ARCHIVED - Transcript, Hearing 10 May 2012

Volume 4, 10 May 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 2012-126, 2012-126-1, 2012-126-2 and 2012-126-3

HELD AT:

Room 200 ABC

Allstream Centre

105 Princes' Boulevard

Toronto, Ontario

10 May 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 2012-126, 2012-126-1, 2012-126-2 and 2012-126-3

BEFORE:

ALSO PRESENT:

HELD AT:

Room 200 ABC

Allstream Centre

105 Princes' Boulevard

Toronto, Ontario

10 May 2012

- iv -

TABLE OF CONTENTS

PAGE / PARA

APPEARING ITEMS

PHASE I

PRESENTATIONS

APPEARING INDIVIDUALLY

PHASE II

INTERVENTIONS

PANEL OF INTERVENERS

PHASE III

REPLIES

No reply

PHASE I

PRESENTATIONS

APPEARING INDIVIDUALLY

PHASE II

INTERVENTIONS

APPEARING INDIVIDUALLY

PHASE III

REPLIES

No reply

PHASE I

PRESENTATIONS

APPEARING INDIVIDUALLY

- vi -

UNDERTAKINGS

PAGE / PARA

Toronto, Ontario

--- Upon commencing on Thursday, May 10, 2012 at 0900

5066   THE CHAIRPERSON: Madam Secretary, I see by the clock on the wall it's 9 o'clock. Can we start?

5067   THE SECRETARY: It's 9 o'clock; we're ready to start.

5068   I just have a few housekeeping matters before we start. Please note that since the transcript of the hearing does not contain the text of video aired during the hearing we would ask that all parties provide one copy of any video presentation to be shown as part of their presentation for the public record.

5069   For applicants who have already appeared, one copy of any video shown must be filed with the hearing secretary by 4:00 p.m. on Thursday, May 10th, which is today.

5070   I would also like to remind all participants that Public Works and Government Services Canada will be conducting a major power shutdown throughout various departments located in our complex. In light of this, our CRTC website access key and emails will not be accessible from tomorrow, Friday, May 11 at approximately 4:00 p.m. until Saturday, may 12 at 10:00 p.m. or until the project is completed. So just keep it in mind if you have undertakings to file.

5071   We're now ready to hear Item 12 on the agenda, which is an application by 79 -- I'm sorry, 7954689 Canada Inc. for a broadcasting licence to operate an English-language commercial specialty FM radio programming undertaking in Toronto.

5072   I would ask that you please introduce yourselves for the record, after which you have 20 minutes for your presentation.

PRESENTATION

5073   MR. CONNELL: Thank you very much, and good morning, everybody. On our panel from my left to right is Christian Bourque, an Executive Vice-President at Leger Marketing, Nicholas Tétrault, a managing partner of TTP Media, Mr. Paul Tietolman, also a managing partner of TTP Media.

5074   To my immediate right, Rajiv Pancholy, a managing partner of TTP, Corey Anne Bloom of Raymond Chabot Grant Thornton, Michelle Sarmentio, also of Raymond Chabot Grant Thornton. Steve Kowch is at the far end of the front row. And in the back panel on the far left is Dimitra Maniatis of Leger Marketing.

5075   My name is Jim Connell.

5076   Mr. Chairman, Commissioners and CRTC staff members, on behalf of the managing partners of 7954689 Canada Inc., I would like to thank the CRTC for the privilege and the opportunity of submitting our unique proposal to be granted a licence to operate an FM frequency in Toronto in order to better service the needs of the listeners in the greater Toronto area.

5077   I'm pleased to say that our panel consists of some of the pre-eminent broadcast, financial and creative professionals in Canada. For your convenience, we've included brief profiles of our panel members as an appendix to our presentation.

5078   Ladies and gentlemen, we appear before you today in response to the call for applications to operate a radio broadcasting undertaking on the 88.1 FM frequency serving the greater Toronto area. Our mission is to create a radio station that enhances the choice, the quality and the diversity of talk information programming available to the multitude of cultures represented in Toronto, while expanding the reach of talk information programming to a broader age demographic by broadcasting it where they listen, on the FM band.

5079   You have in the GTA 16 music stations that are part of the PPM survey. There are 11 ethnic stations, one Aboriginal, two sports, one all news, one national information station and two AM talk stations.

5080   Here's what we believe is missing in the marketplace. Plurality of opinions throughout the broadcast day. Live local talk and interactive programming 24 hours a day, seven days a talk. Live local newscasts 24 hours a day, and coverage of community events throughout the week. Contemporary talk for an audience demographic that is currently not being served. An independent new voice in this key market.

5081   In order to develop this vision and to ensure that our concept will successfully meet the challenge, TTP Media commissioned a team of respected professionals from Leger Marketing's Toronto office to conduct not one, but two surveys asking Torontonians how radio and, specifically, talk information radio, could best serve their needs.

5082   At this point I would like to introduce Christian Bourque, Executive Vice-President of Leger Marketing, who will give us a summary analysis of their findings.

5083   Christian.

5084   MR. BOURQUE: Thank you, Jim.

5085   I'll spare you the reading of the 80 or so pages of reports that you have before you and simply will summarize the research the following way.

5086   Both pieces of research were done with significant probabilistic samples of the GTA population, and our conclusions from those surveys are the following.

5087   Four in 10 listeners in the GTA believe that Toronto talk information radio stations do not cover enough local issues, while more than a third say that these stations are not -- do not broadcast enough local news.

5088   Six in 10 Toronto radio listeners as well say that they would listen to a new talk information radio station presenting controversial, intelligent, provocative local content and investigative journalism on 88.1 FM.

5089   So clearly, a significant proportion of Toronto radio listeners are not satisfied with the current talk radio stations available in the market.

5090   When we looked at the data in greater detail by demographic segments, what clearly stood out to us is that those who tended to say that current talk radio does not meet their needs were among the younger demographic. More specifically, numbers on potential demand for a new talk radio station in the GTA are significantly higher among those 25 to 44 years of age.

5091   Our conclusion is that this younger demographic, who are, traditionally, FM listeners, say that regardless of format, they will not likely switch to FM -- to AM, sorry. Conversely, if we believe that talk radio is or tended to be an older Caucasian male market, it is largely because younger audiences and female audiences are not pushing the AM button on their radio.

5092   MR. CONNELL: Thank you, Christian.

5093   Tietolman Tétrault Pancholy Media will program vibrant, contemporary talk information radio whereby the content and the delivery will meet the needs of Torontonians where they work, in the 416, for the most part, and where they live, in the 905 area code.

5094   Vibrant, active, driven at all hours day and night, that is the reality of Toronto. Toronto's New Talk 88.1 will reflect that reality.

5095   Toronto deserves local live talk programming and news reporting 24 hours a day, seven days a week. And Toronto's New Talk 88.1 will provide it.

5096   With details on how our news and programming will meet our objectives, here is Steve Kowch who, over the course of 14 years, was director of programming at one of Canada's most listened-to news talk radio stations, NEWSTALK 1010 (CFRB) Toronto.

5097   Steve.

5098   MR. KOWCH: Thank you, Jim.

5099   Tietolman Tétrault Pancholy Media will broadcast live local newscasts 24 hours a day, seven days a week in Canada's largest city. This initiative will provide Toronto listenership with a much-desired service and will also create much-needed job opportunities in the Toronto radio market for both male and female broadcasters and broadcast journalists.

5100   We are committed to hiring a team of 12 full-time local news reporters and an additional four weekend reporters.

5101   A special investigative unit will be created. These investigative journalism specials and mini-series will be featured in our newscasts and talk programming. Regular town hall meetings featuring newsmakers and prominent personalities, allowing listeners to interact and react to their views positions.

5102   A team of eight producers will research and support content development to ensure a contemporary, quality on-air performance.

5103   88.1 FM's talk shows will be hosted by a team of co-hosts. Face to face on-air personalities will express opposing views and interact with listeners on the important issues of the day that are pertinent to Toronto listeners.

5104   The co-host concept permits stating extreme controversial opinions and to broadcast opposing views on the top news of the day, and interacting with listeners ensures a diversity of voices, opinions and endows listeners with a greater choice of content and treatment.

5105   Face to face talk radio allows listeners to hear both sides of the issue being debate. This is not your conventional one host, one opinion, I am right and you are wrong kind of talk radio that exists today in Toronto.

5106   TTP Media will not broadcast pre-recorded shows or American syndicated shows at night and on weekends, but will broadcast Toronto's news talk live 24/7 on 88.1 FM.

5107   Teitolman Tétrault Pancholy Media will also use overnight and weekend programming on 88.1 FM to provide an opportunity for emerging talk and news talent to gain valuable on-air experience working side by side with broadcast professionals.

5108   TTP Media proposes additional, bolder strategies such as providing college and university students a three-hour block of air time Sunday nights to produce and host their own talk shows. Broadcast journalism students will also anchor their own newscasts during those three hours on Sunday night.

5109   When it comes to finding talented writers, journalists and broadcasters from the many cultural communities in Toronto, the place to go is a non-profit organization called Innoversity. This organization creates opportunities to build bridges between the different cultural communities and the media.

5110   Innoversity has agreed to work hand in hand with Teitolman Tétrault Pancholy Media to reach out to the different communities to discover, nurture and coach new emerging talent in journalism and talk radio broadcasting.

