- and they are all very speculative. While they can be debated, we have just from experience seem that that impact is very, very low.

198   Ken...?

199   MR. GOLDSTEIN: We have analyzed these numbers going back to the 2008 application and intervention. At that point in 2008 Fabmar said that a new station that was then proposed would cost them 80 percent of 16-1/2 percent of their local revenues.

200   They had presented at the hearing a chart showing seven areas that they considered the Humboldt market. Of those seven areas three of them are either wholly excluded or partially excluded from the market area that Golden West will serve.

201   In the current proceeding Fabmar has now reduced that from 80 percent of 16-1/2 percent to 54 percent of 16-1/2 percent. However, if you read the Insightrix study filed with the Fabmar application at page 2 it says the impact would be minimal.

202   So I think that -- I know one wants to claim harm and one wants to try to say, you know, this is better than the other because there will be less of this or more of that, but the fact is that we have analyzed these markets, we have looked at the retail trade, all of the projected advertising revenue that we have come up with, that range of $1.1 to $1.3 million as the potential, is based solely in Humboldt and surrounding area, but in that market of 22,000 people. It doesn't go into Melfort, it doesn't go into Saskatoon.

203   If you look also at the study in the Fabmar application you will see that there is -- I could find the page but I won't take the time now -- you will see that there is an answer to one of the questions: Would you increase your budget? The majority said yes. Would it stay the same? And the rest of them said yes. Would it go down? No.

204   So I think that the station can be accommodated without doing any significant harm to the Melfort stations.

205   MR. HILDEBRAND: I think also to add to that, when we did the monitors of the Melfort radio station there was relatively very little Humboldt advertising on the Melfort radio station, so that would indicate to us that there wouldn't be a significant loss of revenue.

206   COMMISSIONER DUNCAN: My next question was sort of related and I think you have covered it, but I might just ask it in case there is something you want to add to it.

207   Their concern is, as you have mentioned, with the substantial negative effect on their revenues and what I was wondering about was the unexploited potential that you see in the Humboldt trading area.

208   I guess you have addressed that because you have told us that your retail sales revenue that you have done is all with the area that you have proposed to be served, all within that area.

209   MR. GOLDSTEIN: That's correct.


211   MR. HILDEBRAND: Yes. I think it's also fair to say that we have developed relatively sophisticated sales processes for smaller markets that we spend a lot of time and effort on developing and honing and then implementing in these communities so that we see business that we will generate from advertisers that generally don't use radio, or they haven't been exposed to radio. So there is, from our perspective, a huge potential in that unexploited market.

212   COMMISSIONER DUNCAN: Thank you. That's very helpful.

213   My next question relates to audience share and market share and you are projecting 3 percent growth in audience share starting at 18 percent and reaching 36 percent in year seven. Fabmar is projecting 34 percent in year one growing to 43 percent by the end of the license term. However, when I look at the revenue projections you are projecting 125 percent growth in revenue over the first license term as compared to Fabmar's expectations of 56 percent growth. So their tuning is much higher than yours, but the revenue is much lower.

214   So I'm just interested to know how you would explain the differences between the audience share in terms of projected revenue.

215   MR. FRIESEN: Our experience across our entire area that we serve in small communities, it's very evident that the amount of -- first of all, all of our markets do not get measured, because at the end of the day we find that that has very little to do with actual revenue. So the numbers and the percentages of audience really are not something that we spend a lot of time with.

216   What we spend time with is providing service, and effective service, to both the audience and especially the advertiser. So we need to make it.

217   So that's where we get our projections from. It's from the experience.

218   The audience numbers are very important to us, but they don't directly, in our case, translate into sales. Community service and our service to the community directly impacts the sales growth.


220   MR. HILDEBRAND: I think also it's reasonable to put on the record that when you are projecting audience levels out seven years, I mean only a magician would even --


222   MR. HILDEBRAND: -- assume to be accurate there, you know. So we have to -- you put numbers in there, but it's impossible to do that with any measure of preciseness.

223   So, as Lyndon says, we have basically been able to get ourselves involved and totally enmeshed in the community and when we do that the audience is there. When we do that, then the advertisers are there. So it's a sort of a simple wheel that we know that if we do this this will happen and this will follow.

224   So I mean, as I said earlier, we generally tend to be somewhat conservative in our projections and, you know, over the years we show that we could, in most instances, beat our projections when it comes to developing revenue.

225   COMMISSIONER DUNCAN: So if I'm understanding you correctly, really that you are placing less emphasis on the number, your percentage share.

226   MR. HILDEBRAND: Yes. Right.

227   COMMISSIONER DUNCAN: It's really your experience and the emphasis is on the revenue that you are projecting based on the --

228   MR. HILDEBRAND: Right.

229   COMMISSIONER DUNCAN: Okay, that's fine. I understand.

230   MR. HILDEBRAND: Right.

231   COMMISSIONER DUNCAN: And so then the likelihood, based on what you have just said, I was wondering about the likelihood of achieving 125 percent growth in revenue over that first license term.

232   What I heard your last remark was that you are quite confident that you would achieve that.

233   MR. FRIESEN: We are very confident.


235   MR. FRIESEN: We know that the level of service that we will provide to a community like that will translate into that kind of growth.

236   COMMISSIONER DUNCAN: Just sticking with the revenue for a minute, do your revenue figures include revenues from your online activities?

237   MR. FRIESEN: No, our online activities are all done separately. They are all recorded separately and so we have not made a projection in terms of online revenues.

238   COMMISSIONER DUNCAN: So then on the other side of that, then with the employee expenses, the nine employees that you will have in Humboldt, they are involved, I take it, in online, but are their salaries fully captured in the projections on the expense side?

239   MR. FRIESEN: They are fully captured within the projections that we have put together.

240   What we have -- how we have grown that over the years has been to take existing staff and make them a multimedia reporter --


242   MR. FRIESEN: -- and they are the ones that contribute to it, but all of their energy -- they are actually radio employees.

243   We employ -- nobody has a job in our organization that is exclusively online on the on-air and program and news side. We have exclusive salespeople.

244   But that likely wouldn't happen in the first while. Our plan is to put the radio station together, get it up and going and provide this as a community service. And we know from our experience elsewhere that when that starts to grow, then it creates a value to the community and then we will start marketing it.

245   COMMISSIONER DUNCAN: So your community portal, when did you expect to start that up then?

246   MR. FRIESEN: We will start that immediately.

247   COMMISSIONER DUNCAN: At the beginning, okay.

248   MR. FRIESEN: Yes.


250   I was curious to know if you have statistics on the number of homes in Humboldt and the surrounding areas that would be able to access that service, your online portal?

251   MR. FRIESEN: You know, I don't have numbers.

252   Ken...?

253   MR. GOLDSTEIN: One could extract those numbers and if you want them I think I could probably get them over the next few days, but I would say that you probably are in the -- counting the towns and the rural, and so on, you are probably in about the 70 percent range.

254   COMMISSIONER DUNCAN: So you would have to have high-speed Internet to get that; right?

255   MR. GOLDSTEIN: No.

256   MR. FRIESEN: No.

257   MR. GOLDSTEIN: No.

258   MR. FRIESEN: Tim, maybe you can help us with this

259   MR. THIBAULT: Yes. Actually, I worked for a web development company as a part-time thing. My background is IT.

260   Within the Humboldt area the organization that I worked for was in the cattle industry and the majority of their market were cattle farmers so we had to develop websites that were very user-friendly on a dial-up modem.

261   That being said, what we found is the majority of the market in the Humboldt area has full access to the Internet. SaskTel is going to be rolling out their 3G network in Humboldt in October -- well I guess in this month is what they have it slated for -- so with your Rocket Stick you will be able to access high-speed.

262   We do have wireless carriers as well. Access Communications is opening a new office in Humboldt. They are also an Internet provider. So the Internet access is very abundant within the area.

263   There are some sketchy areas where you get into some of the hills and stuff where, you know, you may have to put, you know, a 100-foot tower up to actually be able to pull the radio frequency and if you are on a wireless connection, but aside from that the infrastructure is very, very good within the province. So the only reason people don't have good Internet access is by choice.

264   COMMISSIONER DUNCAN: Okay. Very good. Thanks very much, that's helpful.

265   So the nine new employees, are those full-time positions?

266   MR. FRIESEN: They are all full-time positions.


268   Looking at the two applications, Fabmar is proposing to serve 20 percent more people than Golden West, 11,440 versus 9,508 in the 3 mV contours. I know that you have to be concerned about the common ownership policy, so I looked at the maps, because 20 percent is a big difference.

269   So, from my view of it, it looked like Cudworth, Prud'homme, Meacham and Viscount are all communities within the 3 mV contour of the Saskatoon FMs and so they would have a local radio station. I'm going to ask you to confirm this in a second.

270   If that is the case, with the numbers that I have here, which I can give you in a minute if it's necessary, then that 20 percent drops to 7 percent. And of the communities listed in both your applications, comparing them both, only Annaheim, serving 218 people, is outside of the 3 mV contour of the Saskatoon station and of your proposed Humboldt station -- is closer to Melfort I guess.

271   At any rate, so I'm just wondering -- I can give you the numbers I have for the communities. I'm interested in your comment -- you don't have to give it to me right now, you could look at it and give it to us in the morning -- about whether that 20 percent discrepancy -- it's not really a discrepancy --

272   MR. FRIESEN: Difference.

273   COMMISSIONER DUNCAN: The 20 percent less number of people that you are prepared to serve than Fabmar is addressed because the difference, 13 percent there, is served from the Saskatoon stations.

274   Are you following my question?

275   MR. FRIESEN: I think I am.


277   MR. FRIESEN: Our quick observation is that I think they are contoured. It goes a little wider towards Saskatoon.

278   Ken, do you have a comment?

279   COMMISSIONER DUNCAN: I think it does as well.

280   UNIDENTIFIED SPEAKER: Yes, definitely.

281   COMMISSIONER DUNCAN: And I think that's why they are encompassing those and you are not.

282   MR. GOLDSTEIN Yes. I think it does a little, but I think that the -- obviously we measure two contours here and --

283   COMMISSIONER DUNCAN: I'm sorry, I missed that. You measure two --

284   MR. GOLDSTEIN: You measure two contours --


286   MR. GOLDSTEIN: -- you measure the 3 and the .5 I believe.


288   MR. GOLDSTEIN: So obviously no one can make these contours -- at least I don't know an engineer yet who can make these contours stop at the edge of one rural municipality and not go into the other. So I think the key is to examine not so much the contour itself, but the principal marketing area that each applicant has established.

289   And there are differences in approaches, so I don't think that contour -- it's useful for some purposes, but in terms of the marketing I think that's perhaps a better comparison.

290   And the principal marketing area in the case of this application is slightly less than the Humboldt functional economic area as defined by that study by the people from the University of Saskatchewan.

291   So it's entirely Humboldt-oriented, it does not go to Saskatoon and it does not go to Melfort.

292   COMMISSIONER DUNCAN: I just want to look and give you the reference in the application, if I can find it quickly, that addresses this.

293   MR. HILDEBRAND: While you are looking for that just a comment.


295   MR. HILDEBRAND: Again, historically we have found that most of our business is generated within a 50 mile radius of the studio, then in the 50 to 75 mile radius there will be some business generated, but the further you get away from the studio the less business you will generate.

296   So that may also answer why we are looking to a smaller basket of people than they might be.

297   COMMISSIONER DUNCAN: I guess what I was thinking about was people being served and it's 6.2 of the applications and it does ask:

"Please provide quantitative estimates of the population within the service contours, as well as an estimate of the population within the area to which the station's principal marketing activities will be directed." (As read)

298   So the numbers are dealing with the principal marketing activity.

299   MR. HILDEBRAND: Right. Yes.

300   COMMISSIONER DUNCAN: So my concern was -- okay.

301   I guess my concern, I'm looking at two applications, one proposes to serve 20 percent more people than the other.

302   MR. GOLDSTEIN: Well, I'm looking at the Golden West application now 6.2 and the principal market area, as of the 2006 census, has 20,486 people, which is now up to about 22,000; and I'm looking at the principal marketing area for the other application which says 11,440.

303   So I think there is some different ways of defining it obviously in the mind of one applicant versus the other, but it is the 3 mV/m contour that is the 9,508 versus the 11,440, but the principal marketing area number is different than that.

304   COMMISSIONER DUNCAN: Right. So principal marketing is giving an emphasis to the -- let me rephrase my question.

305   So looking at the first column, the population in the 3 mV contour, right, the number on Fabmar's application is 20 percent higher and so I'm concerned about people getting service. So I looked at it and thought well, those people in those communities I have identified that fall within what appear to be the Saskatoon contour when I look at those maps, they are being served, albeit not by this new Humboldt station, but they are being served with a local radio station.

306   MR. HILDEBRAND: That's right.

307   COMMISSIONER DUNCAN: Would that be the case?

308   MR. HILDEBRAND: That's right, yes.

309   MR. FRIESEN: Right.

310   COMMISSIONER DUNCAN: Yes. So would you be interested in looking at it and confirming that the numbers are not 20 percent but some other number that is not served?

311   For example, what I did, I took Cudworth has 738 residents -- I think we got these off of their websites, the municipality's websites -- Prud'homme 167, and Meacham 90 and Viscount 251.

312   So when I took that difference away from the 20 percent it reduced the difference between the number of people you are proposing to serve versus the number of people Fabmar is proposing to serve to 7 percent. I could clearly see why 218 people, the population from Anaheim, are outside your contour, they are not on the Saskatoon side. Those people do not have a local radio station and will not in this proposal here that you have made, this 218.

313   MR. HILDEBRAND: True.

314   COMMISSIONER DUNCAN: But if you can bring the number down, or at least confirm or improve on that number, that would be helpful, as long as you understand what -- I'm making my point.

315   MR. FRIESEN: I think I do and we will undertake to get that.


316   COMMISSIONER DUNCAN: Thank you. Thanks.

317   So tomorrow morning, if you could, that would be great.

318   MR. FRIESEN: True.

319   COMMISSIONER DUNCAN: So my second last question was -- and I think that you have addressed it -- it was concerning the quote in Fabmar's application.

"Golden West had underestimated the potential impact that its proposed station would have on the audience and advertising revenues generated in Humboldt and surrounding areas by CJVR-FM and CKJH-AM in Melfort." (As read)

320   And you have addressed that and unless you wanted to add anything to it I think I have the information I need on that. Okay.

321   So my last question is just that it would he helpful for us if you would like to summarize why you believe your application to serve Humboldt is stronger than that of Fabmar's.

322   MR. FRIESEN: Well, thank you.

323   We have a different approach in that we overspend on surveillance news on-air and the whole live-to-air process differently than what we have seen in the other application.

324   We will give Humboldt more local service, because when we have more feet on the street, the community, they benefit big-time. So if there is one difference that I think you need to take into account it would be that one difference.

325   We plan to spend $2.1 million in the term on programming, while the other applicant will spend only $2.9 million --

326   UNIDENTIFIED SPEAKER: $1.9 million.

327   MR. FRIESEN: -- over the term.

328   And so there is a significant difference and that is all about service to the community.

329   COMMISSIONER DUNCAN: What were those numbers again, please?

330   MR. FRIESEN: My numbers say over the -- no, I used the wrong number. I'm sorry here.

331   Okay. So we are going to spend $2.1 million over seven, they are going to spend $975 --


333   MR. FRIESEN: Thousand over the first seven year term.


335   MR. FRIESEN: Which in their case is 30 percent of their revenue, in our case it's 50 percent of our revenue will be invested back into those services.


337   MR. FRIESEN: So that's to us the significant element.

338   What our role is in those communities is to provide them incredible local service just about their communities and their regions and we think if we do that well, if we serve them well, we will be looked after.

339   That's the significant difference over any other company.

340   MR. HILDEBRAND: Well, I think just to underline that, our plans always are and always have been to do things for the long run. So we are not looking for a short hit, we are looking for the long run and that's why we invest in the local people, that's why we invest in the local training, and that's how we can develop the local business.

341   Having been doing this for over 50 years, as you know, we just know that this works and if we spend the money it comes back later on. So you have to do this first and later on you get the benefits, and all the while the community is really getting the benefit.

342   COMMISSIONER DUNCAN: Thank you very much. Thank you for your patience in answering my questions.

343   MR. HILDEBRAND: Thank you.

344   COMMISSIONER DUNCAN: Thanks. That's it, Mr. Chairman.

345   THE CHAIRPERSON: Thank you very much.

346   Commissioner Molnar...?


348   Good morning. I just want to follow-up some more.

349   I know you have been talking with Commissioner Duncan about the cross impacts on the Fabmar stations that exist in that region and I just want to continue that because I feel that between these two applications there is very, very significant differences in what are viewed to be the cross impacts.

350   So first of all, a matter of clarity, your economic analysis that said there was $1.1 million to $1.3 million potential in that market, did you say that the Golden West application is for some segment of that, that in fact the area you would serve is less than full $1.1 million to $1.3 million?

351   MR. GOLDSTEIN: No. What we did was start with the definition of the Humboldt market that came from the study for the Saskatchewan government and then we took off some rural municipalities that were in the southern, eastern part that wouldn't be reached by the signal.

352   COMMISSIONER MOLNAR: Okay. So you modified that functional economic area to match?

353   MR. GOLDSTEIN: Exactly. As a matter of fact, it's called in to report "the modified functional economic area".


355   MR. GOLDSTEIN: But then the calculation of the retail trade, the calculation of the radio revenue potential, was all on the modified area.

356   COMMISSIONER MOLNAR: Okay. So let me begin by one of the things that troubled me somewhat.

357   You mentioned that you monitored the FM station out of Melfort and found a very small amount of advertising, 3.9 percent I believe you said.

358   Did you monitor the AM station?

359   MR. FRIESEN: I can't answer that today, but I will let you know by tomorrow morning.



361   MR. FRIESEN: Yes.

362   COMMISSIONER MOLNAR: Because there is both an AM and an FM station.

363   MR. FRIESEN: Yes. My sense is we did both, but -- my sense is we did both. I have to go back and look.

364   COMMISSIONER MOLNAR: And that 3.9 percent reflects both?

365   MR. FRIESEN: That reflects our whole survey, our whole monitored. So I will have --

366   COMMISSIONER MOLNAR: So you are going to confirm that that is --

367   MR. FRIESEN: That it was both stations.

368   COMMISSIONER MOLNAR: That it was both AM and FM?

369   MR. FRIESEN: Yes. I will confirm that with you.


371   MR. FRIESEN: I can't right now because I don't --


373   MR. FRIESEN: My sense is that we did, but I have to go back and check it, which I don't have.


375   Because certainly we might have some -- we certainly have some different views as to how much of the advertising potential in Humboldt is already served, but some of it is served.

376   I mean we know that those Melfort stations are deriving revenue and providing some services to Humboldt. An example I suppose -- and that's why I asked about the AM is I know that they provide the Humboldt Broncos games on their AM station and run Humboldt advertising in large part through that segment. So it's surprising that there would just a 3.9 percent of advertising coming from the Humboldt market.

377   MR. FRIESEN: That was our estimate based on what we literally heard on two separate monitors that we provided. So again, what it is we don't know until we are able to look.

378   What we do know is what we heard and that was an estimate just drawn from that.

379   COMMISSIONER MOLNAR: Okay. And you understand that if you were successful and went into this market that they would still be there. They potentially would still hold, you know, the licence to run the Humboldt --

380   MR. FRIESEN: For sure. For sure.

381   COMMISSIONER MOLNAR: -- Broncos and everything else.

382   MR. FRIESEN: Yes.

383   COMMISSIONER MOLNAR: Yes. So you would be sharing --

384   MR. FRIESEN: Of course we are aware of that.

385   COMMISSIONER MOLNAR: -- the economic potential in Humboldt.

386   MR. FRIESEN: Of course.

387   COMMISSIONER MOLNAR: Okay. So this $1.1 to $1.3 million would be shared, if you were successful between your local station and the regional station that also serves Humboldt to some degree?

388   MR. GOLDSTEIN: Yes, except I think it's important to point out if you go back to the document that was filed by Fabmar at the 2008 hearing where they listed seven areas, not all of those areas are completely contained within the Humboldt market as we have defined it. But the broad answer to your question is yes.

389   COMMISSIONER MOLNAR: So I just want to ensure, then, when I'm looking at your revenue forecasts, your revenue projections -- and this information is not confidential; correct?

390   MR. GOLDSTEIN: No.


392   Where you are projecting to grow the revenue by year seven to $900,000, how does that compare to the market capacity of $1.1 million?

393   Is that just inflation-adjusted? Like how much of that market, of that advertising market have you projected you are going to obtain?

394   MR. GOLDSTEIN: Well, the $1.1 to $1.3 million is last year.

395   I would point out that the retail trade in the Humboldt area over the last half a dozen years has gone up from about $150 or $160 million to about $200 million and so it's based against that approximately $200 million that you get a $1.1 to $1.3 million.

396   If the retail trade grows up by a comparable rate -- and as a matter of fact what I hear about the economy of this province, and particularly the potash industry, it might go up even faster -- we won't be dealing with $900,000 out of $1.1 million in 2015, we will probably be dealing with $900,000 out of $1.6 million in 2015.

397   So the $1.1 or $1.3 million is a benchmark against which you do a reality check for your projections. It doesn't mean the benchmark is fixed, the benchmark will grow as retail trade will grow.

398   MR. HILDEBRAND: Yes. As the community grows the business for the radio stations, both Fabmar and ours, would continue to grow. So the pie continues to grow.

399   Again, as I said earlier, when you are projecting seven years out I mean you are doing this with a lot of faith that the province will still be here and we expect it will be.

400   But going forward our projections certainly are conservative because we think that under normal environments that we have seen in the province we will be able to do considerably better than that in real terms.

401   COMMISSIONER MOLNAR: I understand you view your estimates to be conservative, I'm just trying to understand if these estimates -- based on the economic projections you have for Humboldt, if we could license a new station and there would be enough capacity to continue the business plan of the existing station at the same time?

402   MR. HILDEBRAND: In my estimation without a doubt you could do that, yes, there is room.

403   COMMISSIONER MOLNAR: There is room?

404   MR. HILDEBRAND: Yes.

405   COMMISSIONER MOLNAR: And is there anything that you have filed that I can look at to say that room exists?

406   MR. HILDEBRAND: Nothing in the numbers you have.

407   MR. GOLDSTEIN: Well, I think the analysis we --

408   COMMISSIONER MOLNAR: The $1.3 million?

409   MR. GOLDSTEIN: -- the $1.1 to $1.3 million, as I say, you do that as -- we come at this many different ways. We come at it from retail trade, we come at it from population, we come at it from incomes and then you have to do a reality check. The reality check is the most recent year for which you can do data. What does it tell you? How do the projections look?

410   An earlier question that I thought was a very good question about the growth that's projected for the revenues for the Golden West station, they are within the envelope of the benchmark. I think that's the key finding here, they are within the envelope of the benchmark. We expect the benchmark will grow, but you have that comfort level that they are within the envelope.

411   I think you -- I would take it --

412   COMMISSIONER MOLNAR: Excuse me, if I could just interject --

413   MR. GOLDSTEIN: Yes.

414   COMMISSIONER MOLNAR: -- that's where I don't have a comfort level, because it's within the envelope, but it doesn't -- the benchmark is the total market and you would be sharing that market. That's my point.

415   MR. GOLDSTEIN: Yes.

416   COMMISSIONER MOLNAR: It appears to almost encompass the total.

417   So unless we know or have faith that the market will grow substantially --

418   MR. GOLDSTEIN: Well, first of all, in the first year if you add up the two projected -- well, first of all, we don't have to add the two projected revenues because what we are talking about here is not adding two applicants for Humboldt, we are talking about, if I understand your question correctly, adding the Golden West application to Humboldt, to that portion of the Humboldt market that really goes to Melfort. I think that's the intent.

419   And if you take a look at the numbers, they are well below the benchmark which is last year well into the next few years.

420   So I think -- do I have faith that this province is going to grow? I do. I'm from Winnipeg, but I have done a lot of work in this province with a lot of media and this province is going to grow and I think the potential is there.

421   So I wouldn't get hung up on the $1.1 or $1.3 million going forward, I think it's just a reality check and I think there is room to accommodate their Humboldt share and a real brand-new station.

422   MR. HILDEBRAND: I would like to add to that.

423   So if we are looking at $1.1 to $1.3 million availability of advertising revenue today, we are only projecting $400,000, so that leaves them to get $900,000 in addition. There's still room. So going forward it would appear there would be lots of room for our station, Humboldt, plus Fabmar's regional service that would also provide service there.

424   So the community would then be served by a local station and the regional station and together they could generate up to $1.1, $1.3 million.

425   Even in year six we are only just about halfway there. By year six we would assume that it would have grown a little bit at least.

426   So I think any way you look at the numbers there is room to provide a local service plus a regional service and we would see this as complementary to the area where they would have two choices as opposed one.


428   So I have to throw out this question, although I'm somewhat anticipating the answer.

429   If we can have a local and a regional, why don't we just throw out two local licences?

430   MR. HILDEBRAND: Well, I mean I guess you could do that, too.

431   We think that there probably should only be -- if you are licensing something in Humboldt today there should only be one. And you could license two, but I think that would not necessarily provide the same service because there would be a lot of rate cutting at that point that would drive prices down and wouldn't necessarily benefit the community in the same way.

