ARCHIVED - Transcript, Hearing 17 January 2012

Volume 2, 17 January 2012

TRANSCRIPTION OF PROCEEDINGS BEFORE THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION

SUBJECT:

To consider the broadcasting applications listed in Broadcasting Notice of Consultation CRTC 2011-675, 2011-675-1, 2011-675-2 , 2011-675-3 and 2011-675-4

HELD AT:

Cains/Sevogle Rooms

Rodd Miramichi River Hotel

1809 Water Street

Miramichi, New Brunswick

17 January 2012

Transcription

In order to meet the requirements of the Official Languages Act, transcripts of proceedings before the Commission will be bilingual as to their covers, the listing of the CRTC members and staff attending the public hearings, and the Table of Contents.

However, the aforementioned publication is the recorded verbatim transcript and, as such, is taped and transcribed in either of the official languages, depending on the language spoken by the participant at the public hearing.

Canadian Radio-television and Telecommunications Commission

Transcription

To consider the broadcasting applications listed in Broadcasting Notice of Consultation CRTC 2011-675, 2011-675-1, 2011-675-2 , 2011-675-3 and 2011-675-4

BEFORE:

ALSO PRESENT:

Cains/Sevogle Rooms

Rodd Miramichi River Hotel

1809 Water Street

Miramichi, New Brunswick

17 January 2012

- iv -

TABLE OF CONTENTS

PAGE / PARA

APPEARING ITEMS

PHASE I

PRESENTATIONS

APPEARING INDIVIDUALLY

PHASE II

INTERVENTIONS

APPEARING INDIVIDUALLY

PHASE III

REPLIES

APPEARING INDIVIDUALLY

- vi -

UNDERTAKINGS

PAGE / PARA

Miramichi, NB

--- Upon resuming on Tuesday, January 17, 2012 at 0834

1824   THE CHAIRPERSON: Good morning.

1825   Madam Secretary...

1826   THE SECRETARY: Good morning. We will now proceed with Item 4 on the agenda, which is an application by Hector Broadcasting Company Limited for a broadcasting licence to operate an English-language commercial FM radio programming undertaking in New Glasgow.

1827   Please introduce yourself and your colleagues. You will then have 20 minutes for your presentation.

1828   Thank you.

PRESENTATION

1829   MR. DOUGLAS FREEMAN: Thank you, and good morning, Madam Chair, Members of the Commission and Commission Staff.

1830   My name is Doug Freeman, the President of Hector Broadcasting Company Limited, the licensee of CKEC-FM, known as 94.1 East Coast FM.

1831   I would like to take a moment, also, to say good morning to our staff back home, and to all of our families listening online to these proceedings. Thank you.

1832   I started my radio career at the age of 15, reading the news on Truro radio, and worked in various capacities in a number of Maritime and Ontario radio stations, including four years in television.

1833   I purchased CKEC-AM in 1964 and served as General Manager, Sales Manager, and as on-air personality for many years. In 1996 I passed the daily responsibilities on to my son, Michael. I still provide, however, a weekly show on Sunday nights, and specialty shows throughout the year, including the Messiah at Christmastime, which I have been presenting for 46 years.

1834   First, I would like to introduce our panel.

1835   To my left is my son, Michael, Vice-President and General Manager of Hector Broadcasting. Mike started in radio 26 years ago as a broadcast engineer, and has worked in almost every position at the station since -- traffic, music, script writing.

1836   In the last few years, he has developed and taught himself software programming, and has developed a program that now manages, if you can imagine, 37 categories of internal radio station information at EC-FM.

1837   To his left is Lynn MacDonald, who is a very capable accountant, and manages all office administration. Her title is Office Manager, but she does much more than that for the station, actually, including coordinating our many contacts and supports in and outside the station.

1838   To Lynn's left is our capable Program Director, Ann MacGregor. Ann is also the co-host of our very popular morning show.

1839   If you are wondering where the name Hector came from, what codger dreamt up that name, actually the name comes from the ship Hector, which brought the first Scottish settlers to Nova Scotia in 1773, with 170 Highlanders arriving in Pictou Harbour.

1840   They landed on wooded shores just as winter was about to arrive, which meant that their very survival depended on helping each other. That cohesive attitude has stayed throughout the centuries. Even to this day, Pictou County is noted as staying together and helping one another.

1841   Our broadcast company has carried on these traits in helping our listeners and neighbours, no matter the person or the cause.

1842   Since the beginning of Hector Broadcasting Company Limited in 1953, there have been only two owners, James M. Cameron, the founder, and myself. During those 59 years of operation there have been three managers, the latest being my son, Michael.

1843   We faced competition right from the very first days, principally in those days from CFCY-AM in Charlottetown, which was the number one station in our county, Antigonish, Colchester and Cumberland counties. In fact, they had a studio in New Glasgow back in those days.

1844   Through our strong local service, over the years we became Pictou County's number one station. The stability and values that come from a family environment, where the owner is resident in the community, explain to a great extent our success.

1845   We have been courted by many large and powerful corporations to sell our holdings and live a life of ease. Some of these proposals were rather aggressive in nature, in the form of threats: Sell to us or face our application for a competing FM.

1846   I think that I can speak for Michael as well as myself in saying that we can't imagine doing anything else but living in radio and being a part of it. We are a family company -- and I stress that -- and we are not about to betray the confidence given to us by the people of Pictou County and the CRTC.

1847   Our appearance today is another step in broadening the services of radio in Pictou County by a Pictou County family.

1848   MR. MICHAEL FREEMAN: Today we are pleased to be able to present an exciting new radio option for the people of Pictou County.

1849   In October 2005, we appeared at a hearing in Charlottetown, and felt at that time that we were in a fight for our very existence.

1850   As the chart on your handout shows, retail sales had dropped in each of the previous two years, from $485 million in 2003 to $474.4 million in 2004, and $444 million in 2005.

1851   What was worse at that time was that FP Markets was projecting that they would only get back to $476 million by 2010.

1852   We were fighting a battle on at least three fronts, with Charlottetown stations drawing audiences, CJFX-FM in Antigonish drawing some audience and actively soliciting revenues in our market, and Astral Radio in Truro, with two FM stations, also drawing audience and revenues. And many of the Halifax stations have been available in our market for some time.

1853   Regional and national advertisers have long had the option of bypassing us in favour of spill from these stations.

1854   As you might imagine, our long-established, community-based AM station was struggling with all of this competition for a shrinking advertising pie. If you look at our annual return information for that period, you will see that we were in a loss situation in each of 2003, 2004 and 2005.

1855   We had been preparing an application for a switch to FM in the months leading up to the Commission's call for applications, but we were concerned about being able to finance the capital costs. The call accelerated our timeline.

1856   We applied for the conversion to FM and were competing with two companies who were already soliciting revenues in our market, and a third company bankrolled by the Irving broadcasting arm.

1857   The Commission understood our situation and approved our application, while denying the other applicants. We re-launched CKEC-AM as 94.1 East Coast FM in December 2007.

1858   Going FM was definitely the right move for us. Revenues increased in 2008 by 11.3 percent, another 6.3 percent in 2009, and then 10.4 percent in 2010. The recession had little impact on our radio station at that time. However, 2011 was an off-year for us. National business was off, as it was for most small-market stations, and we actually saw our revenues shrink by 7.7 percent.

1859   However, we are seeing a bounce-back in the first quarter of this fiscal year, with revenues up 10 percent over the first quarter of last year.

1860   This picture of increasing revenues should be tempered by a look at our profit margins. We did incur significant capital costs in going FM, and we have maintained all of our spending on local news and other programming over that period.

1861   We registered losses in 2007 and 2008, with modest profits in 2009 and 2010, and a bit of a loss in 2011. We are predicting profits in the current fiscal year.

1862   Pre-tax margins are below 5 percent at their strongest, barely enough to make the necessary improvements to our property, and no real cushion for capital improvements.

1863   The application today is based upon two motivations: first, to provide a new listening alternative to the men in our region, which, at the same time, will allow us to focus our existing station more clearly on the needs of our female listeners; and second, to allow us to access advertising revenues by expanding the amount of inventory, particularly in drive periods.

1864   I would now ask Ann MacGregor to explain the programming dilemma that we face.

1865   MS MacGREGOR: East Coast FM is an AC/Hot AC station, with a fairly broad format, trying to serve as many people as possible. We have been successful in reaching our local audience. Despite the availability of the Charlottetown, Antigonish and Truro FM stations, 70 percent of all persons 12-plus listen to us at least once a week.

1866   But you can't satisfy all of the people all of the time, as the BBM results from the fall of 2010 clearly indicate. As you might expect, the AC/Hot AC format works better with women than men. Our reach numbers are almost identical, but our share of hours tuned differs between men and women. While 52 percent of the hours tuned by women 18-plus go to East Coast FM, only 39.4 percent of the hours tuned by men 18-plus go to our station.

1867   Clearly, Pictou County men tune into us with great regularity. Over 70 percent of men 18-plus tune into us at least once a week. We believe from anecdotal sources -- listener calls, e-mail, et cetera -- that they tune into the morning show to get their local news, sports, surveillance information, and features.

1868   Then, when the programming moves into more music, they go off to their favourite format, and we believe that is, primarily, rock.

1869   Men in our area like the local news and community services available to them, but they also want their favourite music. A review of the most popular tuning by adult males across the country makes it clear that this is rock. Those men in Pictou County who want to listen to rock during the day do so without access to local information that they need. Anyone who has lived in our area knows that winter weather, and sometimes summer for that matter, is changeable and localized. These listeners do not get access to essential local information in non-drive times.

1870   MR. MICHAEL FREEMAN: We are facing another interesting phenomenon. As our application indicates, the area is showing signs of renewed economic life. We are not going to rival Alberta's economics; nonetheless, we have seen some turnaround from the doldrums of the previous years. We foresee slow and steady growth.

1871   We have established ourselves more strongly in the marketplace with our switch to FM, but we face a different problem, available inventory.

1872   Advertisers are interested in getting on the air, particularly in the morning and afternoon drive, when most people are listening. This allows us to charge premium rates, just like any other radio station.