5111   Members of ethnic communities and younger listeners will find a stimulating source of talk news programming on Toronto's New Talk 88.1 FM, primarily due to the inclusion of topics that are of direct interest to them.

5112   MR. CONNELL: So that is what we want to do and why we want to do it. What will it take to make this all happen?

5113   TTP Media managing partner Rajiv Pancholy will now speak to the financial arrangements that will make this happen.

5114   MR. PANCHOLY: Well, thank you, Jim.

5115   In looking at a project of this importance we have taken the following steps to be assured of success in this very key venture:

5116   - We have asked Raymond Chabot Grant Thornton, one of Canada's top-tier accounting firms, to perform sensitivity analysis on our projected financials and ensure that we have adequate cash reserves even in the event that our revenue performance is well below projected levels. Additionally, we have asked them to model our projected cash spending, assuming a launch of two Montreal stations, one Calgary station and a Toronto station within a span of 12 months, and make sure that our cash reserves are more than adequate on a combined basis.

5117   - Secondly, it is important to note that we have realized some significant reductions in our cash outflow for the launch of our Montreal stations. These savings of more than $6 million represent an additional cash reserve that we can apply towards our project in Toronto. I am also pleased to report that with every step in the execution of our Montreal project we are realizing savings on many of the expense line items, underscoring our earlier belief that our spending assumptions were conservative and that the actual values are considerably lower.

5118   - For Toronto, the market study performed by Leger Marketing points to a potentially large market share. While we are happy with this potential identified by Leger Marketing and this positive feedback on our proposed format, we have elected to stay very conservative in our revenue projections and assumed revenue per point of market share that is well below the average for the Toronto market.

5119   Based on the above, I am confident that we have done an exhaustive analysis of various scenarios that we could realistically face and that the initial commitment of $42 million by our lenders on a consolidated basis is therefore more than adequate to meet our needs and leaves us with approximately $19 million of available and unused capital in any of the seven years, which is the term of this licence.

5120   Jim, over to you.

5121   MR. CONNELL: Radio broadcasting in Canada plays an important role in the development of Canadian content. TTP Media shares the CRTC's vision and fully commits to the following Canadian Content Development contributions and what we call Responsible Initiatives.

5122   - TTP Media will fully respect the mandatory basic contribution that represents a projected total payment of $267,000 during the first seven years of licensed operation.

5123   - TTP Media will also commit to over and above contributions to third-party organizations approved by the CRTC, amounting to $1.034 million during the first seven-year licence term.

5124   - TTP Media will also be investing and spending an amount of $880,000 over the first seven-year licence term on what we refer to as Responsible Investments that do not meet the definition of CCD initiatives but are clearly creative initiatives that will enhance the development of Canadian content and Canadian talent. The total investment of $2.182 million will also be supported promotionally both on-air and off-air with an additional advertising and promotion budget of almost $2.2 million.

5125   TTP media accepts all of the above commitments as a condition of licence should we receive the approval to serve Toronto listeners on 88.1 FM.

5126   In summary, we are asking for approval to create a new and relevant information radio station for the people of the Greater Toronto Area, one that enhances the choice, quality and diversity of information programming available to the multitude of cultures represented in Toronto while expanding the reach of talk and information programming to a broader age demographic by presenting it where they listen: on the FM band.

5127   We have had Canada's most respected market research organization survey this market and we have heard here today how a significant number of Torontonians are likely to listen to a new talk/information station and, most importantly, contemporary talk and information radio.

5128   Toronto's New Talk radio will attract new listenership and that includes a new, younger demographic audience.

5129   We believe our market share and revenue projections are attainable.

5130   We have the skills, the experience and the management bench strength to execute and implement a project of this scope and importance, and that is to bring a new profound talk/information voice to serve the residents of Canada's largest city:

5131   - A station that will have live local news coverage seven days a week;

5132   - We will put investigative journalism in our news and programming so people will always know the whole story;

5133   - A station that will use the face-to-face concept and total interactivity audience to involve people in intense but balanced debates on the issues that affect them;

5134   - We will take our programming to the streets and dialogue with the entire cross-section of society in both the 416 and the 905 area codes, setting up remote studios and hosting town hall meetings on location to allow people direct access to newsmakers;

5135   - We will create at least 65 new employment opportunities in the GTA and encourage and financially support the efforts of young aspiring broadcasters who will be tomorrow's broadcasting professionals;

5136   - We will reach out to female listeners, members of ethnic communities and younger listeners, who will find a relevant source of talk/information programming on Toronto's New Talk 88.1.

5137   The people at TTP Media and others involved in this project are passionate about talk/information radio.

5138   We are fully prepared, creatively and financially, to share that passion with the people of Toronto with a contemporary talk/information radio station that we know Torontonians will be passionate about as well.

5139   Thank you for your attention and now the members of our team are prepared for any questions you may have.

5140   THE CHAIRPERSON: Thank you.

5141   I would ask Commissioner Simpson to begin the questioning.

5142   COMMISSIONER SIMPSON: Thank you very much. Good morning.

5143   I think I'm going to start my line of questioning on the concept of the particular talk show format and ask you, in looking at your audience projections, they reinforce your argument, it seems, very fulsomely that the marketplace is not being served by the kind of talk that people want. That's the substance of your research and it seems to be showing up in your audience projections, which, to my mind at least, seems to be extremely ambitious.

5144   I guess the first question I want to ask is why do you think it's going to be that easy to pull audience to your particular news/talk format, presumably away from the other three stations in this market? Yet, it seems in your revenue projections that it's going to be significantly longer, I think year four, before you start turning the corner on the profitability.

5145   MR. KOWCH: Well, first of all, sir, nothing is easy when it comes to radio and especially talk radio because it really is improvisation and interaction with an audience.

5146   The issue here is we don't anticipate that we will only take listeners from the current talk stations on the AM dial. The experience in the United States with transfer of talk to FM stations is that they are taking listeners away from people on the same band, on the FM band, as they punch around on the band.

5147   So talk listeners also listen to music and they go to movies and they go to concerts. So because they're on the FM band and they're punching around, they will end up dropping by our FM news and information station.

5148   MR. CONNELL: I think another possible answer to your question, Commissioner Simpson, is that the market research that we have done shows a willingness on the part of Torontonians to search out something new, something that has never before been on the FM band or is not currently on the FM band in Toronto and those audience projection numbers are very optimistic and we like them. When we look at them they are very heartening, I guess, is the word.

5149   However, we based our revenue projections on our personal experiences, I guess, to a large extent in the marketplace and have kept them very conservative.

5150   MR. TIETOLMAN: If I can add one thing, Commissioner Simpson?

5151   COMMISSIONER SIMPSON: Go ahead.

5152   MR. TIETOLMAN: In the research we find that the average person listens to three or more radio stations in a given day. FM radio is primarily music radio, many different music formats. We know that this audience is not being served by talk/information radio. Most of them do not tune into AM radio.

5153   Therefore, to have a commercial broadcaster doing a quality talk/information format, we will basically share audiences with the music formats. We are not going to steal from them, we are not going to take from them, but after they listen to their music and they want to be well informed and they want to participate in an interactive talk format and platform, they will have that opportunity for the first time ever.

5154   COMMISSIONER SIMPSON: Okay.

5155   Moving off of the pure revenue into the PBITs -- and a significant amount of your information filed with the Commission is confidential, so I'm sort of dancing around on lily pads here and I'm sure staff will jump in if I get over the line.

5156   But on your financial projections with respect to your PBIT, is the driving factor to profitability one of a slowness in capturing revenues or the fact that your programming is going to be, as talk has traditionally been, an expensive investment and it's going to take a longer period of time to amortize your programming costs?

5157   MR. PANCHOLY: Commissioner Simpson, I think the answer is both.

5158   We are cognizant of the fact that we are newcomers in this market and we have to be very cautious in terms of what kind of a revenue ramp we assume.

5159   But the other reality, as you rightly pointed out, is that the cost of producing a show of this quality is indeed quite high and we have made a conscious decision not to compromise on that.

5160   COMMISSIONER SIMPSON: Thank you.

5161   While I have you, you had talked about performing a sensitivity analysis. Is that like a stress test? Is that what you're talking about?

5162   MR. PANCHOLY: I will get Corey Anne to comment on that, but I think in my vernacular, yes, it is. Yes.

5163   MS BLOOM: Hi. A sensitivity analysis just means that we have taken 85 percent of the revenues and of most of the expenses. So what we projected for is if there were contingencies in the market, what would the figures look like with an 85-percent base as opposed to 100 percent.

5164   COMMISSIONER SIMPSON: Yes.

5165   Can I get some clarification with respect to how you were looking at managing your cash flows? Not being the brightest penny in the change drawer at times on balance sheets, would you explain to me how you went about your cash flow analysis? Was it based on assumptions of success in all your applications to this format?

5166   You obviously are successful in Montreal, but you have an application pending in Calgary and here. Were your operational costs synergistically spread over all your applications based on certain assumptions or did you take out and rejig your formulas so that you had a worst-case scenario?

5167   MR. PANCHOLY: All of our cash flow projections are based on individual licences, but the common thread that binds them all is that we have a common set of financial institutions that are providing financing to us. So in a sense, from their point of view, they see the consolidated cash that's needed.

5168   But just to reiterate, we did build the models based on each individual licence bottom-up without any regard for synergies.