432   We recently -- I think we have referred to Drumheller here a few times where the Commission licensed an application for Golden West and so now Drumheller has two operators. Drumheller is not much larger.

433   Down the road that probably doesn't work. Even though we have been able to meet our projections at this point we don't see it -- in small communities for the long-term benefit it probably will end up with only one operator.

434   COMMISSIONER MOLNAR: But it will end up with the strongest operator at the end.

435   MR. HILDEBRAND: Well, you know, I guess we will have to see how that plays out, but -- or who has the most commitment to the area.


437   Those are my questions.

438   MR. GOLDSTEIN: Might I add one brief point to expand on that?

439   In the given case you have a regional operator based in Melfort that provides some service into Humboldt. Were you to license two local stations in Humboldt, one of which was also owned by the same regional operator, I think you would have a bit of a structural imbalance.

440   I think that the best opportunity for diversity in this market is to license Golden West and have Golden West as a strong local operator and Fabmar as a strong regional operator.

441   THE CHAIRPERSON: Thank you very much.

442   I have just a couple of quick questions to clean up.

443   Mr. Friesen, you had mentioned previously to the Commission that the strategy of having a web portal is becoming increasingly more important to how you approach a marketplace and build your presence and build that relationship with the community.

444   When you are sizing up a market for entry by your company, how much does the revenue of the Internet site factor into the viability of making your move?

445   MR. FRIESEN: You know, while we see it as very, very important in our strategy, it's about providing more of a full service to the community. We have to, we think, be where the people are. If they are texting, we have to be texting; if they are online, we have to be online. I think that service has to be there.

446   Like Elmer said earlier, it's going to take a lot of investment before we get -- and a lot of investment in the product, in the content on the Internet before we see the revenues that we think are going to play out.

447   We already see great growth where we have been in a place for a long time. In some of the communities we have been 5 to 7 years, we are starting to establish terrific revenues.

448   So it's a little bit chicken and egg. We have to put a huge investment into that product before we see revenue, so we don't factor in that at all. In fact, in this case we haven't even considered it. We don't see the revenue there in the short term at all.

449   THE CHAIRPERSON: Are those revenues -- I'm sorry, go ahead.

450   MR. HILDEBRAND: Go ahead.

451   THE CHAIRPERSON: Are those revenues rolled into your balance sheet for the radio station or are they kept separate?

452   MR. HILDEBRAND: Well, they are ultimately rolled into the corporate balance sheet, but they are not part of the individual station revenue because it's not a revenue that needs to be reported to the CRTC annual return. So it's a separate entity, but certainly in our corporate balance sheets they are all rolled in, yes.

453   THE CHAIRPERSON: Getting into the way back machine, going back to December of 2009 and your original application, I'm looking at -- in your Appendix 8D, Table 4, which was produced by Kroeger Media, you had in your market analysis or surveying you had asked the Humboldt market for their preferences or top of mind recalls as to their preferences for how they get their music off commercial radio and in that table you had indicated that there were three stations that were in pretty much a three-way tie for first place, CJDJ -- I'm glad I'm not on the air to say that -- CFMC and CFWD.

454   My question is this: Although this question was about music choice, music preference and with respect to listening over the air, I couldn't help but notice when you add up the percentages there is a gap of 20 percent before you get to the universe of 100. There is the 20 percent gap between the 80 percent of the respondents and an undeclared 20 percent and I'm just wondering if that's because it may be the CBC, which is not a music station, or whether they are getting their music from other sources other than radio?

455   MR. FRIESEN: My estimate would be it would be from all of those.

456   Satellite is another consideration that we factor in. We find in the rural areas, certainly in Saskatchewan, there is a high level of -- where there is less choice or -- the more rural it gets the more satellite has some penetration. So that's certainly been our observation.

457   MR. HILDEBRAND: I think also the less local service there is the more satellite there is. If there is a vibrant, dynamic local service that sort of moves the satellite out of the picture, but if there isn't that, then there is no reason for the people to be loyal to any station because the outside the market stations, they are not going to have any local information about -- Saskatoon for example won't have anything about Humboldt unless there's a big fire, an accident or some other calamity, but they won't have anything about the school board or the municipal activities or all of those things that make small communities tick.

458   And so once you have that local service then the satellite listener backs off, the satellite then replaces the CD in the car. But absent a local service then the satellite companies, you know, they have their biggest chunk of audience in areas where there is little service.

459   THE CHAIRPERSON: Surprisingly, we weren't in town 15 minutes yesterday and in doing the coffee shop conversations we did hear surprisingly right off the bat that satellite via cable was a choice that some of the market was going to.

460   MR. HILDEBRAND: Yes.

461   THE CHAIRPERSON: It was quite surprising.

462   May I just pick your brains for a second, Mr. Thibault, just on -- this has nothing to do with broadcasting, it's my curiosity.

463   You had mentioned that G3 and openly G4 is available in Humboldt --

464   MR. THIBAULT: Yes.

465   THE CHAIRPERSON: -- and you had mentioned that the Rogers Rocket Stick would be a usable device in the market.

466   One of the reasons why this hearing is not being held in Humboldt is that we found that there wasn't satisfactory cell service. As a matter of fact we, between the three of us, have both TELUS and Rogers and we were getting hashmarks yesterday.

467   What is the cell service like there?

468   MR. THIBAULT: The cell service in Humboldt is not great. It never really has been and with the new 3G network we are hoping that that will rollout.

469   For SaskTel service it's great coverage, but as far as Rogers and other carriers go, that's probably the number one complaint that we have from people visiting Humboldt, is my phone doesn't work.

470   You know, I can't answer to why that is, other than the fact that we do have good SaskTel coverage, but every other carrier, no.

471   MR. HILDEBRAND: That's why I have to have two phones when I'm in Saskatchewan.

472   THE CHAIRPERSON: Welcome to the club and I may be looking at three.

473   Thank you very much for that, that's very helpful.

474   Well, I think that concludes things. I would like to take -- my watch says we are 25 after 10:00, I would like to take a 20-minute break and convene again at 10:45.

475   Thank you very much.

476   Yes...?

477   MS HULLEY: I have undertakings to read into the record.

478   For Golden West, I have two.

479   The first was in response to Commissioner Duncan in reference to 6.2 of the applications and the 20 percent difference in the number of persons served. Provide comments on how many of this percentage is served by other local stations, for example from Saskatoon.

480   The second, in response to Commissioner Molnar, confirm that your monitoring of Humboldt advertising on the Melfort stations included the AM station.

481   I would ask that those undertakings be filed by 9:00 a.m. tomorrow morning, if that's acceptable.

482   MR. FRIESEN: Thank you.

483   Yes, it is.

484   MS HULLEY: Thank you.

485   That's everything.

486   THE CHAIRPERSON: The lawyer can't have the last word, the Chairman has to.

--- Laughter

487   THE CHAIRPERSON: We will convene again in 20 minutes.

488   Thank you very much.

489   MR. HILDEBRAND: Thank you.

490   MR. FRIESEN: Thank you.

--- Upon recessing at 1027

--- Upon resuming at 1103

491   THE CHAIRPERSON: Order, please.

492   First of all I would like to offer my apologies for the interruptions, the technical delays. Our Hearing Secretary tells me it has something to do with federal-provincial transfer payments and --

--- Laughter

493   THE CHAIRPERSON: -- Saskatchewan is holding out now that they know a few of us are in town.

494   Madam Secretary, would you please introduce our next presenter?

495   THE SECRETARY: Thank you, Mr. Chair.

496   We will now proceed with Item 2 on the Agenda which is an application by Fabmar Communications Ltd. for a broadcasting licence to operate an English-language FM commercial radio programming undertaking in Humboldt.

497   The new station would operate on frequency 107.5 MHz (channel 298C1) with an effective radiated power of 100,000 watts (non-directional antenna with an effective height of antenna above average terrain of 164.1 metres).

498   Appearing for the applicant is Gene Fabro. Please introduce your colleagues and then you will have 20 minutes for your presentation.


499   MR. FABRO: Thank you and good morning, Chairman Simpson, Commissioner Molnar, Commissioner Duncan and CRTC staff. Welcome to Saskatoon and thank you for allowing us this opportunity to appear before you once again.

500   Before we begin our presentation for a new FM licence for Humboldt, I would like to introduce myself and the members of the team.

501   My name is Gene Fabro, I am President of Fabmar Communications which we will refer to today as Fabcom, which is a company owned by my family.

502   Twenty years ago we purchased CJVR-AM, now known as CKJH-AM based in Melfort, Saskatchewan. Since that time we have launched CJVR-FM in Melfort, CIXF-FM in Whitecourt and CHWK-FM in Chilliwack, B.C.

503   To my right is Dean Sinclair, a broadcast veteran whose 30 year career includes programming, on-air, sales and senior management experience. He is a Professor of Media Studies at Humber College in Toronto specializing in radio. Dean is also General Manager of Humber College's radio station, 96.9 FM. Dean has provided us input and direction for our proposed classic rock music format.

504   Next to Dean is Lang McGilp. Lang has over 12 years of market research experience working with some of Canada's largest research firms, including Ipsos Reid and is currently Vice President of Research Services for Insightrix Research services of Saskatoon. Lang and his team undertook our research in preparation for this application.

505   On my far left is Dave Marcoux, who has been with our company for almost 10 years. As Sales Manager for all of our Saskatchewan stations, David oversees our team of account executives that sell advertising for CJVR and CKJH in the key communities which include Humboldt.

506   Next to Dave is Brian Kusch. Brian has been with our company for over six years and has been a territory account representative for Humboldt for three of those years.

507   Brian and his young family live in Humboldt and are actively involved in the community. He is a Director of Humboldt Chamber of Commerce, played a key role on the Humboldt Hockeyville Committee this past year, is on the host committee for the Royal Bank Cup coming to Humboldt in 2012, and over the past few weeks has been very busy with the Humboldt Hospital Foundation's fund-raising efforts that culminated with a 7-day radiothon where CJVR and CKJH helped raise over $150,000.

508   With all of his community involvement we sometimes wonder when Brian has time to sell advertising, but he's doing a great job for us and will be part of our senior management team at our new Humboldt station, should we be approved.

509   To Brian's right is Linda Rheaume, Administrative Manager for Fabcom and Station Manager for our two Melfort stations, CJVR and CKJH. Linda has been with us for the past 19 years.

510   To my immediate left is Ken Singer who is Fabmar's Vice President of Broadcast Operations. Ken has been in the broadcast business almost as many years as our first Saskatchewan radio station has been on the air, beginning in 1967 right here in -- Ken began his career in 1967 right here in Saskatoon.

511   Ken oversees all the management of our four radio stations and will quarterback our presentation team here this morning.

512   Ken...?

513   MR. SINGER: Thank you, Gene.

514   Before we begin I would just like to recognize one more member of the Fabcom team that is with us today and sitting in the audience, and he is Bill Wood who soon will be celebrating his 37th year with our company. Bill has been our Morning Host for most of those years and is Program Director of our Melfort stations.

515   Mr. Chair and Commissioners, Fabmar Communications is pleased to appear before you today to seek CRTC approval to bring the growing community of Humboldt and area their first locally based radio station that they can call their own.

516   If approved, Fabcom's classic rock Q107 will provide important benefits to Humboldt and surrounding communities. The public interest of the Canadian broadcasting system will be strengthened by ensuring ownership diversity and competitive balance within Saskatchewan's broadcasting community.

517   Just as importantly, approval of this application will ensure essential ongoing stability and growth for Fabcom's Saskatchewan regional operations that have provided four decades of quality local service to the Humboldt region.

518   Fabcom, as a local Saskatchewan heritage broadcaster, has been an integral part of the everyday lives of thousands of individuals and families throughout northeast Saskatchewan. Although Humboldt, with a population of less than 6,000 people does not have a radio station physically based in the city, Fabcom's CKJH, along with CJVR and its FM rebroadcaster located nearby in Dafoe have played a key role as Humboldt's local radio stations.

519   The residents of Humboldt have relied on the Fabcom stations to meet their needs. The Saskatoon stations do not reflect the identity of Humboldt. The CJVR/CKJH team serves on community committees, boards and fund-raisers. We are sponsors, promoters, builders, providing the connecting link between Humboldt and its neighbouring communities.

520   Since 1975 our stations have been the voice of the Humboldt Broncos, providing live play-by-play of over 1,000 junior hockey games over the past 35 years. We look forward to being the host radio broadcaster of the Royal Bank Cup when Humboldt will be the site for this Canadian Junior A championship in 2012.

521   The citizens of Humboldt have shown their desire to have this application approved. The 48 letters of support submitted as part of the public process all attest to Fabcom's record of daily involvement of community activities and events in and around Humboldt.

522   In his letter of intervention, Humboldt's Mayor Malcolm Eaton writes, and I quote:

"CJVR-FM and CK750-AM have been a strong radio presence in our community for many years. We are very pleased with the support they have provided to the business community and to the events and activities that occur in Humboldt. Fabmar Communications have a very successful track record in working with markets such as ours. They know our community and our region."

523   End of quote.

524   Fabcom has witnessed firsthand how Humboldt's population and major economic sectors have experienced constant growth, especially over the past 20 years. Fabcom contracted Insightrix Research to conduct an economic assessment, as well as a survey of local businesses, to determine the level of interest in advertising on a new Humboldt station.

525   MR. McGILP: The data positively identified Humboldt as a major trading centre with a growing population of almost 6,000, for a total regional population of approximately 29,000 within its trading area. The Humboldt region, with a diverse economy including agriculture, large-scale manufacturing, potash mining, health and education, has seen significant growth in the housing sector.

526   The Insightrix survey of 121 business people, including a series of in-depth interviews, showed 8 in 10 businesses use newspaper as a form of advertising and that 4 in 10 currently use radio to advertise. On that note, CJVR and CKJH are the most commonly used radio stations.

527   Of the respondents who used radio, 76 percent expressed that they were either somewhat or very satisfied with the choice of radio stations available to them, with 72 percent indicating CJVR and 70 percent indicating CKJH as their stations of choice.

528   Among respondents who do not currently advertise on the radio, 32 percent indicated that they would be very likely to use radio if a local station were established in Humboldt. Sixty-two percent indicate that they would increase their radio advertising with the establishment of a new Humboldt station.

529   Evaluating how Q107 will impact the advertising revenue currently flowing to the Melfort stations, 75 percent of current clients indicates that they would shift some of their advertising to the new station, 14 percent said they would move all of their advertising and 11 percent stated they would continue with the same level of advertising on CJVR and CKJH.

530   Overall, 62 percent of respondents said they would likely increase their advertising with the introduction of a new station.

531   MR. MARCOUX: We realize that a significant portion of our Humboldt territory revenues derived by a new Fabcom Humboldt station would be at the expense of our Melfort operations. At the same time, we see several opportunities whereby in year one Q107 would attract brand new advertising dollars as follows: Some of our existing clients would likely allocate additional dollars to the new station, resulting in incremental revenues estimated at $25,000.

532   Q107 would likely attract new local advertisers to radio from other media, producing a total of $25,000 in new revenues. New national and regional clients would account for $90,000 in first-year revenues for Q107.

533   The overall net potential for Q107 would yield incremental revenue gains of $140,000. After year one we estimate that our annual revenue growth would be between 7 and 9 percent for the first license term.

534   MR. SINCLAIR: In January Fabcom invited Humboldt residents to participate in an online listener survey. Four hundred and thirty-five respondents offered us their personal preferences for the proposed new FM station.

535   Of the 15 different stations and satellite services listened to over a seven-day period, CJVR and CKJH were mentioned by 94 percent. When asked to identify their favourite station, Fabcom's stations combined were mentioned by 27 percent. Sixty-nine percent of the respondents indicated they were satisfied or extremely satisfied with the present radio choices in Humboldt.

536   When asked to evaluate 10 different music formats, including sample core artists for each, the five choices in the top range were classic rock with 74 percent, and then '80s and '90s retro pop, after that hot adult contemporary, then '70s pop rock and, finally, country.

537   After evaluating these choices we eliminated hot country as this format is already being programmed by CJVR as well as Saskatoon stations. We also eliminated '70s pop rock and '80s and '90s retro pop as these formats are available from Saskatoon stations and from Fabcom's CKJH that programs oldies. Finally, we eliminated hot adult contemporary. This is the same format of Saskatoon's C95 FM.

538   Classic rock was the first choice, with a 25 to 49 demographic and the second choice for the 50 to 54 age group. Since almost 70 percent of Humboldt's population is older than 25, classic rock is the best format choice for the Humboldt market.

539   Here is how Q107's classic rock format will sound.

--- Audio clip

540   MR. SINCLAIR: Fabcom also accepts as a condition of licence that Q107 will play a minimum of 40 percent Canadian content. This will be applied to both the entire broadcast week and the period between 6:00 a.m. and 6:00 p.m.

541   Q107 will locally produce the following 6 hours and 40 minutes of special Canadian music-based programs each week: Great Canadian Rocks, Canadian Rock 'n Roll Roots, and Q107's Canadians on Track. Our supplementary brief will give you details further on each of these programs.

542   MR. KUSCH: Meeting the needs of our listeners and reflecting the communities we serve with local information is a mandate of all Fabcom stations.

543   The format for Q107 will include at least 12-1/4 hours of spoken word programming weekly, with over 5-1/2 hours of local news packages, including weather, sports and farm information.

544   Each of our five daily major information packages will include 90 seconds of farm news. Fabcom's Agriculture Director, Alice McFarland(ph), will host a daily 10-minute farm show, along with regular reports.

545   As part of our hourly programming, a further 252 scheduled weather reports will air each week. Like all Fabcom stations, Q107 will have an emergency on-air procedures plan to provide weather warnings and other public safety messages when conditions warrant.

546   Q107 will keep Humboldt and area listeners up-to-date and informed about current and upcoming local news and events with these daily features, including Community Update, Humboldt City Beat, Humboldt Connections, Humboldt Chamber and Tourism Reports, Q107 Listener Feedback and Q107 School Reports.

547   As the voice of the Humboldt Broncos, some hockey games will air on Q107 along with daily Bronco reports.

548   MS RHEAUME: Approval of Fabcom's application will yield significant benefits to local Canadian talent in Humboldt and surrounding areas with the following types of initiatives, the development and enhancement of educational and training skills, direct funding to local talent, a dedicated indirect on-air expenditures budget to assist in the promotion and development of local artists, and the creation of windows of opportunity for Canadian artists to gain on-air exposure through the special music-based programs mentioned.

549   Over seven years Fabcom will commit a minimum indirect CCD budget of $322,000 for the promotion of local concerts, performers and artistic programs.

550   A further $42,000 in direct CCD expenditures, of which $39,000 is over and above the basic, will be expended over the licence term as follows: $9,600 will be contributed to FACTOR that has committed to reinvest all of these funds in Saskatchewan talent; $27,400 will be directed to Q107's Horizon Unlimited initiative that will render financial assistance to musical talent in the Humboldt area at three development stages, including a starter, intermediate and senior level; and $5000 in scholarships available at the University of Regina School of Journalism.

551   MR. SINGER: Mr. Chair, the Fabcom proposal for a new classic rock FM service is the best choice and the only choice in licensing one station for Humboldt and here is why:

552   Fabcom's application meets the Commission's criteria for a new licence and is founded on solid professional research of hundreds of area residents and business people.

553   We have a firsthand awareness of the business community support for local-based radio that is founded on the very long-term relationship between Humboldt retailers and our Melfort stations.

554   Our financial forecasts are based on the hard evidence of 44 years of selling in Humboldt and further supported by the Insightrix retail study.

555   Fabcom's established advertiser base in Humboldt allows for a rapid new station start-up.

556   As Humboldt's local radio stations CJVR and CKJH play an active role working together with local volunteers, organizations and committees to help Humboldt grow and prosper. Humboldt will benefit with the creation of five new local full-time and one part-time position.

557   Fabcom's application optimizes the 107.5 MHz frequency, extending Q107's classic rock music format to the more than 32,000 persons living within the stations .5 mV coverage area.

558   Conversely, the Golden West proposal utilizes the same frequency or their alternate frequency. Utilizing those frequencies are restricted in order to satisfy the common ownership regulations and does not make full use of the spectrum. By using a directional antenna, Golden West's proposed signal will serve almost 6,000 less compared to the Fabcom signal.

559   MS RHEAUME: The impact that a new Humboldt station would have on our regional service currently provided by CJVR and CKJH is paramount in deciding which one of these two applications should be approved.

560   By choosing Golden West over the Fabcom application our current Humboldt and territory revenues would decline by at least 80 percent. These losses represent 15 percent of Fabcom's total local Saskatchewan sales.

561   In addition, the licensing of a Golden West station would erode the overall regional audience share of CJVR and CKJH, resulting in a further 20 percent loss of national business.

562   The combined revenue losses would jeopardize our ability to maintain the current level and quality of local and regional programming.

563   Approval of the Fabcom application will give Humboldt a station that would provide an even greater degree of locally focused programming, increase programming diversity and listener choice, and protect Fabcom's substantial investments in providing over four decades of quality local service to Humboldt and region.

564   MR. SINGER: Canada's private broadcast sector is rapidly evolving from a collection of independently owned entities into commonly owned multiple licence holders. To assure that smaller independent radio voices are maintained amidst larger ownership concentration approval of the Fabcom application is more important than ever.

565   In Saskatchewan 35 of the 39 mainstream commercial radio stations are owned and/or controlled by three of the industry's larger operators as follows: Golden West Broadcasting with 16 stations; Rawlco Radio with 13; and Harvard Broadcasting with 6.

566   MR. FABRO: Mr. Chair and Commissioners, central among the many positive elements that Fabcom brings to the table is my family's firm commitment as owners to provide a high quality local station that the residents of Humboldt can call their own. We hope you will carefully consider the following points and approve our application for these reasons.

567   Fabcom has been providing quality service to Humboldt and area for 44 years.

568   Q107's classic rock format will best serve Humboldt's 25 to 54-year-old demographic.

569   Q107 will provide over 12 hours of local Humboldt information.

570   On demand, Q107 will implement Fabcom's emergency on-air procedures, providing a first response public to service Humboldt.

571   Q107 will provide 40 percent of Cancon throughout the week.

572   Saskatchewan local talent will benefit from Q107's $354,000 CCT support.

573   Fabcom's technical proposal optimizes the 107.5 frequency.

574   Humboldt will benefit from the creation of five new full-time and one part-time position.

575   With Fabcom's considerable resources already in place, we are best positioned for a rapid start-up.

576   Approval of Fabcom's application will provide ownership diversity.

577   Licensing Golden West to serve Humboldt would have a serious financial impact on Fabcom.

578   Finally, clearly Humboldt wants Fabcom's Q107.

579   We respectfully ask the Commission to approve our application to establish a new classic rock FM station to serve Humboldt and surrounding regions.

580   Thank you for this opportunity.

581   Our panel would be happy to answer any questions you may have. Merci.

582   THE CHAIRPERSON: Thank you very much, Mr. Fabro.

583   First of all, just satisfy my curiosity, you are currently broadcasting the Humboldt Bronco games.

584   Is that correct?

585   MR. SINGER: That's correct, yes.

586   MR. FABRO: That's correct.

587   THE CHAIRPERSON: Would it be your intention at any point to consider moving those broadcasts to the Humboldt station?

588   MR. FABRO: Probably we wouldn't. We would move some of them, but because of our large coverage area on our AM we would probably leave it on the AM stations.


590   MR. SINGER: I might just add that given approval of a Humboldt licence, however, it would allow us to carry more games because in addition to Humboldt we carry two other SJHL teams --


592   MR. SINGER: -- and this would just give us a little more flexibility. Should Humboldt get in playoffs, then we can do additional games, and so on.

593   THE CHAIRPERSON: Thank you.

594   The last question before I turn things over to Commissioner Molnar, in your statement to the Commission regarding financial impact you have referred to percentiles such as 75 percent of current clients, 11 percent stated, 62 percent stated.

595   Are you comfortable telling the Commission what percentage of your advertising comes from Humboldt right now or is that something you would like to submit later?

596   MR. SINGER: We have indicated, both in 2008 and in our application, that approximately 15 percent of our local Saskatchewan revenue would be affected should Golden West have this application in Humboldt.

597   So we have submitted that percentage of our -- as a percentage of our local advertising.

598   THE CHAIRPERSON: Okay. Thank you very much.

599   Commissioner Molnar...?


601   Good morning everyone. I want to continue on a little bit from where Commissioner Simpson was and talk about your current operation of the regional station. Is it fair to describe Melfort as the regional station?

602   MR. SINGER: Yes, I think it is because, really, we serve a great deal of communities, and Humboldt is one of them within that region.

603   So, yes, we have always thought of ourselves as a regional service, and that was the game plan when we applied for our FM several years ago, as well, for Melfort, putting in repeaters to be able to provide the regional service with that signal.

604   COMMISSIONER MOLNAR: You mentioned just now that about 15 percent of your local revenue from Humboldt would be affected.