1873   Competition in the market definitely keeps a cap on those premiums, but this also puts a limit on the spots that we can run, and many advertisers are not interested in running in non-prime time slots.

1874   We know that you can only run a certain number of spots per hour without doing a disservice to our listeners.

1875   So we have to turn away business in the morning and afternoon drive, and sell at a much lower rate in other time periods -- and in some cases not get the buy at all. The other time periods are even less desirable because of the phenomenon that Ann described of men leaving our station outside of high information periods.

1876   The important thing for us is that money is being left on the table, or going to out-of-market broadcasters.

1877   As you can see in your handout, FP Markets estimated retail sales in our market to be $495.6 million in 2009 and $547 million in 2010. Using the Radio Bureau's rule of thumb that advertising usually represents 3 percent of retail sales, and radio gets approximately 12 percent of that, there should have been about $1.8 million radio revenues available in the market in 2009, and about $2 million radio revenues available in 2010.

1878   We estimate that out-of-market stations take about $200,000 of this, and we know what we take out of the market. So, clearly, there is a sizeable amount of revenue left on the table.

1879   To put it differently, there is $200,000 to $300,000 available for a new station without putting our station in any peril. This is not enough to launch a full new station, unless it is a rebroadcast of a distant signal or run remotely from elsewhere.

1880   But we can put a station on the air at a reasonable cost by using the synergies already available to us. We do expect some transfer of revenues from the existing station to the new one, but we also expect to be able to attract those revenues that have been left on the table, and we hope to take some of the revenues back that go out of the market.

1881   All in all, we believe that Rock 97.9 can pick up more than is lost on the old one and also meet the additional costs. The net result for the two stations would be ongoing modest profits, as projected in our application -- a pre-tax profit over 7 percent, over seven years, which is better than we are doing at present, even if it trails industry averages.

1882   We can do this because of the synergies we will derive from our existing operations.

1883   We do not need additional management. I will continue to be the General Manager of the two stations, and I will also manage the sales team of the stations.

1884   We already own a transmitter site, which can easily accommodate a second FM transmitter, and we have ample space in our downtown New Glasgow building for additional studio and office space.

1885   The same engineer will serve both stations -- and right now that's me.

1886   Copy, traffic and back office functions will not require any additional staff, particularly with the ongoing developments in technology.

1887   The only increases in staff costs will be additional commissions paid based on the additional sales and increases in staff in the news and programming areas.

1888   We already have a strong news department, three people who provide excellent coverage throughout Pictou County. We can build on the strength of this group and add one additional person, who will be responsible for some reporting and preparing newscasts for Rock 97.9.

1889   Also, we will need some additional on-air staff. One of the new staff will be Rock 97.9's Program Director, as well as our afternoon drive host.

1890   In order to reach a broad male demographic, a target audience of men 18 to 54, we will focus on rock. Our Hot AC station, East Coast FM, already does a great job of covering contemporary pop, rock and urban hits, and will focus even more than before on super-serving female listeners.

1891   At the same time, Rock 97.9 will focus on classic rock, classic rock hits, and compatible contemporary harder rock, super-serving male listeners.

1892   To describe the sound of Rock 97.9, here is Ann MacGregor again.

1893   MS MacGREGOR: Rock 97.9 will offer up a sizzling combination of classic rockers, from The Who and The Rolling Stones to U2 and Neil Young -- and, of course, Led Zeppelin, and one of Pictou County's favourites, AC/DC.

1894   To this rock core will be added the rock hits of artists like the Bruces -- Springsteen, Cockburn, Hornsby -- and, of course, more contemporary rockers who fit the sound -- Florence + the Machine, The Foo Fighters, Mumford & Sons, and Staind.

1895   This is a great format for Canadian artists, starting in the sixties with acts like The Guess Who, Neil Young and BTO, The Band and Rush, through the explosion of acts like Chilliwack, Carole Pope and Rough Trade, and Lighthouse in the seventies.

1896   From the eighties, we will have Loverboy, Honeymoon Suite, Glass Tiger, Bryan Adams, the Parachute Club from Toronto, and, of course, Kingston's Tragically Hip, as well as blues rockers like Colin James, David Wilcox and Jeff Healey.

1897   The nineties saw a widening of sounds and new bands with innovative approaches. Halifax was the new Seattle for a while, led by Sloan.

1898   The last decade has seen the trend continue -- Sam Roberts, Joel Plaskett, Finger Eleven, Simple Plan, and love them or not, Nickelback.

1899   Contemporary East Coast rockers like The Trews, Slowcoaster and Broken Ohms, as well as Pictou County artists like The Stanfields and Alert The Medic will find a more appropriate home on Rock 97.9, which will allow us to play more of their music.

1900   We have a record in New Glasgow of creating buzz for local and regional acts, and for supporting Canadian content. In fact, the East Coast Music Awards recognized 94.1 East Coast FM as the Small Market Station of the Year in both 2007 and 2009.

1901   We have no doubt that we can meet our commitment of 40 percent Canadian content for the broadcast week, and we would be pleased to accept this as a condition of licence.

1902   We have committed that a minimum of 2 percent of all music we play will come from emerging Canadian artists. We will do that during our regular programming, by having a new artist feature in each shift; that is, morning drive, mid-days, afternoon drive, and evenings.

1903   We will also have a weekly East Coast rock show, with a strong emphasis on local and regional emerging artists.

1904   Finally, our weekly countdown show will always feature at least one new emerging artist.

1905   MS MacDONALD: At East Coast FM, we pride ourselves on the excellence of our coverage of local news, information and community events. This excellence is the result of our commitment to our local community in a wide variety of ways.

1906   While I am sure that many of the big group stations have managers in local communities that are devoted to local service, there is nothing like having the owners live in the community, involved in service clubs, broadcast a program on the station, meet local listeners, community leaders, politicians, social service organizations, and cultural organizations, to focus the attention on the local community.

1907   Our dedication to community extends to our staff, as well. Ann MacGregor has been recognized on many occasions for her services as a tourism ambassador for our region, for her work with Big Brothers Big Sisters, and with women's organizations.

1908   East Coast FM was the largest fundraiser in the province for this year's Relay for Life, and we combined our efforts to raise money with exposure for local artists in a 12-hour radio marathon.

1909   If you ask local people, they will tell you that CKEC-FM is the local station in every respect.

1910   Having a second station means that we will continue our great tradition of news and community programming. During drive times we will run separate newscasts on the two stations. While many of the stories will be the same, the focus will be somewhat different.

1911   Outside of peak times we can stagger the newscasts, so that while East Coast FM will be on the hour, the rock station's news will be on the half-hour.

1912   News fans will have lots of opportunity to stay on top of the news. We propose to provide 10 hours of news per week, with 7 hours being pure news. To this we will add many features, with a total spoken word commitment of 22.7 hours per week.

1913   MR. MICHAEL FREEMAN: My father and I know only too well what it's like to run a radio station for your friends and neighbours. He has been doing it for 61 years, and I have been active in our station since I was a teenager. We don't need BBM or audience surveys to know how we are doing -- we hear the good, we hear the bad, and we hear the ugly, when we are at the grocery store, when I am playing bass in one of the bands I work with in my downtime, when we walk down the street, or go to the mall.

1914   There is accountability to our actions that shows up in two ways: the comments of our friends, clients, family and acquaintances, and in our sales. This can be scary at times, since not everyone has the same tastes or the same take on events.

1915   Over the past few years we have been invited to lunch by most of the major broadcasters, wanting to write us a cheque to assure our financial futures. But we like what we do, and I can't imagine doing anything else.

1916   Our focus is very manageable. We don't have to worry about what the bottom line is looking like in Alberta, Ontario, Quebec, New Brunswick, or even elsewhere in Nova Scotia. Our interest in radio begins and ends in Pictou County.

1917   MR. DOUGLAS FREEMAN: Madam Chair, this application is not about large profits, and if I may diverge here for a moment, I will explain that using one example.

1918   Back in 1992 we had a terrible mine disaster at Westray, killing 26 of our local young men. It was a devastating shock to the county.

1919   We took that into account by cancelling all commercial activity on CKEC for over a week, and we adjusted our musical programming to complete instrumental music suitable for such a time.

1920   We are not always thinking of profit, we are thinking about Pictou County, our families there and the people we serve. It is about diversifying our operations so that we can better serve.

1921   We propose to provide a new and exciting rock radio service. Rock 97.9 will target the rock fans of Pictou County. This will allow us to provide a softer contemporary music service on East Coast FM, super-serving the female demographic in our area.

1922   We will build on our existing strengths: a state of the art technical plant that will ensure a greater signal, which will cover the 1,400 square miles that make up our Pictou County market; a standard of news and information excellence; a strong community involvement; and a commitment to local and regional music.

1923   We would ask you to consider and recognize our long-established record of high quality service by allowing us to offer our community a new radio option.

1924   Thank you. We would be pleased now to reply to your questions.

1925   THE CHAIRPERSON: Thank you, Mr. Freeman.

1926   Commissioner Poirier is going to do the initial questioning.

1927   COMMISSIONER POIRIER: Good morning. Thank you for the wonderful presentation, and I say hello to all of your listeners down in New Glasgow.

1928   I have a few subjects that I want to bring to the table. We will start with the market impact and financial projections.

1929   I am sure that Madam Chair and Mr. Denton will continue to ask questions on these matters.

1930   When we read the decision that was written in 2006 -- and I know that the hearing was in 2005 -- when you converted CKEC AM to FM, you argued that the Pictou market could not support two licences. What has changed in the Pictou market since then?

1931   MR. MICHAEL FREEMAN: Several things have changed in the market. Retail sales are starting to come back.

1932   As you can see in the handouts --

1933   COMMISSIONER POIRIER: Yes, if you could go over --

1934   MR. MICHAEL FREEMAN: Right. In 2005, we had been seeing in the two previous years, including 2005, that retail sales had decreased by $41 million over those three years.

1935   In 2005, at that time, the Financial Post was only predicting five years later that retail sales would be $3 million more than they were in 2005.