5169   COMMISSIONER SIMPSON: Okay.

5170   Mr. Bourque, on your very exhaustive analysis you have obviously given the applicant quite a lot of encouragement with respect to the appetite for a different type of talk format and I see the word "potentially" popping up a lot in terms of describing, you know, the expectations -- the potential expectations of the market.

5171   Other than the pure quantitative exercise of testing people, did you have anything else that you pushed your numbers through that you could share with us that aided these optimistic projections?

5172   MR. BOURQUE: Whenever we use survey data to sort of project potential behaviour, we usually say that survey respondents are great at telling us what they currently do and how they feel, but about what they eventually might do, we need to curb down the enthusiasm of respondents a little bit.

5173   So from our basic raw projections, of course the share that we suggested could be attainable by this applicant. We basically needed to curb that down.

5174   We basically looked at the experience of current stations in Toronto, the share, current share of market of the stations here, to basically provide what we thought was a conservative figure for a potential share. So of course we cannot use the raw data and project an audience.

5175   One of our key recommendations was basically to say -- not to consider only taking audience away from the current talk format, but basically say you need to go for this new market that is being sort of untapped here.

5176   And we also looked at past experiences, one of them being the CBC. When they switched over to FM here in the Toronto market, magically their audience became younger, basically because that's where younger listeners are, on the FM band.

5177   So they were able to make that transition and we felt that this application in a way represented this potential of getting a younger target audience listening to talk.

5178   COMMISSIONER SIMPSON: Were you doing qualitative as well as quantitative?

5179   MR. BOURQUE: We did not do quantitative research specifically. We looked at other sources of quantitative data out there, audience measurement and other data available.

5180   COMMISSIONER SIMPSON: Why I asked is in looking at the nature of the questions, it has been my experience that when probing -- doing a gap analysis or probing the idea of developing a new concept, whether it's a consumer good or a service, customers have different ways of describing what they think they are looking for, but it seems that in practical reality the customer never really knows until they have it.

5181   And I'm curious, Mr. Connell and Mr. Tietolman, how you would take -- how the research was leading you to this inescapable conclusion, not just that there was a deficiency in talk format but brought you to the doorstep of the format you are proposing?

5182   MR. TIETOLMAN: We basically took the research that Leger Marketing had prepared for us and, ironically, we sat down with Mr. Bourque and his team of people and we felt that their projection for market share, for example, was very ambitious and we reduced it dramatically. And I'm sincere, dramatically.

5183   That is what we submitted finally to the CRTC, to yourselves, based on a realistic conservative broadcaster's outlook on what we felt we could achieve in a safe, secure manner and match up with our financial capacity to get something done in a quality -- solid quality manner.

5184   COMMISSIONER SIMPSON: Again, bridging programming to research, for the record and for my memory, is this TNT-type format, if I may call it that, the format you proposed in Montreal as well as Calgary, just for the record?

5185   MR. CONNELL: No, not at all, sir. The Calgary presentation was for a music station.

5186   COMMISSIONER SIMPSON: Okay. Yes. Good. That's why I asked.

5187   But in Montreal the format is to be similar?

5188   MR. TIETOLMAN: Yes, and it has been very successful. Number one in Canada in BBM ratings.

5189   COMMISSIONER SIMPSON: Okay.

5190   You had mentioned the 905 versus 416 equation and I'm trying to bridge this to a statement about your research pulling out that one of the major deficiencies, it appears, in the present offerings is that there is not enough local, not enough local issue discussion.

5191   I would like to know, not being a resident of Toronto, although it is my hometown originally, is the 905 still traditionally considered a bedroom community to the extent that the stuff that you would talk about with respect to 416 issues are relevant to 905 commuters because they at least work in the 416?

5192   MR. CONNELL: I would like to get Steve to answer that question. As the Program Director of CFRB for so many years I'm pretty sure he has the answer.

5193   COMMISSIONER SIMPSON: Sure.

5194   MR. KOWCH: When people talk about local, I think when they say there is not enough local, I think those are the people in the 905.

5195   My experience working here in Toronto is we spend more time talking about what's going on in Toronto where people work and not enough time talking about what's going on in the communities where they live, in the communities where they shop, in the communities where they take their children to play sports.

5196   That's why we want to emphasize more local news, not just from Toronto where they work, but to go out into the communities and cover what is going on in Peel, in York, in Durham, in those areas of the Greater GTA.

5197   MR. TIETOLMAN: We plan on opening a satellite studio in this community and these community areas to better service and be closer to the people, as well as a mobile studio that would travel throughout these areas.

5198   COMMISSIONER SIMPSON: Is that -- okay, fine. That's great. I think that's significant.

5199   Mr. Kowch and Mr. Connell, both of you have substantial news/talk experience and it wouldn't be misrepresentative to say that talk has been going through some stress tests of its own over the last few years.

5200   I think CKO was a very interesting exercise because it was ambitious as all get out and didn't enjoy -- it had deep pockets but didn't enjoy the success that I think it perhaps should have as a news station. And CFRB has been going through its trials and tribulations.

5201   Seeing the needle going down on the majority of talk across the country, why is this -- fully understanding that your research is telling you that there is a gap here, what brought you across the chasm to the belief that this is going to work?

5202   MR. CONNELL: I'm not sure that that chasm exists, for one thing.

5203   I believe a large part -- if there is indeed a dip in audience for talk and information radio, and as far as information radio goes and news radio goes, 680 News would probably argue with you that the needle is going the other way.

5204   I think there is more than ever a hunger for news and information. There is a hunger for debate, and fair debate, even-handed debate, on the topics of the day. In this economy, in the political situation in the world, in the economic situation in the world today, I think more than ever people want news and information programming.

5205   I think that traditional stations have disenfranchised a large portion of their potential audience, that being the younger demographic, by not presenting this on the FM band, where these people live and play.

5206   I mean you talk to most -- a lot of very young people today don't even know what AM radio is. I mean it's time that this sort of information was brought to them in the place they live.

5207   MR. KOWCH: I also think, Mr. Simpson, that sometimes we create our own problems in talk radio. And yes, we are going through a transition. Part of the problem is I think people are tired of knee-jerk reaction talk radio.

5208   What I like about face-to-face is when you have two people opposing views, you are at least going to get both sides of the story instead of a conversation that goes like, "That's my opinion, I'm right, you're wrong, thanks for calling."

5209   I believe the needle will move to where it should be because we will be on FM and because we will do more intelligent talk radio than knee-jerk reaction talk radio.

5210   MR. TIETOLMAN: Just one other thing to add to that.

5211   COMMISSIONER SIMPSON: Please. Absolutely.

5212   MR. TIETOLMAN: Surveys and research have shown -- there is a report out there that the top 10 radio stations in North America, including Toronto, are either talk, talk/news, news/talk formats. Nine out of 10 come from that format category. Only one is a music format. In Montreal, FM talk radio is number one.

5213   COMMISSIONER SIMPSON: Yes, no doubt, but Fox News, the CNBCs, and so on, have usually maintained a format where they take a stance editorially and use that as the tool by which they attract like-minded audience.

5214   I want to go further into your idea of not necessarily riding the fence, but being the arena keepers in which the battles are fought.

5215   Do you think that you are going to -- I mean, you obviously do, but why do you think that you are going to be able to attract individuals of opposing views to get in and debate the affairs of the day?

5216   Because, traditionally, handlers of politicians and authority figures do everything they can to keep their principals out of debate, because bad things can happen.

5217   Why do you think this is going to work?

5218   MR. CONNELL: I don't think it's avoidable on their part any more. I think there is so much media scrutiny, so much media intensity, that somebody has to talk to somebody, somewhere, sometime, and once they do, the door is open.

5219   We would like to initiate most of those conversations, but somebody else will initiate them if we don't, and then the door is open.

5220   You mentioned CKO. I used to have finance ministers calling me to look for a platform to express their view, if we were running a story that was negative toward them, of course.

5221   COMMISSIONER SIMPSON: Yes. They are usually looking for a venue, but not necessarily a debate.

5222   MR. KOWCH: I covered politics for four years at the Quebec National Assembly, and I can tell you that my experience with politicians is that very few of them can pass up a microphone.

5223   COMMISSIONER SIMPSON: True.

5224   MR. KOWCH: And if you are doing a good talk show, if you are being fair, you will not have a problem.

5225   If we have the listeners, as we expect and hope to have, we will not have a problem.

5226   It's all about how you present and how you treat your guests when they come on that radio station, and we expect to treat them fairly and ask them tough questions, which is what they expect.

5227   COMMISSIONER SIMPSON: With respect to your audience demographics, there is no doubt that politics has lost a lot of traction in the under 35's. You just have to look at the poll results.

5228   And I commend you for wanting to engage a younger audience in healthy debate, but -- I guess two questions.

5229   The younger market has a tendency to not necessarily want to drink from the well of conventional wisdom and authority, and I am curious as to how your programming is going to feed to that reality.

5230   Are you going to try to run to the opposing views, even if there is debate going on, or are you going to try to have the older authority figures convert their dialogue to a younger market? How is that all going to work?

5231   MR. PANCHOLY: I will ask Christian Bourque to weigh in on this one, but just to introduce the topic from my point of view, if you look at the dynamics of the younger generation -- I see that firsthand, I have two teenage kids. They like to debate the issues on blogs, and it's not so much that that's a medium of convenience, but there is something fundamental going on.