605   MR. SINGER: No, 15 percent of our overall revenue comes from Humboldt, of our overall local advertising comes from Humboldt.

606   COMMISSIONER MOLNAR: So is that local Humboldt advertisers or businesses advertising into Humboldt? That's what you define as local?

607   MR. SINGER: Yes, and we define them as Humboldt and, you know, the surrounding area; the Humboldt territory, yes.

608   COMMISSIONER MOLNAR: Is that 15 percent roughly equal between your AM and FM stations?

609   MR. SINGER: There would be just slightly more on the FM than there is on the AM. The FM is usually about a 52 to 48 percent split, more in favour of the FM.

610   COMMISSIONER MOLNAR: Can you tell me, if about 15 percent of your advertising revenue is coming out of Humboldt, what proportion of your current spoken word programming would be directed to the Humboldt market?

611   MR. SINGER: I don't know if I could give you a quantified figure for that, but we treat Humboldt the same as we do all of the centres we serve. We have community information on our stations on an hourly basis, and if there are events going on in Humboldt, they will most definitely be a part of our spoken word.

612   And we monitor that carefully. Our Program Director is very adamant about us reflecting more, so we don't sound like we are just a Melfort radio station, because we are serving a much larger audience than Melfort.

613   And our news stories are -- we cover news events in Humboldt as they develop. So on some days we may not have a Humboldt news story, but on other days we would.

614   And our weather information is certainly always encompassing Humboldt and the Humboldt area.

615   But anything to do with, of course, the Broncos, as being the voice of the Broncos, too -- you know, this year our regular season is approximately 28 hockey games, so that's a lot of content for Humboldt right there, just on the hockey side, plus our sports coverage of Humboldt, as well, on sportscasts and reports and so on.

616   COMMISSIONER MOLNAR: So if I sort of boil that down, you don't have any objectives or metrics or anything to say, as a regional station: This is our objective, to ensure that we are reflecting all the different communities in our region, or providing them adequate reflection.

617   MR. SINGER: We do have the objective that we try to be balanced in our whole coverage area, that we are not just talking about one segment of our coverage area.

618   As I say, our announcers are far beyond -- I mean, their program preparation includes information about what is going on in our coverage area, and Humboldt, of course, is a big part of that and always has been.

619   So we don't have a percentage, but I can tell you that, in any given week, you are going to hear a fair amount of promotion for things and events that are going on in Humboldt.

620   And having Brian, who lives and works in Humboldt, he is the eyes and ears of the radio station in Humboldt. So we have probably more information flowing to us because we have a person in the community, as opposed to, you know, phoning out for information.

621   But we have been there a long time, Commissioner Molnar, and our experience is that people just expect that -- you know, if something is going on, we are getting a fax about it, or we are getting an e-mail or a phone call, or Brian is getting a phone call, or someone is stopping him on the street saying, "Can you get this on the air for us?"

622   So the content is -- if we are aware of it, it's on our stations, if it's in Humboldt and region. So I would say that it's pretty predominant.

623   MR. FABRO: Before you ask your next question, I would just like to add one thing. It's kind of funny, when we do the weather reports -- and I have asked this many times, "Why don't we just talk about two or three locations around our coverage area?" There must be 12 or 15 different communities where they mention the temperature and what is going to happen in that region. It is almost mind-boggling how much we cover as a regional station. You really have to listen to us to understand it.

624   MR. SINGER: And I --

625   COMMISSIONER MOLNAR: Just for the record -- because I do have a number of questions, I am going to continue. For the record, I have listened, and that's one of the benefits of streaming your station.

626   Where I wanted to get to was, I was trying to understand your programming strategy today as a regional station and how that would change if you were awarded a local radio station in Humboldt. Would that change the programming on your existing stations, or your strategy?

627   MR. SINGER: No, it certainly wouldn't because we recognize that Humboldt is a potential market not only for listenership to a new station, as proposed, but we are offering two distinctly -- two more format choices in our country music and in our oldies format on our AM.

628   So we have certainly recognized that we can still maintain some listenership in Humboldt, but the bulk of the Humboldt listenership, from our research, would be to the new station. What would change is, Humboldt would have a radio station whose focus is solely Humboldt and area, compared to our regional service, which is Humboldt and all of the other communities that we serve.

629   So Humboldt benefits by receiving a station -- or now having a station that they can call their own, and our regional service wouldn't change one iota because, again, we are talking about three distinct audiences here.


631   What about if you were not successful and we were to license Golden West instead? Would that change how you were to program your existing regional station?

632   MR. SINGER: From a content point of view, absolutely not. Again, we have made the commitment to serve that area. We have invested in a repeater transmitter that takes our FM into that area. And we know that, regardless of format going into that market, we have two strong formats that are still going to receive some attention from listeners.

633   Most definitely, we would continue to do our commitment to the hockey broadcasts as one item, and our content direction would be exactly the same as it has been for the last four decades.


635   I want to move on to the issue of regional advertising. It appears from your application that roughly 20 percent of regional and national advertising sales also are coming from Humboldt, or projected to come from Humboldt, which would be at risk if we were to license someone else, and I am not exactly sure that I understand what is regional. How do you define regional advertising?

636   MR. SINGER: We have local advertisers, which are, of course, the community business people, and all else would fall into either regional -- regional might be a Crown corporation, such as SaskTel, which buys radio right across the province.

637   And, then, national advertising, the farm chemical dealers, would be probably the biggest single category in our part of the province.

638   We did that and, you know, it's purely an estimate. National business is a little hard to predict.

639   As Mr. Hildebrand pointed out, so are most of these figures a little hard to predict, based on a turbulent economy and so on.

640   But national business is usually based on market-by-market. You noted that there is a new Tim Hortons going up in Humboldt. Currently there is no national business from Tim Hortons; well, there will be, because Tim Hortons is going up.

641   COMMISSIONER MOLNAR: Right. Mr. Singer, I am comfortable with what is national, a little less comfortable with what we define as regional. I am aware from looking at your website that you have, for example, sales staff in Saskatoon.

642   MR. SINGER: Yes.

643   COMMISSIONER MOLNAR: So the purpose of having sales staff in Saskatoon is to what, drive the regional business?

644   MR. SINGER: I will let Dave answer that.

645   MR. MARCOUX: We do sell in the Saskatoon market, but it is more based on a client need, such as perhaps CUC that has a big concert in town.

646   The population of Saskatoon maybe doesn't support selling out 14,000 seats, so they would buy our markets, as well as Mr. Hildebrand's markets.

647   We are not going to stop people shopping locally outside our local markets. We do our best to tell people to shop locally in all of the markets we cover, but when people come to Saskatoon, whether it's for shopping or visiting, there are hotels that they stay at, they go to shows -- you know, whatever is happening in Saskatoon. That's where we get some of the Saskatoon business from.

648   Also, Mr. Hildebrand has a rep for Kindersley and Rosetown and Saskatoon.

649   There is business that comes out of here. We have a lot of farm and ag business that comes out of Saskatoon. So that's why we have a rep in Saskatoon.

650   MR. SINGER: I might just add a little further clarification. Our definition of regional also is that those are clients who use an advertising agency to do their placement.

651   So it's similar to the national structure, only it is more locally based. There are several advertising agencies here in Saskatoon, and Regina, that make up what we call our regional.

652   I guess it shouldn't be confused with regional service. Regional advertising is locally handled -- I guess, call it national business.

653   COMMISSIONER MOLNAR: So you are not selling Saskatoon advertising to a Saskatoon audience, you are selling it to your regional audience.

654   MR. MARCOUX: That is correct.

655   Also, on our AM station, we have the University of Saskatchewan Huskies that we, obviously, have Saskatoon merchants on, and some rural businesses also.

656   COMMISSIONER MOLNAR: So if you were to be in Humboldt -- and Humboldt, of course, is marginally closer than Melfort to Saskatoon -- would you see that growing?

657   MR. MARCOUX: The Saskatoon -- again, it would go to the needs of the client. It's all based on client needs. If they need that area of support, whether it is agriculture or, again, a major event coming to Saskatoon -- I mean, I have been selling for 28 years and I don't turn a lot of advertising down.

658   It's all based on client need and what that business is, and what he needs -- you know, what he considers his client base to be, where they come from, whether it's hotels, restaurants, major events, that sort of thing.

659   I hope that answers your question.

660   COMMISSIONER MOLNAR: Yes, thanks.

661   I want to move on. Your application shows five incremental positions and a positive PBIT by Year 2, I think you have estimated, if you were to be granted the licence in Humboldt, and very significant revenue transfers from your Melfort station -- your existing stations.

662   What I wasn't able to really understand from your application is whether or not Fabmar, or Fabcom, as you were called today, is better off with or without the station licensed in Humboldt.

663   MR. SINGER: I think we are better off with it, and I believe that we have indicated that we see opportunities to grow our revenue.

664   I think, initially, the incremental revenues are quite small, but we see tremendous potential for Humboldt, with the growth of the community.

665   We see, most definitely, a strengthening of business in Saskatchewan overall, and definitely -- you know, we wouldn't be here today if we didn't think that this would be a good investment for us, and a feasible investment, because I really do recognize that -- if we have to look at the two scenarios, our losses certainly would outweigh our gains. It would have a greater impact on us --

666   Or, I'm sorry, it's the other way around.

667   COMMISSIONER MOLNAR: Just to be clear -- and I will try to be brief with my questions, and perhaps you could do likewise --

668   MR. SINGER: I'm sorry.

--- Laughter

669   COMMISSIONER MOLNAR: I understand that you would be better -- if someone is licensed in Humboldt, obviously, economically, it is better if it's you. If no one is licensed in Humboldt, are you better off?

670   Are you better off being licensed in Humboldt, or no licence awarded at all in Humboldt?

671   MR. SINGER: I would have to say that we are better off being licensed in Humboldt, and so is Humboldt better off.

672   COMMISSIONER MOLNAR: Right. Humboldt is clearly better off.

673   MR. SINGER: Yes.

674   COMMISSIONER MOLNAR: That leads me to something that, I think, confused me somewhat. You understood in 2008 that there were radio broadcasters looking at Humboldt --

675   MR. SINGER: Yes.

676   COMMISSIONER MOLNAR: -- so why didn't you make an application yourself?

677   If you are better off by having a licence there, you know the market very well, you knew there was other interest in the market, why was your application simply in response to someone else?

678   MR. SINGER: I would have to say, first of all, that we weren't aware, until the application was actually Gazetted, that there was an application filed in Humboldt. We were not aware that that application was before the Commission until it actually appeared on the Commission's website in 2008. It was filed in `07.

679   So, at that point, we didn't have an option of applying. At least, from our interpretation, we didn't have that opportunity. So we, obviously, took the next option, which was: Let's see if we can intervene against this.

680   Because we have been in this market --

681   COMMISSIONER MOLNAR: I'm sorry, Mr. Singer, I am not asking why didn't you apply in 2008, I am saying, why didn't you apply between 2008 and this one, which, in your application, you say is in response to knowing that somebody else was digging around.

682   MR. SINGER: I guess where I am going with that -- and I'm sorry if I am a little wordy here. I am trying to get to that point, but --

683   Coming away from that, and when that application was denied, we knew at that time that our next move was: We are going to have to file an application at some point here, because we don't want this opportunity to get away from us.

684   And that wasn't that long ago, really.

685   And as the Commission is aware, we have been very, very busy filing applications over the last few years. Humboldt was always on our mind as an opportunity down the road and, most definitely, the research that was done, and just being in the market and seeing that this community is getting stronger and stronger, encouraged us that now is the time to do it.

686   We don't think that prior to 2008 was the time to apply for a licence in Humboldt.

687   So that was the thought process. We always knew, in the back of our mind, after going through the hearing in Winnipeg in 2008, that we were going to have to get moving on an application, and we did start to make plans at that time.

688   Definitely the Golden West filing made it -- you know, it just tightened the window. We said: We had better get this in there, like, right now.

689   But I can assure you that our discussions have always been that, within our coverage area, Humboldt was probably our next -- it was definitely our next opportunity to do something within our coverage area and establish a local station.

690   COMMISSIONER MOLNAR: Moving back to your application, you provided estimates of revenue and of audience share for your new classic rock proposal. To what extent do your estimates of audience share influence your revenue projections? Are they correlated in any way?

691   And I am saying this because Golden West before you -- and I know that you were all in the room -- said that audience share doesn't necessarily correlate to advertiser activity in a market.

692   So are these correlated numbers?

693   MR. SINGER: I would have to say that I would agree with the Golden West comment on that, because our numbers -- our financial numbers, first of all -- we will talk about financial and audience share -- our financial numbers are all based on the hard, actual evidence of what we are doing and have been doing in the marketplace, where --

694   COMMISSIONER MOLNAR: I am going to ask you more about your revenue numbers. I just want to --

695   MR. SINGER: Okay.

696   COMMISSIONER MOLNAR: So if your audience share looks aggressive or not, that is not going to influence the revenue projections.

697   MR. SINGER: Our audience share numbers were developed from the online research that we did in preparation for this application.

698   COMMISSIONER MOLNAR: I want to move on to the revenue numbers. I am certain that you have reviewed the Golden West application, as well, that was filed, and know that your numbers appear to be less optimistic, more conservative -- whatever. You know, your revenue projections are quite a bit lower, and your cross impacts are significantly higher in the estimates.

699   I want to address both of those, and I want to start with the issue of the cross impacts, the impact that this station, a new station in Humboldt, would have on Fabcom.

700   I am going to tell you that I have looked at your application, and I have looked at it, and I like playing with numbers, so...

--- Laughter

701   COMMISSIONER MOLNAR: You say that 54 percent of total revenue in Year 1 would come from existing Fabcom stations.

702   MR. SINGER: Yes, correct.

703   COMMISSIONER MOLNAR: Your customer research indicates that 59 percent of advertisers would spend more, and that 75 percent would retain some advertising on your Melfort stations.

704   When I look at all of those numbers, and when I look at the customer research upon which it appears your revenue cross impacts are determined, I don't understand the math, to be honest. So can you, maybe, tell me how your estimated cross impacts have been derived?

705   MR. SINGER: Okay. It started with us taking a historic look at the clients, client-by-client, in the Humboldt and area -- territory -- and because we have been doing business with them for a long time, not just a little time, we do have a sense and a relationship with each of these clients to know what their targeting needs are.

706   Going through that process, we quantified a number of clients who would switch all of their business -- and, again, we are predicting, we are looking at their type of business -- would take all of their advertising business and switch it to a Humboldt station -- to our new Humboldt station.

707   Then we looked at the ones that would likely increase their budgets, and by both our Melfort stations and our Humboldt stations, and we put them into another category.

708   Then we looked at ones that are using our Melfort stations and using some Saskatoon stations -- and there are a number of those types of clients -- and determined how a Humboldt station would impact their spending.

709   So, really, we are taking this broad list of clients that we do business with, and we put them into these areas, and projected over a period of years, starting with Year 1 in Humboldt, with a new radio station, how that would impact our Melfort revenues.

710   So those numbers are really derived from doing a one-on-one look at every client that we have been doing business with in the market.

711   COMMISSIONER MOLNAR: So the customer research was not used to derive your revenue estimates.

712   MR. SINGER: No, the customer research was used to give us a sense of -- that was our projection, and we talked to some of our retailers -- the process I just described -- but we also wanted Insightrix to do some in-market studying and, really, I didn't really find a big surprise there. I think it did complement what we had gone through in doing our own evaluation.

713   Clearly, there are advertisers there who will definitely want to maintain their advertising on our Melfort station, but they may be reducing that revenue to allow them to buy now three Fabcom stations instead of two.

714   So it's a little difficult to just -- it's not black and white, but definitely there was a correlation between us doing our own evaluation, based on real spending, and the Insightrix study that talked to advertisers that were currently active on our stations, advertisers that have never used our radio stations and have used other media.

715   Perhaps I could have Lang, from Insightrix, comment more on that, if you wish.

716   COMMISSIONER MOLNAR: If you wouldn't mind, just briefly help me.

717   Again, I see this result that says that 11.4 percent would continue all of their advertising on the Melfort stations, and 75 percent would continue some of their advertising on the Melfort stations, and yet the resulting impact says that 54 percent of the revenue would leave, and that is a confusing bit of information.

718   MR. McGILP: I can certainly speak to the survey that we did. In terms of how the sales forecasts worked, I wasn't part of that process, but certainly the research did show that there would be an interest in spending more money in that market.

719   But in terms of the sales projections...

720   COMMISSIONER MOLNAR: If you were to look at this market research, could you come up with something that would say that 54 percent of the revenue would move, based on your market research, or anything in that range?

721   MR. McGILP: We didn't go into a line of questioning asking how much revenue would you move if the station were to be established, but certainly we do see a trajectory of saying that some of the shift would take place.

722   I mean, when we have three-quarters of the people saying that they are going to move some of their dollars over, that does suggest a shift.

723   At the same time, we had 6 out of 10 people who currently advertise with Fabmar say that they would, potentially, advertise more with Fabmar, increase their wallet share.

724   So I think that there are some opportunities there.

725   Where the sales projections came from, in terms of how conservative -- you know, my colleagues were on that, and I am not sure about the process on that, but I think it does show that there is opportunity in the market.

726   COMMISSIONER MOLNAR: Could I ask you to comment -- Golden West, just before you, was talking about their estimated economic capacity for the Humboldt market, in the range of $1.1 million to $1.3 million, being the economic capacity of the market to support radio.

727   Have you done any work, or would you be able to comment on that in any way?

728   MR. SINGER: I think that our experience there is the best research you could actually find. We knock on doors every day there. We know the potential of the market for our radio stations.

729   In that many years you do get a sense of what the market -- or how much money the market will dedicate to our two Melfort radio stations.

730   I recognize -- again, back to the Insightrix research -- that the most commonly used medium in Humboldt currently is newspaper. So that encourages us to think, if you have a locally focused radio station on the ground in Humboldt, that there is a great opportunity to increase radio spending.

731   I am a believer that if there is $1.5 million in advertising revenues in Humboldt, having a local new radio station in the market will derive a lot more than we are getting currently as a regional station. So there is no dispute over that at all.

732   But, again, the best research, from our point of view, today is: What is the real spending in the market. We have a good sense of that.

733   The number one factor here for an advertiser in Humboldt right now is that they have to buy our radio station, or they choose to buy our radio station, because we do have a fair listenership in Humboldt. But they are also paying to be broadcast to areas that -- you know, they are reaching Melfort, and for a lot of those Humboldt businesses, they don't need Melfort, but we are charging them our rate for that coverage.

734   So the appeal of a new local station is going to be more affordable for Humboldt businesses that aren't interested in that full coverage, and that will create new opportunities as well.

735   Again, that is the process of going back through this list and saying: What kind of advertiser would turn our Melfort station off, as far as an advertising resource, and put all of their money into Humboldt?

736   Again, we did it on pure numbers, based on actual clients and their history of spending with us.

737   COMMISSIONER MOLNAR: So that same process led you to the conclusion that it would be 54 percent if you were the licence holder, and 80 percent if Golden West were licensed.

738   MR. SINGER: Correct.

739   COMMISSIONER MOLNAR: One-by-one you looked at them?

740   MR. SINGER: Yes.

741   COMMISSIONER MOLNAR: Just to be clear, let's assume in this case that Golden West was licensed and you were to lose 80 percent of your local revenue out of the Humboldt market. You would continue to do all of your programming into Humboldt, carry all of the Broncos games and everything, absent advertising support?

742   MR. SINGER: We would do the best we could, but we certainly would feel the financial impact to give us the resources to do those things.

743   MR. FABRO: I think that our commitment wouldn't change, but we wouldn't have the funds in order to contribute as much to Humboldt as we could previously.

744   COMMISSIONER MOLNAR: Okay. I have a better idea of how you determined your cross impacts. Incremental revenue, however, is relatively small. I think you forecast incremental local revenue at $50,000. That looks like a pretty small amount of incremental revenue, if you were to dedicate yourself to that community, and, as you said, it would have lower rates than your Melfort station and so on.

745   One of the questions that I wondered was: In your application you propose one incremental sales position, I believe. Do you believe that you could get more local revenue if you had greater sales staff dedicated to Humboldt?

746   MR. SINGER: The business plan for start-up is, yes, with one salesperson, but we would hope, as the market grew, that we could add more resources.

747   Right now, and for the past several years, we have had one rep dedicated to Humboldt and territory, but definitely, if the business warrants it, we would be happy -- I would love to have that problem, to have to add another salesman sooner than later.

748   COMMISSIONER MOLNAR: I lost my little sheet with everyone's name, but I understand that you are the sales rep for Humboldt today --

749   Brian?

750   MR. KUSCH: Yes.

751   COMMISSIONER MOLNAR: -- and that you would be dedicated to the new Humboldt station. So would you be selling for the Melfort station and the Humboldt station?

752   MR. KUSCH: I think we would look into that, but I think the plan is to replace the Melfort stations, CJBR and CKJH -- replacing my position with somebody else, and I would be dedicated to the Humboldt radio station.

753   COMMISSIONER MOLNAR: Okay, thanks.

754   As it regards the synergies between Melfort and Humboldt, you would be having five incremental positions to run Humboldt and a number of synergies with Melfort.

755   Do you do the same functions -- you listed all of the functions in your application that you would do at Melfort. Do you do those same functions for the B.C. and Alberta stations out of Melfort?

756   MR. SINGER: I will ask Linda, our Administration Manager, to speak to that.

757   MS RHEAUME: Thanks, Ken.

758   For Whitecourt we have the same synergies, as far as traffic, admin -- traffic and admin are your main synergies.

759   In Chilliwack we have a creative writer that works in Chilliwack for the Chilliwack station; whereas in Whitecourt the commercials are written in Melfort, talking to the clients in Whitecourt.

760   So the main synergies between traffic and admin are all the same in all the stations.

761   COMMISSIONER MOLNAR: Just to repeat myself -- sometimes it takes me more than once to ask a question to understand the answer.

762   You are not proposing any synergies on the sales side between the two?

763   MR. SINGER: I should point out that we have clients that do want to buy the full regional service. It's almost on a case-by-case -- like the assigned salesperson to that particular client, because they are interested in --

764   If we had the Humboldt station, we might have one salesperson dealing with that client.

765   I guess that Dave could elaborate more on that, but definitely we see the opportunity here just to be a stronger sales force by adding another radio station, most definitely.

766   And our ability to offer clients more choices within our region, now, if we had somebody who just wanted the Humboldt market, we could do something for them in that regard.

767   COMMISSIONER MOLNAR: Fair enough. And I assume that your financial projections and your sales and promotion costs in there reflect the cost of supporting that revenue, regardless of where that person resides.

768   MR. SINGER: Yes, that's correct.

769   COMMISSIONER MOLNAR: Fair enough.

770   I have a few detail questions, but before I go on to that, I just wanted to ask you about the new media. I believe that was one of the synergies that you had identified, that you would support the website from Melfort.

771   MR. SINGER: Each of our four radio stations has its own website. We do use our promotion person in Melfort to coordinate a lot of the functions for those four websites, but within our Whitecourt station and our Chilliwack station, we also have a person in charge of portions of the duties associated with their own website.

772   So it's not all one person doing all things, but there are some functions that we can administer from Melfort for all four.

773   COMMISSIONER MOLNAR: And you are aware that Golden West has proposed quite an aggressive new media platform, a community portal?

774   MR. SINGER: Yes.

775   COMMISSIONER MOLNAR: Do you want to tell us a little bit about what yours would look like?

776   MR. SINGER: I think, when you talk about new media, it is always work in progress. As we speak, we are developing some new elements for our websites, our four websites. We have just undertaken on three of our four stations a new streaming service that will offer us some new revenue opportunities that we didn't have in the past.

777   Definitely it's hard to keep up to that train, I find, but we do the best we can.

778   Our goal is to engage our listeners with our website, and we are doing a lot of that through our loyal listener databases and so on. Our Saskatchewan stations have over 10,000 loyal listeners in our database that we do a fair amount of weekly contact with, and we are using that database as part of our marketing efforts, for sure.

779   So streaming, contesting -- and we are doing, you know, news and sport headlines.

780   In Chilliwack we are undertaking a similar format to a local portal, called "", and that is just about to be unveiled, and we are kind of using that as, I guess, the guinea pig for the other markets, to see how that unfolds, and then we would develop that as a new look and a new functionality for our Saskatchewan and Alberta websites.

781   COMMISSIONER MOLNAR: Okay, thanks.

782   I just have a few detail questions here.

783   Local programming -- and you heard Commissioner Duncan ask this to Golden West -- there is a requirement in markets with more than one station that there be a minimum amount of local programming in order to solicit advertising, and that minimum amount is 42 hours. That is the minimum amount required in the case of a non-single market station.

784   Would you be willing to accept a condition of licence, if you were successful in this, to a minimum amount of local programming?

785   MR. SINGER: Our commitment is to provide 126 hours of local programming.

786   COMMISSIONER MOLNAR: Would you be willing to accept that as a condition of licence?

787   MR. SINGER: Yes, we would.

788   COMMISSIONER MOLNAR: Okay. Thank you.

789   In your news programming you have proposed 2 hours and 12 minutes of pure news per broadcast week. Could you give us some breakdown and tell us, of this amount, how much would relate to local news and local reflection versus that which would be regional, national and international?