1936   So the picture in 2005 for us -- that's the way it was looking.

1937   In 2007, obviously, retail sales came up. You can see on the graph that retail sales are starting to slowly come back, but in 2005 the predictions, which were five years later -- you know, retail sales were only going to be $3 million more than they were at that time, when, in fact, the projections from 2005 to 2011 -- retail sales have increased $110 million.

1938   So that's quite a change from what we were seeing in 2005, when they thought it was only going to increase by $4 million.

1939   COMMISSIONER POIRIER: The long term and the medium term economic outlook for the market is what in Pictou?

1940   MR. MICHAEL FREEMAN: We are seeing several things that are coming to our area. We have a wellness centre that is under construction right now. It is a significant, $40 million investment in our community.

1941   Our hospital is doing a renovation and expansion.

1942   Sobeys head office just built a new $7 million head office building, so that ensures that they are staying in our community, which was kind of questionable for a while, because they were in need of a new head office, and it is no secret that the CEO is interested in Ontario.

1943   But the Sobeys are a local family, and they decided to stay in Pictou County. We are very pleased with that.

1944   There is a new retail area that is opening up along the highway. It's called the Albion Park Business Development. There is a new hotel there. One of the large building suppliers, locally, built a brand new $10 million store there.

1945   Another building supplier is relocating their store to that area.

1946   So we are seeing some economic growth, more than we have seen in the 20 years previous to this.

1947   We have a new minimum security jail that is coming to the area.

1948   The steel plant was closed when we flipped in Trenton. It was actually the oldest steel plant in the country. That has been taken over by DSME - Daewoo. They build wind towers.

1949   And for some of the people who drove to New Brunswick, when you drove through the Tantramar Marsh, you actually saw part of that construction underway.

1950   That's 100 jobs.

1951   We are getting some employment back in the area. We still want more than we are getting, but there is a trend that definitely shows that things are starting to turn around.

1952   COMMISSIONER POIRIER: That explains why the first year you can make a profit from the new station?

1953   MR. MICHAEL FREEMAN: Yes. And when we looked at our expenses when we did this, we didn't take the incremental cost of the synergies into account on the new FM station. In the financial projections that we have given you, basically the existing station is carrying the expenses, as they would be going on now, and the expenses and profit margins that are shown on the second FM station would reflect just the cost directly related with putting that new operation into place.

1954   COMMISSIONER POIRIER: Okay. Your projections do or don't include the synergies?

1955   MR. MICHAEL FREEMAN: They do, but I think --

1956   COMMISSIONER POIRIER: They do.

1957   MR. MICHAEL FREEMAN: Yes, they do, but they are being carried by one station, as opposed to trying to split them out between the two.

1958   COMMISSIONER POIRIER: Okay. That helps.

1959   If you are profitable the first year, doesn't that mean that there is room for another radio station that would be competitive with you?

1960   MR. MICHAEL FREEMAN: When we look at the money that is available in the market, and that is really what has guided us, we see that there is about $2 million available in the market. We know what we are taking out now. We work very hard in the market. We have good salespeople. So we don't feel that sales-wise, on our part, the market is being underserved.

1961   There is money going out of the market to other radio stations. We have two companies selling three radio stations in our market besides us, every day. So there is money leaving the market.

1962   COMMISSIONER POIRIER: Which ones?

1963   MR. MICHAEL FREEMAN: CJFX-FM in Antigonish, to the east of us. It's an adjacent market. It is selling in our market every day.

1964   And Astral, to the west of us, an adjacent market, is selling two FM radio stations in our market every day.

1965   So, in our market, where we are one station, there are three other radio stations being sold in our market with us.

1966   MS MacDONALD: If I may, Madam Commissioner, as we said in our opening remarks, based on the data that we have from the Financial Post and the actual figures that we see going through our own station, with the money that is there, to build another station to repatriate that money would not be feasible.

1967   We can do it because we have the tower, we have the facilities, a home base where we can have our Rock 97.9 studios.

1968   So, really, the money that is on the table would only serve a station that is already there, with the capability of sharing the synergies and the physical assets that are already available through CKEC-FM.

1969   COMMISSIONER POIRIER: Would you repatriate mostly national advertising revenues, or local?

1970   MR. MICHAEL FREEMAN: Both. We would be after both for sure. Definitely, yes.

1971   We would probably end up repatriating more local than national, as we don't have the influence nationally on sales as we do locally.

1972   COMMISSIONER POIRIER: You referenced, I think, $200,000 or $300,000 as possible revenues.

1973   MR. MICHAEL FREEMAN: Right.

1974   COMMISSIONER POIRIER: Is that enough to guarantee the success of the new station?

1975   MR. MICHAEL FREEMAN: With what is being taken out of the market and what is left in the market, yes, we do feel that there is enough for us to carry forward.

1976   We don't feel it is enough for a new entrant, a standalone new entrant, but we feel that it is enough to carry forward with the synergies we have.

1977   MR. DOUGLAS FREEMAN: May I also add that if there was a new entrant, you are taking that small pie and making it worse for us and the new entrant, and that would certainly qualify lesser quality or things that we actually can do.

1978   COMMISSIONER POIRIER: Could it put at risk some other radio stations out of your market, because you are going to get some of their audience and their revenues?

1979   MR. MICHAEL FREEMAN: We don't actively seek revenues on the adjacent markets beside us, either way. There are some spill clients --

1980   COMMISSIONER POIRIER: But they are seeking some.

1981   MR. MICHAEL FREEMAN: They are with us, yes. We are in the middle, and they are on either side of us, so we have either side coming at us.

1982   To be quite honest, if we look at the BBM numbers, the listenership between the three markets is that Truro's two stations dominate Truro, CKEC dominates New Glasgow, and Antigonish and Port Hawkesbury have the Antigonish/Guysborough market. We don't have significant revenue coming from Truro or Antigonish.

1983   There are some clients that wish to reach people in New Glasgow, that may not have a business in New Glasgow, that is in Antigonish or Truro. So that is kind of the cross-over business that we see.

1984   Do we see a substantial -- or do we think there will be a substantial amount of revenue that would come from Truro or Antigonish? No, just because of the simple numbers.

1985   Our BBM numbers show that there is -- I don't know -- a 1.5 percent reach into Antigonish.

1986   The home station is the home station in their market. They are the dominant force. So if an advertiser looks at that, it's inefficient.

1987   There are some perceptions out there, maybe, at times that people get convinced one way or another, but we are not going to try to push a client to buy our business, buy our radio ads, if we don't feel that it's going to be effective. We are not just out selling spots, we are out dealing with businesses.

1988   When we approach a business for sales, the first question we ask is: What are you trying to accomplish? Is it a short-term goal? Is it a long-term goal? What other media are you involved with? Are you involved in print? Do you only do print? Do you only do radio?

1989   We talk about all of these things when we deal with our clients. We are not just out there hustling airtime, because in a small market in rural Nova Scotia, the only way that we will survive is through repeat business. So if we sell an advertiser a bill of goods that doesn't --

1990   COMMISSIONER POIRIER: They will remember.

1991   MR. MICHAEL FREEMAN: Right, they are not going to come back the second time.

1992   COMMISSIONER POIRIER: And you want to add...?

1993   MR. DOUGLAS FREEMAN: I just want to add that if it is 1.5 percent listenership in Antigonish to a Pictou County station, what kind of rate could we prorate back at 1.5 percent listeners and make it worthwhile for anybody?

1994   COMMISSIONER POIRIER: Okay. Talking to the engineer, then, why are you planning an effective radiated power of 100,000 watts? You don't need that power to cover the Pictou market.

1995   MR. MICHAEL FREEMAN: We believe that we do. Pictou County is 1,400 square miles. Miramichi is 70 square miles.

1996   COMMISSIONER POIRIER: Yes, but when we look at the area that you cover, it's much wider. You go to Charlottetown, you go a little bit to --

1997   MR. MICHAEL FREEMAN: Another phenomenon in Pictou County is that there are hills everywhere. We have Mount Thom, we have Greenhill, we have Satellite Mountain, we have Blue Mountain. There are hills everywhere.

1998   When we did the conversion from AM to FM, we actually looked at eight different sites in Pictou County, and regardless of where we went, we always had some kind of obstruction from a hill, because FM is line of sight.

1999   So we found the site that would give us the highest elevation, to be able to see over these other hills, to reach our market. And our market goes from River John to East River St. Mary's. It takes about an hour to drive from one corner of our community to the other corner of our community.

2000   It's 1,400 square miles, so to get a primary contour of half a millivolt -- or a 3 millivolt contour over our primary market, we really did need to have that signal.

2001   COMMISSIONER POIRIER: Will it mirror the power that you have for CKEC?

2002   MR. MICHAEL FREEMAN: CKEC is actually 80,000 watts and --

2003   COMMISSIONER POIRIER: This one is a little bit more powerful.

2004   MR. MICHAEL FREEMAN: It's 100, yes.

2005   And we did apply to Industry Canada to get as much as we could, because we have a large area to serve. Pictou County is 1,400 square miles, again. We don't want to just cover the central market as best we can, we want to cover the whole community as best we can.

2006   MR. DOUGLAS FREEMAN: The other point, too, to be made is that our central area, which is New Glasgow, essentially, itself, is down in a valley, and our tower is over here, and we have spots right in the town of New Glasgow which are kind of spotty at times.

2007   So by putting the new station on top of our present tower, and increasing it, we hope that we can get the spill over into the valley, which consists of New Glasgow --

2008   COMMISSIONER POIRIER: Did you get complaints about that?

2009   MR. DOUGLAS FREEMAN: Yes, we have had --

2010   MR. MICHAEL FREEMAN: A little bit.

2011   The biggest problem with this many hills is, you get what is called multi-pass signal reception, in that FM bounces around like light, like a flashlight on mirrors. So if you have a strong signal, but it is bouncing back and forth between these hills, it can sound like a more distant signal on your radio, although it's just four or five strong signals that are bouncing around in your radio.

2012   COMMISSIONER POIRIER: Okay. Let's move to local programming, and maybe synergies.

2013   You mentioned in your presentation today that you have two reasons to apply for a new FM radio station, and the first is to provide a new listening alternative.