5232   In blogs you can go to the stream and the topic that you believe is relevant to you, whereas today talk radio is not offering that relevance to the demographic.

5233   I think that is the key to our success. If you bring topics of discussion that are relevant to a certain community, the people will listen and use that media.

5234   Christian...

5235   MR. BOURQUE: My personal belief with the younger demographic -- and, of course, by younger here, we mostly focus on 25 to 44.

5236   And full integration with social media, in terms of interaction on air, of course, will be a key, if you are asking for my recommendation on that.

5237   The second element is that we find that youth do not tend to participate politically the way they used to, in terms of not turning out to vote.

5238   However, talking about local issues, debating local matters, is still something that is very much in vogue. If you walked down the streets of Montreal these past few weeks, you will have noticed that.

5239   So social involvement, if you want -- they are not socially disengaged youth, they basically may have lost the belief that you need to participate in formal politics. That might be two different things.

5240   MR. TIETOLMAN: The same incident that Mr. Bourque is talking about, or a series of incidents -- we are witnessing, for example, the president of a student union, representing 200,000 young people, younger than 25 years of age. When the minister finally extended her hand and said, "Let's sit down and talk," 100,000 -- 200,000 people demonstrations turned into 1,000 people demonstrations, which indicates clearly to us that if we give the people the platform and the relevant chance to express themselves face-to-face with a minister to solve their problem situation, it will work, absolutely.

5241   MR. KOWCH: If I could just add one thing, it all comes down to who is speaking on the radio. If we are going to have just older people speaking on the radio, you are absolutely right, the younger demos are not going to be attracted. But if we have young on-air, talented talk show hosts, the younger people will listen.

5242   My experience at CFRB with putting someone like a Ryan Doyle, a 30-something individual, on the radio -- he has some of the youngest listeners on that radio station because he speaks their language. He has a way of coming up with his opinions that match those of his generation.

5243   That's what we also have to do, and will do, on 88.1 FM.

5244   COMMISSIONER SIMPSON: Picking up on your last words, Mr. Kowch -- but this is a question, I think, for Mr. Connell or Mr. Tietolman -- there may be significant evidence that would convince the Commission that there is a need for a different kind of dialogue in a major market like Toronto, and you have indicated that your audience ambitions, if not skewed or weighted to, they are, at least, wanting to embrace a younger audience, and this is why FM is the solution to that problem.

5245   But the problem I have, that I have to ask, because it's the elephant in the room, is: Is this format -- giving you face value on all of your programming ambitions and analyses -- is that really, in your mind --

5246   And, of course, I know that the answer is going to be yes, but I have to ask the question.

5247   Is it really the best use of this last piece of real estate, which happens to be FM, putting talk on a high quality signal like that?

5248   MR. CONNELL: Yes.

5249   COMMISSIONER SIMPSON: Could you be a little clearer?

--- Laughter

5250   MR. CONNELL: Yes, I believe that it is absolutely the best use of FM, and I believe that it is the best proposal in the room right now to deal with FM --

5251   Our application on the FM band is the best choice that you could make.

5252   COMMISSIONER SIMPSON: With respect to Montreal, you are simply working with what you've got.

5253   MR. CONNELL: It's a different market. There was no FM frequency up for grabs at that point, and, technically, Montreal is a different kind of market, too. You can reach your audience on AM easier in Montreal than you can in Toronto.

5254   MR. TIETOLMAN: In addition to that, you have 16 music-formatted stations in Toronto. Most formats are covered. There may be one or two that are not, but amongst all of the applicants this week and next week, not one has brought forward a different, unique music format that is not serving the population currently.

5255   Whereas, with talk radio, aside from Radio One -- and that shows very well in the ratings -- this is something that we think, sincerely, the market is waiting for, and the research proves it.

5256   COMMISSIONER SIMPSON: To get into the programming details a little bit, if you don't mind, this is going to be, from my understanding of your presentation, a news authority as well as a public affairs authority. How are you going to --

5257   Do you mind walking me through how your day parts are going to be broken out? Will the morning and afternoon drive be more news, and talk resides in different parts of the day?

5258   MR. KOWCH: Morning and afternoon drive -- let's break it down first with mornings.

5259   Listeners wake up and they want to know what's happening, but I guess it comes down to what is your definition of news. For me, news is what is of interest to different people. It's like beauty, beauty is in the eye of the beholder. What some people will like in news, other people will say: That's not news, in my opinion.

5260   When we do morning radio, we need to be talking about the events that happened while they were sleeping, and give them information about the events that may have happened the night before, and then give them an opportunity to talk about it.

5261   If it's the day after the Academy Awards, that's probably a good thing to be talking about. The day after one of the biggest TV series comes to an end, people will want to talk about it, because that's what they talk about.

5262   So that's the type of thing that we want to do: what they talk about, what they want to talk about, and also, of course, what we think they should be talking about.

5263   MR. TIETOLMAN: And we are not a 15-minute news wheel. We respect 680News. They do an excellent job, and hats off to them, and the ratings and revenues they produce show that clearly.

5264   I am sure that the Commission must have their revenues per rating point.

5265   COMMISSIONER SIMPSON: So, to paraphrase, the younger market definitely distinguishes hard news from information. Information seems to be the greater portion of their diet, some of which is entertainment, some of which is current affairs and the like, as opposed to the old model of hard news, hard politics.

5266   I am sensing, then, that what you are proposing as an overall theme to the station is discussion that is of a very broad nature, which is more societal, as opposed to within a certain news or political beltway.

5267   MR. PANCHOLY: Commissioner Simpson, just a point of clarity. I think the discussion about the youth segment has dominated our discussion so far.

5268   COMMISSIONER SIMPSON: Yes.

5269   MR. PANCHOLY: But I think the other part that we are missing in our proposition is that, if you look at talk radio, female participation is very low in that segment, and that is equally important and relevant to our application.

5270   So we are focusing on that as much as on youth.

5271   COMMISSIONER SIMPSON: Would you like to elaborate on how you are going to accomplish that?

5272   MR. PANCHOLY: Yes, I will turn it over to Christian, because we have some interesting statistics on female participation in talk radio.

5273   So it will be Christian followed by Steve.

5274   COMMISSIONER SIMPSON: Okay.

5275   MR. BOURQUE: Quickly, the female audience was also something that was of interest in the data in terms of their interest in talk. Usually, female audiences tend to turn away from talk.

5276   This is also why we suggested that it should be talk information and introducing a broader sort of lifestyle, life stage issues into information outside the hard news that you were talking about.

5277   So I think that the mix will have to be different from traditional talk if that female audience has to be converted over to this new station.

5278   MR. TIETOLMAN: News is the news. You can't change the news headline. Talk radio will complement that and extend that discussion in an intelligent manner.

5279   MR. KOWCH: Just like I suggested that in order to play in the sandbox where the younger demos are, we need to do the same thing. Toronto talk radio has very few female talk show hosts. As a result, it's pretty difficult for a bunch of guys to sit around on the radio and talk about things that are relevant to the female audience. For example, Michelle and Corey are here with us.

5280   Michelle, if you were doing talk radio what would you talk about?

5281   MS SARMIENTO: I think what would be relevant for me right now would be personal finance and relationships but that's obviously personal for my situation and life stage.

5282   MR. KOWCH: Corey?

5283   MR. PANCHOLY: This is yours.

5284   COMMISSIONER SIMPSON: This is what they call the ambush interview.

--- Laughter

5285   MS BLOOM: I thought the questions were going to come from in front.

5286   I like things that are current, edgy, white-collared crime, fraud. I do like politics as well. Fashion; once again current, edgy, that kind of thing.

5287   MR. KOWCH: This is like that movie Field of Dreams. Build it and they will come.

5288   Put young people on the radio, you will attract younger people.

5289   Put female -- talented females on the radio, you will attract them.

5290   Put members of the cultural communities on the radio, you will attract them because we will be speaking to them about what they care about. That's the key to talk radio.

5291   COMMISSIONER SIMPSON: Mr. Kowch, you are giving me all these segues. It's just wonderful. Thank you.

5292   Because I do want to ask about the proposition of bringing -- I don't want to use the word more amateur talent but I'm very intrigued about your proposition to bring the educational institutions, you know the colleges into the programming mix. And I was wondering if you could -- again, if you are willing to share this.

5293   You know, what's going to be your methodology in terms of how you select your partners on that particular project because I'm sure you are going to get a lot of takers for the proposition of those weekend slots.

5294   MR. KOWCH: Well, I work with a lot of students, broadcast students and broadcast journalism students because I teach at Humber College. I teach at Seneca.

5295   I have seen the talent out there. I have seen the need to provide the new generation, the up and coming generation of broadcasters, an opportunity to get on the air, experience what it's like and to be able to learn in the process.

5296   So our approach is basically -- and I have talked to some of the colleges and universities about this -- is to set up a schedule and say, "Okay, your school, I need some students who want to do talk" and we'll just log it in and schedule it.

5297   We will go to the news curriculum and get broadcast journalism wannabes who are in their second or third year. This is not a question of just putting anybody on, you know. There will be a process where I will be talking to them and making sure, you know that they are ready. And then we will work with them. It's not a question of just putting them on the radio.

5298   But the notion is to provide the opportunity and a nice three block period where they can do this. We are not talking about putting them on at midnight. We are talking about putting them on around nine o'clock or so.