790   MR. SINGER: Our components would be at least 90 percent local, and the rest would be -- the remaining 10 percent would be international and regional/provincial.

791   We also, as part of our news commitment, are providing a great deal of ag news. So, in addition to our 2 hours and 12 minutes of pure news that we indicate on the chart that was submitted with our application, the ag news makes up another 87 and a half minutes a week.

792   So, I guess, realistically, our pure news is the combination of both of those, which would give us a total of --

793   COMMISSIONER MOLNAR: The ag news is unique to Humboldt?

794   MR. SINGER: Yes, it would be. It would be produced by our agricultural reporter, Alice McFarlane, who does all of our ag programming in Melfort, but she would produce a special program that would air on the Humboldt station, which would be separate from the Melfort station's program.

795   COMMISSIONER MOLNAR: To say it's raining?

--- Laughter

796   MR. SINGER: Yes, this is more the hard news of agriculture, not weather related.

797   COMMISSIONER MOLNAR: Well, that's hard news of agriculture right now, "It's raining again."

798   MR. SINGER: Yes.

799   Alice McFarlane, by the way, just won a Canadian farm writer award this past weekend for her work in agricultural reporting, so we are kind of proud of that and hope we can bring that to Humboldt.


801   I just have one more question, and it relates to your CCD commitments. Do you have with you the revised Appendix 8(a) that you filed with us detailing your CCD commitments?

802   MR. SINGER: Yes, I do.


804   I am interested in the CCD that is over and above the basic, and what normally occurs is that we like to see the commitments by year and in total, so that Commission Staff can track it each year, to determine if people are meeting their commitments.

805   MR. SINGER: Yes.

806   COMMISSIONER MOLNAR: We have had some problems, to be honest, in looking at this file, to understand what is your CCD commitment by year in over and above.

807   Just to confirm, your total over and above CCD commitment is $39,000. Is that true?

808   MR. SINGER: Correct, yes.

809   COMMISSIONER MOLNAR: If we look at Appendix 8(a), we see one line that says, "CCD that is over and above the basic," and it shows, in amounts per year, $6,000 in Year 1, $5,500 in Year 2 --

810   Do you see that line?

811   MR. SINGER: Yes.

812   COMMISSIONER MOLNAR: So $6,000 in Year 1, $5,500 in Year 2, $5,500 in Year 3 -- $5,500 each year thereafter.

813   Is that your commitment?

814   MR. SINGER: Yes, it is.

815   COMMISSIONER MOLNAR: In over and above.

816   MR. SINGER: Correct.

817   COMMISSIONER MOLNAR: Okay. So, then, if we wanted to understand your commitment by initiative, we look down to the next line, which says, "Total direct CCD," and I understand that your commitment there to FACTOR includes basic and over and above.

818   But you can see, if we look at the total numbers there, that they don't align with the numbers above.

819   Can you see that?

820   This total direct CCD would be your basic and your over and above, and yet it shows in Year 1 the total amount to be $4,900 versus the $6,000 that you have said you would be spending in the first year.

821   MR. SINGER: I know that we answered this in a deficiency question, and I would have to review that.

822   Would it be possible for us to give you an evaluation of this, because I am not really sure how this has unfolded here.

823   COMMISSIONER MOLNAR: I think it is certainly something we would appreciate receiving.

824   MR. SINGER: Yes, we could do that later today, if you like.

825   COMMISSIONER MOLNAR: Okay. What we need is the CCD that is over and above the basic, by initiative, by year.

826   MR. SINGER: Okay.

827   COMMISSIONER MOLNAR: Reconciling to those amounts each year, and to that total, $39,000.

828   MR. SINGER: Okay.

829   COMMISSIONER MOLNAR: Which, I believe, this was intended to do, but the math doesn't work. So if you could provide us a revised --

830   MR. SINGER: Yes.

831   I do know that we were asked about that in one of our deficiencies and --

832   COMMISSIONER MOLNAR: And I think this is what you provided us as an answer, so we are still confused. If you could just re-file that, we would appreciate it.

833   MR. SINGER: We would be happy to offer some clarification on that.


834   COMMISSIONER MOLNAR: Thank you very much.

835   Those are my questions.

836   THE CHAIRPERSON: Commissioner Duncan, go ahead.

837   COMMISSIONER DUNCAN: I have just a few questions.

838   I am just wondering, your local programming is 126 hours, of which 44 hours are live.

839   MR. SINGER: Yes.

840   COMMISSIONER DUNCAN: I am just wondering, is the balance all voice-tracked or is it some other...

841   MR. SINGER: It would be live-assist. In other words, it would be produced in the radio station in Humboldt. We don't have plans to carry programming originating from any of our other stations.

842   So it's all locally produced, and, primarily, it would be our low audience hours that would be voice-tracked.


844   The extra positions that you are hiring, will they all be resident in Humboldt?

845   MR. SINGER: Yes.

846   COMMISSIONER DUNCAN: They will all be.

847   If I look at your Appendix 1 of your supplementary brief, you list shows like "Great Canadian Rockies".

848   MR. SINGER: Yes.

849   COMMISSIONER DUNCAN: Is that program produced, or will that program be produced in Humboldt?

850   MR. SINGER: Yes.

851   And that's a typo, it's "Great Canadian Rocks". I have been reminded of that about a hundred times this week.

--- Laughter

852   COMMISSIONER DUNCAN: It immediately brought Chilliwack to mind, so that's why I asked.

853   Thank you very much.

854   Thank you, Mr. Chairman.

855   THE CHAIRPERSON: Thank you, Commissioner Duncan.

856   Before we break for lunch, are there any other matters of business, Madam Secretary, or items for the record?

857   MS HULLEY: I can confirm for the record the undertaking.


859   MS HULLEY: The undertaking in response to Commissioner Molnar's question was to provide clarifications on the CCD: the total seven-year over and above CCD contribution that is proposed; the over and above CCD contribution breakdown per broadcast year; and the specific amounts per broadcast year that will be devoted to each initiative for the over and above CCD contributions.

860   And you undertook, I believe, to file that by the end of the day today.

861   MR. SINGER: Correct.

862   THE SECRETARY: We would accept 9:00 a.m. tomorrow morning, if that's acceptable. That's when Golden West's undertakings are due.

863   Thank you.

864   THE CHAIRPERSON: Madam Secretary, is there any other business?

865   THE SECRETARY: Thank you, Mr. Chairman.

866   This concludes Phase I for Items 1 and 2 on the agenda.

867   THE CHAIRPERSON: Very good. It is quarter after 12, just slightly past by my watch. I would like to break for lunch, please, and we will be back at 1:30.

868   Does that sound reasonable for everyone?

869   Great. Thank you very much.

--- Upon recessing at 1217

--- Upon resuming at 1338

870   THE CHAIRPERSON: Madam Secretary, would you please do the honours and introduce the next presentation.

871   THE SECRETARY: Thank you, Mr. Chair.

872   We have now reached Phase II, in which applicants appear in the same order to intervene on competing applications, if they wish.

873   We will begin this phase with Golden West Broadcasting Limited.

874   Please reintroduce yourselves for the record. You have 10 minutes for your presentation.


875   MR. FRIESEN: Thank you. I am Lyndon Friesen, President of Golden West Broadcasting. On my left is Elmer Hildebrand, CEO of Golden West Broadcasting. Next to him is Ken Goldstein, communications management; Tim Thibault, a resident of Humboldt and in his own business; and Dave Lehman is our online manager for Golden West.

876   We will take just a few moments to make a few points in response to this morning. I would ask Ken Goldstein to open with a few comments.

877   MR. GOLDSTEIN: You have in front of you a comparison that we have prepared, based entirely on material that is on the public file, and I will just touch on three highlights. The first is the comparison of the commitment to the community, both in dollar terms and employment terms.

878   Second is the fact that we believe the Fabcom format and audience research is severely flawed, because it is inconsistent with BBM findings as to hours tuned; and we also found that, apparently, in the application, where you are supposed to do 12-plus, they didn't do 12-plus, they did total population, which, of course, introduces an error into all subsequent calculations.

879   Finally, there is the key issue of market impact. It was 80 percent, and then it was 54 percent, and page 2 of the Insightrix survey says that there would be minimal cannibalization on existing Fabmar stations. I think the distance between minimal and 54 percent is a lot farther than the distance from Humboldt to Melfort.

880   MR. FRIESEN: Thank you, Ken.

881   Now I would ask Tim Thibault to make one final comment.

882   MR. THIBAULT: As someone who knows our community and the support we have for our local hockey team, and in consideration of Fabmar generating most of their advertising revenues due to their support and carriage of that team, the Humboldt Broncos, and their commitment to continue broadcasting their games, I believe they have grossly overstated the impact that a local Humboldt FM station would have on the revenues that they are receiving from their other stations.

883   MR. FRIESEN: Now, Dave Lehman would like to make a comment about new media.

884   MR. LEHMAN: A station website can be an effective promotional vehicle for a radio station, but it is not a service to the community. However, a locally focused community portal website is a true community service, and it would be a tremendous benefit to all of the businesses, organizations and residents of Humboldt.

885   MR. FRIESEN: And, of course, it wouldn't be complete if we didn't ask Elmer to make a few candid comments.

886   MR. HILDEBRAND: Just some observations. It would appear that the Fabmar application is really more about serving Saskatoon. Their coverage in Saskatoon will certainly provide a very listenable signal for the city.

887   Their format is also more designed for an urban audience than a rural one.

888   And we know, even from Melfort right now, that they are often targeting Saskatoon. Their sales manager lives in Saskatoon, they have huge billboards in the City of Saskatoon, and a few years ago they made a $250,000 donation to the Saskatoon Huskies. As a result, they are the exclusive broadcaster of the Huskies in Saskatoon.

889   So our guess is, should this application by Fabmar be approved, they would concentrate even more on Saskatoon, at the expense of Humboldt. Thank you.

890   MR. FRIESEN: We think it is obvious that the choice will be between two distinctly different offerings of service, one which seems to be more of a regional approach to service, and ours, which we know is intensely local.

891   But at the end of the day we would ask that you only consider one thing, and that, I guess, is what is important for all of us here today, and that is not what is good for Golden West or not what is good for Fabcom, but only consider what is good for Humboldt. Then we think the rest will make a lot of sense.

892   We thank you so much for listening to us today.

893   THE CHAIRPERSON: Thank you very much for your presentation.

894   Madam Secretary...

895   THE SECRETARY: Thank you, Mr. Chair.

896   We will now proceed with Fabmar Communications Ltd.

897   Please reintroduce yourselves for the record. You have 10 minutes for your presentation.

898   MR. SINGER: I am Ken Singer, Vice-President of Broadcast Operations for Fabmar Communications Ltd.

899   We have no comment at this time. We will reserve our comments for Phase IV. Thank you.

900   THE CHAIRPERSON: Thank you very much.

901   THE SECRETARY: Thank you.

902   This completes Phase II for Items 1 and 2 on the agenda.

903   Now, Mr. Chair, we will proceed to Phase III, in which intervenors appear in the order set out on the agenda to present their intervention.

904   We will begin with the Humboldt and District Chamber of Commerce.

905   Would you please come forward.

906   Appearing for the Humboldt and District Chamber of Commerce is DonnaLyn Dyok.

907   You may now begin. You have 10 minutes for your presentation.


908   MS DYOK: Good afternoon. My name is DonnaLyn Dyok, and I am the Executive Director for the Humboldt and District Chamber of Commerce.

909   Our chamber works for our members as a partner for business growth, ensuring that the Humboldt area is the best place to do business.

910   I am here today to give you some facts about our community and the relationship that our chamber has with one particular member, that is, Fabmar Communications Ltd.

911   I would first like to tell you a little bit about the City of Humboldt and, most importantly, about the growth that our business community is experiencing.

912   Humboldt is a dynamic, growing city, located in central Saskatchewan. It has a population of over 5,900, and a trading area in excess of 27,000 people.

913   The city and its surrounding trading area welcome the tremendous economic growth seen over the past several years, and are working to ensure that it continues to provide exciting opportunities into the future.

914   With all of the amenities of a larger centre and the desired lifestyle offered by a small city, Humboldt is an attractive place to call home.

915   Our chamber currently has 181 members. We have more than doubled in members over the past seven years. I believe that this is due not only to the growth of our community, but to the progressiveness of it. Businesses are getting smarter, more involved, and realizing the benefits of being involved in the community and in organizations such as the Chamber of Commerce.

916   Humboldt is being recognized provincially for the growth that we are experiencing, which is evident in the appointment of the Humboldt chamber to the provincial chamber's Growth Strategy Task Force, a group of highly respected business people and chamber representatives that is dedicated to identifying and addressing issues to barriers for growth in our province.

917   Although we are the smallest community represented around this table, we are highly respected and our input is valued.

918   Humboldt was also recently awarded one of two pilot projects in our province for the Third Quarter Initiative, employing workers ages 50 to 64 to help address the current and expected labour shortage.

919   These things are not happening by accident. Humboldt is on the map in this province as a growing and progressive community that is embracing the growth that our province is experiencing.

920   As of July 1st, 2010, there were 1,045,622 people living in Saskatchewan, an increase of 4,887 people over the past quarter, and 16,498 people over the past year. That is the largest quarterly increase in Saskatchewan's population since 1982 and the largest year-over-year increase since 1953.

921   The year-over-year growth rate of 1.6 percent is the highest of any province in Canada.

922   Although we do not yet have Humboldt's data for 2010, we do know that our trading area is experiencing the same growth trend that our province has been experiencing.

923   Fabmar has been a member of the Humboldt and District Chamber of Commerce as far back as we have recorded, which is 11 years. They currently have a staff member on our Board of Directors, and have had representation on the Board in the past, as well.

924   They have been proactive in their approach to the Humboldt market by recently relocating a full-time staff person to our city. They are involved in our community and have representation on many local boards and committees. They know Humboldt and have become the trusted and most local radio station we have.

925   They are quick to cover events and newsworthy topics that pertain to Humboldt, and strive to include Humboldt amongst all of the other communities that they have to cover.

926   Humboldt is a community that comes together when there is a common cause. One such cause would be our quest to win the national Hockeyville Competition in 2009. Many citizens, young and old, hockey fans and not, jumped on board and worked to make sure that Humboldt gave every effort to be the top contender in this competition.

927   Fabmar Communications was with us every step of the way, making sure that their entire listening audience knew when and how to vote for Humboldt.

928   More recently was their involvement with the Humboldt and District Hospital Equipment Campaign, with their radio blitz and Have-a-Heart Run.

929   Along with assisting and planning the run, they were alongside the runners from the beginning and cheering them on at the end.

930   Fabmar Communications has been present in our community for a long time. They know our businesses, our organizations, and our citizens, and we all know them.

931   In 2012 Humboldt will host the national RBC Cup. How perfect it would be to have a supportive and local radio station actively involved. We know that Fabmar will take on this role wholeheartedly.

932   As I am here today on behalf of our chamber members, I would like to share with you the thoughts of a few of our Humboldt businesses and organizations.

933   Bob Johnson, President of the Humboldt Broncos, told me:

"The Humboldt Broncos Hockey Club feels that with the growth of our region, it is very important to have a local radio station that is focused on the City of Humboldt and surrounding communities. CJVR/CK750 has done a great job covering the Humboldt Broncos, but they have two other SJHL teams to cover, as well. Having a radio station right here in Humboldt would help us stay connected to our fan base and give us much more exposure in our market."

934   Richard Kosokowsky of South 20 Dodge Chrysler said:

"Having an established local radio station would be a great thing to have. Right now we are often confused about where to advertise and which station is reaching the Humboldt area. It is very important to our business to have a radio station based in Humboldt, and it should be a priority."

935   Jeff Bunko, owner of Sears Humboldt and Heim-Sinn Dekor told me:

"Ultimately, with our community growing, we need to be branded as a separate entity, and what better way to be branded than with our own local radio station."

936   Paul Kneeshaw of Misty Gardens said:

"Businesses can reach more people effectively through local news and local happenings. The type of music doesn't matter so much, as people will listen because it's immediate and it is local. It's important to everyone who lives here to have a station focused on local news."

937   And, finally, Greg Velanoff of Canadian Tire said:

"Humboldt and its surrounding area is a rapidly growing marketplace. Currently there are limited publication options available to businesses and other organizations to communicate with the region's population, due to its rural postal coverage. One or more local radio stations gives us access to a much larger and currently underserved population base, to inform them of local sales events and news more often and more cost effectively than what can be achieved with print ads alone."

938   Clearly, our business community is in support and anticipation of a local radio station, and it is the opinion of the Humboldt and District Chamber of Commerce that a local radio station is an essential component to our growing community.

939   Thank you for the opportunity to share our perspective with you here today.

940   THE CHAIRPERSON: Thank you very much, Ms Dyok.

941   How long have you lived in Humboldt?

942   MS DYOK: I have lived in Humboldt since early 2005.

943   THE CHAIRPERSON: And you came from where?

944   MS DYOK: I actually moved around the province quite a bit, working with AG Company, but I had been in Watson, which is half an hour out of Humboldt, for about six years prior to moving to Humboldt.

945   THE CHAIRPERSON: And what is it about Humboldt that you like and made you move there?

946   MS DYOK: Well, I was ready to start my family and we were looking for a centre that was going to provide us with everything we needed for our family needs.

947   I moved to Humboldt, as I have moved around to a lot of other places, and very quickly have called it home. Not originally being from there, I still have a very strong passion for the community and it is my plan to stay there, raise my children there, and have a career there.

948   THE CHAIRPERSON: In addition to the chamber, how many active service clubs are there in Humboldt? I am thinking Rotary and others.

949   MS DYOK: There are a lot of clubs in different aspects. When you talk about the well-known ones, when you talk about the Rotary Club and that kind of thing, we don't have a lot of those right now, but there are so many different groups doing different things for projects.

950   For example, the Have-a-Heart Run that just went on, that was a committee that was thrown together to put on this run to raise funds for the hospital, and it brought over 300 runners. Some had never run before for a common cause.

951   Hockeyville was another thing; a committee that was thrown together, with people that are very interested in seeing a community get together and do things.

952   So although we don't have a lot that meet regularly, there are, very, very often, groups getting together and promoting things that are pertinent at the time.

953   THE CHAIRPERSON: You have 181 members. What percentage of that membership would be retail versus institutional or other?

954   MS DYOK: I don't have that exact number with me today, so it would be --

955   THE CHAIRPERSON: A guess?

956   MS DYOK: A guess? Probably 50 or 60 percent.

957   THE CHAIRPERSON: And are they all pretty much in Humboldt, or are they further afield? I am thinking local versus regional.

958   MS DYOK: Yes, we probably have about 90 percent that are based right in Humboldt. We are Humboldt and District, and that is something that we are actually working on with some of the surrounding communities, to make us more regional, and we are working with the provincial chamber on ways of doing that.

959   So we do have members -- there are a few that are out of Saskatoon, Englefeld, Watson, Muenster of course, St. Gregor -- some of the surrounding areas, as well. But that seems to be coming in the last couple of years a little bit more.

960   THE CHAIRPERSON: Is the chamber the dominant service organization or community group in Humboldt?

961   MS DYOK: No, I wouldn't say we are dominant. We also have an enterprise region that is based out of Humboldt that covers a large area around. They are doing a lot of work with businesses and industry, as well.

962   There are several organizations, but I would hope that the chamber would be one of the most respected.

963   THE CHAIRPERSON: On the first page of your submission you indicate that Fabmar, or Fabcom, is a significant supporter of Humboldt, in terms of its community activities. That I understand as a corporation. Which of the two entities, the AM or the FM, or both, do you enjoy the most support from?

964   MS DYOK: Both, equally.

965   From the chamber side, when we are talking about promoting things that are going on in Humboldt, I know that we usually do it fifty-fifty, so that we are hearing it on both stations.

966   THE CHAIRPERSON: My final question -- just to put you on the spot, because I love to do that -- you are very gracious with your indication of past support that you have enjoyed and that Humboldt has enjoyed with respect to Fabcom's -- I've got to get used to that -- Fabcom's support of the community, but I noticed that, in the end, you were basically supportive of the introduction of a radio station to the community.

967   Are you deliberately distinguishing between the two? Are you sitting on the fence or is the chamber endorsing an application?

968   MS DYOK: As the chamber, we are very excited and anticipate a local radio station in Humboldt, whether it be Golden West or Fabmar.

969   We have history with Fabmar, so we are able to sit up here today and talk about that past history, and we don't have that with Golden West.

970   So, at the end of the day, the members of the Chamber of Commerce would like to see a radio station in Humboldt.

971   THE CHAIRPERSON: Very good.

972   Commissioner Duncan, do you have any questions?

973   COMMISSIONER DUNCAN: No, thank you.

974   THE CHAIRPERSON: Commissioner Molnar?

975   COMMISSIONER MOLNAR: No, thank you.

976   THE CHAIRPERSON: Thank you very much.

977   MS DYOK: Thank you.

978   THE CHAIRPERSON: Madam Secretary...

979   THE SECRETARY: Thank you.

980   We will now proceed with the Humboldt District Hospital Foundation Inc.

981   If you would like to come forward...

982   Please introduce yourself, after which you will have 10 minutes for your presentation.


983   MS BUNKO: Thank you.

984   Good afternoon. My name is Lorrie Bunko, and I have been the Executive Director for the Humboldt District Hospital Foundation for nearly two years. Prior to that I worked for another, active, non-profit organization in Humboldt.

985   The Humboldt District Hospital Foundation focuses on a large rural area that has well over 27,000 people. Our boundaries reach to the northern tip of the arm of Lake Lenore, west as far as Prudhomme, south down by Nokomis, and east as far as Kamsack.

986   Our efforts focus primarily on raising funds to purchase medical equipment for the Humboldt District Hospital. On average, we spend $200,000 per year.

987   Just recently our organization completed a $1.8 million equipment campaign for our new hospital. We accomplished our goal within 17 months of introducing the campaign to the public.

988   When reflecting back to when we were developing our marketing strategy for the campaign, the question was asked: How will we reach out to over 27,000 people in our hospital-user district?

989   It was determined that media was going to be an imperative component of the campaign. We identified CJVR/CK750 as one of the three primary media resources.

990   A meeting was called with the identified media groups to discuss our campaign and to request their assistance in keeping the public informed and up to date on our progress.

991   The support we received from CJVR/CK750, along with others, was a tremendous boost to our campaign, and we can't thank them enough.

992   Not only did CJVR/CK750 provide us with frequent news coverage and affordable advertising, they also provided us with ideas, suggestions and volunteerism.

993   In the last week of our campaign, prior to reaching our $1.8 million goal, CJVR/CK750 offered to bring their station to Humboldt for a 72-hour radio marathon at no cost. From Monday, September 20th until Saturday, September 25th, CJVR/CK750 was with us from 6:00 a.m. to 6:00 p.m. Aside from airing their regular news, advertising and music, they interviewed our staff at our hospital, volunteers and many more.

994   The word rapidly spread throughout the area, and more and more people tuned in throughout the week, realizing that Humboldt had a spot on the airwaves for a week.

995   Donations were coming in as people were listening throughout the week. We began the week needing to fundraise $150,000, and by the end of the week we had reached our goal and then some.

996   We strongly believe that CJVR/CK750 made a positive impact in the last part of our campaign.

997   Some may think that any station could have come in and made the same impact. We would have to disagree, and I will provide you with explanations as to why.

998   In order to even begin a 72-hour radio marathon, the station needs to have knowledge about the organization itself, knowledge about the topic of what is to be discussed, and knowledge about the target area. The station needs to have a vested interest in the cause, as the message being relayed is that much more powerful.

999   The station also needs to have a passion for the organization's mission.

1000   Brian Kusch, who is the salesperson for CJVR/CK750 from the Humboldt district, lives in Humboldt with a young family. He knows the importance of having exceptional health care available. Mr. Kusch can personally relate to the goals of the Humboldt District Hospital Foundation.

1001   I will provide you with the scenario of a station from outside our district that knows very little about us.

1002   In late winter, a request for proposal to host a radio marathon was sent to three radio stations. CJVR/CK750 acknowledged the RFP almost immediately, one never responded to us, and the other made me feel that we were not important enough to focus on and we were too small for their level of radio.

1003   As Executive Director of the Humboldt District Hospital Foundation, I am a strong believer that effective marketing has to involve print and radio. These two go hand-in-hand. People need to be able to read about an event or news in their local paper, and they need to be able to listen to the event or news on their local radio station.

1004   As a charitable organization, we work with limited dollars. We want to ensure that our dollars that are available for marketing and advertising are used to their maximum potential. As our events or projects are focused to our district, we need to work with local advertising agencies. Although CJVR/CK750 does their best right now in fulfilling our needs, it is still not the same. We need our own local station, so that district residents and abroad can listen to current events and news in our large rural area.

1005   Why Fabmar Communications? Fabmar Communications has a proven, established working relationship with local organizations and businesses in the Humboldt district. The trust and partnership is already there. Having Fabmar Communications make Humboldt as one of their homes only seems to be a natural fit. Everything else will fall into place if you, the CRTC, approve Fabmar Communication's application.