2014   We want to check how new the alternative is going to be. Okay?

2015   MR. MICHAEL FREEMAN: Sure.

2016   COMMISSIONER POIRIER: Out of 126 hours of programming, I would love to know how much of the local programming will be produced by the station or exclusively for the station.

2017   MR. MICHAEL FREEMAN: I might ask Ann to comment on that, but --

2018   COMMISSIONER POIRIER: And I would love you to be as precise as you can be. How many hours are going to be local programming, and how much is going to be for local news, for PSA's, and will you have syndicated programming?

2019   MR. MICHAEL FREEMAN: We are only looking at one syndicated program, one hour per week right now, actually, and everything else would be done locally for the station, by the station, in-house.

2020   COMMISSIONER POIRIER: In-house?

2021   MR. MICHAEL FREEMAN: Yes.

2022   COMMISSIONER POIRIER: Not by CKEC?

2023   MR. MICHAEL FREEMAN: Well, by the synergies of the staff --

2024   No. We are going to have separate on-air staff. We are going to have three people on-air, which would include the Program Director. We are adding one person to the newsroom, and a part-time on-air person.

2025   COMMISSIONER POIRIER: So five staff specifically --

2026   MR. MICHAEL FREEMAN: Four and a half.

2027   COMMISSIONER POIRIER: Four and a half --

2028   MR. MICHAEL FREEMAN: Yes, specifically --

2029   COMMISSIONER POIRIER: Specifically for the new station.

2030   MR. MICHAEL FREEMAN: Yes.

2031   On-air operations only, yes.

2032   COMMISSIONER POIRIER: So I will repeat my question. How much of the produced local programming by the new station will be exclusively produced for that station?

2033   MR. MICHAEL FREEMAN: One hundred and twenty-five hours out of the one hundred and twenty-six hours per week.

2034   COMMISSIONER POIRIER: Would you be willing to make a commitment to this in the licence, if we give you the licence?

2035   MR. MICHAEL FREEMAN: Certainly.

2036   COMMISSIONER POIRIER: You would?

2037   MR. MICHAEL FREEMAN: Yes, definitely.

2038   COMMISSIONER POIRIER: Definitely.

2039   MR. MICHAEL FREEMAN: Yes.

2040   MR. DOUGLAS FREEMAN: It's going to happen anyway.

2041   COMMISSIONER POIRIER: Yes?

2042   MR. MICHAEL FREEMAN: Yes.

2043   COMMISSIONER POIRIER: Okay.

2044   What other synergies -- I know you went in the document to some of your synergies. You told us the antenna would be the same. The studios are going to be the same. Staff -- part of the staff is going to be the same.

2045   MR. MICHAEL FREEMAN: That's right.

2046   COMMISSIONER POIRIER: You will add new staff?

2047   MR. MICHAEL FREEMAN: Yes.

2048   COMMISSIONER POIRIER: A new salesperson, news reporter, but imagine I'm a listener in New Glasgow or in the Pictou County and I listen to your newscast --

2049   MR. MICHAEL FREEMAN: M'hmm.

2050   COMMISSIONER POIRIER:  -- at the same time for the two stations.

2051   MR. MICHAEL FREEMAN: Yes.

2052   COMMISSIONER POIRIER: How different will they be?

2053   MR. MICHAEL FREEMAN: Yes.

2054   Do you want to speak to that, Ann?

2055   MS MacGREGOR: Yes.

2056   Good morning.

2057   COMMISSIONER POIRIER: Good morning.

2058   MS MacGREGOR: Well, I would be staying, for instance, on 94.1 East Coast FM. I currently host the morning show and where we would be able to streamline that to a female audience. I mean news is news. If it's happening and it's local it's going to be on.

2059   But the thing is that some stories perhaps -- Lynn and I were chatting about one there this morning about a beer truck that was in an accident that fell over and beer was lost out of it.

2060   That would be something that would be more appropriate on the rock station. So it's sort of geared towards those listening to the rock station while something to do with day care or that type of story might be more prominently featured on the east coast FM station which is geared towards our female audience.

2061   So in the long run, though, we always -- local news is so important to us and news is news in a lot of ways. But there will be those differences to cater to the different listeners.

2062   COMMISSIONER POIRIER: Yeah. But we want to make sure that your newscast doesn't -- is not duplicating from -- your new radio station is not duplicating the newscast from the other. We want to have a real different newscast in the new FM.

2063   MR. MICHAEL FREEMAN: Sure, and that's what that position would be in the newsroom that they would be responsible for tailoring those newscasts for that station.

2064   COMMISSIONER POIRIER: Okay.

2065   MR. MICHAEL FREEMAN: Yes.

2066   COMMISSIONER POIRIER: So what percentage of the newscast would be different from one station to the other?

2067   MR. MICHAEL FREEMAN: Well, that's - I'm not --

2068   COMMISSIONER POIRIER: You can think about it and in your reply come back to us. But it's important to see how different it is going to be.

2069   MR. MICHAEL FREEMAN: Sure, okay.

2070   COMMISSIONER POIRIER: Okay? You can reply later on, on this.

2071   MR. MICHAEL FREEMAN: Sure, okay. Thank you.

Undertaking

2072   COMMISSIONER POIRIER: Okay. So we want to make sure that the newscast is different from one station to the other so what percentage you feel the newscast would be different from one another.

2073   MR. MICHAEL FREEMAN: I would say 75/25 really. I mean I think you know --

2074   COMMISSIONER POIRIER: Yes.

2075   MR. MICHAEL FREEMAN: You know like I say there are still going to be that local content. So I guess it's still giving that local content only worded differently, I guess, to tailor to the demographics of serving each station.

2076   COMMISSIONER POIRIER: M'hmm.

2077   MR. MICHAEL FREEMAN: You know, I don't want to sound like a broken record, but local news is local news. It's important to both stations but, yes, there definitely will be differences to that.

2078   COMMISSIONER POIRIER: So you said 75/25?

2079   MR. MICHAEL FREEMAN: 75/25, yeah.

2080   COMMISSIONER POIRIER: Okay, 75 new?

2081   MR. MICHAEL FREEMAN: Yes.

2082   COMMISSIONER POIRIER: And 25 similar?

2083   MR. MICHAEL FREEMAN: Yes.

2084   COMMISSIONER POIRIER: Or exactly the same?

2085   MR. MICHAEL FREEMAN: I wouldn't -- I don't feel comfortable in saying exactly the same.

2086   COMMISSIONER POIRIER: Oh, okay.

2087   MR. MICHAEL FREEMAN: You know, yeah.

2088   COMMISSIONER POIRIER: Okay.

2089   MR. MICHAEL FREEMAN: I mean there will be similarities but exactly the same, no.

2090   COMMISSIONER POIRIER: Okay.

2091   MR. MICHAEL FREEMAN: Yeah.

2092   COMMISSIONER POIRIER: Yes?

2093   MS MacDONALD: Just to follow up on the comments about the news you know, there will be a dedicated newsperson for 97.9 and they will be writing their own scripts. So, as you can appreciate, in a newsroom you have people working together.

2094   If somebody hears about a story they are going to share information but that person will be given the task to chase that down for 97.9 and write their script accordingly. And as Ann indicated earlier, some stories may be appropriate to 97.9 whilst others more so for 94.1.

2095   COMMISSIONER POIRIER: Okay, so I thank you. I'll let the Chair and the other Commissioner continue.

2096   MR. MICHAEL FREEMAN: Thank you.

2097   COMMISSIONER POIRIER: Thank you very much.

2098   MR. DOUGLAS FREEMAN: Thank you very much.

2099   THE CHAIRPERSON: Commissioner Denton?

2100   COMMISSIONER DENTON: I have no questions.

2101   THE CHAIRPERSON: I have a few, just to sort of follow up.

2102   And just picking up on the last item there, I think what you're saying is the topic -- and that's a question. I'm not telling you what you are saying.

2103   MR. MICHAEL FREEMAN: Oh, yeah, sure, sure. Thank you.

2104   THE CHAIRPERSON: The topic is the same because that's what has happened in the news.

2105   MR. MICHAEL FREEMAN: Right.

2106   THE CHAIRPERSON: But you'll have two different people writing the stories.

2107   MR. MICHAEL FREEMAN: Correct.

2108   THE CHAIRPERSON: So the verbatim won't be on both stations.

2109   MR. MICHAEL FREEMAN: That's right. That's correct.

2110   THE CHAIRPERSON: Okay. I just wanted to --

2111   MR. MICHAEL FREEMAN: Yeah.

2112   THE CHAIRPERSON: I noticed in the information that I was given -- I just didn't have time to flip through here where it originated from but I'm sure it's in what you had submitted -- that you had said that you would do a minimum of 100 hours of local programming.

2113   So today, now, you're increasing that to 125. Is that correct?

2114   MR. MICHAEL FREEMAN: Yes.

2115   THE CHAIRPERSON: Okay, fine.

2116   And what did you say about the syndicated hour again?

2117   MR. MICHAEL FREEMAN: It will be one hour a week, yeah, the syndicated show. It's a top Canada rock countdown.

2118   THE CHAIRPERSON: Oh, yes, it's a Canadian show.

2119   MR. MICHAEL FREEMAN: It is, yeah.

2120   THE CHAIRPERSON: Okay, thank you.

2121   So then as far as the 125, following up again on Commissioner Poirier's question, none of it will be identical to what's heard on the other station?

2122   MR. MICHAEL FREEMAN: No, and to be quite honest, I don't think our listeners would let us get away with that because we are very close to the community and, you know, we do have long-time listeners that tune in on a regular basis. So if we step sideways there is somebody there pretty quickly to tell us that we have.

2123   THE CHAIRPERSON: That kind of brings me to one of the other questions that I was wondering about, because I heard clearly how you said you got your response from your neighbours and friends and your sales. But did you conduct any formal market research at all?

2124   MR. MICHAEL FREEMAN: We did BBM until fall 2010 and that's what kind of guided us to this point.

2125   THE CHAIRPERSON: Oh, just based on where the audience was going.

2126   MR. MICHAEL FREEMAN: Right.

2127   THE CHAIRPERSON: Okay.

2128   MR. MICHAEL FREEMAN: Yeah.

2129   MS MacDONALD: And if I may, Madam Commissioner, I think as well when we made the change from AM to FM, Pictou County was listening and they were saying "Is this going to be different or what is going to be on air?"