5299   MR. PANCHOLY: Commissioner Simpson, if I may just add to that?

5300   COMMISSIONER SIMPSON: Yes.

5301   MR. PANCHOLY: Just to elaborate in maybe a little more precise fashion, the process is a threefold process.

5302   One is of course making sure people are aware of the fact that we have this program. Then making sure we have the process where you screen all the applicants. And I'm sure we will get a lot of calls and requests for this time.

5303   But the most important part is the coaching, that from the people we select we will spend as a team a lot of time coaching and nurturing them.

5304   And then comes the final step which is, as a formal aviator, I will tell you there comes a time when you have got to hand them the controls. We will do that when they feel they are ready.

5305   COMMISSIONER SIMPSON: Excellent.

5306   Just two more questions and then I'm done.

5307   Just to clarify, you have indicated very clearly that it is your intention to not be doing any repeat broadcasts; that this will be a 24/7 live undertaking. Is that correct?

5308   MR. TIETOLMAN: It's correct, sir.

5309   COMMISSIONER SIMPSON: And are there any potential for brokering or other types of third party that you have considered?

5310   MR. TIETOLMAN: If you can clarify?

5311   COMMISSIONER SIMPSON: Being a very ambitious format of 24-hour news would you be -- it's been a formula, if you like, with some stations particularly in the ethnic community, to offer blocks of programming to other voices, other concerns or organizations. That would not be the case here?

5312   MR. TIETOLMAN: (No audible response / Aucune réponse audible)

5313   COMMISSIONER SIMPSON: Okay.

5314   The last question I have really got -- but I just want to be absolutely clear. We are fine with respect to any concerns or issues regarding CCD?

5315   MS HULLEY: We are not going to ask for additional input.

5316   COMMISSIONER SIMPSON: Fine, okay. Terrific.

5317   I think those are my questions. Thank you.

5318   THE CHAIRPERSON: Thank you very much. I have got a couple of questions and so do my colleagues.

5319   I want to go back to your stress test and the fact that you have identified that in the Montreal rollout you have overachieved.

5320   Can you share with us where the overachievement is? Is it a reduction in costs? Is it increases in revenues?

5321   MR. PANCHOLY: Principally, it is a reduction in costs. To be precise, when we had put forward the Montreal business case we were assuming that to setup the transmitters we would be acquiring land, building our own infrastructure which for AM, as you know, is quite expensive.

5322   What we have actually succeeded in doing is getting into an infrastructure sharing agreement with some of the other operators in the Montreal area.

5323   So therefore we moved from a very heavy CAPEX model to a much more substantive reduced OPEX model which is based on steady lease costs. Those are the principal areas of savings.

5324   THE CHAIRPERSON: And how are you doing on the revenue side?

5325   MR. PANCHOLY: We are doing okay on the revenue side. We are pretty much on track.

5326   THE CHAIRPERSON: You are achieving your forecasts?

5327   MR. PANCHOLY: Well, we have not launched yet.

5328   THE CHAIRPERSON: Okay.

5329   MR. PANCHOLY: But we have some early agreements with potential advertisers and that is exactly in line with what we had projected.

5330   THE CHAIRPERSON: When are you planning to launch?

5331   MR. PANCHOLY: On schedule in September 2012.

5332   THE CHAIRPERSON: Okay.

5333   And it's an AM frequency?

5334   MR. PANCHOLY: That's correct.

5335   THE CHAIRPERSON: And I heard you talk to Chairman Simpson indicating that the Quebec market is a different market than the Ontario markets. So you are looking for an FM frequency here.

5336   MR. PANCHOLY: Yes, that's correct, for here. For Toronto we need an FM frequency.

5337   Technically speaking, there is a technical reason why in Montreal I think, as Jim mentioned, the AM propagation downtown is a little easier. The principal difference with Toronto is the streetcars and the electrical wiring that doesn't exist in Montreal actually lets the AM signals go downtown a little bit more easily, versus that not being the case with as much ease in Toronto.

5338   THE CHAIRPERSON: Have you listened to AM 680 in Toronto?

5339   MR. PANCHOLY: Some parts, yes.

5340   THE CHAIRPERSON: Do they have problems with listenership and audience? They seem to be very successful.

5341   MR. PANCHOLY: Of course they are very successful financially. I mean I don't have access to details in terms of which pockets they are not able to tap into.

5342   So I'm going by the general principle that AM transmission in downtown Toronto is challenging. That is something that has been, I think, mentioned by already competitors here in Toronto.

5343   MR. TIETOLMAN: In addition, the 940 frequency in Montreal is a clear channel frequency and that gives us an opportunity and an advantage. And the fact that there is a lack of competition in the type of program format that we have put together gives us an opportunity to succeed.

5344   THE CHAIRPERSON: If you are not successful in acquiring an FM frequency will you look for an AM frequency in the Greater Toronto Area?

5345   MR. PANCHOLY: No, sir.

5346   THE CHAIRPERSON: Okay. My other question has to do with the revenue forecast, the stress test, and you talked a bit about the 85 percent revenue level and you are still solvent and sufficiently viable.

5347   At what floor are you no longer sufficiently viable? Is it 70 percent? Is it 75 percent? Is it lower than that?

5348   MS BLOOM: Well, we actually put the numbers and ran them through a model and we went -- we looked at the 85 percent and we looked at the 80 percent. At 80 percent they were still positive closing cash balances because our concern was mainly cash flows and liquidity.

5349   So once again, we went down to 80 percent and we still had a positive closing cash balance. We didn't run the numbers lower than 80 percent.

5350   THE CHAIRPERSON: Okay.

5351   MS BLOOM: But there are other buffers in the numbers as well.

5352   THE CHAIRPERSON: But you didn't go below 80 percent?

5353   MS BLOOM: Well, at 80 percent --

5354   THE CHAIRPERSON: Yeah, you are fine.

5355   MS BLOOM:  -- there is still positive closing cash balances.

5356   THE CHAIRPERSON: Okay.

5357   One of the things that you have brought forward today on page 6, at the bottom of page 6 of your submission, is some information that was not in your initial application. The fact that you have got an initial commitment of $42 million by your lenders did not show up in your first application to us.

5358   In the initial one you actually had, and I can't quote the numbers, but you had some guarantees of some financial capability that was much lower than that.

5359   So this is new information and, as we said in the opening remarks on Monday, you are not able to enhance your application with additional information that was not in the initial application.

5360   MR. PANCHOLY: If I may just offer a point of clarity, this is not new information, sir.

5361   This number is the consolidated cash available to us across all the projects. The number for Toronto remains unchanged.

5362   THE CHAIRPERSON: Okay. So we go with the number for Toronto because that's what we are looking at on a face value.

5363   Okay. I think that covers it from my end.

5364   Vice-Chairman Pentefountas...?

5365   COMMISSIONER PENTEFOUNTAS: Thank you.

5366   Good morning. The first question: Why is the Greek in the back row? How does that work?

--- Laughter

5367   COMMISSIONER PENTEFOUNTAS: A little levity.

5368   Secondly, I heard a lot about dial surfing and the FM dial and how, while they are surfing the FM dial they are going to get to 88.1 TNT and that they will stick there.

5369   My impression was, unless this is a different kind of model, that you know AM was something that you tuned into when you woke up in the morning. And I'm sure that's sort of how CFRA works, and I know that's how CJAD works in Montreal. They turn it on. They leave it on. They are there all day.

5370   The demo obviously is older. That's no secret.

5371   But how do you -- how does this -- explain to me the model whereby you don't wake up and turn it on to 88.1 but you sort of surf your way onto 88.1. If that's the case, how do you stay on 88.1?

5372   And are you going to have sort of pockets of time that people will be listening to 88.1 as opposed to being on it all day?

5373   MR. PANCHOLY: Well, perhaps we didn't clearly articulate what we feel is going to happen.

5374   The proposition is not where we think that people are just going to surf the dial and find us. We certainly hope that's the case in a certain number of cases, right?

5375   But the real issue is the barrier that exists between AM and FM that certain demographics don't exist and will not migrate from FM back to AM for the sake of relevance and for addressing those demographics it is important that we be on FM.

5376   COMMISSIONER PENTEFOUNTAS: Okay.

5377   Maybe more clarification on how you differentiate yourself. You know there is a lucrative market.

5378   I was looking at the market share. It's almost 25 percent of the market between the four news talk radio stations in Toronto, starting from CBC One and going down to CFMJ.

5379   How will you -- there are four different options there already available in Toronto. How do you differentiate yourselves? How do you find your niche?

5380   They have already got close to a quarter of the market. There are different personalities on-air. There are different demographics. How do you differentiate yourselves to get your market share -- and I'm going to get to that later.

5381   MR. KOWCH: I guess, first of all, we need to look at what those other stations are doing and then compare it to what we are doing.

5382   COMMISSIONER PENTEFOUNTAS: Okay.

5383   MR. KOWCH: CFRB does not have live local talk programming overnight. They use a syndicated comedy show after midnight.

5384   640 does not have live local talk programming overnight as well. They air U.S. syndicated coast to coast. It's a show about the paranormal and UFOs.

5385   680 News does not have open line programming interactive with listeners. That's not their format. Their format is a news wheel and they have set times for different news features and traffic.

5386   On weekends CFRB does not have live local programming or even a live local newscast in the evening and overnights. They rely on Canadian press.