1006   Thank you.

1007   THE CHAIRPERSON: Thank you very much for your presentation.

1008   Commissioner Duncan...

1009   COMMISSIONER DUNCAN: Thank you, Ms Bunko, for coming and for telling us all that Fabmar has done to assist your foundation. Congratulations on your successful fundraising efforts.

1010   MS BUNKO: Thank you.

1011   COMMISSIONER DUNCAN: I am sure that everybody is excited about that.

1012   Would you agree with the previous lady that appeared from the Chamber of Commerce, Ms Dyok, that a radio station is your top importance?

1013   You are supporting Fabmar, but your key point is that you need a radio station, that Humboldt needs its own radio station?

1014   MS BUNKO: We need a radio station; however, the partnership -- like I said in the last part, the partnership is already there, and when you are doing something like this and bringing something like this into a district that's new, it's always nice to have a partnership, and to see faces. I believe that's very important. We see it in business all the time.

1015   COMMISSIONER DUNCAN: Thank you very much. I think that your testimony is clear. That's good. You have been successful, and I am happy for that. That's great. I appreciate your comments.

1016   I don't know if the Chair has any more questions.

1017   Thank you.

1018   COMMISSIONER DUNCAN: Thank you very much for coming to the hearing.

1019   Madam Secretary...

1020   THE SECRETARY: Thank you.

1021   We will now proceed with Mayor Malcolm Eaton of the City of Humboldt.

1022   If you would like to come forward...

1023   Mayor Eaton, you may now proceed. You have 10 minutes for your presentation.


1024   MR. EATON: Thank you very much.

1025   I am very pleased to appear today on behalf of the City of Humboldt. Thank you very much to the Commission members and staff for this opportunity to be part of this very important process, and welcome to Saskatchewan.

1026   Discussions about a radio station for our community have been going on for some time. This topic is part of a much larger conversation about how, as a growing economic region, our community is changing. We no longer have the small-town communication network that let everyone know what was going on at the rink, or the seniors' centre, or the school, or the church. We are a growing, vibrant, progressive city, and we need the information and advertising and programming that a local radio station can provide.

1027   We hear this constantly from our businesses, our schools, our community groups and organizations, our seniors, minor sports groups, and visitors to our city.

1028   We appreciate very much the support and services provided by the Melfort radio station, and the Saskatoon radio stations, as well. However, we believe it would be beneficial, of course, for a local radio station to provide that support and those services directly from our community.

1029   I have written letters of support on behalf of our community for both applications. In those letters I pointed out the significant growth and development that is occurring in all aspects of our economy, the significant population growth we are experiencing, and the potential of further growth and development resulting from expansions in the potash industry in our area.

1030   Let me share today just a bit more detail about that growth and development.

1031   We are an important service and retail centre for our region.

1032   We are one of Saskatchewan's gateway immigration centres.

1033   We are part of the Iron Triangle, which includes several manufacturers that market agriculture equipment internationally.

1034   We are opening a new hospital within the next two months, which will service the health care needs of a large region.

1035   A new $25 million high school and community college facility is under construction. It will be attached to our existing recreational and cultural centre, which includes our arena, our curling rink, an indoor pool, and convention and meeting facilities.

1036   A new 94-unit senior housing complex is under construction.

1037   The city issued 57 new residential housing building permits so far this year, and total building permits for all categories are well over $40 million.

1038   The new 84-room Canalta Hotel opened at the end of August.

1039   St. Peter's College, six miles down the road, in the community of Muenster, is undergoing a $15 million renovation to accommodate additional University of Saskatchewan programs.

1040   Canadian Tire opened a store last year, on a new 30-acre commercial development, with more stores on the way.

1041   Finally, as has been previously mentioned, the long-awaited Tim Hortons is half finished, and hopes to be serving coffee and donuts by early November.

1042   The potash mine, PCS Lanigan, 30 miles away, is a major economic driver in our region and has been for several years.

1043   The proposed new BHP Billiton Jansen Lake potash mine project is also within 30 miles of our city, and will be an even greater economic influence in our region for years to come.

1044   Certainly all indications are that this growth and development of our city and our region will continue for the next few years.

1045   As you have already heard, in March we received word that our bid to host the National Junior "A" Hockey Championship, the Royal Bank Cup, was successful. In May 2012, Humboldt will welcome players, parents, fans, scouts and college recruiters from across Canada and into the United States. This is just one example of the energy and enthusiasm there is in our community for hosting, sponsoring and celebrating special events.

1046   Humboldt is centrally located, and has a reputation for having the facilities and resources to host conferences, conventions and special events.

1047   We recognize that both Golden West Broadcasting and Fabmar Communications have a proven record of success in the community radio business. Golden West has several stations in Saskatchewan communities, and in my conversations with municipal colleagues in those communities, they certainly speak highly of Golden West's radio station work in their local community.

1048   And, of course, Fabmar, as you have heard today, has a long and very positive relationship with our community through its CJVR station in Melfort and its support of many, many community events and activities.

1049   We recognize that a radio station is a business and must operate and be supported by a solid business plan. We believe, though, that it is also about building community spirit, supporting community events, and helping communities become great places to work, live, and raise families.

1050   I am here today to simply express our community's strong support for the granting of a radio licence for the City of Humboldt and region. We appreciate the considerable research and effort that Golden West Broadcasting and Fabmar Communications have devoted to proposing a radio station for our city. The work that is going on here today is certainly detailed and impressive.

1051   I thank you for your consideration of my remarks in your deliberations, and I shall be pleased to answer any questions.

1052   THE CHAIRPERSON: Thank you very much, Your Worship. I understand that Tim Hortons is going to be up against one of the best coffee shops, just up the street from the new hotel.

1053   I just have one question of interest. With all of the development going on, what is your mill rate?

--- Laughter

1054   MR. EATON: All of our commercial businesses had a 5 percent reduction in taxes this year, simply because of the increased tax base that is moving in.

1055   The commercial tax rate I can't give you off the top of my head, but we are doing quite well. Compare our tax rates to anybody's.

1056   THE CHAIRPERSON: Yes. I was quite impressed with the new hotel.

1057   Commissioner Molnar, I think, has some questions for you.

1058   Thank you.

1059   COMMISSIONER MOLNAR: Thank you, and welcome, Mayor Eaton.

1060   I just have a comment before I ask my questions. I have lived in Saskatchewan my whole life, and I have told a number of people this story, that in one of my previous jobs I drove the province, and I took great pride and I told many people that I used to know where every Tim Hortons was in this province, and I think, with what has happened with our economy in the last three years, I may now know, maybe, 75 percent. It's so nice to hear of a boom that attracts something like a Tim Hortons into cities like Humboldt.

1061   Tim Hortons is actually, I think, a great indication of the growing economic powers in very many of our communities.

1062   You have laid out in your submission a number of examples of how the community is growing and prospering, and if you sat here this morning, you will know that we have heard that over and over. So accepting that as true -- and we have seen market research and so on to suggest that the Humboldt economy can support a radio station -- we are left with the struggle of who to license.

1063   As you point out in your remarks, we recognize that both Golden West and Fabmar have a proven record of success. Is there anything more, from your position, in your community, on a radio station?

1064   Both are quality broadcasters, so you would be satisfied with either station being licensed?

1065   MR. EATON: Certainly, the conversations we have had as a city council, trying to reflect the views of our community, is that we believe it is time for us to have our own radio station.

1066   Certainly, as I indicated in my presentation, I have talked to municipal colleagues in other communities, and Golden West does a great job.

1067   Our experience with the Melfort station has been a tremendous experience. I have lived in Humboldt for almost 30 years, I raised a family there, I was a school principal there, I have been involved in many groups and organizations through the years. I get a phone call every Tuesday morning from their news director about what is going on in Humboldt. We have many connections with the Melfort radio station.

1068   We are very regional in nature, and we take a very regional approach. The Northeast Region is the region we belong to, and Melfort is the centre of the Northeast Region. We are part of the Northeast Region in our urban municipalities' network, among other things.

1069   Having said that, certainly there is a lot of value to the history, the partnerships, the experience, the relationships, and so on and so forth, that have gone on with the Melfort radio station. From my perception, it has been a very successful relationship, given that they are the Melfort radio station and they are trying to provide services to Humboldt, Nipawin, Tisdale, and many other small communities.

1070   I have no doubt, though, that if Golden West is the successful applicant, they are going to embark upon the same journey. I would expect that and would hope that they would embark upon a journey to meet the needs, establish the relationships, create the partnerships, and do everything they can to truly be our local radio station.

1071   It's a hard choice that you have to make, and we value very much --

1072   COMMISSIONER MOLNAR: It was a hard question that I asked you, as well.

1073   MR. EATON: It was a hard question.

--- Laughter

1074   MR. EATON: We value the previous relationship --

1075   COMMISSIONER MOLNAR: Thank you. You can leave it like that.

1076   Thank you very much.

1077   MR. EATON: Thank you.

1078   THE CHAIRPERSON: You are a politician, you are used to those questions.

--- Laughter

1079   MR. EATON: This is one of the harder ones. Usually I am not on the fence.

1080   THE CHAIRPERSON: Thank you very much, Your Worship. I appreciate you coming before the hearing today.

1081   Madam Secretary...

1082   THE SECRETARY: Thank you very much.

1083   This completes the list of appearing intervenors and Phase III for Items 1 and 2 on the agenda.

1084   Now, Mr. Chair, we will proceed to Phase IV, in which applicants can reply to all interventions on their application. The applicants appear in reverse order.

1085   We will begin with Fabmar Communications Ltd.

1086   Please come forward.

1087   Again, please reintroduce yourselves for the record. You will then have 10 minutes for your presentation.


1088   MR. SINGER: Good afternoon. I am still Ken Singer, Vice-President of Broadcast Operations, at least until the end of this hearing, for Fabmar Communications, and I have with me Lang McGilp, who is with Insightrix Research Inc. in Saskatoon.

1089   Thank you for this opportunity. We would just like to make a brief comment on a few of the points raised by Golden West in Phase II.

1090   First of all, dealing with the research point on how advertisers would allocate their budgets should a new Humboldt radio station be established, I would ask Lang to give some comment on that.

1091   MR. McGILP: Certainly. Thanks, Ken.

1092   Essentially, overall, the statistic that has been quoted, the 59 percent, is taken a little bit out of context, with all due respect.

1093   The research overall is a sound, scientific approach that has been used, following fundamental practices, which have been outlined in the methodology of the report; and the statistic itself is relating more to the customer base that Fabmar is currently servicing in Humboldt, as opposed to not really having a relation in terms of what the market potential might be or anything of that nature.

1094   MR. SINGER: Further to the research criticism, there was a comment that our audience projections are unfounded, as we are not using BBM data.

1095   We are not members of BBM. I am not aware of any BBM data for the market of Humboldt, so that is why we didn't use that as a source.

1096   We feel that our online survey, with over 450 responses, which is extremely high, indicated to us quite clearly the share of listenership for the classic rock format. We based our share on that particular projection.

1097   I don't think we were questioned on that this morning. We were questioned on the revenue, but not how we arrived at the share. And our application does give full details as to how we arrived at that share.

1098   Turning to the comment about our revenues in Humboldt, especially that derived from Humboldt Broncos Hockey play-by-play, I would make it very clear that if we could live on the revenues of Humboldt hockey, that would be wonderful. That is not our chief source of revenue in the Humboldt market.

1099   The suggestion that we are trying to become a Saskatoon station is totally unfounded. Number one, to become a Sasktoon station, you have to have a signal that penetrates Saskatoon, and I am talking about a quality signal.

1100   If you look at the technical study done by D.E.M. Allen, we are far from being in a technical position to compete with Saskatoon Radio.

1101   Turning to our involvement in Saskatoon, criticism of us being the voice of the University of Saskatchewan Huskies is quite surprising, considering that more than 10 years ago the Huskies said to us: Nobody in Saskatoon is interested in broadcasting our games. Would you be interested?

1102   We stepped up to the plate. We stepped up to the plate because the players on the University of Saskatchewan Huskies come from all over this province. Their families listen to those broadcasts. We get e-mails and letters at every game, saying, "Thanks for doing these games." Nobody else would do them.

1103   Interestingly, Saskatoon Radio would love to have those games now.

1104   Why do we have billboards up? It's part of our broadcast agreement with the University of Saskatchewan Huskies. The billboards promote the Huskies' broadcasts, that's it. They are only up during football season.

1105   I would also mention, just getting back to the roster of the U of S Huskies -- and it has been noted over, at least, the 10 years that we have been broadcasting the games -- that a high percentage of the players on the U of S Huskies -- and I certainly can find data for this -- have come from the Humboldt high school. They must have an amazing high school football program in Humboldt, because it is always amazing to me to look at where these players come from, and Humboldt always seems to lead the list. Even more reason, because Humboldt is a key part of our coverage area for our two Melfort radio stations.

1106   Regarding the fact that our sales manager currently lives in Saskatoon, I would also like to point out that he also lives in Melfort. He has a home in both cities, and spends more time in Melfort than he does in Saskatoon.

1107   And I don't think that has any relevance to our business plan for the market of Humboldt, no more than it does to the Drumheller station that Golden West operates, which has a morning newsman that lives in Calgary.

1108   Those are my comments and responses. I appreciate the opportunity to respond today. I would like to close by thanking the Commission for a very fair opportunity here today, and I would thank our intervenors, who travelled from Humboldt today to appear on our behalf.

1109   Thank you.

1110   THE CHAIRPERSON: Thank you very much, it's much appreciated.

1111   Madam Secretary...

1112   THE SECRETARY: Thank you.

1113   We will now proceed with Golden West Broadcasting Limited.

1114   Please come forward.

1115   Please reintroduce yourselves for the record. You will then have 10 minutes for your presentation.


1116   MR. FRIESEN: I am Lyndon Friesen of Golden West Broadcasting, and beside me is Elmer Hildebrand, the CEO of Golden West Broadcasting.

1117   I just want to end with one comment, and that's a comment of thank you. Thanks for hearing this, thanks for letting us tell you all about our intentions for Humboldt.

1118   And we especially want to thank the intervenors, as well, for coming out to support their community, because at the end of the day that's what is important.

1119   Elmer has one more comment.

1120   MR. HILDEBRAND: Thank you.

1121   It was interesting to note that the Chamber of Commerce presentation indicated that the Fabmar organization moved somebody to Humboldt after we had applied for the previous application here. We would just note that for the record.

1122   I also want to thank everyone. I think that the intervenors were all positive that they want a radio station for Humboldt. And, as Lyndon said earlier, at the end of the day it's not about Golden West or about Fabmar, it's about Humboldt, and you have the tough call now.

1123   Thank you.

1124   THE CHAIRPERSON: Thank you very much for your comforting parting words, Mr. Hildebrand.

--- Laughter

1125   THE CHAIRPERSON: Madam Secretary...

1126   THE SECRETARY: Thank you, Mr. Chair.

1127   This completes the consideration of Items 1 and 2 on the agenda.

1128   THE CHAIRPERSON: All right. It looks like we are running ahead of schedule, or are we?

1129   Phase IV is done, okay. So I would like to call a break, and we will reconvene in 15 minutes.

--- Upon recessing at 1425

--- Upon resuming at 1443

1130   THE CHAIRPERSON: Madam Secretary, would you do the honours and introduce our next applicant. Thank you.

1131   THE SECRETARY: Thank you, Mr. Chair.

1132   We will now proceed with Item 3 on the agenda, which is an application by Corus Audio & Advertising Services Ltd. for a broadcasting licence to operate a regional, English-language, Category 2 specialty television programming undertaking, to be known as Local1.

1133   Appearing for the applicant is Mr. Bryan Ellis.

1134   Please introduce your colleague.

1135   You will then have 20 minutes to make your presentation.


1136   MR. ELLIS: Thanks very much.

1137   Good afternoon, Mr. Chair and Commissioners. My name is Bryan Ellis and I am Vice-President of Content Management for Corus Entertainment.

1138   With me is Sylvie Courtemanche, Vice-President of Government Relations.

1139   Mr. Maavara is not able to join us here today, but sends his regrets.

1140   We are delighted to be here today to discuss our plans to launch a regional Category 2 service in western Canada to be known as Local1. Before getting into the programming details, let me briefly describe where the idea for Local1 originated.

1141   For over 10 years our wholly-owned subsidiary, Corus Custom Networks, provided an exempt TV listings channel on the basic analog service of cable systems in western Canada. It combined an onscreen program guide with a teleshopping and still-image advertising opportunity for local businesses in each market it served.

1142   The TV listing service was a relatively robust business for several years, at its peak achieving advertising revenues of approximately $12 million in 2007-08.

1143   Despite its success at that time, however, we knew that this level of performance could not be sustained in the long run. As a forward-thinking broadcaster, Corus strives to anticipate changes in the communications environment, and to adapt our business to reflect those changes.

1144   In the case of the TV listing service, we knew that the transition to digital cable, with its more sophisticated electronic program guide, meant that there would no longer be a need for an analog channel guide. It would become outdated and increasingly irrelevant as the take-up of digital cable gained momentum.

1145   In short, the TV listing service, although successful at the time, was quickly becoming a sunset business.

1146   In fact, Persons 2-plus with access to analog cable dropped 36 percent from 2004 to 2009, while Persons 2-plus with access to digital cable increased 138 percent during the same period. Revenues dropped from $9.3 million in 2009 to only $4.4 million in the most recent broadcast year, ended August 31, 2010.

1147   Given these significant declines, which could not be reversed, we took the difficult decision to discontinue the TV listing service at the end of August of this year.

1148   As this was taking place, however, we were thinking of ways to adapt the old service and transition it to a digital environment. We quickly recognized that we could capitalize on the proprietary software that we had developed for the analog listings channel.

1149   We also assessed the potential market demand for local news, weather and information delivered in this form.

1150   Our technology platform allows us to tailor unique local content from video and data information that we collect from a number of different sources. The software can target this content to individual communities or specific residential zones, producing a series of unique local channels.

1151   In Vancouver, for example, Corus Custom Networks created and delivered customized content to four distinct zones or communities.

1152   The digital cable transition provides us with the opportunity to use this technology to replace the old TV listing service with an innovative digital service. This new service could provide a broad range of hyperlocal content tailored for individual communities.

1153   Our informal survey of the market, as illustrated by the hundreds of positive interventions filed with the Commission, gave us confidence that we had a viable idea. Our proposal for the regional Category 2 service, Local1, is the result.

1154   Local1 will feature an on-air presentation based on a multi-zone screen. At any given time, a viewer will have immediate access to local news, sports headlines, information about community activities and events, road reports, and local weather conditions and forecasts.

1155   Although operating under a single regional Category 2 licence, Local1 will, in effect, be a series of unique hyperlocal channels. It will be a service that viewers in each small town and big city will view as their own personal Local1.

1156   Here is a brief video clip to illustrate the Local1 concept.

--- Video presentation

1157   MS COURTEMANCHE: As you can see in the screen shots appended to our opening remarks, the screen real estate in any given community will be subdivided into five to seven distinct zones, with each zone dedicated to specific content relevant to that community. Two of the on-screen zones will provide windows for video content. One will have audio content at any given time, and the other will not. This multi-zone screen format allows us to provide a comprehensive and continuous package of local news, weather forecasts, sports scores, road conditions, and information about community activities and events.

1158   One of Local1's compelling features will be the delivery of hosted local news, information and weather segments, updated regularly during the day, using one of the video windows on the screen.

1159   At launch, our plan is to produce unique hosted local segments for ten communities in western Canada. The number of communities receiving individual hosted local segments will be increased over time, as resources permit.

1160   The provision of hosted local weather forecasts, tailored for the individual community in which it is distributed, is a unique feature of the Local1 service. It distinguishes the weather portion of our service from the more regional and national orientation of The Weather Network.

1161   Having said that, it is important to understand that this video window will contain more than just weather. We believe that the service will provide an even more compelling experience if it includes a broader range of video content. This will further complement the hyperlocal text, images and graphical content that will be provided in other zones on the screen.

1162   The Local1 platform will be able to collect a vast amount of information about things that matter to individual communities -- municipal council meetings, Chamber of Commerce activities, community groups and fundraisers, minor sports and so on.

1163   The hosts of our video segments will be able to include this type of information in their community coverage. For example, if Local1 were in operation this fall, our segments would be an excellent vehicle to report on local municipal election candidates and issues.

1164   In addition, the sample program wheel included with the application identified other segments, such as The Green Minute feature and the Earth TV feature. These segments provide other relevant video content, covering topics well beyond the confines of weather information.

1165   Beyond the content broadcast in the video window, other local news and information will be continuously available in the other zones of the screen. This information will be drawn from a number of diverse content providers.

1166   For example, we will make use of the local and regional feeds of third party subscription services, such as Canadian Press.

1167   We will also draw upon the feeds provided by municipalities and provincial governments, by provincial motor associations, and by various government bodies, with traffic camera images and webcam shots.

1168   Municipalities and individual viewers will have the ability to create, upload and share information for local broadcasts on Local1 using a dedicated website and our broadcast technology engine. We will make Local1 as user friendly as possible, leveraging new media platforms and social media sites such as Twitter and Facebook to solicit user-generated content.

1169   A local viewer, for example, will be able to contribute videos and photos of interest to the community. Municipalities will be able to upload community news and announcements about local activities and events. Our in-house editors will review all uploaded content to ensure suitability for broadcast.

1170   This user input feature will reinforce the hyperlocal nature of Local1, increasing its value to viewers. It builds on the concept that Corus Radio utilized in Edmonton with iNews 880 and extends it to a linear television channel.

1171   Given the intensely local nature of this service, we are seeking your approval to sell a limited amount of local advertising in each community where Local1 is distributed, up to a maximum of six minutes per hour.

1172   The balance of our advertising would be national. This proposal is consistent with the Commission's fundamental principle that a licensee should be allowed to solicit local advertising only in markets where it also provides local programming.

1173   Our ability to broadcast local advertising will enable Local1 to provide an entry-level television advertising vehicle. It will give small merchants an opportunity to reach their customers on television at an affordable rate.

1174   As a discretionary digital cable service, Local1's local advertising revenues will be very modest, less than $3 million by the third year of operation.

1175   This is considerably less than the $12 million in revenues that our analog TV listing service was able to achieve just two years ago in the 2008 broadcast year and well below the $4.4 million revenue performance of the analog service for the year ended two months ago.

1176   It is self-evident that at this level of activity Local1 will have negligible impact on the revenues of other licensed broadcasters.

1177   MR. ELLIS: Finally a word on distribution.

1178   Local1 will rely on cable carriage in western Canada to reach viewers. The technology we will employ to provide hyperlocal elements of our service cannot be fully implemented through DTH carriage. We need access to the cable head-ends in individual communities to operate Local1.

1179   In addition to BDU distribution, Local1 is also designed to exploit other viewing platforms, internet, mobile and out of home. Content will be repurposed for distribution by whatever means available.

1180   Mr. Chair and Commissioners, our proposal meets all of the criteria for the licensing of a Category 2 service. It does not directly compete with any existing analog specialty or Category 1 service.

1181   Local1 will provide a unique, new and essential local news and information service to residents of communities large and small in western Canada. It will be a new type of hyperlocal service not currently available from any other source in the regulated broadcasting system.

1182   That completes our opening remarks. Thank you for your attention and we would be pleased to respond to your questions.

1183   THE CHAIRPERSON: Thank you very much.

1184   This is undoubtedly a very innovative proposal and it has captured my attention and that of the Commission. It is, you know, very creative and because of that I will be asking a lot of questions that sort of come with the territory of groundbreaking because we truly want to understand what this is.

1185   I will make a deal with you that there may be some areas that are going to become proprietary, in which case, you know, you may reserve the right to ask for -- either to not submit any information at all or perhaps, if necessary, a written submission which I would prefer not to have to do. But with that all in place I will start the questioning.

1186   You are making an application to use an exempt channel for the purpose of -- using this exempt channel which you had provided the service to before, and the application is for what you were calling a regional Category 2 licence.

1187   And I was wondering if you could in your terms, so that we could start matching up terminology, define what you determine is a region given all of the regional licences that have been granted in the past.

1188   MS COURTEMANCHE: Well, in the past you have had a number of licences that have been granted on a regional basis.

1189   For instance, many, many years ago the Commission authorized pay services so one region is the same region that we would be serving. We currently are the licensees of that, our Movie Network and our Encore Avenue. So there are a number of examples in which the Commission split the country up and decided to licence accordingly.

1190   You know CablePulse 24 is a regional service. It's a regional news service that, you know, services southern Ontario. You currently have a number of cable systems which are licensed on a regional basis.

1191   You know, I note that the application form itself for a Category 2 has a box, "national or regional". So I'm assuming that the Commission has longstanding experience in licensing regional services and that's why we came.

1192   One of the reasons, just so you understand why we did come, based only a regional and not a national basis, is that we were building on an existing service that was only available in western Canada. So you know, I think it's safe to assume that had that service been available across Canada we probably would be looking at a national service.

1193   But we are looking to build on the experience that we gained and the knowledge that we have with the various advertisers and take that and bring it to a digital environment in an innovative, very different way. Obviously, it's a different beast but that's why we came in as a regional service.