2130   And I think we really stepped up to the plate and we are very different. The morning show alone that Ann has is a whole new creation for CKEC and the response to that, I think, speaks to the success and how we do listen to our community and they respond. You know we have clients that come on in the morning, water cooler portion, and they tell us that some of their business -- when they are on the water cooler their business quadruples.

2131   So if we can get that kind of response for clients we know we are doing our job.

2132   THE CHAIRPERSON: So when you took on that responsibility what exactly -- like what is special about your drive, morning drive show?

2133   MS MacGREGOR: Thank you, yes.

2134   Well, it was -- it had always been my dream to host a morning show and when I was given the opportunity I did not want to let them down.

2135   And what was really neat about it, when I was first in the position an opportunity came up to try out for Canadian Idol for the media portion bit. I can't sing at all but I'm very animated and I like to show off a little bit.

--- Laughter

2136   MS MacGREGOR: So I created a rap and my co-host and I went up to Halifax and auditioned and we got the whole community involved. If we had won it we would have got $1,000 for the SPCA, the charity of our choice.

2137   So we just -- we drove home. The vote for us and everything and the support and love from the community was unreal. And we won it.

2138   So only one of us could go and represent the station and so it was me. I went to Toronto for the Media Idol Finals. And I was up against big markets, Toronto and Calgary. It was crazy. I couldn't believe it.

2139   And then I won! I beat out all the big ones and they all could sing and everything and I just went up and did my rap and the whole community, they all got behind me. It was unbelievable. And since then that really sort of kicked off this real community involvement.

2140   Our community is the -- they are the stars, not us. They are a part of our every day. The names we drop in the run of a morning, oh, my, 50 minimum. And mentioning those names and giving them life and, you know everybody is more alike than we are different.

2141   THE CHAIRPERSON: M'hmm.

2142   MS MacGREGOR: And I think that people just want to be recognized. I really learned about community and how important local is doing it.

2143   Really, before I focused on a lot of things like you know, how things were doing in the entertainment world and everything. I love entertainment buzz and things. But I'll tell you the real stars are our community.

2144   THE CHAIRPERSON: So did you come from the community?

2145   MS MacGREGOR: Yeah. I'm from the rural area.

2146   THE CHAIRPERSON: Well, I would ask you to do the rap for us but I'm not sure the court reporter could keep up with it.

--- Laughter

2147   COMMISSIONER POIRIER: Could you send it to us?

2148   MS MacGREGOR: Well, it's funny because they only gave us like four or five different choices and one of them was Twinkle Twinkle Little Star. And that's what I did and I turned it into a rap. It just went out of --

2149   MR. MICHAEL FREEMAN: It took a life.

2150   MS MacGREGOR: It took a life of its own, yeah. I just couldn't believe how it happened.

2151   THE CHAIRPERSON: That's a wonderful story.

2152   MS MacGREGOR: Thank you.

2153   MR. MICHAEL FREEMAN: I might also add that winning that included a four-foot trophy which we beautifully have in our lobby and the distinction that the Canadian Media Idol was part of the Canadian Idol show. And actually Ann is the last person to win Canadian Media Idol because they haven't carried it on since, so thank you.

2154   THE CHAIRPERSON: We'll hope they start that show up again.

2155   Well, that's very interesting. So I'm assuming you're looking for a duplicate for your new station, maybe borrow --

2156   MR. MICHAEL FREEMAN: If I could clone Ann and her energy we would be winning the war.

2157   THE CHAIRPERSON: Yes, okay, that's good.

2158   So I'm surprised -- just my sort of gut feeling, no basis for it, but I'm surprised that in that market you wouldn't be interested in country. Is there -- I guess Astral has a country station?

2159   MR. MICHAEL FREEMAN: Yes, Astral has a country station beside us and there is a country station on the island. So there is some country.

2160   The feedback that we got from our community and the gut feeling from us and the feedback that we get is that people were looking for a rock station.

2161   We have an all request show every week for a couple of hours and AC/DC is on there every week. And it's not the same person that calls in every time.

--- Laughter

2162   MR. MICHAEL FREEMAN: I just want to qualify that.

2163   But, yeah, there is the interest there. And we listen to the community and we listen to that feedback and we know there is out-of-market tuning and there is out-of-market tuning for the male demographic to the rock station that's -- well, Astral they have a rock format but they call it today's best too, so I'm not sure.

2164   We are going to be more focused on classic rock than the other you know markets around us. So that's the feedback that we got from our community.

2165   MR. DOUGLAS FREEMAN: And Madam Commissioner, if I may add too, on this request show that we have every Friday for two hours or three hours, the music on that we discovered was completely different than a lot of the music that we played during the week.

2166   So this sort of led us to the conclusion, gosh, we should try and develop that. The perfect place for it would be on what we had back in the office called Radio Two.

2167   THE CHAIRPERSON: Okay, all right.

2168   I noticed the decision from 2005 I think was issued in March 2006.

2169   MR. MICHAEL FREEMAN: That's right, yeah.

2170   THE CHAIRPERSON: And you started your station, I think, in December of '07?

2171   MR. MICHAEL FREEMAN: That's correct.

2172   THE CHAIRPERSON: What would be your plans in this regard? When would you hope to have your new station if you were licenced?

2173   MR. MICHAEL FREEMAN: If we were licenced I would expect that it would take us probably six months to get everything together because we do have the tower now and the sites. So we're not starting from scratch.

2174   THE CHAIRPERSON: Yes.

2175   MR. MICHAEL FREEMAN: So it should come around a lot quicker.

2176   THE CHAIRPERSON: Yes, and I can certainly attest to the fact that it is around there.

2177   MR. MICHAEL FREEMAN: Yes.

2178   THE CHAIRPERSON: But I was wondering as well about the power. So that explains that.

2179   MR. MICHAEL FREEMAN: Sure.

2180   THE CHAIRPERSON: So your three millivolts contour then is all that -- is really what you're trying to accomplish there.

2181   MR. MICHAEL FREEMAN: It is.

2182   THE CHAIRPERSON: Not to get into any of the five but to just service that three millivolt contour.

2183   MR. MICHAEL FREEMAN: Well, that's really where our primary -- I don't have that contour right in front of me actually.

2184   THE CHAIRPERSON: I think I have a map here.

2185   MR. MICHAEL FREEMAN: No, that's all right. I did have our contour.

2186   Yeah, we really wanted to get as much of the three millivolt contour over the central part of our market as we could, but still we are very concerned about the other 1,400 you know square miles of the community that we serve. See because at the -- I guess it would be the northeastern corner of our community, they can very easily pick up the five radio stations coming from Prince Edward Island.

2187   So when we were AM and had to reduce our power at night that end of our own community really had not much involvement with us because at night our signal disappeared because we were AM and with the island stations literally just across the water.

2188   So, you know, part of the FM that has been good for us is that it has given us a more consistent stable signal in our own market 24 hours a day.

2189   THE CHAIRPERSON: So the three millivolt is this on the attachment?

2190   MR. MICHAEL FREEMAN: I don't think so.

2191   THE CHAIRPERSON: It's not marked on here?

2192   MR. MICHAEL FREEMAN: No, it's not.

2193   THE CHAIRPERSON: No.

2194   MR. MICHAEL FREEMAN: I think it may be in some of the other -- well, of course it's with the application but it may be in one of the other files we gave here.

2195   THE CHAIRPERSON: The challenge that I have in looking at what I have got here in the binder is that I can't really read Antigonish --

2196   MR. MICHAEL FREEMAN: Okay.

2197   THE CHAIRPERSON:  -- the word Antigonish and the word Truro. So maybe you could help me.

2198   MR. MICHAEL FREEMAN: I will.

2199   THE CHAIRPERSON: I take it they are not in your three millivolt contour. I just don't know quite where they are.

2200   THE CHAIRPERSON: Truro is here, Antigonish is there.

2201   THE CHAIRPERSON: Oh, Antigonish is way outside, is it?

2202   MR. MICHAEL FREEMAN: Yes, yes.

2203   THE CHAIRPERSON: So I see it now.

2204   MR. MICHAEL FREEMAN: Yeah.

2205   THE CHAIRPERSON: I couldn't see it written.

2206   MR. MICHAEL FREEMAN: Yeah.

2207   THE CHAIRPERSON: There it is there, Antigonish.

2208   MR. MICHAEL FREEMAN: Right, and this is Truro over here I do believe. Is that Truro? Yes, I do believe.

2209   THE CHAIRPERSON: Can you see it?

2210   Anyway it's far enough away it answers my question.

2211   MR. MICHAEL FREEMAN: Yes, there is Truro right there, yes.

2212   THE CHAIRPERSON: So they are outside. They are well outside your three millivolts. Thank you very much both of you.

--- Laughter

2213   THE CHAIRPERSON: Thank you. Okay, I appreciate that. Thank you.

2214   So I'm just going through here -- through that.

2215   MR. MICHAEL FREEMAN: If I could just kind of chime in there a little bit?

2216   THE CHAIRPERSON: M'hmm.

2217   MR. MICHAEL FREEMAN: Do we feel that we are going to have a negative effect to our adjacent markets? No; a big no. They are solid in their own markets just as we are solid in our own markets.

2218   And to be quite honest, you know, we are interested in serving our markets. That's where we have, you know, really based the heart and soul of the application, is our local market is going to support us, not the outside markets.

2219   MR. DOUGLAS FREEMAN: Yes, and I will just chime in on that too, Mike, and the effect that if we are doing a good and proper job in our own market we have no time for anything else.

2220   And being a radio man of many years I would apply that to our competition and their markets too. If they are doing their job they won't be so interested in outside markets claiming them as their home market.

2221   Thank you.

2222   THE CHAIRPERSON: Okay, thank you. I'm just going to look up -- I had asked an answer. I just wanted to read the answer I got to my question.