5387   Most of the open line programming on CFRB and 640 is made up of one white male host.

5388   Toronto's new talk 88.1 FM will have live local open line programming, interactive with callers 24 hours a day, seven days a week. We will have live local newscasts 24 hours a day, seven days a week.

5389   These are just examples of what we will be doing that some of them aren't doing.

5390   COMMISSIONER PENTEFOUNTAS: And the other stations aren't doing call-in --

5391   MR. KOWCH: Overnight?

5392   COMMISSIONER PENTEFOUNTAS:  -- overnight?

5393   MR. KOWCH: No. CFRB has a comedy show for like five hours.

5394   COMMISSIONER PENTEFOUNTAS: Okay.

5395   MR. KOWCH: Because we are on the FM band while its competition is on the AM band, we will have access to the younger demographics that are not listening to AM radio.

5396   Because we are on the FM band there is a greater opportunity to reach out to females who tend to -- as we look at CBC Radio One's audience, they have a lot of female listeners while talk radio on the AM band don't have a lot of talk listeners from female audience.

5397   COMMISSIONER PENTEFOUNTAS: Okay.

5398   MR. TIETOLMAN: And if I can add one thing, sir?

5399   COMMISSIONER PENTEFOUNTAS: Yeah.

5400   MR. TIETOLMAN: Investigative journalism is something that has disappeared from radio and in other media as well. We will be different and we will do something unique with investigative journalism on a regular basis.

5401   COMMISSIONER PENTEFOUNTAS: You bring another point, Mr. Tietolman. Listen, this is an interesting project but very ambitious and very expensive.

5402   You run the numbers. It's not my money. It's your money and if you want to blow it, it's your privilege. But this is a very ambitious and expensive project and when you add sort of the -- first of all, you are going to be live 24/7.

5403   There is not going to be any brokering. There is not going to be any programming coming in from south of the border. And you add investigative journalism into the mix doesn't that seem to you a little unrealistic?

5404   MR. TIETOLMAN: Not at all. I can turn to Mr. Pancholy, the financing part.

5405   MR. PANCHOLY: I think the best way to answer the question is we believe in the project with all its constraints and challenges and also the opportunities. We have taken the time to look at it. We are convinced this is something we can make happen.

5406   As far as the brokerage is concerned, perhaps we didn't answer the question fully. I think the answer that we gave you was limited to: Will we be offering syndicated programming? The answer was no.

5407   COMMISSIONER PENTEFOUNTAS: Okay.

5408   MR. PANCHOLY: But we have not ruled out exporting our content. We believe if you do a very good job that there is ample appetite in the rest of Canada and possibly in the U.S. to really understand what's happening in Toronto.

5409   It is the economic engine. It is the city which has the corporate headquarters. And this information is of relevance to a lot of Canadians.

5410   COMMISSIONER PENTEFOUNTAS: You would derive revenues from the programming on your Toronto channels -- Toronto stations, that is?

5411   MR. PANCHOLY: Yes, we would. Yes.

5412   COMMISSIONER PENTEFOUNTAS: Okay.

5413   And is it Toronto that allows you to be that ambitious? I mean could you do investigative journalism and 24/7 in a medium-sized market?

5414   MR. PANCHOLY: Not with this much credibility, I would say.

5415   If you look at other markets, certainly the size of the markets is a big determinant. Sometimes linguistic duality becomes an impediment to doing this. But in Toronto I think we can make it work.

5416   COMMISSIONER PENTEFOUNTAS: You mentioned female audiences. You already mentioned that a big chunk of your programming philosophy will be face to face debate, perhaps even conflict. And my understanding when I look at sort of sociological studies women don't like conflict. How do you attract them?

5417   MR. PANCHOLY: We actually -- I mean just to deviate a little bit from the discussion I will take some liberty to introduce some humour.

5418   We had a big fight amongst ourselves yesterday where we were debating this issue. The question was: How do you make content relevant and relevant to, for example, females?

5419   I think the answer is a female would likely open up to what he or she feels about the host as a female and other participants are females. It may not work as well. So I think that's the other part of the key.

5420   So we talked about several enablers. I think being on the FM band is certainly one enabler. But having relevant content and discussion of relevant topics with hosts that have qualified and have the trust of the listeners in their domain that is key.

5421   MR. KOWCH: And if I may add, debate, discussion, even heated, doesn't necessarily translate into conflict.

5422   And I understand what you are saying, you know, about the female audience. That is why if you have two people giving both sides of the story it's more inclusive than just one person doing a talk show, their opinion, "You're on. Thanks for calling".

5423   COMMISSIONER PENTEFOUNTAS: Well, I'm a Quebecer. We like social peace. I don't personally like it but it's all about social peace and not getting in conflict.

5424   Listen, the other element is that all of the people that will be coming on to debate, none of these people will be getting paid. Is that right?

5425   MR. TIETOLMAN: No, not to debate.

5426   COMMISSIONER PENTEFOUNTAS: Politicians?

5427   MR. TIETOLMAN: No, not at all.

5428   COMMISSIONER PENTEFOUNTAS: Okay.

5429   MR. TIETOLMAN: The hosts on air are paid, obviously.

5430   COMMISSIONER PENTEFOUNTAS: Okay. I understand that. But none of the people coming on to debate -- I mean it's not going to be an extra cost having all these debates, right?

5431   MR. TIETOLMAN: No.

5432   COMMISSIONER PENTEFOUNTAS: People will come in for free?

5433   MR. TIETOLMAN: They are newsmakers.

5434   COMMISSIONER PENTEFOUNTAS: They are newsmakers, okay.

5435   The Sunday night shows who is going to pay for that airtime? Are the universities going to have to pay or are the students going to have to go out there and find financing, or is that coming out of Tietolman Tétrault Pancholy Media fund?

5436   MR. TIETOLMAN: We our handing the three-hour block over to the students of Greater Toronto.

5437   COMMISSIONER PENTEFOUNTAS: Okay.

5438   MR. TIETOLMAN: And if they so desire they will sell their airtime and they will keep that revenue in that revenue pool for good projects, quality projects for students in the GTA.

5439   MR. KOWCH: It's in investment in the future, sir. It's an investment to provide the opportunity for tomorrow's radio stars to get their start.

5440   COMMISSIONER PENTEFOUNTAS: You are creating a farm club.

5441   MR. KOWCH: Well, the problem is that the media has abandoned its farm teams by using overnights and weekends for syndicated programming.

5442   COMMISSIONER PENTEFOUNTAS: Yeah.

5443   What is Innoversity? Maybe everybody knows, but I don't.

5444   MR. KOWCH: Innoversity is this incredible organization that I have had experience working with. They were able to -- what they do is they link people in the various cultural communities who are broadcasters, documentary producers, writers, with mainstream media.

5445   I have used them on several occasions to find people to do what we call the "Neighbourhoods". There was a five-part series in different cultural communities.

5446   That's what they do. They link -- they help the media find people in the different cultural communities and put them on the radio.

5447   COMMISSIONER PENTEFOUNTAS: Okay. And this is specifically happening in Toronto? This is an organization in Toronto?

5448   MR. KOWCH: Yeah, this is a Toronto organization.

5449   COMMISSIONER PENTEFOUNTAS: Just to get briefly to market share, you are ambitious in your plan and you are also ambitious in your revenues.

5450   I don't have a problem with your revenue point. It is much lower than what we have seen. I think part of that's confidential but it's very conservative. But a 3 percent market share in Year 1, is that realistic?

5451   And I add to that the fact that the Leger study you gave us showed that 5 percent of listeners would listen to the station every day, 5 percent. I mean 43 percent would be interested in it but only 5 will listen to it every day. So that would mean they have to get 3 out of that 5 percent in Year 1.

5452   Now, I know you are called TNT and its explosive radio probably or whatever, but I mean how do you do 3 market share in Toronto in Year 1, guys?

5453   MR. PANCHOLY: I think part of the answer lies in the fact that when you are coming out with a product for which there is a clear market and opportunity it's relatively easy versus being the end force in the market where you have so many other incumbents doing exactly the same thing.

5454   And we would not be nearly as ambitious if it were going in that vein. We would be offering something that was almost the same as what the incumbents are offering.

5455   We are unique. We have looked exhaustively at what the competition is doing today and we feel that there is a very distinct niche that we can tap into.

5456   And on another dimension, I mean, we are not going to be just sitting back and letting people discover us. We are going to do everything to promote ourselves, to show people what we do.

5457   I think, as our expense line shows, we want to invest in the quality programming. We as a team believe that there is absolutely nothing more than you do better in terms of using your money than to create quality content.

5458   MR. BOURQUE: If I may add very quickly, sorry, one of the issues is that a majority of the market listens to three stations or more per day, so I think in terms of getting a three share, which is -- so lower than what the raw figure would suggest -- needs to come from that switching potential that the Toronto market has.

5459   So the reach will be fairly large and if they deliver on the promise in terms of content, then it's just a matter of getting the frequency. But that three percent share is -- to us, seemed conservative and attainable.

5460   COMMISSIONER PENTEFOUNTAS: I was --

5461   MS BLOOM: Sorry, I would like to add to that.

5462   COMMISSIONER PENTEFOUNTAS: Yeah.

5463   MS BLOOM: Sorry. Because if you want to look at the relation between the revenues and the three percent market share, although in the numbers there is a three percent that was used, there's actually a correction factor that was incorporated after the three percent.