1194   Hope that helps.

1195   THE CHAIRPERSON: In pursuit of aligning our visions as to what is regional, from my limited experience on the Commission of a few years, I have gone back and tried to get more exacting terms in front of myself to see what the Commission has regarded as regional.

1196   In instances where you have made specific reference to Citytv or CP24, it seems that in those instances that you drew upon as examples, they are regional, regional within a province, a region within a province. And in some instances I found that there were -- regional licences were granted to serve an entire province. I have never seen all of western Canada described as a region before and I --

1197   MS COURTEMANCHE: Well, the pay service is western Canada.


1199   MS COURTEMANCHE: That's an example where a service, you know, services an entire region just like the Astral movie service services an entire east of Manitoba.


1201   MS COURTEMANCHE: So that's your perfect example.

1202   THE CHAIRPERSON: Okay, perfect.

1203   Are you using existing technology that was developed for the purpose of the alphanumeric service you were providing before?

1204   MR. ELLIS: In most cases, yes.

1205   THE CHAIRPERSON: And is this -- is it a requisite for you to provide the technology at the head-ends to make this work?

1206   MR. ELLIS: Exactly.

1207   THE CHAIRPERSON: And if you were to negotiate other carriage agreements with other BDUs you would be following through on that installation of technology?

1208   MR. ELLIS: Exactly.

1209   THE CHAIRPERSON: Is this technology proprietary to you?

1210   MR. ELLIS: The play units are basically regular computers with a very large video driver. So from that perspective there is nothing proprietary about that.

1211   It is the technology behind the screen zones and the ability for us to have the advertisers literally do their commercials, pay for their commercials and send the commercials to us to traffic those and then get them into the windows.

1212   Now, there are lots of other suppliers. Bil Trainor, Capitol Networks, you know, who has done the Pulse 24 system for example, has his own system.

1213   Over the course of 15 years that the service plus -- the service has been around, we have had an opportunity very gradually to build upon the technology and make this into something a little more robust and, quite frankly, unique.

1214   THE CHAIRPERSON: Does this technology require matching technology at the other end of the set-top box that Shaw employs versus other BDUs? Is any part of this distribution methodology -- involve IP addressability?

1215   MR. ELLIS: It does indeed. We send the signal to the play out units, if you will, via IP internet.

1216   THE CHAIRPERSON: Interesting.

1217   Where is master control going to be?

1218   MR. ELLIS: We are thinking at this point it will definitely be in Alberta and most likely it will be Calgary.

1219   THE CHAIRPERSON: Okay. Please correct me if I'm mistaken in this. Your proposal for programming is based on a wheel. Is that correct?

1220   MR. ELLIS: Correct.

1221   THE CHAIRPERSON: Does that then lead me to assume that everything is running consecutively?

1222   I know that in traditional alphanumeric you know with tickers, RSS feeds and so on, there is a lot going on all at once but with respect to specific line items within your programming wheel within that video box, let's say, will there be consecutive programming appearing so that within the wheel you will go to a weather segment within that video portion and then later a news segment and so on throughout the programming hour?

1223   MR. ELLIS: Correct. That video window, if you will, on the left-hand side of the screen is really the anchor and for all intensive purposes that's where the wheel emanates from.

1224   All of the ticker information as it's so described, and the other windows, will depend on volume, how many times it loops through for example.

1225   THE CHAIRPERSON: M'hmm.

1226   Where would this video content en masse come from? Where are you planning to emanate it from?

1227   MR. ELLIS: Well, obviously some of it we are going to create ourselves but we want to make use of every bit of new technology social networking platform that we can access. So if there happened to be a new video version of Twitter in the next year and a half or two we would pull video from there. We would ask for user-generated content and have that sent to us via web.

1228   So a variety of sources.

1229   We don't intend to have people on the street, our employee shooting news content. It would be very much a pull -- if I can use that technical term --

1230   THE CHAIRPERSON: M'hmm.

1231   MR. ELLIS: -- to describe how we get the information.

1232   MS COURTEMANCHE: Yeah, we have become more of an aggregator as opposed to you know a creator, other than the window in the left where we are going to actually produce and, you know, do those news and weather elements.

1233   The rest is really going to be as an aggregator, but an aggregator in a different way because we are going to look to aggregate from a variety of sources and platforms and the opportunities for people to engage in that service are going to be larger than as otherwise available to, you know, the common -- to the public.

1234   THE CHAIRPERSON: Your application indicates that this will be a news, weather and community information channel. Is that correct?

1235   From my grade school reckoning on the math, when -- and this has been a critique of intervenors -- when you look at the wheel and you look at a 30-minute segment and you pull out the various forms of weather; national, regional, local, I get 14 minutes. And when you pull out six minutes of commercials per half-hour you are up to 20 minutes, and then pull out bumpers and promos and so on for another minute and a half or two minutes, you are down to eight minutes for news and community.

1236   Is that the plan?

1237   MR. ELLIS: Sorry, I was just going to jump in on that.

1238   In terms of the left-hand side of the screen in that window I think that's a valid comment. However, if you look at the information, availabilities provided by the other four to five windows that's not the case. There is continual streams of content going on the other areas.

1239   So I think we have to look at what's available in the seven zones, not just the ones in terms of that content calculation.

1240   MS COURTEMANCHE: Yeah, our local news and information window is not restricted to what's going to be on the audiovisual component. It really is those multi-zones, so where it is going to be you know constantly fed and changed.

1241   So you have to look at the whole visual experience to when you are looking at what we are providing from a news and information perspective. Yes, there will be some on that but there is also lots going on elsewhere.

1242   MR. ELLIS: And if you look at the content frame that we provided back at the opening remarks you will see that there is also, where the traffic picture is, that's another video source for us. We can actually switch from one on the left-hand side with audio to the one on the right with audio depending on what's happening and what -- it's totally flexible.

1243   MS COURTEMANCHE: Right. So --

1244   MR. ELLIS: I guess the point is that you can't just count the content that's in the left-hand window. You have to look at the totality.

1245   MS COURTEMANCHE: It's a very busy screen but that's the idea.

1246   MR. ELLIS: Oh, yeah.

1247   MS COURTEMANCHE: The idea is to get as much, you know, information and opportunities to speak about these local communities.

1248   We felt this was the best way to -- and given the nature of the service that we wanted to offer which was just really hyperlocal. You couldn't just have, you know, a screen, a full screen and get that type of granular, really granular type of information that we want to get out.

1249   So this really required this type of a model.

1250   THE CHAIRPERSON: It almost begs asking the question as a regulator, how do we -- how do we monitor and measure that? It's like playing a Shania Twain record behind a newscast and using that as a contribution to Canadian content.

1251   MS COURTEMANCHE: You know, the contributions of a Cat 2, currently is through your Canadian program -- well, your Canadian content. As you know, it grows over three years.

1252   This service from day one it's going to be 100 percent Canadian content by virtue of what --

1253   THE CHAIRPERSON: I'm making inference to local content, Mrs. Courtemanche.

1254   MS COURTEMANCHE: Oh, sorry.


1256   MS COURTEMANCHE: How do we measure the local content?

1257   THE CHAIRPERSON: M'hmm.

1258   MS COURTEMANCHE: Because what you are saying is at the end of the day you are only counting the audiovisual component of it. And I would say that the audiovisual component of this is going to be Canadian and it's going to be local Canadian, 100 percent.

1259   THE CHAIRPERSON: Your initial launch plans, understandably, involve major and secondary markets and it could be argued that in opening up the service in a market like Vancouver which I know well, it's not difficult to be local and regional at the same time because of the nature of that market.

1260   How do you propose to follow through on your locality, your hyperlocality for the purpose of justifying your request for selling local avails when you start to get down to the Salmon Arms of this world? How does that work?

1261   MR. ELLIS: We battled that same issue with the TV listing service in Vancouver. And you are familiar with the Vancouver market. You may remember that the TV listing service basically served the whole of Vancouver.


1263   MR. ELLIS: We decided, I guess probably about three years ago now, to try and experiment to divide Vancouver, as I said in the opening remarks, into the four zones. That turned out to be very successful.

1264   We felt intuitively that it would work, that there was -- that the areas were very distinct and so we took the chance and we did it. So we were going to --

1265   MS COURTEMANCHE: Well, I was just going to say, is that in large communities because of the technology, the way we are going to become hyperlocal is doing exactly what Bryan just said, is we are going to start breaking it down in to zones.

1266   So we already do -- well, we did that in Vancouver. We broke it down in four zones. In large centres that's what we would have to do, to really get to the granular level and break it down.

1267   MR. ELLIS: Sorry, so I was just going to say that we benefit from the fact that Shaw had an infrastructure that supported that type of zonal arrangement where we could put four playback units, you know, in various head-ends.

1268   THE CHAIRPERSON: M'hmm.

1269   MR. ELLIS: That will not be the case in every community.

1270   THE CHAIRPERSON: So you will be relying more on alphanmumeric and other feeds to be hyperlocal?

1271   MR. ELLIS: Yes, yes.

1272   THE CHAIRPERSON: But that's informatics. That's not programming.

1273   MS COURTEMANCHE: It's alphanumeric and it's not programs as defined under the Broadcasting Act, you are absolutely correct.

1274   But having said; that at the end of the day we are coming up with an innovative proposal. There are other services out there that do use the multi-screen.

1275   We think that at this point in time the Commission -- although its jurisdiction and the way you count and so on and so forth is very defined. And we think that we can still fit in because we are proposing local content within the audiovisual screen in the communities where we are going to have, you know, those playbacks. That's going to be local and that's going to be audiovisual and that could be counted and monies will flow and so on and so forth.

1276   But we are just saying that we are looking to provide something that's innovative to people and we think that, you know, the Commission can look at the entire experience even though its jurisdiction is limited to the programs.

1277   But I think it's still fine for the Commission to look at these types of services and say, you know, the whole experience it's Canadian. It provides valued information. It provides a service to communities that wouldn't otherwise be available. So I think it's valuable for you to look at the whole thing.

1278   From a regulatory perspective you are --

1279   THE CHAIRPERSON: And make no mistake. We are looking at this.


1281   THE CHAIRPERSON: We are very open-minded because it is a very innovative proposal.

1282   MS COURTEMANCHE: Right.

1283   THE CHAIRPERSON: But it bends a lot of conventional regulation and --

1284   MS COURTEMANCHE: I don't think it bends. What I think what it does is that it takes, you know, conventional regulation and it takes it to the next step to where we are all going. I think that in the future people are less interested in just relying on, you know, being entertained. They want to participate in the media process.

1285   To the extent that traditional media engages people we will keep them interested to traditional broadcasting. Otherwise, they are just going to go to other platforms that are not regulated.

1286   This is really taking -- you know, people who would consume non-regulated product, it keeps them in the regulatory sphere where they are contributing to, you know, expenses and content and so on and so forth.

1287   But notwithstanding that, we still think that the Commission can apply its current rules and regulations to this service and it's not a problem.

1288   MR. ELLIS: The other point I wanted to make was that there are still people who are aggregating the content, editing the content and making sure it goes back into the pipe.

1289   So there is an expenditure for people managing that local content and, as such of course, it does qualify as a CPE expenditure.

1290   THE CHAIRPERSON: Let me ask you this and, again, interrupt at any time if I'm off base or I'm operating with wrong information because I'm just trying to understand what we are looking at here.

1291   When you net out the commercial content in a given half-hour or hour and you look at the percentage of content left, arguably give or take a few percentage points, the preponderance of the content within a half-hour of your wheel is weather, not news and not community.

1292   And if you are prepared to sort of accept that as a general statement, why would this Commission look at your proposal when we have a weather network that by our reckoning requires genre protection because of its nature?

1293   MS COURTEMANCHE: Well, there is a couple of issues, is that -- again, we are going to go back to the fact that, yes, you are talking about the audiovisual part, you know what does that contribute as versus -- we will go back to the fact that there is a bunch of information that is provided you know other than that.

1294   But having said that, the audiovisual component of the weather network is a national and regional service. It's local where it says that it does -- you know it provides local news or local weather information to 1,200. Well, that's text and graphics. They don't do that through their audiovisual.

1295   You know they don't report. They don't have a person reporting just for Flin Flon. That's audio and you accept that. You say they are providing.

1296   Well, if it's good for them it should be good for us. You know, I look at that and I say, well, if their text and graphics component provides the local service that you say is sufficient then why wouldn't you know the local news and text portion that we are willing to provide is sufficient for our local news and information?

1297   You know, last week at the Montreal hearing Commissioner Poirier said, "What's good for Minou is good for Pitou". Well, that's the way I looked at it. I thought, yeah. To me that makes sense.

1298   So the audiovisual component that we are going to offer is going to be distinct from the Weather Network because we are going to have this person who is standing up there and is reporting solely for Calgary. Then there will be some -- you know and there will be a different reporter for Vancouver and there will be a different one for Saskatoon.

1299   You know, the Weather Network doesn't have a dedicated newscast just for that particular locale.


1301   MS COURTEMANCHE: So that makes us different.

1302   THE CHAIRPERSON: Then I must have missed something because I need you to walk me through where all this content is going to be coming from other than Calgary because I don't think your proposal really indicates that.

1303   Where is the weather going to be coming from in Saskatoon and in Winnipeg?

1304   MR. ELLIS: We will use the same services that most of the other weather providers use.

1305   THE CHAIRPERSON: No, I am not talking about --

1306   MS COURTEMANCHE: No, I think that --

1307   THE CHAIRPERSON: I'm talking weathercasts.

1308   MS COURTEMANCHE: Yeah, and maybe what we haven't explained --

1309   THE CHAIRPERSON: Because I'm picking up on Ms Courtemanche's point that they are -- sorry -- the weather channel is not doing that, but you are saying you will but you are not telling me how.

1310   MS COURTEMANCHE: Okay. Perhaps what we were going to say is that we are going to be producing separate segments.

1311   So there is the wheel. There will be a segment produced for Calgary. So in that wheel there is going to be a segment produced for Calgary. We are also going to be producing a segment for Edmonton.

1312   And I'm sorry. I don't have the list.

1313   Can you give me the list of the cities, Bryan?

1314   So what we are going to do is we are going to have a half-hour wheel for Vancouver, Victoria, Nanaimo, Kelowna, Calgary, Edmonton, Red Deer Lethbridge, Saskatoon, Winnipeg.

1315   THE CHAIRPERSON: M'hmm.

1316   MS COURTEMANCHE: That's pre-recorded but a wheel that's addressed to that city or those cities alone.


1318   MS COURTEMANCHE: And over time we will add and the on-air person will, you know, provide a newscast on a wheel or news and weather -- you know, you are right, mostly weather information, but it's going to be just for that locale. The audio version person is going to say, "Here is the weather for Calgary" and "Here is what is going on for Calgary" and "Here is what is going for Kelowna".


1320   MS COURTEMANCHE: That's what different to the Weather Network.

1321   THE CHAIRPERSON: And is that difference spelled out in your application?

1322   MS COURTEMANCHE: We thought we had. Perhaps -- I must admit I am a little surprised that, you know, that didn't get through. I thought that that was clear by our application.

1323   So if it isn't, I'm very sorry. I can tell you that that's what we tried to do.

1324   THE CHAIRPERSON: That's why we have a hearing.

1325   MS COURTEMANCHE: And the application form, if I can just -- sorry --

1326   THE CHAIRPERSON: Please.

1327   MS COURTEMANCHE: -- refer to the supplementary brief we tried to make this clear at page 6 where we said that:

"At full deployment Local1 will produce a total of 48 hosted segments each day with on-air talent. It will provide hosted weather information with a strong focus on local conditions but we will also do some news and information." (As read)

1328   So yeah, the 48 hosted segments is -- here is how it's going to work. There is going to be a national cast updated three times daily. So that's three.

1329   THE CHAIRPERSON: M'hmm.

1330   MS COURTEMANCHE: Then there is a regional/western Canada cast that's updated three times daily, so that's three.

1331   Then you have provincial. There is going to be four of those, one for each province, you know your casts. That's updated three times daily. And that's 12.

1332   And then there is 10 local casts that are going to be updated three times daily and that's 30.

1333   So that's how you get to your 48 hosted segments.

1334   So if that wasn't clear we would be happy to provide this information in writing so that it's absolutely clear what it is we are intending to do. And that's why we will be very different.

1335   THE CHAIRPERSON: It was clear that there would be hosted segments. What I perhaps got all caught up on was the hyperlocality, assuming that you were meaning that content would be generated at least on a provincial/regional basis not from a single source for an entire half of a country, albeit crafted for a local market.

1336   That to me isn't local. That's content that has local inference but, you know, I would throw a radio station application out if they were trying to broadcast to a market from another city.

1337   MR. ELLIS: We would be happy to provide that clarification.

1338   THE CHAIRPERSON: I would like that.

1339   MS COURTEMANCHE: Yeah, obviously we will do that. Thank you.

1340   THE CHAIRPERSON: If I may, because I can go on forever in this line of questioning but again I really have a lot of territory to cover.

1341   On the remaining eight minutes of content with respect to news and community you are intimating -- and I certainly understand this. I have got a 21-year old daughter and she got me into Twitter and it has become reputed to break more stories than conventional news services and all that wonderful stuff that's going along with social media, the accuracy of which however is suspect.

1342   But with that said, I heard you say today that your intent is to make available this channel for the uploading of community or user or viewer-generated content that would be managed through some type of a site manager and edited for appropriateness and accuracy. And appreciating again the ingenuity of that content, is that not just community access by a different form?

1343   If somebody wants to put a 30-second video segment together on their quilting society or their dog club, is that not what community television all about?

1344   MS COURTEMANCHE: Community television, we believe it tries to go beyond the access that we are intending to provide because although that is going to be a component of the service it's not the entire service.

1345   So, yes, it is the role of community television to provide access but traditionally it's done in a more long form program, half an hour; hour, whatever. Community television doesn't typically give you the 10, 15, 30-second, one minute-type access that we are going to provide. So I think that distinguishes the type of access that community television is going to provide.

1346   Community television tries to form people. You know we won't be bringing people into studios to try to train them on how to become a broadcaster. So I think the whole experience is going to be very, very different.

1347   THE CHAIRPERSON: On news, will news be generated from a single source in your master in Calgary and again tailored to local markets?

1348   How are you going to be able to get hyperlocal when you do get to the point toward the end of your first licence period and you are talking to a market of -- a subscriber base in a cable region of 1,500 people? How are you going to get that stuff back up and processed and back down?

1349   MR. ELLIS: A lot of it, quite frankly, we rely on this push technology where -- sorry, the pull technology.


1351   MR. ELLIS: Where communities are providing, much like they do for information radio in other markets, to send the information and post it on our website or send it to us through conventional IP means. It's something you obviously wrestle with because how much content are you going to get initially? When does the tipping point happen where you are inundated with material?

1352   I don't have an answer for you in terms of when that tipping point is, but we do know that based on our experience and talking to the information radio people at various times that, you know, it takes a while for the momentum to build and that information to be sent in.

1353   But, as I said, we do not have or intend to have people on the street in a conventional television broadcast arrangement with cameras searching for news and taking that route. It's quite different and quite distinct from --

1354   MS COURTEMANCHE: Yeah, I give you as an example tourist information radio. It's all programmed out of one location in Halifax for all of Canada. So what happens is that people know that that's where you send your information. It's processed and then it's redistributed across the country.

1355   This is a bit of a model like that where you know over time people will know that we are an aggregator of that type of information and an opportunity to get. We obviously have to establish relationships, but we will.

1356   We are going to have to go out and meet with the community. You know meet the chambers of commerce and mayors which is what we did because, as you know, we had 538 supporting applications. We talked to a lot of people on this. So we went to see a lot of people.

1357   So once deployed, that's exactly what we would do. We would have to go out there and talk to these people and say, "Here is what we can do for you. This is the kind of service that we can make available".

1358   That kind of contact and the fact that we will repeat it on air and that it will be available that, you know, we will solicit both on the audiovisual component of the service as well as on the texting and graphics component. We will solicit that type of user or, excuse me, content. So we think that using all of those tools we will be able to, you know, get lots of content.

1359   Quite frankly our radio experience demonstrates to us that there is really a pent-up demand. A lot of people would like to get that type of granular type of information available.

1360   Radio does a terrific job of doing that but sometimes they just can't handle it all. So you know we would be another vehicle to get that granular information out.

1361   MR. ELLIS: And if you look at the success that YouTube has had in generating that type of content you know we have seen that grow and grow and we are optimistic that once people are aware of this service and can see themselves reflected in their community they will take advantage of it, whether that's textual, whether that's video, not sure at this point.

1362   MS COURTEMANCHE: You know we are experiencing it right now in Edmonton where, you know, people send us -- I was looking at our website I-880 News, you know, where there is a webcam of -- sorry -- a clip of you know an accident and rollover or the ice pilot, you know, in an old DC-3 and there is -- the whole story was provided and it was actually quite excellent.

1363   THE CHAIRPERSON: I get the point.

1364   MS COURTEMANCHE: So you know I think the point is that we are -- this is a different beast. There is no doubt about it. We know we have to --


1366   MS COURTEMANCHE: -- we are going to have to market it any --

1367   THE CHAIRPERSON: Well, on the subject of that -- sorry, it's just that we are time constrained. I think you have given me a good answer, a fulsome answer to that question.

1368   But I'm glad also that you mentioned the traffic and tourist services that are out there. But they are distinctly utilities as was this audiovisual service you provided before on this same channel. It was a utility. It wasn't broadcasting. It was informatics.

1369   And this is a broadcasting application and with it come programming obligations particularly if you want us to be favourable in consideration of your request for exemption to be able to sell local avails.

1370   I go back to what you have just described to me which sounds more like a utility and, yet, you are drawing inference to examples that we should also look at in this decision which are things like CP24 and Citytv. While they are regional and, you know, arguably smaller regional than what you are applying for, they made pretty substantial programming commitments to that local market area in return for that franchise to be able to sell advertising. I don't see that here.

1371   I mean I see that you have the capability -- you have a technological capability that you are trying to innovate and I'm very supportive of innovation. But this starts to look a little bit like crackers and peanut butter where all the crackers is, is a delivery system for the peanut butter and the peanut butter in this sense is six minutes of local avails and you are trying to sell me your cracker and tell me that it's something else.

1372   I just don't see the fullness of your argument that this is a broadcasting service particularly with your own admission that you don't know where the tipping point is as you get into the real true essence of what you call hyperlocal, which is the most local of local markets and where you are going to peter out on your ability to be local from a programming standpoint.

1373   MS COURTEMANCHE: Well, I guess I'm a little confused because if the Weather Network is a broadcast service I'm not sure the difference --

1374   THE CHAIRPERSON: They are not asking to sell local avails.

1375   MS COURTEMANCHE: Yeah, but -- okay.

1376   Understood, but on the local side I guess what we would, you know, come back and say to you is that on the fulsomeness -- and you are right -- is that if -- and we can't give you a commitment as to you know how much news and information because we are not going to have as you know the newsrooms or the reporters out on the fields. Really, what we are looking for is something that's very different.

1377   I think, you know, at this point in time it's up to the Commission to decide whether the local and the sort of visual experience has to be of a certain qualitative nature for it to be justifiable or to not only be licensed but also to have the opportunity to avail yourselves of local --

1378   THE CHAIRPERSON: Right.

1379   MS COURTEMANCHE: -- revenues.

1380   And I understand your dilemma. We have -- you know we looked at it very carefully. We said at this point in time this is what we can do. This is what we can offer.

1381   Yes, it does have a very utilitarian type of feel and perhaps look to it. But, again, we have looked at it not just on the audiovisual component. We really looked at it as a whole product and on that basis we said, you know, there is going to be a lot of rich local content.

1382   On that basis we thought that we should have an opportunity to sell locally to a maximum obviously of six minutes based on -- just remember that the Rogers application in Toronto was going to repurpose existing television and radio. It's not going to be original. CP is, of course, original content but the Rogers' proposal was to repurpose existing content and the Commission found that that was sufficient in order to be licensed.

1383   So I'm just putting that as a point out there.

1384   MR. ELLIS: The other example that I like to give, a different medium, but information radio again is a utility. They sell locally and it is a broadcast licence.

1385   So I think there are examples. We are not just a utility. I think we are a service as well.

1386   THE CHAIRPERSON: Excellent.

1387   Ms Courtemanche, you have just beautifully segued into the next segment of my questioning, which is to do with the radio component.

1388   Corus is an excellent broadcaster. It operates a significant number of radio stations across the country and there had been intimations that those resources on the ground in various markets would be sources of content for this application by virtue of providing RSS feeds and other information.

1389   Could you give me a more illustrative example of how that inter-relationship works between the local radio station and their contribution to Local1 in their area? How much of a participation are they enjoying?

1390   Can you give me a feel for this?

1391   MR. ELLIS: Sure. I think what our editors will do is scour online all of our radio websites. They will take obviously the textual information from those websites. If they see that there is an actuality that they would like to bring forward we have the ability through IP currently to do that, to get access to it.

1392   Again, it's a bit of us scanning them, them scanning us and sharing that information. I don't think there is anything particularly either unique or proprietary about that.