2223   Okay. So you indicated that both Atlantic broadcasters and Astral are selling in your market?

2224   MR. MICHAEL FREEMAN: Yes, regularly, yes.

2225   THE CHAIRPERSON: You know the rules around selling versus accepting ads, so you are not allowed to actually sell in somebody else's market?

2226   MR. MICHAEL FREEMAN: We don't.

2227   THE CHAIRPERSON: No, you don't. I'm not saying you do, but you are saying the others are.

2228   MR. MICHAEL FREEMAN: Because our clients come to us and they say they are in our markets soliciting revenue, yes, every day.

2229   THE CHAIRPERSON: Yeah.

2230   MR. MICHAEL FREEMAN: Astral has an employee that used to work for us that lives in our community that works for them in Truro that spends most of their time in our market.

2231   THE CHAIRPERSON: Okay. I guess the only comment I would have to that is that you know the process works that you can file complaints if you have a complaint.

2232   MR. MICHAEL FREEMAN: Okay. Thank you.

2233   THE CHAIRPERSON: I mean I'm not inviting you to do that. That's your choice.

2234   MR. MICHAEL FREEMAN: No, I appreciate that.

2235   THE CHAIRPERSON: But those are the rules and --

2236   MR. MICHAEL FREEMAN: I do appreciate that. Thank you.

2237   THE CHAIRPERSON:  -- if that's the case then that's up to you.

2238   THE CHAIRPERSON: There is a difference, Madam Chair, if they solicited advertising.

2239   MR. MICHAEL FREEMAN: Yes.

2240   MR. DOUGLAS FREEMAN: Yes.

2241   COMMISSIONER POIRIER: Rather than okaying -- being asked.

2242   MR. MICHAEL FREEMAN: Right, yes, I do understand.

2243   COMMISSIONER POIRIER: Okay, do you understand the difference.

2244   MR. MICHAEL FREEMAN: Yes, I do. Yes, thank you for clarifying.

2245   THE CHAIRPERSON: That was the point I was making.

2246   MR. MICHAEL FREEMAN: Yes, thank you.

2247   THE CHAIRPERSON: So just I think that's all the questions I have unless somebody else has a question. So at this point -- let's get on the right page in the process here.

2248   I think, Madam Roy, we are going to take a break first.

2249   THE SECRETARY: Yes.

2250   THE CHAIRPERSON: Okay. So we are going to take a 10-minute break so we will be back, say, at 10:45?

2251   THE SECRETARY: 9:40 --

2252   THE CHAIRPERSON: Yeah, okay, good. Eastern time on my computer and I'm not adjusting --

2253   THE SECRETARY:  -- and we will be back with the interveners. Thank you.

2254   THE CHAIRPERSON: Okay, 9:45, thank you.

--- Upon recessing at 0929

--- Upon resuming at 0946

2255   THE SECRETARY: We will now proceed to Phase II in which interveners appear in the order set out in the Agenda to present their intervention.

2256   We will now hear the intervention of Atlantic Broadcaster Limited. Please introduce yourself and your colleagues, and you have 10 minutes for your presentation. Thanks.

INTERVENTION

2257   MR. FARRELL: Good morning, Madam Chair, Commissioners and, certainly, good morning to our listeners back in Antigonish this morning as well.

2258   My name is Ken Farrell. I am General Manager of CJFX-FM, Atlantic Broadcasters Radio, Antigonish, Nova Scotia. I would like to let you know that I took the position in June of '09.

2259   With me this morning is Barry MacKinnon, a gentleman who has 32 years of radio broadcast experience and has been our program director for the past seven years.

2260   A little bit about Atlantic Broadcasters: Atlantic Broadcasters Limited has been serving the listeners of eastern Nova Scotia including Cape Breton Island since 1943. Initially, on 580 kilohertz on AM and in recent years an FM service on 98.9 megahertz and 102.5.

2261   The radio station has its main broadcast transmitter near Antigonish, Nova Scotia providing service on 98.9 megahertz to five eastern counties; Pictou, Antigonish, Guysborough, Richmond and Southern Inverness County, and two broadcast repeaters on 102.5 megahertz providing service in northern Inverness County.

2262   Atlantic Broadcasters Limited has a co-operative ownership structure and is committed to serve its listeners and stakeholders throughout this geographically large, but sparsely populated region. CJFX-FM has been a strong independent voice in the broadcasting community and is committed to reinforcing that position into the future.

2263   Barry...?

2264   MR. MacKINNON: Good morning, Madam Chair and Commissioners and thank you for giving us the opportunity to appear before you today.

2265   Hector Broadcasting is making application for a second licence in Pictou County. One of their main reasons stated in their application is that after their information packages audience share drops.

2266   As a Program Director I feel what has to be considered is what is being offered and/or not offered in current programming by Hector.

2267   There is a reason why people are tuning out. If our radio station was faced with such a problem we would look at necessary programming changes. Content is evidently an issue and granting a second licence to Hector does not solve the current problem.

2268   CJFX's music format is best described in our annual return as AC, adult contemporary, with a positioning statement of "today's best music and Classics, too". This branding has been in effect since 2004. Our daily playlist consists of a mix of contemporary music, which includes Pop and Rock, Classic Rock and Classic Hits. For example, Three Doors Down, Daughtry, Hot Chelle Rae, Kelly Clarkson, Aerosmith and The Rolling Stones.

2269   We realize this format is very appealing to both our listeners and advertisers. In fact, over the past several years during long holiday weekends, for example Labour Day, we feature a favourites weekend where we play almost exclusively Classics and Classic Rock, with a small contemporary component.

2270   Hector's proposed format is basically a mirror of CJFX-FM's existing format. We offer contemporary Rock, Classics and Classic Rock.

2271   In the Hector Programming Clock Sample for a new FM the daily features are basically a copy of what is being offered by CKEC, same names, same relative clock positioning. Nothing new is being offered.

2272   CJFX has traditionally served and continues to serve Pictou County from Marshy Hope on the border of Antigonish County to River John on the Sunrise Trail.

2273   We know that central Pictou County residents are also finding CJFX from the response we receive during contesting, as well as requests for birthday greetings, cancellations and community events.

2274   Our community events called "X Files" are populated with numerous events from Pictou County that we receive from non-profit organizations like New Glasgow Library, Pictou Library, gospel groups and others.

2275   With seasonal weather the Chignecto-Central School Board contacts us to air school cancellations and late buses.

2276   Our news department has consistent content reflecting Pictou County.

2277   Pictou County retailers mainly purchase CJFX commercial time to reach our Antigonish/Guysborough audience, however we know that CJFX also plays a role in the day-to-day life of Pictou County. We receive invitations to the annual New Glasgow and Stellarton Christmas Parades, as well as sponsoring the New Glasgow Jubilee, both summer and winter sessions, and the Sobeys Slam curling event. Our summer events cruiser is invited to many Pictou County events throughout the season.

2278   Our specialty programs, The Ceilidh, Sounds Atlantic, Farmers Forum, Inside Sports regularly feature Pictou County personalities, issues and events.

2279   For these reasons we can comfortably say that the Pictou County audience enjoys our music programming surveillance and overall programming.

2280   There is a tune out of CKEC, as stated in Hector's application. There is a programming problem and one that we feel cannot be solved with a second licence.

2281   MR. FARRELL: CJFX-FM has seen an increase in advertising revenues from Pictou County in the last two years. There has also been an increase in requests from communities within Pictou County for CJFX-FM's presence at community events as well as requests for Public Service Announcements for activities in Pictou County. This indicates to us that our information and programming is favourable, not only to the listeners but to the advertisers from Pictou County.

2282   Advertising revenue from Pictou County is very important to CJFX-FM considering the downturn in National Time Sales for small market radio stations such as CJFX-FM. Another station and an existing station offering combo rates could fragment advertising budgets and seriously affect CJFX-FM's revenue.

2283   It is obvious that in Hector's efforts to repatriate listeners from what they call out-of-market stations -- CJFX-FM being one of them -- they will put in a signal of approximately 1mV/m into Antigonish and, in the process, potentially take listenership away from CJFX-FM. This in turn means that CJFX-FM will lose two ways; less revenue from Pictou County, New Glasgow in particular, as well as less revenue from our core market due to some erosion of our own audience that could take place in Antigonish.

2284   It must be noted the decline in national sales, coupled with the increase in copyright tariffs, has already forced CJFX-FM to downside staff by one full-time position and one part-time position.

2285   Commissioners, I have to emphasize the future fragmentation of local advertising dollars will have a direct effect on the services we provide to our community.

2286   For example, we have a repeater in an area that receives no other English-language radio. This area has no retail base to provide advertising revenues, but the site does have direct cost.

2287   In Hector's application it is clear that one of the main reasons for seeking a second licence is because their traditional audience is leaving following morning drive information and tuning to other radio stations. If Hector is losing audience share to other stations, is this a rationale for application for a second licence or should it not consider a programming change to its current offering?

2288   We request the Commission not to consider approval of this second licence for Hector Broadcasting.

2289   Thank you.

2290   THE CHAIRPERSON: Thank you very much for your comments, Mr. Farrell and Mr. MacKinnnon.

2291   I will ask Commissioner Denton to lead the questioning.

2292   COMMISSIONER DENTON: So basically I hear you saying that your competition is emulating your good example and moving to a Rock format.

2293   MR. FARRELL: We find our format is very variable, yes.

2294   COMMISSIONER DENTON: Yes. And imitation is the highest form of flattery and your rivals a County over are going to copy your example, if we allow them.

2295   MR. FARRELL: Well, it appears that way from the application. What we have realized with our specialty weekends and that sort of thing that, yes, our programming at this point is favourable, it's not that it's not something we are not working on all the time.

2296   COMMISSIONER DENTON: We have these maps which show the 3 mV contour which basically defines good reception area and I note that Hector's proposed 3 mV contour, looking on the coast here, passes by about Lismore, Bailey Brook, Barney's River, so obviously from the point of view of physics their signal will not strongly -- the 3 mV signal won't penetrate into as far as Antigonish. Their 5 mV contour will go a bit beyond.