5464   So the revenues themselves don't actually reflect three percent. They're corrected for an approximate 30 percent factor of -- I wouldn't -- well, I wouldn't call it a learning curve.

5465   Maybe Rajiv, if you --

5466   MR. PANCHOLY: Start-up.

5467   MS BLOOM: Start-up. A start-up curve.

5468   COMMISSIONER PENTEFOUNTAS: You've created a little buffer for yourselves as a safety zone there in case things don't go as well as you thought they would.

5469   MS BLOOM: That's right.

5470   COMMISSIONER PENTEFOUNTAS: I always ask this question about repatriating audiences, and I think you've partially answered it, the female element, the youth element. And you also talk about, I think, immunities.

5471   Do you want to give me your plan on repatriating listeners back to radio above and beyond what you've already said, if there's anything else you want to add to that?

5472   MR. KOWCH: Repatriating people back to radio. That's something, I guess, I spent 14 years trying to figure out, is every time you lose somebody, how do you bring them back.

5473   I think what it really comes down to, as Rajiv says, it's about the promotion, how we promote the radio station and then how we deliver on our programming.

5474   If people come and don't like what we're doing, you're not going to repatriate them. But if people come and say, "That's different. I like that", then you will bring them back.

5475   MR. TIETOLMAN: I'll just add one thing.

5476   The day after Conrad Black left prison, he's on our station the next morning talking to the Toronto audience. Do you think we're not going to get an audience for that? I promise you, we will impact the market dramatically.

5477   COMMISSIONER PENTEFOUNTAS: Are you going to threaten him on -- how are you going to get him on the station the next day?

5478   MR. PANCHOLY: Mr. Pentefountas, if I may add to the issue of repatriation, I don't think that's quite what we want to do with the youth segment.

5479   The youth segment is a multi-modal segment. They have many different mediums that they rely on for information and discussions and chats, and I don't think we will see a day when radio repatriates them back.

5480   I think what we're looking at is adding to the current portfolio of things because radio is missing from one of those mediums by which they get information.

5481   COMMISSIONER PENTEFOUNTAS: Okay.

5482   MR. PANCHOLY: So just focus on the word "repatriation" and say that's not quite what we're talking about.

5483   COMMISSIONER PENTEFOUNTAS: Okay. I understood your arguments on the younger demo. I understood your arguments on women. You also mentioned cultural communities, ethnic communities. I mean, I don't know what the appropriate word is, but we've heard some proposals on third and second generation Canadians.

5484   What's the plan on getting some of that market share to 88.1 New Talk?

5485   MR. PANCHOLY: As you can tell from my generic tan, I'm a first generation immigrant, so I can talk about the issue with some degree of personal knowledge.

5486   Immigrants, and especially new immigrants, have different interests, different concerns, different issues. It's not just a linguistic and cultural issue. They have different kinds of topics of concern to them.

5487   And if you don't know what those issues and concerns are, you cannot deliver to them pertinent and relevant programming. So the challenge we have and the plan we have is to make sure we have representatives from those communities driving and designing those shows. And that's the only way you'll get to basically deliver content to them that's of relevance to them.

5488   And I'll just keep underlining the word make it relevant, and that's how you address them.

5489   COMMISSIONER PENTEFOUNTAS: But you'd have to sort of embed people from your staff and teach them one of those communities. Is that --

5490   MR. PANCHOLY: On the contrary; we'll embed people from those communities into our staff.

5491   COMMISSIONER PENTEFOUNTAS: Tomato, tomahto. Okay.

5492   Thank you, Mr. Chairman.

5493   THE CHAIRMAN: Thank you.

5494   Commissioner Patrone?

5495   COMMISSIONER PATRONE: Thank you, Mr. Chairman.

5496   I appreciate your presentation this morning.

5497   Ms Bloom, you said you like your talk edgy. I'd like you to define what that means. And the second part of that question is why you think that's missing from Toronto's talk radio landscape, whether it's the result of excessive political correctness or whether it's just plain bland right now?

5498   Can you answer that for me, please?

5499   MS BLOOM: If you don't mind, I'm going to answer the second part first by telling you I'm actually here more for my financial knowledge than the Toronto market knowledge, so I'm going to defer that part of the question to somebody else on the team.

5500   What -- if I'm going to go back to the first, what I consider edgy is, once again, is anything that's current, so anything that's -- that would be relevant to me but current, like right away. Like in the news when I mentioned white collar crime, that's really a hot topic. When I mention fashion, well, for me, anyway, that's a hot topic. So things like that.

5501   Does that properly answer your question?

5502   COMMISSIONER PATRONE: No, but thanks for trying.

5503   To me, edgy has a connotation and I just wanted your explanation or your ideas about what would constitute edgy on your particular station.

5504   MS BLOOM: Okay. Well, I'll try to answer --

5505   COMMISSIONER PATRONE: Thanks.

5506   MS BLOOM:  -- a little better for you.

5507   Once again, edgy, for me, is current but it's also not necessarily confrontational, but something that's in the spotlight and that you can debate about or discuss about, that you get different points of view but there's an intelligent, rational, current discussion or debate on.

5508   COMMISSIONER PATRONE: And that's missing right now, in your view?

5509   MS BLOOM: Once again, I'm going to have to defer that to somebody else on the team.

5510   MR. KOWCH: Edgy. You can be edgy and still not turn people off.

5511   I think edgy means like, you know, you're pushing to the limit. And if you cross the line, some people may say, "Well, that's really edgy" while other people will say, you know, "That's not what I'm interested in".

5512   You have to be fearless if you're going to be a talk show host, and when you're fearless, you can be edgy.

5513   COMMISSIONER PENTEFOUNTAS: I noticed on page 5 of your oral in the second paragraph where you talk about co-host's concept permits stating extreme controversial opinions, and words like "extreme" jump out at me.

5514   Do you think that there's an atmosphere currently where the talk radio market, if you will, is, frankly, lacking in a sense of -- in the kind of divergence of opinion that you seem to be referring to?

5515   MR. KOWCH: I think you have less opinion on a station if you have one host doing a show, so when we can say "extreme" -- when you have two people discussing, maybe even getting into a heated argument but you have two people -- if someone crosses the line, the other person can bring them back and say, "You know, that's not -- you know, you can't say that" or "I think that's a racist comment" or what have you, and you deal with the problem immediately on the air rather than have to deal with the Canadian Broadcast Standards Council a month later.

5516   It allows -- it allows people to have their extreme opinions and be tempered by the other side of the argument.

5517   COMMISSIONER PENTEFOUNTAS: Okay. Well, thank you very much, Mr. Kowch.

5518   THE CHAIRPERSON: Thank you.

5519   Commissioner Poirier first, and then Commissioner Menzies.

5520   COMMISSIONER POIRIER: This is going to be an icebreaker. I'll speak in French, so if you need a translation device, please use it.

5521   Alors, je suis toujours un peu surprise de voir que parfois, on est pour la bande AM et parfois on est pour la bande FM pour faire de la nouvelle parlée.

5522   À Montréal, on le sait. Les Québécois veulent de plus en plus entendre des nouvelles parlées sur la bande FM.

5523   Cependant, on nous a toujours dit que le marché anglophone préférait la bande AM pour de la nouvelle parlée.

5524   Alors, j'aimerais que vous m'expliquiez comment vous pensez que culturellement parlant, la population de Toronto va être prête à accepter que l'on fasse de la radio parlée sur les ondes FM.

5525   M. TIETOLMAN : Pour commencer, Madame Poirier, on peut témoigner le fait-même que Radio-Canada, la raison un de ce succès, a une part de marché considérable et impressionnante sur la bande FM en anglais, à Toronto.

5526   C'est sûr, Montréal c'est pas Toronto, et vice et versa. On sait bien qu'on peut dire de deux façons qu'est-ce qui arrive avec la radio AM/FM Montréal, versus AM/FM de Toronto. Il faut jouer avec les faits. Il faut jouer avec les circonstances.

5527   C'est sûr qu'on croit sincèrement, parce qu'on a témoigné ça partout que s'il y avait pas un choix sur la bande FM pour la radio parlée/informations, on peut remplir ce rôle et on peut le jouer de façon importante avec succès.

5528   M. TÉTREAULT : Si je peux continuer, Madame Poirier. La réalité québécoise n'est pas la même que la réalité à Toronto, autant au niveau du nombre de fréquences disponibles en français et musicales, et autant au niveau de stations francophones qui offrent de la musique du contenu de radio parlé.

5529   À Montréal, il n'y en a pas de concurrence. Il y avait qu'une station...

5530   CONSEILLÈRE POIRIER : Mais ma question traite sur Toronto.

5531   M. TÉTREAULT : Oui, je comprends, sur Toronto. Mais vous faites allusion à pourquoi il y a des gens qui favorisent le AM parlé et d'autres le FM.

5532   À Toronto, on a trois stations très fortes de radio parlée sur la bande AM, il y en a pas sur le FM à part Radio-Canada.

5533   Et si on veut se différencier des stations concurrentes avec un contenu jeune, novateur, qui rejoint une clientèle cible qui n'a pas été rejointe, si on regarde toutes les analyses, visiblement par les compétiteurs sur la bande AM...