1393   THE CHAIRPERSON: Okay. With respect, to use a broadcast term, the nulls and voids of distribution within Shaw's footprint in western Canada, this province being one of them, what is your intent with respect to growth first within the rest of this western Canadian region that you are proposing to service and beyond that? Is this a service you contemplate that will go across the country?

1394   MR. ELLIS: I don't think we would contemplate the rest of the country as this point. We would seek to expand our coverage beyond the Shaw systems first.

1395   MS COURTEMANCHE: Yes. I mean I think that it will depend on the success we have. You know we would want to, you know, fully deploy in the 64 communities that we hope to serve.

1396   I think that if we were going to do anything beyond western Canada it would be probably a second licence term. I can't imagine that we would be doing anything of that sort in the first licence term.

1397   In any event, we couldn't because if we were to get a licence it would be solely to western Canada. So if we thought to, you know, service elsewhere we have to come back for an amendment to our licence in order to service other parts of the country.

1398   MR. ELLIS: The other point I was going to make was that our TV listing service was not outside of this western region. This is a market that we know. We are trying to find a way to repatriate that revenue so we are not anticipating at this point going beyond.

1399   THE CHAIRPERSON: As I indicated earlier this -- in analyzing the content within a programming hour from the purposes of the Commission in granting a licence is challenging enough.

1400   How do you propose to make your submissions vis-à-vis your programming logs? How are you going to get your head around that?

1401   MS COURTEMANCHE: Well, any service -- most services -- a lot of specialty services act on the basis of a wheel.


1403   MS COURTEMANCHE: So you know the same way we would log for a wheel on a specialty service we are going to do in this context. We wouldn't do it any differently. It shouldn't be a problem at all.

1404   THE CHAIRPERSON: Okay. So you are not going to really contemplate trying to parse out how much textual content that being --

1405   MS COURTEMANCHE: No, no, no. No, no, we understand. When I told you earlier, I meant that we understand your dilemma that you have a set of regulations, you have a framework.

1406   We are not trying to change that. We understand that we have to make this work within that particular framework.

1407   So yes, we would file on the basis of traditional logs, which is for the audiovisual component and we understand that that's what we would have to be filing on a monthly basis with the Commission.

1408   THE CHAIRPERSON: Okay. So moving forward on this exact point, as you go into year three, year four and you are encouraged to start working into your smaller markets trying to find out where your breaking point is or tipping point on content, it would seem to me that, again, you are going to -- this is a subjective opinion -- find yourself coming up short in your ability to program moving footage or moving video for ultra-small markets.

1409   Yet, we are to contemplate granting you the ability to sell avails in those ultra-small markets because you can. That would seem to me to put the need to go to go back and look at the other local programming content to justify your claim to be hyperlocal.

1410   It was a little convoluted. Do you get the --

1411   MS COURTEMANCHE: Okay, no, no. Look, can I -- I understand your concern absolutely. We want to be clear today and I think -- I told Bryan earlier I don't think we were clear in our application. Let me be clear today.

1412   We only intend to sell in local markets where we provide a specific audiovisual local content. If we are in a market and we are not capable of providing we will not sell in that market, period.

1413   So the restriction on local advertising we should probably have put a condition and condition of licence to say that it is -- the local ad sales will only occur or soliciting will only occur in those markets where we provide a distinct audiovisual component. If we don't we will not solicit local advertising.

1414   We didn't make that clear.


1416   MS COURTEMANCHE: And I said to Bryan we have to make that clear today.

1417   THE CHAIRPERSON: Oh, yeah.

1418   MS COURTEMANCHE: And I hope that's very clear.

1419   THE CHAIRPERSON: Honestly, as innovative as this is, you can drive a truck through parts of this proposal with respect to our --

1420   MS COURTEMANCHE: Right.

1421   THE CHAIRPERSON: -- ability to make a decision on it.

1422   MS COURTEMANCHE: Right.

1423   THE CHAIRPERSON: It disappointed me a little bit because you guys are -- you have a lot of smart people in your shop and you are making our job very tough. It's caused me a lot of late nights.

1424   Let's go on to another fun subject which is the Shaw/Corus relationship. I have had the benefit of sitting in on your analyst's phone call pursuant to your last quarter, which I think was last week.


1426   THE CHAIRPERSON: And it was brought up as it is regularly that as questioned to your president, that Corus is always looking at the appropriateness of whether or not it should merge with Shaw. It's not a question of it but when. It's a question of appropriateness.

1427   So with that sort of cloud looming over our heads what safeguards should we be putting in place to ensure that there is not an undue advantage with respect to the common ownership -- the potential common ownership?

1428   As an add-on to that question, and what comfort do we have with respect to the existing relationship that that type of preference doesn't exist?

1429   MS COURTEMANCHE: Well, the same issue, Commissioner Simpson, arised in the context of the Rogers' application for Toronto where CTV raised those exact issues. The Commission responded in its decision and said it's not a problem.

1430   We have got the affiliate rule, the three to one or the five to one that's going to become three to one, and we have undue preference. So the Commission dismissed those issues in that decision.

1431   I can tell you that Shaw Communications operates independently of Corus and Corus independents -- operates. We have distinct boards. We are listed separately on the TSX. We have a fiduciary obligation in law to operate separately.

1432   Ultimately, the JR Trust does, you know, control Corus. That's true. But for all purposes -- I can tell you that in the context of the BDU review in 2008 we said quite a few things that I'm sure raised some hair in the Shaw Communications household. But at the end of the day we are separate.

1433   The Commission did, many years ago, before you sat as a commissioner, Commissioner Simpson, create structural rules you know between DTH and other people. You know, at the end of the day, they got rid of those conditions of licence when they saw that, you know, people do act separately.

1434   But more importantly, what the Commission did is it introduced these undue preference regulations in all of your regulations. You didn't have them before. Now, you have them everywhere. You have them in the specialty and pay rules. You have them in the BDU rules. It used to be they would only be in the BDU rules.

1435   Well, that's changed. So your environment, your regulatory environment has changed as well as your affiliate rules.

1436   So to me the Commission has stated that, you know, this is how we are going to treat it. It's exactly what you said in the Rogers decision that, yeah, we don't have to worry about that. We have a regulatory environment that deals with those issues.

1437   So that would be my response.

1438   THE CHAIRPERSON: Well, in the -- granted in the three and one, as it's going to become --

1439   MS COURTEMANCHE: M'hmm.

1440   THE CHAIRPERSON: -- the distinction is that they would be unrelated services. And I wonder aloud if in the future this particular application, if it's given the green light, would not trigger other applications of similar form, to the extent that another Category B would come in requesting the opportunity to sell local avails.

1441   How would Shaw respond to that if the three and one kicks in because of you and you create three more competitors and it's just like you? What's going to happen to the advertising, the local avail advertising market, or is this something you have considered?

1442   MS COURTEMANCHE: You know what's going to come down -- I guess what you are saying is that you know is this a type of service on -- because of the ability to -- are you talking from Shaw's perspective to come up with some more or just anybody? Just I'm not clear on your question.

1443   THE CHAIRPERSON: Because this is a rather --

1444   MS COURTEMANCHE: Right.

1445   THE CHAIRPERSON: -- innovative and precedential --

1446   MS COURTEMANCHE: So how many more of these?


1448   MS COURTEMANCHE: Okay. Well, at the end of the day, every time they carry an affiliated service which we are -- according to the Commission's rules we are an affiliated company.

1449   THE CHAIRPERSON: M'hmm.

1450   MS COURTEMANCHE: And so if you carry one Corus company then Shaw has an obligation to carry three unrelated.

1451   THE CHAIRPERSON: That's correct.

1452   MS COURTEMANCHE: So what it means is that if you know as many affiliated-type services then Shaw has an obligation to carry three more. Well, they have only so much bandwidth, I can tell you.

1453   So at the end of the day you know you have to negotiate carriage and if we do negotiate on then there is that obligation to provide opportunities to unrelated. That's how you have dealt with it.

1454   I don't see any reason to change the environment. The environment is what it is. It's there regardless.

1455   That environment wasn't created based on whether somebody has access to local avails or not. It was created as a total solution because currently the system does allow for specialty services to and limited -- you know obviously to a limited extent. But the precedent is out there.

1456   In certain circumstances, yes, specialty services can have access to local avails. Is this going to create a slew of applications? I don't know.

1457   You know, specialty services by their nature traditionally are national in focus. They are really not so much a local type. This is, as you know, quite innovative and quite different.

1458   Could it happen? I just don't know. You know if you are going to get a bunch of children's channels that are going to cater to only Calgary. I just don't see that happening that much, those opportunities out there.

1459   MR. ELLIS: In terms of this channel specifically, if we don't do it somebody else will.

1460   THE CHAIRPERSON: M'hmm.

1461   MS COURTEMANCHE: Yeah, we think that this -- you know we really think that this is an idea where -- and you know we hear it from other people. We just honestly believe that if we don't do it somebody else is going to come along and do it and may very well do it outside of the --


1463   MS COURTEMANCHE: -- regulated environment.

1464   You know your point is taken very well, Commissioner Simpson. What you are trying to say to me very kindly is to say, is this really not more of a broadband type of service and why aren't you actually doing it that way? That's an interesting question.

1465   Obviously, we think that the broadcasting environment still is a terrific aggregator. It brings eyeballs. You know, it gets people engaged in the system.

1466   But to the extent that we encourage this type of activity outside of the regulated system, it's the contributions and the Broadcasting Act objectives that are going to suffer because it's going to happen outside of the system. We would prefer to bring it in where it is contributing and it's actually fulfilling public policy objectives.

1467   THE CHAIRPERSON: I will tell you why I asked that question. This is not so much a -- this is a little bit of a statement but I would like your opinion because I respect you as broadcasters and I think you fully understand the impact of this kind of a proposal.

1468   Digital conversion is going to happen next year. There is still a big question mark, a cloud if you like, over some broadcasters who are trying to decide whether the $2-$3 million cost is worth it as opposed to handing in a licence and going purely through cable distribution.

1469   Now, it has been said to me that this application -- and again this is not damning you with any praise but it's a compliment about -- I mean I feel like it. This is really a non over-the-air OTA but all networked up. So it's trying to get the best of both worlds in that it's trying to be a local programmer, however possible that is, enjoy the benefits of local avail sales as well as national sales, and on the other hand be a network Category 2 broadcaster distributed through cable.

1470   My concern is that in this next 24 months; well, not even that, in this next 10 months we are going to see potentially a possible shakeout of a lot of OTAs who may choose to zig when everybody else zags with respect to going digital. It has crossed my mind several times that one of the avenues that they could go is to go this route as a local OTA. So they give up their broadcast licence, go to Shaw and say, "We like this. We want one".

1471   Will it be up -- are you saying that it's a bandwidth problem or a corporate ownership problem or a technology problem that they might say no?

1472   So there is the rhetorical question. Help me out here.

1473   MS COURTEMANCHE: You know CTV in its interventions said something really interesting. It said a service like Local1 may complement local broadcasters in markets like Vancouver, Calgary, Edmonton but the services it provides are quite different from the in-depth professional news offered by local broadcasters like CGM. It's not only the news. It would be all the public affairs, drama. I think we are very different to local, you know local television.

1474   But I take your question which is going far beyond that. You are -- the Commission and local broadcasters have a larger predicament, is that there is a significant investment that they need in order to make to take all the current analog operations and convert them to, you know, over-the-air and digital transmission. In some markets it's going to occur and in other markets it's not going to occur.

1475   Is the alternative just to turn around and say, well, let's stop this nonsense and just do -- yeah, I think some people are looking and I think that's probably why last week or two weeks ago, I should say, that you know Shaw proposed that $23 million of its benefit monies go towards digital conversions because, quite frankly, there is no additional money to be made by a broadcaster by doing digital conversion.


1477   MS COURTEMANCHE: So it is a problem.

1478   We are facing the problem too. We are in non-mandatory markets.

1479   MR. ELLIS: In Kingston and Peterborough --

1480   MS COURTEMANCHE: Yeah, right.

1481   MR. ELLIS: -- and Oshawa and we are looking at having to convert our Brighton transmitter.

1482   MS COURTEMANCHE: Yeah, but you know what? Kingston is in a market that is right, right across Lake Ontario from the States. Well, you know what? We don't have a choice because the States has gone digital and we are just going to have to do the conversion. And in Brighton we are in the channels that we have to vacate so we are going to do it.

1483   What's going to happen long term? I don't know. You are right. There is a lot of changes that are going to occur over the last 18 or the next -- sorry -- 18 to 24 months, not only from digital conversion, just from an ownership perspective.

1484   I mean on the heels of the Shaw/Canwest you have the Bell/CTV transaction and I think there is going to be more transactions over the next 18 to 24 months.

1485   THE CHAIRPERSON: M'hmm.

1486   MS COURTEMANCHE: But you know my experience in broadcasting has been that there is always some turbulence. This is the most least static environment that I have ever operated in.

1487   Before I got into communications I worked in three different tribunals. I worked for the National Transportation Agency and I also worked for the National Energy Board. So I know the regulatory environment. I can tell you those two other regulatory environments there is not a lot of changes that happen. I got into the communications environment. It's lightening speed. I can hardly keep up.

1488   All I can tell you is that if you are concerned that, you know, the future and something that could happen could overtake or this could hamper or even be an impetus for something else to happen, I don't buy that. I think what's happening right now in the industry is going to happen regardless of whether you licence a small Category 2 service.

1489   There are bigger imperatives going on than this particular application. This is not what's going to drive our world. It's the Googles of this world. It's all kinds of things. So I just don't see us being that significant.

1490   THE CHAIRPERSON: Understand, thank you.

1491   Mr. Ellis, you seem to be the sharp cookie with respect to technological understanding. I hope you are because I have got a question for you.

1492   What is the upper limit in terms of what a cable BDU like Shaw can handle in terms of a number of these services? Do you have any kind of a measure?

1493   MR. ELLIS: I don't. I can only give you an example and that is we could produce this tomorrow in HD. We believe that there is not an appetite to consume the type of bandwidth that HD would consume for this type of service.

1494   THE CHAIRPERSON: M'hmm.

1495   MR. ELLIS: So we know it's finite. I can't respond from the cable side as to how many.

1496   THE CHAIRPERSON: Okay. More questions.

1497   Is it a fair question to ask what sums you have to pay for this Local1 service?

1498   MS COURTEMANCHE: We asked to keep that information confidential.

1499   THE CHAIRPERSON: Right.

1500   MS COURTEMANCHE: You granted that request and we would like to --

1501   THE CHAIRPERSON: Okay, yeah.

1502   MS COURTEMANCHE: -- maintain that confidentiality. You know it is -- Category 2 services do have to negotiate their carriage onto the system so we would like to keep those negotiations as confidential as possible.

1503   THE CHAIRPERSON: M'hmm.

1504   I wear the accessibility issue on my sleeve after doing the hearing last year and I want to bring out a question regarding your reply to a deficiency question on our part.

1505   You had indicated that you did not believe that it would be appropriate to overlay second audio description services because it would repeat what is already being conveyed by the IR presenter. Is that correct?

1506   MS COURTEMANCHE: That's correct.


1508   Are there any other plans to make -- there is beyond compliance requirements now -- any other innovative technologies that you have got up your sleeve that would make this more user-friendly to accessible audiences beyond described --

1509   MS COURTEMANCHE: Well, I mean we are not available of any technology right now that we could overlay, Commissioner Simpson, on this. I'm as interested as you are on these issues.

1510   I can tell you that it was Corus that got the broadcasters back to the table on closed captioning to make sure that the working groups got their work done. So I can tell you that we work very, very closely. We are part of the industry group that's working on described video. We monitor all the developments.

1511   But I can tell you quite frankly if there is a leader in the world not just in Canada on accessibility issues, it is Canada. I can tell you on closed captioning and also on described video we are doing more than anybody else. Jurisdictions are coming to us and asking us what we are up to. So you can be proud of what you are doing.

1512   What I will tell you is that if there is anything out there that does become available we will certainly look at it and see how we can work -- function in the system. We are just not aware of it right now.

1513   THE CHAIRPERSON: Okay. With respect to your rollout -- again, going back to some of the major holes, I think, in your application and one that I did not understand, you intimated that there would be a major market, a secondary market rollout initially and ultimately it is your intention by the end of your first term to be everywhere you want to or can be with the Shaw distribution system.

1514   With that very wide parameter, is it just your intention to only offer this service in those major and secondary markets first, or will there be some form of that service in the smaller markets as well at the launch? And if you are going to be going system-wide but only producing content for your rollout markets will you be attempting to sell avails in the smaller markets?

1515   MS COURTEMANCHE: We will not sell in those markets unless we provide discrete audiovisual programming that's locally focused. If we can rollout and we can't provide local then we won't sell local.

1516   THE CHAIRPERSON: There has got to be a schedule and a commitment that we can hang out hat on that --

1517   MS COURTEMANCHE: We would be prepared to come back in reply with a very specific commitment in that regard.

1518   THE CHAIRPERSON: To not only --

1519   MS COURTEMANCHE: Absolutely.

1520   THE CHAIRPERSON: When you choose to rollout, how you rollout and what we can determine is the programming content commitment that would allow you to then start being active in that secondary or tertiary market.

1521   On the revenue stream I was a little confused by two apparently conflicting statements. One was that it is your ask of us to allow you to sell six out of 12 minutes in the local market. Yet, elsewhere in your submission you intimated that your revenue as a percentage of the total, 75 percent of the revenue would be coming from the local avail sales. Is that correct?

1522   MR. ELLIS: That's correct. And the reason for that is that, much like TVL, this will be a rated service. The national advertisers will not commit in the early stages of this without numbers and we anticipated that the national revenue will be a build.

1523   So initially it will be more dependent on local than it will be in the end. Our experience with TVL, for example, is that 40 percent in the last year was national revenue. We anticipate mirroring that example.

1524   MS COURTEMANCHE: But on the local side and on any of the sales, quite frankly, national and local -- and Bryan, perhaps you can explain a little bit better is how we come in as far as the buy goes?

1525   I will let Bryan explain how the short of food chain works and where we are situated within that food chain.

1526   MR. ELLIS: Again, a practical example of what happened at TVL, first of all it was the conventional television -- from a national perspective conventional television bought specialty second, radio third and then we are very much an entry-level advertising vehicle chosen to fill holes if there were any, gaps in the national advertising.

1527   I think the same is probably true from a local advertising perspective. They will choose the radio and the newspaper first before they turn to us.

1528   We have been lucky in the TVL business to see a lot of our customers grow from that entry level and then again to buy beyond our small service.

1529   MS COURTEMANCHE: Yeah, sometimes what happens is that our advertisers would start with us. They would grow and then they would leave us to go to radio and local television and we would lose them.

1530   But we are okay with that. We are happy to see them grow and then we just look for some more entry levels.

1531   So that's why we are convinced on the impact that, you know, because we are very different on the food chain that that's -- we are not your -- because of the content we provide you know, just on a TV listing service there is nothing really attractive about a TV listing service. People advertise on them, quite frankly, on the TV listing service just because it was the pricing and the -- entry level pricing that they could get. It wasn't because of the service quite frankly.

1532   You know I don't want to be mean but --

1533   MR. ELLIS: Sorry. The churn level on TV listing service is much higher than radio for example. It's about 30 percent. We are certainly higher than that.

1534   THE CHAIRPERSON: In your -- you just know this one is coming.

1535   In your community television intervention Corus was very adamant that local markets were stressed and that the potential of a community television station selling local advertising would not be good for the incumbents at all, given the economy and the like.

1536   What has changed?

1537   MS COURTEMANCHE: Not so much that changed. What we thought was -- at that particular time, as we said in our reply to interventions is that, you know, we really saw the local community's TV station as different just because of its positioning on the dial, you know, basic service, that type of zero to 13 type of offering.

1538   So at that particular time we said we really think that, you know, given that sort of preferred type of carriage that that kind of carriage is more of a concern from a local perspective because of the programming.

1539   Also, it's more a long form programming than what you know we are going to provide which is as you know a much different beast than either local television or local community television.

1540   THE CHAIRPERSON: I am glad that is being written down because I don't think I understood the answer. I'm sorry. That's all right. I will move on.

1541   Mr. Ellis, in your submission you said that because of the delays in coming before the Commission you had elected to wind up the audiovisual company. Is that correct?

1542   MR. ELLIS: That's absolutely correct.

1543   THE CHAIRPERSON: So last night I'm in my hotel room and I'm looking at Channel 11 which is a Shaw service and I'm looking at basically this audiovisual service.

1544   My question is who is maintaining that service and who is selling the advertising that's on it now?

1545   MR. ELLIS: Shaw is maintaining the service. They felt that there was still a need to provide, even despite the dwindling analog environment, that there be an analog service. They have indicated to us and they have indicated to advertisers that this will end. When exactly I don't know but it will come to an end.

1546   We had a number of contracts that extended beyond the August 31st period. They graciously agreed to continue running those ads so that the advertisers weren't left high and dry but they are not, to my knowledge, actively soliciting new advertising but they are going to carry advertising that is there.

1547   If they can, through other means, gain advertising then they will but it's a rapidly sun-setting business with Shaw, that's correct.


1549   My last question before I turn it over to my compatriots is it has been argued in interventions, and I'm very interested to hear your answer, that because this is ostensibly a local service that you are providing that economic analysis on a market-by-market basis is necessary. Otherwise, your application is really incomplete.

1550   How do you answer that?

1551   MR. ELLIS: I think the first answer on that is the fact that our TV listing service is in the market and it was in the market, was active.

1552   THE CHAIRPERSON: But that was an exempt channel. That's not what we are talking about here. This is a brand new application.

1553   MR. ELLIS: It is indeed a new application but, as we said all along, we are trying to repatriate the money that was moving out.

1554   MS COURTEMANCHE: Although it's a different service, we are going to be looking for the same advertisers, the advertisers which advertised on the TV listing service and did not harm local television and radio because it's operating for 25 years. Yes, it's a different service but we are targeting the same amount of money.

1555   There is $12 million two years ago that was being extracted from the system that had no impact on broadcasters and those are the people we are going to target with a different beast but it's the same people. We are not looking to target another advertising base. Based on our rate cards, that's how we are going to operate.

1556   So that's why we think -- you know, we equate the two even though it's not the same service because we are targeting the same advertisers.

1557   THE CHAIRPERSON: Thank you.

1558   Commissioner Molnar, do you have any questions?

1559   COMMISSIONER MOLNAR: Thank you.

1560   I'm just going to follow up with what has been discussed right now, that it's repatriating the money from the exempt channel listing service.

1561   You are anticipating that this will be $3 million whereas you generated $12 million out of the exempt listing service. One might argue just based on what you were saying, "Who wants to be advertising on a listing service?" I mean you were saying it was kind of the bottom of the bucket.

1562   You are providing a more robust service coming forward, more relevant to the viewers potentially. So why is it now you are forecasting revenue that is so significantly less than what you were able to generate on your TV listing service?

1563   MR. ELLIS: A much smaller base.

1564   COMMISSIONER MOLNAR: Because it's solely digital?

1565   MR. ELLIS: No, it's a smaller base because we are only servicing the smaller base of communities. It's much smaller than the TVL listing service which was, of course, ubiquitous across western Canada in many, many more communities than we will serve here.

1566   COMMISSIONER MOLNAR: So your TV listing service was in more than 64 locations?

1567   MR. ELLIS: Correct.

1568   MS COURTEMANCHE: Available across Shaw all of it in western Canada so it's available everywhere.

1569   COMMISSIONER MOLNAR: It couldn't have been very many more significantly large locations, though.

1570   I mean when I look at the locations in your top ten those if I was to do some sort of subscriber analysis which I haven't done, but I would say that that would be the bulk of Shaw's subscribers that are existing in those 10 communities. If you have moved to 64 you must have the bulk of the Shaw subscribers in these 64 you have targeted in here.

1571   MR. ELLIS: I think you are correct. The difference is, though, that the advertiser realizes that we are servicing a much smaller area in terms of digital versus the analog.

1572   Now, we obviously know that the digital market is growing and will at some point take over and we expect that throughout the course of the seven-year licence period that -- we are certainly hopeful that we will be back to that $12 million level. But initially we are very conservative about what we will be able to garner.

1573   MS COURTEMANCHE: Plus, we have to realize that, you know, we are starting up a new service and therefore, you know, as Bryan said earlier, on the TV listing service we actually had BBM data that supported buys for our service.

1574   Well, for the first year of a Cat 2 we are not going to have any data to provide to anybody as far as, you know, justifying eyeballs or who is actually tuning in, in order to sell. So we had to be conservative because any start-up, you know, even though we are going to target the same people, we don't have any proof of how many eyeballs we are delivering.

1575   So that's one of the reasons why we were very conservative.

1576   COMMISSIONER MOLNAR: I think I will just leave with a comment that it's not convincing to me when you are moving to digital, when you are targeting the same base, when you have had preliminary discussions with Shaw; you have an ongoing relationship. You have your technology and all of their head-ends. You are going to the same base on the growing digital customer base and you are proposing that revenues will drop by -- you know, from $12 to $3 million and therefore that $3 million, based upon it being $3 million there is a minimal impact on local advertisers in the market.

1577   MS COURTEMANCHE: Well, Commissioner Molnar, the best evidence I can give you is the real evidence. Last year we pulled in $4.4 million, so $12 million was two years ago and we went down from $12 to $4.4 million.