2297   Do you have any comments on the signal strength question?

2298   MR. FARRELL: Right. That's just what our engineer tells us, that that's how much we would be impacted with the one.

2299   COMMISSIONER DENTON: Yes. Right.

2300   MR. FARRELL: And Route 245, which we consider the shore road between Antigonish and New Glasgow, Pictou County where it comes out to Sutherland River, we have a huge coverage area in through there.

2301   COMMISSIONER DENTON: Right. How far does your coverage area go, because I'm only seeing theirs. The map I have before me is only their coverage area, how far does your go into their market?

2302   MR. FARRELL: Well, you can pick us up on the other side of Truro and then it's not that favourable in the Truro area, and then throughout Pictou County we have what I would say is a good signal.

2303   COMMISSIONER DENTON: Okay. So basically then your rivals are proposing to copy a successful Rock format, presumably dedicated to or more directed to a male listenership to complement their predominantly female listenership in Adult Contemporary.

2304   So what I'm hearing you say is, this is competition and we don't need it, thank you very much.

2305   MR. FARRELL: Pretty much, yes. And the programming is very similar.

2306   COMMISSIONER DENTON: Yes. Yes.

2307   I'm afraid I don't have any other further questions for you, gentlemen. I think this is pretty much a straight case of whether we approve or don't approve more competition in the area and that would depend on the financial situation of Pictou County and other considerations that might go through other Commissioner's minds.

2308   You were telling me a story that advertising is picking up a bit in your region of Nova Scotia.

2309   MR. FARRELL: Yes. With the exception of national time sales, although the first quarter has been more favourable than the first quarter last year on the national time sales.

2310   COMMISSIONER DENTON: What are national time sales doing?

2311   MR. FARRELL: How have they increased?

2312   COMMISSIONER DENTON: Yes.

2313   MR. FARRELL: Well, we were off by approximately 25 percent last year.

2314   COMMISSIONER DENTON: Yes. And it's recovering a bit.

2315   MR. FARRELL: We are gaining back 10-11 to this point.

2316   COMMISSIONER DENTON: Okay.

2317   MR. FARRELL: At this point. Our local time sales have seen a modest increase in the last two years.

2318   COMMISSIONER DENTON: So are things picking up slightly in the area where you -- can we infer from this that economic conditions are improving slightly, but not greatly?

2319   MR. FARRELL: Well, from the Antigonish area we are anchored nicely by a community hospital and StFX University, but we do encompass the Strait Area, Guysborough County, which we consider part of our listening area, and eastern Antigonish County.

2320   COMMISSIONER DENTON: Yes.

2321   MR. FARRELL: Of course we have the issues in the Strait Area with the pulp mill and the out-migration in Guysborough County and in Antigonish County for that matter.

2322   COMMISSIONER DENTON: Yes, you have lost the 1 percent of your population I think since about 2000.

2323   MR. FARRELL: Yes.

2324   COMMISSIONER DENTON: Yes. Okay.

2325   Gentlemen, I have no particular wisdom to offer you at this stage. I hear you and we are going to have to think about this, that's all I can cay.

2326   MR. FARRELL: Okay. We appreciate you giving us some consideration.

2327   THE CHAIRPERSON: Commissioner Poirier has some questions.

2328   COMMISSIONER POIRIER: Yes.

2329   Today, Mr. MacKinnon, you mentioned in your presentation that CJFX also plays a role in the day-to-day lives of Pictou County, so my question is why approving a new licence to Hector would prevent you from continuing doing so?

2330   MR. MacKINNON: Well, we do play a role in the day-to-day life of Pictou County. We will always be there. I don't think it would change our position of where we are with standing in Pictou County with the people that do come searching us out because they like what they hear, so there probably would be no change in that.

2331   Again, we are looking at what they are offering is very close to what we are doing and recommending that maybe they look at their current programming and not look at a second outlet to serve that audience.

2332   COMMISSIONER POIRIER: Yes.

2333   MR. MacKINNON: It's something that we have done with our programming about 7 years ago.

2334   COMMISSIONER POIRIER: You have two different BBM markets, don't you?

2335   MR. MacKINNON: Yes, there are different sales.

2336   COMMISSIONER POIRIER: You and Hector?

2337   MR. MacKINNON: Yes. Different sales, correct, yes

2338   COMMISSIONER POIRIER: Okay. There are two markets.

2339   MR. MacKINNON: Yes.

2340   COMMISSIONER POIRIER: Okay.

2341   And we don't regulate the format; you know that.

2342   MR. MacKINNON: Yes. M'hmm.

2343   COMMISSIONER POIRIER: Okay. So I heard Mr. Freeman -- I don't know if it's the father or the son, they look alike.

--- Laughter

2344   COMMISSIONER POIRIER: They said, well, then you will have to do a better job to keep your audience. Don't you think it's the case?

2345   MR. MacKINNON: There is a case for that, yes.

2346   COMMISSIONER POIRIER: Okay.

2347   MR. MacKINNON: Yes.

2348   COMMISSIONER POIRIER: Okay.

2349   MR. MacKINNON: Yes.

2350   COMMISSIONER POIRIER: That's all.

2351   COMMISSIONER DENTON: What's the size of your advertising market? Are you a $2 million market, a $1 million market? What are you?

2352   MR. FARRELL: The last fiscal $1.9.

2353   COMMISSIONER DENTON: One-point-nine.

2354   MR. FARRELL: Yes.

2355   COMMISSIONER DENTON: Okay.

2356   MR. FARRELL: And that keeping in mind that's national time sales off by 25 to 27 percent, which I am hearing more and more in the last couple of days that that's the way it has been in markets our size, unfortunately, and out of our control.

2357   COMMISSIONER DENTON: Yes, I gather that this is entirely systemic across --

2358   MR. FARRELL: M'hmm.

2359   COMMISSIONER DENTON:  -- with the smaller markets get shorted when national -- when national advertising drops local markets get shorted on national advertising.

2360   COMMISSIONER DENTON: Thank you.

2361   THE CHAIRPERSON: I don't think I have too many more questions to ask.

2362   So the $1.9 million already reflects a drop in national sales, do you think that they will drop much more than that?

2363   MR. FARRELL: As I mentioned earlier, they are back a bit in the first quarter this year.

2364   THE CHAIRPERSON: They are coming back.

2365   MR. FARRELL: Right?

2366   THE CHAIRPERSON: So you are a $1.9 million market.

2367   MR. FARRELL: Yes.

2368   THE CHAIRPERSON: And your 3 mV contour doesn't go into the area, obviously, that the applicant is proposing to serve; correct?

2369   MR. FARRELL: Our signal?

2370   THE CHAIRPERSON: Yes, your 3 mV.

2371   MR. FARRELL: Our signal goes into Pictou County, yes.

2372   THE CHAIRPERSON: But the 5 mV, not the 3 mV.

2373   MR. FARRELL: No, sorry.

2374   THE CHAIRPERSON: Right. Not the 3 mV.

2375   Because you mentioned that you also served the Strait Area in Port Hawkesbury, does your 3 mV include that as well?

2376   MR. FARRELL: Yes. We go into southern Inverness County, then we go to 102.5 in the Margaree and Gillisdale, which is a repeater, and then we also have a repeater at the very tip of Cape Breton Island servicing Pleasant Bay, a 50 watt on 102.5.

2377   THE CHAIRPERSON: Okay.

2378   MR. FARRELL: That all occurred when the company flipped from AM to FM and that's a big area with not a lot of radio coverage.

2379   THE CHAIRPERSON: Okay. I see you had applied, or Atlantic Broadcasters had applied, in 2005 for a licence for New Glasgow and I notice it's interesting with the statistics -- I don't know if you saw the bar chart that was presented to us --

2380   MR. FARRELL: No.

2381   THE CHAIRPERSON:  -- but what the applicant is showing is how much the volume in revenue has increased in that market -- retail sales, sorry, have increased since 2003.

2382   So when you applied in 2005 it was actually at a low point and since then it's gone up quite a bit.

2383   Did you ever consider reapplying for the licence? Not that you have, but I'm just kind of curious.

2384   MR. FARRELL: Not since I have come onboard.

2385   THE CHAIRPERSON: No.

2386   MR. FARRELL: That was only in '09 that I came along. That was in Dave McLean's time as General Manager.

2387   THE CHAIRPERSON: Okay. As Commissioner Poirier noted, we don't regulate the format.

2388   MR. FARRELL: M'hmm.

2389   THE CHAIRPERSON: All right.

2390   MR. FARRELL: We as a management are responsible to our shareholders and that would be part of our reason for being here today to make a presentation, because we have been around since '43 on a shareholder's basis. And we do have shareholders in Pictou County as well I might add.

2391   THE CHAIRPERSON: Okay. Thank you very much. I have no further questions.

2392   Legal, do you have any questions?

2393   MR. BOWLES: No, thanks.

2394   THE CHAIRPERSON: Okay. Okay then, thank you very much.

2395   MR. FARRELL: Thank you.

2396   MR. MacKINNON: Thank you.

2397   THE SECRETARY: Thank you.

2398   We will now proceed to Phase III in which the applicant can reply to all interventions submitted for its item.

2399   I would ask Hector Broadcasting to come to the presentation table.

--- Pause

2400   THE SECRETARY: When you are ready you have 10 minutes for your reply.

2401   Thank you.

REPLY

2402   MR. DOUGLAS FREEMAN: Hello once again, Madam Chair, Members of the Commission and Commission Staff. As you know, I am Doug Freeman and I'm here to reply to the written and oral interventions to our application.

2403   I am once more accompanied by my son Michael, our Office Manager, Lynn MacDonald and Program Director Ann MacGregor.

2404   Quite frankly, we are baffled by the intervention by CJFX and don't understand its motivation.

2405   First of all, we know that we will have no impact on their market, as you have pointed out in the mV.

2406   We were supposed to have slides, incidentally, at this section, but --

2407   MR. MICHAEL FREEMAN: If I could, sorry, just interrupt, we did give a copy of the replies to inventions slide show presentation to your stenographer, so the slides that we reference here will be in there.