1578   COMMISSIONER MOLNAR: That's comparing analog to digital, right?

1579   MS COURTEMANCHE: Well, it's --

1580   MR. ELLIS: The same advertisers.

1581   MS COURTEMANCHE: -- the same advertisers.

1582   COMMISSIONER MOLNAR: But a different subscriber base.

1583   MS COURTEMANCHE: A bigger subscriber base. So it's a bigger subscriber base and you know it is clearly a business where the opportunities were going down. So you know to grow it back up again we just think that it's not going to happen overnight especially with the new service.

1584   I take your point but, like I say, my best evidence is last year we went down to $4.4 million.

1585   COMMISSIONER MOLNAR: And you are proposing to use the same rates with this service?

1586   MR. ELLIS: Largely, yes.


1588   You may not be aware but I live in Regina so it's -- you know, seeing the 64 communities you have targeted, clearly all Shaw communities, not necessarily the largest populated communities in western Canada, arguably not the communities most in need of an additional local voice. You know what comes to mind very clearly for me is Brandon as an example without -- having lost its local television station, does not have local news and information right now.

1589   Have you given thought to moving to those kinds of communities?

1590   MR. ELLIS: We would love to be able to negotiate carriage with West Man in the case of Brandon and access certainly in Saskatchewan. We would love to be able to do that.

1591   COMMISSIONER MOLNAR: But you are not proposing to us that you would have local -- a local program, a hyperlocal programming program for those communities?

1592   MR. ELLIS: If we could get carriage we certainly would.


1594   COMMISSIONER MOLNAR: Have you talked to anyone?

1595   MR. ELLIS: I haven't, but that is not an exhaustive survey.

1596   MS COURTEMANCHE: Yeah. I think it's our intention to -- if we were to get a licence from the Commission in those communities that we haven't identified.

1597   In particular the community that you have identified, Brandon, I think it is incumbent on us to go back and look at, you know, the proposal and say, you know, there are some communities that really would like this type of service and we will try to negotiate carriage.

1598   So I think that it's a fair comment. We actually talked about this yesterday and said, you know, yeah, absolutely. You know, we would.

1599   I guess the point was, is that here is where we were already operating so we think -- I mean you have to understand. We really took a sunset business and tried to make it digital based on what we were doing previously. That's why you have those 64 communities. It's because it's where we were already. We had a sales force we understood. We knew we had a relationship with those communities. That's why we identified them.

1600   But if we were to service and be a true service to all of western Canada it's incumbent on us to reach out to other distributors. Hopefully we can secure carriage and if we can secure carriage then it would be incumbent on us to -- as long as we can get access to their head-end to provide the same type of service that we would for Shaw systems that would be local and perhaps fill that void that you have just identified.

1601   COMMISSIONER MOLNAR: And I want to understand this technology. You said that Shaw took over your existing analog service, TV listing service and they are kind of running it to its natural decline.

1602   And the technology used for that is not the same technology you need to deploy your new service?

1603   MR. ELLIS: They are using our technology. Just to give you an example if we had over 40 people they have retained one person permanently and two people on a contract basis.

1604   COMMISSIONER MOLNAR: And the equipment in their head-ends that is supplying that is your equipment that would also be used to supply Local1?

1605   MR. ELLIS: We would -- as you can imagine, technology changes over the course of the years. We would replace all of that with new equipment.

1606   MS COURTEMANCHE: They are using the old stuff.

1607   MR. ELLIS: Yeah.

1608   MS COURTEMANCHE: We are proposing to update. I mean what we are doing is we are building on the proprietary stuff that we have now but it is going to have to be beefed up in order to offer the Local1 service.

1609   So what's being used by Shaw is the old stuff. We would have some new equipment and software and so on and so forth for the new Local1.

1610   MR. ELLIS: The service life is about done.


1612   COMMISSIONER MOLNAR: Okay. So then the real only tie you have to 64 communities is your advertising relationship because the equipment in all that needs to be replaced anyway.

1613   And I want to make sure -- and I apologize. I know that you had quite an extended discussion with Commissioner Simpson on this but sometimes I need to hear things more than twice to understand.

1614   Despite having said on page 6 here that local:

"...we are seeking your approval to sell a limited amount of local advertising in each community where Local1 is distributed."

1615   You have said now that it is not where it is distributed. You are saying only where you will be providing unique local content for that community?

1616   MS COURTEMANCHE: Correct, and that's why we said we would come back and clarify our commitment in that regard to Commissioner Simpson.

1617   We understand that that is not clear and we will be coming back and reply to state specifically when and at what particular moment we would avail ourselves or feel that it's appropriate for us to avail ourselves of the opportunity to sell locally.

1618   COMMISSIONER MOLNAR: So if at the beginning you were creating local programming only for the 10 centres, you said initially, arguably that's the only authority you need from us.


1620   COMMISSIONER MOLNAR: And if you were licensed as a Cat 2 you could provide it to the other 64 communities. You could provide it to any community if a BDU chose to pickup your service.

1621   MS COURTEMANCHE: Yeah, I said we couldn't sell locally. We could be carried by anywhere. As long as you give us the licence for western Canada any licensed BDU in Canada would be authorized to offer our service.


1623   MS COURTEMANCHE: The only thing I would distinguish is in which communities we could actually sell locally.

1624   COMMISSIONER MOLNAR: Right. And at this point you are committing to create local programming for 10.

1625   MS COURTEMANCHE: Correct.

1626   COMMISSIONER MOLNAR: Okay, thank you. That's all.

1627   THE CHAIRPERSON: Thank you very much.

1628   Commissioner --

1629   MR. ELLIS: Just one point of clarification.

1630   We would need to put a box at the head-end. It's not that they would just be able to pluck us out of the air. We would have to have the box there at the head-end.

1631   THE CHAIRPERSON: Right.

1632   Commissioner Duncan...?

1633   COMMISSIONER DUNCAN: Okay. So possibly some of my questions will be repetitive but, again, probably need to hear the answers a few times to absorb it all.

1634   I'm just going back now to the 64 or 65 communities -- 64?


1636   COMMISSIONER DUNCAN: And 10 are the ones that are listed in the application that will be the -- they will be hyperlocal and they will be your initial stations.

1637   And is there a schedule for the rollout? I have a list here of all the stations -- as to when the others would be rolled out?

1638   MS COURTEMANCHE: Sorry. We will provide that tomorrow. At the same time we provide the information we will provide you with the rollout breakdown.

1639   COMMISSIONER DUNCAN: Okay. And when you do that are you able to also identify the ones that would be likely to have your hyperlocal service?

1640   MS COURTEMANCHE: Will do.


1642   So at this point can you tell me what percentage of the 64 will end up with the hyperlocal service?

1643   MS COURTEMANCHE: We are hoping that eventually they all will. That's the objective. But we will -- yeah, otherwise we can't sell locally.

1644   So our objective is that that's what we want to do because we want to have the ability to sell locally. So if we don't, we don't sell locally. Because we do want to then that's our objective, is to get there.

1645   COMMISSIONER DUNCAN: So within three -- well, you are going to give us a schedule.

1646   MS COURTEMANCHE: Yeah. I think that we had talked about 45 within four years and 64 by year seven. That was what we were talking about.

1647   COMMISSIONER DUNCAN: And they will have your hyperlocal service?

1648   MR. ELLIS: Correct.

1649   COMMISSIONER DUNCAN: Which I understand then, from the conversation here, is just the left side of the screen, the video component?

1650   MS COURTEMANCHE: That's correct.

1651   COMMISSIONER DUNCAN: That's just for local component?

1652   MS COURTEMANCHE: Excuse me, yes, sorry. You are right. I apologize, yes.

1653   What I meant to say is that for regulatory purposes you care about the video, audiovisual, but just so you understand the 64 would have the whole package, would be hyperlocal.

1654   COMMISSIONER DUNCAN: So initially until you got the equipment -- well, you are going to have the equipment in the head-end anyway.

1655   As soon as the system is put in place in a cable system they automatically get the hyperlocal service. Is that the idea?

1656   MR. ELLIS: Let me try again on that.

1657   We would put a box in the head-end once we have negotiated carriage. Then we can do the hyperlocal in each market.

1658   COMMISSIONER DUNCAN: Okay. So dealing with the Shaw systems first, the 64 systems, it's just going to be a matter of getting the equipment into it.

1659   I know you referred to negotiation but assuming it's going to be successful then it's just as soon as the box goes into that particular system you are able to offer and will offer the hyperlocal?

1660   MR. ELLIS: Correct.

1661   COMMISSIONER DUNCAN: Okay. And so just a quick, for me if you would -- your point on the video distinguishing it from the Weather Network is that yours is just that, the video is local and theirs is national -- regional?

1662   MS COURTEMANCHE: Regional, yeah. So you know there will be a national and regional component in ours but we will also have a local segment, a local, local segment on the audiovisual component.

1663   COMMISSIONER DUNCAN: So recently in Halifax when the hurricane went through the Weather Network offered extensive coverage. You would not be doing that then, full screen --


1665   COMMISSIONER DUNCAN: To cover the storm, the hurricane when it went through.

1666   MS COURTEMANCHE: In another part of the country?

1667   COMMISSIONER DUNCAN: No, no, if it was here.

1668   MS COURTEMANCHE: Oh, if we would have the capability of doing it, yes. But I mean is it our intention to do that?

1669   I think that, you know, because we would be a local news and information service I think we would probably want to do -- but as we said earlier, we are not going to have reporters or people out on, you know, the streets. I mean we rely on existing sources for weather and from the news we are going to use commercial services and other fees, you know, and subscription services and so on and so forth. So we will report on it.

1670   You know, whether we would actually turnaround and become -- you know, what Weather Network did is get into full blown, back to back coverage.

1671   COMMISSIONER DUNCAN: I think, yeah, I have got my own answer because I'm thinking I'm understanding better what the Weather Network would have done. I assume that the coverage on the storm would have gone across the country but yours will just go in that particular community, not over all 64.

1672   MS COURTEMANCHE: Exactly. But for instance if, in Winnipeg, it has another flood --


1674   MS COURTEMANCHE: -- and we are in Winnipeg, well, we are going to cover the flood. I mean obviously for that --

1675   COMMISSIONER DUNCAN: In Winnipeg, right.

1676   MS COURTEMANCHE: Exactly. But in Saskatoon there is no flood so we are not -- you know that's --

1677   COMMISSIONER DUNCAN: Okay. I understand now.

1678   MS COURTEMANCHE: -- not the issue. But there might be a hurricane in Edmonton and we will cover it there.

1679   COMMISSIONER DUNCAN: Okay, no, then I understand. That's fine.

1680   MS COURTEMANCHE: No, not a hurricane, a tornado, sorry.

1681   COMMISSIONER DUNCAN: It would be more likely there, I guess. Yeah.

1682   MS COURTEMANCHE: I'm not the on-air person, thank goodness.

--- Laughter

1683   COMMISSIONER DUNCAN: It strikes me that the editors that you are going to have in place to see that the content is acceptable are going to have a pretty hectic job when all 64 are up and running.

1684   MR. ELLIS: That's absolutely correct.

1685   COMMISSIONER DUNCAN: And will they all be -- you had indicated, I think, initially in an answer to Commissioner Simpson in an answer that they would likely be in Calgary?

1686   MR. ELLIS: That's the model, yes.

1687   COMMISSIONER DUNCAN: And even when you reach your full 64 it would still be?

1688   MR. ELLIS: Yeah, I don't think there is any magic about the number of communities served and where the base is.


1690   MS COURTEMANCHE: But as far as number of people just so you understand, the TV listing service had I think about 52 employees -- oh, sorry, in the forties, sorry. But at one point I think they were up to 52 anyway.

1691   So we are going to have a fairly significant staff in order to -- you know we are not going to do this with 10 people. I mean I think that we are looking at what kind of a complement.

1692   MR. ELLIS: And the 52 people that we have mentioned in our application, does not include salespeople.

1693   MS COURTEMANCHE: Right. So we are talking a fairly significant complement of people to do this.

1694   But you are right. We had experience with this in -- we had -- in Quebec we run a news network, a radio news network, and all of our web content is vetted by three dedicated staff.

1695   I'm not saying that this is just going to be three staff but it's fairly -- it's manageable when it's got dedicated staff which we would have in this circumstance as well.


1697   MR. ELLIS: We have also spoken to. Sorry --

1698   COMMISSIONER DUNCAN: No, go ahead. That's all right.

1699   MR. ELLIS: -- a company that aggregates Twitter feeds and social media content and distils it down to the top ten issues.

1700   COMMISSIONER DUNCAN: So this would be like a third party, I suppose, to do that?

1701   MR. ELLIS: Yes, yeah.


1703   So 52 people would be sort of on the creative end, then management perhaps and 40 for sales just approximately?

1704   MR. ELLIS: No, in fact the 52 does not include any salespeople at all.


1706   MR. ELLIS: It is all a small technical crew in that most of our production will be automated and robotic cameras. The rest of the people will be talent, editorial and the editor-type function.


1708   MR. ELLIS: It's really some new classifications in terms of employees that even we at Corus have not had before.

1709   COMMISSIONER DUNCAN: So did I understand you to say then above these 52 would be the sales force?

1710   MR. ELLIS: Correct.

1711   COMMISSIONER DUNCAN: And that might be 40 people?

1712   MR. ELLIS: In our past experiences we have used a combination of staff, sales people. We have also used a lot of contractors, people who sell community. Newspapers might also be able to sell the TV listings channel. We anticipate we will use the same model for this type of --

1713   COMMISSIONER DUNCAN: So that the sales people that you had for the TVL listings they are just gone on to other things. I suppose you may recover some of them.

1714   MR. ELLIS: That's correct.

1715   COMMISSIONER DUNCAN: You may not want to or you might?

1716   MR. ELLIS: We have had them talk to our radio folks but, no, they are gone.

1717   COMMISSIONER DUNCAN: So speaking of the other agencies or whatever that you might use to sell your programming guide service, and you intend to use here third parties to sell as well?

1718   MR. ELLIS: Some, yes.

1719   COMMISSIONER DUNCAN: Yeah, and so what --

1720   MR. ELLIS: Not all.

1721   COMMISSIONER DUNCAN: No. Will you -- how will the Corus radio stations play into that, like will they do any of the selling?

1722   MR. ELLIS: They did not under the TVL model and we don't anticipate they will.

1723   COMMISSIONER DUNCAN: Don't anticipate.

1724   MR. ELLIS: We do, however, have web sales people who work in the radio stations. They may be cross-purposed but I don't envisage that happening but it could be possible.

1725   COMMISSIONER DUNCAN: Are they web sales people or are they web developer?

1726   MR. ELLIS: Web sales.

1727   COMMISSIONER DUNCAN: So they make cold calls?

1728   MR. ELLIS: It's not a very large staff. Our experience has been that web sales for the radio group is a tough go.

1729   COMMISSIONER DUNCAN: And what would they be called, cold calls? Is that what you do? Is that how it would work?

1730   MR. ELLIS: Yes, but they are also leveraging buys that were made on the radio station as well.

1731   COMMISSIONER DUNCAN: Oh, sure, so they are not cold. Okay, all right.

1732   What will you do at -- it occurred to me that what if the data is slow coming in -- well, not the data. There you are adding on other agencies but for your video portion, your hyper portion, what would you do at the outset when you know you have to build up or expect immediately you are going to be able to fill it?

1733   MR. ELLIS: No, we would probably work with the window wheel as we specified in the application.

1734   COMMISSIONER DUNCAN: So just --

1735   MR. ELLIS: As additional content comes in we will shorten parts of the wheel and expand others.

1736   COMMISSIONER DUNCAN: Okay. So this fixed -- this portion where the gentleman here is doing the --

1737   MS COURTEMANCHE: Well, there is the webcam on the traffic. We can get that anytime because that's available. That's a source that is already set.


1739   MS COURTEMANCHE: So that's something we can do anytime. That doesn't to be ramped up.

1740   COMMISSIONER DUNCAN: It's just I think where the gentleman is doing the weather that would be -- it's the only one that you might have to build up. The others, I assume, you can pretty well have from day one?

1741   MR. ELLIS: That's correct.

1742   MS COURTEMANCHE: Oh, yeah.

1743   COMMISSIONER DUNCAN: Yeah. So I'm just wondering, like, will you do your own creative if you don't have it at that point or are you suggesting that you will just dedicate more of the screen to these feeds?

1744   MR. ELLIS: We have the ability to do that but we would anticipate that with the resources that we have we would have video content throughout the -- one advantage of the Corus group is that we do have access to content.

1745   MS COURTEMANCHE: Just to understand correctly is your question that, are we going to have somebody live day one?

1746   COMMISSIONER DUNCAN: Yeah. I'm just wondering how you are going to fill it because --

1747   MS COURTEMANCHE: The answer is yes. I think there was a little misunderstanding. The answer is yes.

1748   We are going to start producing day one. We won't launch the channel until we are in a position to fill this frame with content that we will have produced in addition to --

1749   COMMISSIONER DUNCAN: So am I right that --

1750   MS COURTEMANCHE: -- there will be other stuff that we will acquire from other sources but, you know, obviously we need to be able to produce that component, yes.

1751   COMMISSIONER DUNCAN: So the people that are sending you in their Twitter feeds or whatever, that will end up in here. Initially on day one --

1752   MR. ELLIS: It could very well, yes.

1753   COMMISSIONER DUNCAN: -- you won't be able to fill that with that information.

1754   MS COURTEMANCHE: Oh, no, no.

1755   MR. ELLIS: Correct.

1756   MS COURTEMANCHE: Obviously we have to build on that stuff.

1757   COMMISSIONER DUNCAN: Yeah, okay.

1758   MS COURTEMANCHE: Yes, obviously that's going to take time because we have to -- as I said to Commissioner Simpson earlier, we are going to have to, you know, go out there and market and talk to people and you know it's going to take time to ramp it up.

1759   So obviously that's -- you know it's like any service, and service starts with a particular look and over time it builds its content.

1760   COMMISSIONER DUNCAN: Okay, thank you.

1761   The box there that says Calgary weather that you told us was just a webcam, so you are able to remove it, make it smaller, whatever you want depending on --

1762   MR. ELLIS: That's correct.


1764   MR. ELLIS: Yeah, it's very flexible.


1766   MR. ELLIS: Some communities may have five zones. Others may have seven.

1767   COMMISSIONER DUNCAN: So when they have those seven zones for example would it be like the Vancouver example that you gave at the hyper portion, what I'm calling the video part, will have seven different -- possible?

1768   MR. ELLIS: Yes, it is possible. I think we would have to look at how distinct would the content be for a city like Vancouver in terms of weather for example. The four districts of Vancouver may not. The weather may not be that different.


1770   MR. ELLIS: Technically, yes, we do have that capability.

1771   COMMISSIONER DUNCAN: Do you think that the Weather Network's concern that this is duplicating their service is justifiable?

1772   MS COURTEMANCHE: Well, based on the fact, as what we said earlier, we are far more granular than what they are capable of providing. So you know that's why we think we are different.

1773   I mean obviously, yeah, the look. I mean, you know, there is -- yes, we look the same. There is an on-air person who is talking about the weather, yes, absolutely.

1774   But the Commission has traditionally, you know, said that even you know depending on how targeted a program is it will distinguish it from another service. So you know national news is a different service to local news. Well, we think that, you know, national and regional -- weather is different too because it's more granular and focused. So we think it complements it. It doesn't directly compete.

1775   COMMISSIONER DUNCAN: All right. I just have one more question.

1776   I'm just wondering, because I don't recall reading it in the material, what will happen to your proposal if we don't approve the sale of local ads?

1777   MR. ELLIS: From a financial perspective I think it would -- it just wouldn't fly. It wouldn't be sustainable.

1778   COMMISSIONER DUNCAN: Okay, all right. Thank you.

1779   MS COURTEMANCHE: Yeah, because it's the basis of the previous model that we are looking to get at, so yeah.

1780   COMMISSIONER DUNCAN: Okay, I understand. Thank you.

1781   Thank you, Mr. Chairman.

1782   THE CHAIRPERSON: Thank you very much, Commissioner Duncan.

1783   I have to come back on two more questions if I may.

1784   Ms Courtemanche, did I just hear you say that this service will not be competitive with the Weather Network but it will be better?

1785   MS COURTEMANCHE: No, it will complement, not be better.

1786   THE CHAIRPERSON: More granular.

1787   MS COURTEMANCHE: More granular in the sense that it will provide a level of detail that the Weather Network does on a -- you know it's graphic. I mean you know, obviously the Weather Network provides a very granular level of weather information with its text and graphics.

1788   What I'm saying is from the audiovisual component we will have a granular level of weather forecasts and information that the Weather Network doesn't provide. It provides it from a texting graphics basis. We are going to do it from an audiovisual basis and also a texting graphics basis.

1789   THE CHAIRPERSON: Okay, thank you.

1790   With respect to your submission that will be coming in after the hearing, your written submission, might I ask you to contemplate synchronizing a recast of your weather projection so as you move into next generation markets after your launch we have a good understanding of the financial impact of what that means on a market-by-market basis?

1791   I know it's detailed but it's important. Is that possible so that the revenue forecast is synchronized to the rollout?

--- Pause

1792   MS COURTEMANCHE: I think we understand your question. We have some -- I'm assuming we have some granular information as to how we currently, you know, get revenues from our existing markets. So I think that's -- well, we will figure it out but we will give you the information that you require.

1793   THE CHAIRPERSON: So that we can understand the --

1794   MS COURTEMANCHE: I think it's fairly --

1795   THE CHAIRPERSON: -- escalating impact on each market.

1796   MS COURTEMANCHE: You know, it's obvious to everyone in this room that the majority of our revenues come from larger markets so that's not -- I forget what the percentage is but we will provide that to you.

1797   So what we can do is we can provide you with the kind of granularity that we currently are aware with, with our TV listing service, and then we can make some projections based on what we think would happen as we rollout over the licence term.

1798   THE CHAIRPERSON: Okay, one more question.

1799   With respect to any limitations should this licence be granted, Commissioner Duncan had earlier asked what would happen if we denied your request on avails. What would your response be with respect to other conditions of licence that we might impose on you, not including but what conditions of licence or what would your response be to a position of some conditions of licence with respect to adjustments to your programming such as in weather? What would your reaction be?

1800   MS COURTEMANCHE: What would be the conditions of licence?

1801   THE CHAIRPERSON: If we would put an imposition -- if we were to apply a condition of licence that alters your present proposal for content, programming content such as readjusting the percentage of weather to news to community?

1802   MS COURTEMANCHE: Just to be clear, the problem that we would have with the Commission providing or imposing a specific news component on the audiovisual is that we are reliant -- we are an aggregator. We are not actually producing and we don't have people out in the field producing the news. So you know we -- you know, depending on how the flow occurs we -- a certain percentage we might not be able to do.

1803   So that's where the problem is, is if the Commission was to come up with a percentage and say, well, you have -- you know, on the audiovisual component let's say -- and I don't want to use a number but let's say 30 percent of that has to be news and information, well, depending on how we are able to aggregate it we may or may not be able to do it depending if we have that information, enough of it at that granular level to do it.

1804   Because we are not -- like I say, we don't have a newsroom and so --

1805   THE CHAIRPERSON: So the percentage of weather you are offering now is more because it's available to you, to repurpose, as opposed to news and community, correct?

1806   MS COURTEMANCHE: Right.


1808   MS COURTEMANCHE: So it is what it is, yeah.

1809   THE CHAIRPERSON: Okay. I think that pretty much wraps it up unless anyone has got any last minute questions.

1810   Does legal have any additions to the file?

1811   MS HULLEY: I will just read the undertakings onto the record.

1812   THE CHAIRPERSON: Thanks.

1813   MS HULLEY: I have -- I will call them three undertakings. The first is in response to a question from Commissioner Simpson and it's:

"Provide a breakdown of the 48 individual hosted segments referred to at page 6 of the supplementary brief."

1814   And then in response to questions from all of the Commissioners:

"Identify those markets that will have the hyperlocal service, provide a schedule for the rollout to these markets and provide a clear commitment to a COL limiting local advertising to those markets."

1815   And then the third but related undertaking:

"If necessary, revise the revenue projections to reflect the schedule of that rollout."

1816   I believe you committed to provide the first two pieces of information in your reply tomorrow. If it's acceptable we would put the due date for the third in the reply as well.

1817   Thank you very much.

1818   THE CHAIRPERSON: Madam Secretary, any other business?

1819   THE SECRETARY: This concludes Phase I for Item 3 on the agenda.

1820   Thank you, Mr. Chair.

1821   THE CHAIRPERSON: I would like to thank you very much, Mr. Ellis and Ms Courtemanche, for coming to the great province of Saskatchewan to make your presentation. It was very interesting and an enjoyable afternoon.

1822   Thank you very much. We are going to adjourn for the day and convene tomorrow at nine o'clock.

--- Whereupon the hearing adjourned at 1642, to resume on Thursday, October 7, 2010 at 0900


____________________      ____________________

Lynda Johansson         Jean Desaulniers

____________________      ____________________

Monique Mahoney         Sue Villeneuve

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