2408   THE SECRETARY: We will take a 5-minute break. I don't have copies of that.

2409   MR. MICHAEL FREEMAN: Okay. Thank you.

--- Upon recessing at 1007

--- Upon resuming at 1013

2410   THE SECRETARY: You may continue.

2411   MR. DOUGLAS FREEMAN: All right. Perhaps we will pick up at what we referred to as the first slide.

2412   It shows that both the theoretical and realistic contours of our proposed station -- you can see that the theoretical 0.5 mV just barely touches the Town of Antigonish and the realistic one -- that's the yellow -- does not.

2413   And if you look at the 3 mV m contour, both the theoretical and realistic contours -- the realistic is in red -- that also falls short of the Antigonish market. Moreover, nowhere in their written intervention -- nowhere do they indicate any concern about new stations taking away revenue from them in Antigonish.

2414   The contours of Rock 97.9 would be virtually identical to those of CKEC-FM. The 2010 BBM reach figures indicate that we receive about 1.6 percent -- 1.6 percent of all hours tuned 12-plus in their market and reach less than 5 percent of all people 12-plus.

2415   We concentrate on our home market of Pictou County. In fact, if they have anything to worry about they should be concerned by CIGO-FM in Port Hawkesbury, which drew 27 percent of all hours tuned 12-plus in the Fall 2010 BBM report in their market.

2416   We do not seek out revenues in Antigonish and the only ones we receive are those occasional advertisers who wish to draw folks from Pictou County to their businesses. They are relatively few. A good example would be the KIA dealer in Antigonish. We don't have a KIA dealer in New Glasgow. When they have a promotion they sometimes place orders with us to draw residents to their market. We don't actively go after any accounts in Antigonish County.

2417   Second, we don't see anywhere in their intervention that they intend to provide a second FM service in our home market. Nowhere in their intervention does it indicate that they have taken any steps towards submitting an application, yet it has been over five years since we first appeared before you in Charlottetown. Surely in that intervening period if they had wanted to apply for a new FM station in our home market they would have taken the steps long ago.

2418   Their written intervention is based on, we feel -- that's the written intervention -- on sarcasm more than reason and it also shows a lack of understanding that things change over time. It betrays a singular lack of knowledge of formats and is underpinned by an unearned sense of entitlement.

2419   MR. MICHAEL FREEMAN: The intervenor somehow feels that there is a contradiction between our arguments in 2005 concerning the state of the market and our argument advanced in the current application.

2420   As we pointed out in our opening remarks, we face different circumstances today than we did back then. In 2005 we faced three years of declining revenue in retail sales, potential addition of a new station, one allied to one of the stations already sold into our market. Put it differently, a smaller pie and more pieces to come out of it.

2421   Today with the arrival of FM we have stabilized our market. The economic indicators show slow growth, enough that we can afford the capital investment necessary to bring a second station to air. By prudent management we can derive additional revenues and a modest profit.

2422   In its written intervention, CJFX states:

"Hector Broadcasting sees so much potential advertising that it is concerned that it does not have enough commercial time on its current facility to air all of it."

2423   In fact, our argument is that we see an opportunity to bring more revenue by having more prime time inventory available. We can repatriate some revenues going to out-of-market broadcasters and we can bring some new advertisers by offering them a target audience that they could not reach efficiently before.

2424   MS MacDONALD: The intervenor talks about its historic service to the people of Pictou County, our County. They indicate at one time they were the only station to serve Pictou County. In fact, CFCY from Charlottetown was the first station to serve this area. CJFX-AM came on-air in 1943 as the newcomer, and in 1947 CKCL in Truro joined them. CKEC-AM came on-air in 1953; 10 years later, and shortly thereafter, we became the leading station in Pictou County.

2425   As we pointed out in our opening remarks, CKEC reaches over 70 percent of Pictou County listeners and is by far the leader in hours tuned. Surely after 58 years they must realize that Pictou County is not their market.

2426   The slide before you shows the contour map of their station. It barely enters the edge of our market. Clearly they are not the Pictou County station nor do they exercise "the strong support from listeners and advertisers" that their written intervention claims.

2427   Madam Chair and Commissioners, I am a Town Councillor for the Town of Westville and I was also President and a Board Member of the Regional Tourist Industry Association for eight years. I often presented to every one of the six municipal councils in Pictou County. In all that time I have never seen anyone from CJFX covering the meetings. Indeed I haven't seen, nor has our news staff seen anyone from CJFX at meetings stemming from municipal affairs such as police, fire, recreation planning, et cetera.

2428   MS MacGREGOR: In their written brief CJFX argues that Rock 97.9 will not provide anything new since their Hot AC/Classic Hits format covers the Classic and Contemporary Rock that we propose.

2429   Let me be perfectly clear, a Hot AC/Classic Hits format is not a Classic Rock or a Contemporary Rock format.

2430   This reveals a complete misunderstanding of the two formats on their part. The Hot AC format is a female-oriented format strong on the Top 40 hits of today minus the heaviest rock and rap.

2431   Our Classic Rock and Contemporary Rock format is strongly male-oriented and features rockers like Led Zeppelin, the Who, The Rolling Stones, Neil Young, The Stanfields, Sloan and many many more. The format will be about 10 percent late '60s, 30 percent from the '70s, 30 percent from the '80s, 20 percent from the '90s and 10 percent from after 2000. The potential overlap between these formats is less than 10 percent of music.

2432   I took the time to have a look at their website and their countdown list "8 Pac at 8". It includes artists like Mia Martina, Lady Gaga, Katy Perry and Flo Rida, none of which any self-respecting Rock station would play.

2433   They also state that many of the features we propose are already run on their station. In fact, features like Town Crier, Buy and Sell and many of the other ones they mention were first run on CKEC. We have found that CJFX has imitated our station over the years. If we find a successful feature, they copy it. And we don't blame them,- no successful idea is too good to imitate.

2434   Here is a list of just some of the regular Pictou County meetings that we attend and report on. All six council meetings in Pictou County, the regular monthly school board meetings, the regular hospital board meetings which are open to the public, the library board meetings, Pictou Regional Development Authority. Lynn's experience at the County Council meetings is borne out of all of these other meetings. Our staff never run into CJFX reporters at these meetings. Hopefully they are too busy covering the stories in the market they are licensed to serve.

2435   Even if it were true that our format was similar to theirs and our spoken word features were as well, our proposed Rock station will have a much different focus because we will be a Pictou County radio station, just as East Coast FM is. Just as CJFX is radio station in Antigonish and promotes their commitment to their area with the slogan "service to the community we call home".

2436   We call Pictou Country home and we provide our home with the best service possible. If CJFX-FM wants to argue that they provide Pictou County services, then where is their service to Antigonish?

2437   MR. MICHAEL FREEMAN: So what would CJFX have you do?

2438   Well, they oppose our application, but don't have one of their own, so it appears that they would like you to deny the men and the female Rock fans of Pictou County a second local listening option.

2439   This is what you have before you today, an application in a very small market to improve the service to that market. We propose a new Rock station to serve Pictou County. We will bring the same commitment to local service that 94.1 East Coast FM already does, with 10 hours of news and information per week, 22 hours of spoken word, Canadian Content at 40 percent and a commitment to emerging Canadian Rock artists.

2440   We hope you will see fit to provide a new, exciting, local radio station to the people of Pictou County and to the broadcasting company that has provided a high level of quality of service to that area for more than 58 years.

2441   Thank you. We will be happy to take any questions.

2442   THE CHAIRPERSON: Mr. Freeman, I just have one quick question.

2443   Just on the math, the realistic contour, I believe you referred to it as.

2444   MR. MICHAEL FREEMAN: Yes.

2445   THE CHAIRPERSON: The red indicates where your signal is?

2446   MR. MICHAEL FREEMAN: Strongest, yes.

2447   THE CHAIRPERSON: Is strongest.

2448   MR. MICHAEL FREEMAN: Yes. That would be based on the 3 mV.

2449   THE CHAIRPERSON: Then looking, it's actually quite strong in P.E.I., is that what that tells me?

2450   MR. MICHAEL FREEMAN: It does, yes.

2451   THE CHAIRPERSON: Yes, okay. I was just curious.

2452   MR. MICHAEL FREEMAN: Yes.

2453   THE CHAIRPERSON: I think that we have lots of information here, we appreciate your presentation --

2454   MR. MICHAEL FREEMAN: Thank you.

2455   THE CHAIRPERSON:  -- and have a safe journey home.

2456   MR. MICHAEL FREEMAN: Thank you.

2457   THE CHAIRPERSON: Thank you very much.

2458   MR. MICHAEL FREEMAN: If I could just respond to one question that came up earlier from Madam Poirier?

2459   THE CHAIRPERSON: Yes.

2460   MR. MICHAEL FREEMAN: You had inquired about our first year profitability --

2461   COMMISSIONER POIRIER: Yes.

2462   MR. MICHAEL FREEMAN:  -- and the second station that we would be showing a profit.

2463   COMMISSIONER POIRIER: Yes.

2464   MR. MICHAEL FREEMAN: I just wanted to articulate that the expenses for all the synergies of both operations would be carried by the original station, the first station. So I think if you look on the financials, if you drill down through the list it will show the overall profitability combining both stations because we didn't split those incremental costs.

2465   COMMISSIONER POIRIER: Yes.

2466   MR. MICHAEL FREEMAN: Yes. So I just wanted to make that -- yes.

2467   COMMISSIONER POIRIER: Yes, it was clear.

2468   MR. MICHAEL FREEMAN: Thank you very much.

2469   MR. DOUGLAS FREEMAN: Thank you for allowing us to have the privilege of appearing before you today. Thank you very much.

2470   THE CHAIRPERSON: Thank you all.

2471   THE SECRETARY: Thank you.

2472   I would just like to add for the record, there are non-appearing applications on the Agenda for this hearing, interventions were received on some of the applications, the Panel will consider these interventions along with the applications and a decision will be rendered at a later date.

2473   This completes the Agenda of this hearing.

2474   Thank you, Madam Chair.

--- Whereupon the hearing concluded at 1026

REPORTERS

Johanne Morin

Karen Paré

Jean Desaulniers

Monique Mahoney

Date modified:

2012-01-17