5534   CONSEILLÈRE POIRIER : Oui.

5535   M. TÉTREAULT : ...la bande FM se trouve un outil extraordinaire pour nous en vue d'offrir quelque chose qui va se différencier de la concurrence.

5536   CONSEILLÈRE POIRIER : Alors, je vais donc préciser ma question. Je pense que ce sera à peu près la première fois dans le plus gros marché du Canada qu'on donnera une licence parlée en anglais.

5537   Alors, j'aimerais que vous m'expliquiez pourquoi ça va marcher à Toronto alors que nulle part ailleurs au Canada anglais, cela n'a été testé avec succès.

5538   M. TÉTREAULT : Nous allons toujours innover côté radio pendant des années. Nous croyons sincèrement, à cause qu'il y avait tellement de monde à l'écoute, la radio FM, de bande FM à Toronto, la démographie qu'on cherche, qu'on peut gagner. Ils vont chercher les choses, mais ils vont jamais syntoniser la radio, bande AM. On sait bien.

5539   Puis, on peut retourner la question à Bourque, il pourrait peut-être alimenter les informations sur ça.

5540   M. BOURQUE: Il y a un élément démographique pour le marché de Toronto. C'est que souvent, on dit que les personnes en avançant en âge changent leurs habitudes.

5541   O.K. Ils vont peut-être changer le type de musique qu'ils vont écouter, mais ça veut pas dire qu'ils vont nécessairement changer leurs habitudes pour se tourner vers le AM.

5542   En fait, souvent, quand on teste, les jeunes n'aiment pas le son du AM, n'aiment pas la sonorité.

5543   Donc, plus on va avancer, ou plus ces jeunes-là vont avancer en âge, qu'ils vont devenir le coeur du marché de Toronto, on va devoir les rejoindre sur le FM, parce qu'ils n'iront pas sur le AM éventuellement.

5544   CONSEILLÈRE POIRIER : Oui. Et j'ajouterais donc, un changement de culture, pour moi, voudrait dire que quand même, ça doit prendre du temps. Amener les gens à changer d'habitude et je trouve vos pronostics de part de marché très élevé.

5545   Monsieur Pentefountas l'a dit, trois pour cent la première année, mais huit parts de marché la septième année, c'est ce qui est plus que presque toutes les radios parlées.

5546   Alors, quand on veut changer la culture, il me semble, ça prend du temps et on ne peut pas avoir justement des pronostics aussi optimistes.

5547   M. TÉTREAULT : En tout respect, je les trouve pas optimistes, nos scénarios. On a fait, pas un sondage, on a fait deux sondages qui sont extrêmement révélateurs. Et on a consciemment réduit nos parts de marché.

5548   Mais vous comprendrez aussi qu'outre l'aspect part de marché, il y a une réalité. On est en affaires.

5549   Qu'est-ce qui est important en affaire? C'est de générer des revenus, des dépenses, d'avoir de la rentabilité. Mais on a aussi une obligation sociale envers la population législative en vue de donner à la population un service.

5550   La radio parlée, c'est un service. C'est une plus value qui offre vraiment de l'information et tout. Donc, c'est notre produit, on y croit.

5551   M. TIETOLMAN : Et si nous allons frapper à la septième année une bande de marché de cinq au lieu de huit par exemple. Quatre ou cinq. On va atteindre nos objectifs de vente à 100 pour cent, ce qu'on a prévu.

5552   CONSEILLÈRE POIRIER : Parfait.

5553   Mon deuxième sujet, c'est le fait que le CRTC veut toujours s'assurer que quand il y a un nouvel arrivant, que cela ne mette pas dans une position dramatique ceux qui sont déjà présents.

5554   Par exemple, vos projections de revenus de publicité pour les radios déjà existantes, c'est d'aller chercher 18 pour cent de leur revenu.

5555   Quelle est la part du AM et quelle est la part du FM dans cela? Est-ce que vous l'avez fait, cet estimé-là?

5556   M. TÉTREAULT : Il y a un aspect aussi qu'il faut comprendre. Et c'est pas vrai, la prémisse, en tout respect, elle est fausse. Et elle est « arguable ».

5557   On peut complètement dire que oui, il y a tant de revenus X sur la balance des revenus générés par la radio. Mais c'est complètement mettre de côté tous les revenus disponibles au niveau publicitaire, dans l'assiette publicitaire des téléviseurs, la publicité internet...

5558   CONSEILLÈRE POIRIER : Mais ma question est précise.

5559   M. TÉTREAULT : Oui, elle est précise, mais la base de votre question ne correspond pas à la réalité, dans le sens que oui, on veut se différencier des trois stations AM, oui, on va être des concurrents. Mais on va être des concurrents dans une niche à part et on va être sur une bande à part. Donc, on va prendre peut-être oui, un pourcentage des revenus des stations AM. On va prendre aussi des FM.

5560   CONSEILLÈRE POIRIER : Oui.

5561   M. TÉTREAULT : Mais notre vision d'affaires n'est pas de se limiter au revenu de la radio, mais à l'assiette publicitaire totale de la grande région de Toronto.

5562   CONSEILLÈRE POIRIER : Oui, mais j'ai devant moi les chiffres. Vos prévisions sont de 1.2 million provenant des radios existantes, ce qui correspond à 18 pour cent de vos revenus.

5563   Ma question est, quelle part allez-vous chercher des revenus du AM par rapport aux revenus du FM et est-ce que vous avez des chiffres?

5564   M. TÉTREAULT : Écoutez. Si vous posez cette question-là en tout respect à n'importe qui ici, ils peuvent vous dire n'importe quel pourcentage.

5565   Mais comment peut-on savoir hors de tout doute, qu'on va apporter dans deux ans, on va prendre 20 pour cent des revenus de la radio AM de ce 18 pour cent-là, et c'est 80 pour cent du FM. C'est complètement hypothétique comme question. Et vous donner une approximation va valoir juste une approximation.

5566   Dans l'équilibre de la balance, ce qu'il faut comprendre, c'est le projet global. On a des parts de marché peut-être ambitieuses. Mais on a des revenus très conservateurs, très conservateurs.

5567   CONSEILLÈRE POIRIER : Je regarde, et pour nous, ça paraît gros, les revenus de nouveaux publicitaires est équivalent à la deuxième année à trois millions, ce qui 45 pour cent de vos revenus vont être de nouveaux revenus.

5568   Ça aussi, c'est pas tellement conservateur par rapport à l'ensemble des demandes qu'on a eues. C'est beaucoup plus élevé que cela.

5569   M. TÉTREAULT : Exactement. Et c'est ça la manière de faire des affaires.

5570   On est pas une structure où il y a une série de stations de radio partout qui a la même équipe de vente, qui propose, qui fonctionne de la même manière.

5571   La force qu'on a, c'est qu'on est une équipe jeune, dynamique, et qu'on a un énorme réseau de contacts et qu'on peut vendre - on a des manières novatrices de générer des revenus. Et pourquoi se limiter à la même manière de faire pour générer ces revenus-là?

5572   CONSEILLÈRE POIRIER : Alors, ma question va se préciser. Comment allez-vous faire pour aller chercher 45 pour cent de vos revenus chez de nouveaux publicitaires, même si dans Toronto, l'économie va bien?

5573   M. TIETOLMAN : Pour commencer, Madame Poirier, si on regarde l'enveloppe publicitaire dépensée dans la grande région de Toronto à chaque année, Stats Canada, les chiffres de CRTC avaient quelque chose comme deux milliards six cent cinquante millions de dollars dépensés par les annonceurs pour le marketing, la publicité, l'annonce à la radio/télévision, (inaudible), Transit, etc.

5574   Si on n'est pas capable de ramasser une petite partie d'un pour cent là-dedans...

5575   CONSEILLÈRE POIRIER : Monsieur Tietolman?

5576   M. TIETOLMAN : Oui.

5577   CONSEILLÈRE POIRIER : Expliquez-moi votre stratégie pour aller chercher 45 pour cent de nouveaux publicitaires. Do you have a strategy?

5578   M. TIETOLMAN : Ah! Mais c'est ça, notre stratégie. Si vous voulez, on peut vous soumettre ça dans les prochains jours.

5579   CONSEILLÈRE POIRIER : Non, non.

5580   M. TIETOLMAN : On peut pas commencer à parler de stratégie de vente juste comme ça.

5581   CONSEILLÈRE POIRIER : O.K. O.K.

5582   Mais vous avez une stratégie.

5583   M. TÉTREAULT : Absolument.

5584   CONSEILLÈRE POIRIER : Parfait.

5585   M. TÉTREAULT : Juste, en tout respect, puis l'important c'est que oui, on sait exactement comment faire. Mais ce qu'on veut dire exactement tout de suite dans les détails devant tout le monde, à nos concurrents, qu'est-ce qu'on veut faire!

5586   CONSEILLÈRE POIRIER : Non, non. Ça, je le comprends. Mais vous me confirmez que vous avez une stratégie.

5587   M. TÉTREAULT : Oui, absolument.

5588   CONSEILLÈRE POIRIER : Parfait. C'est ce que je voulais savoir.

5589   Yes, if you want to add on this.

5590   MR. PANCHOLY: Yes, I would like to add to that.

5591   If you look at basically the revenues that are coming to competing talk stations in Toronto --

5592   COMMISSIONER POIRIER: Yes.

5593   MR. PANCHOLY:  -- it's very revealing.

5594   Some of the stations that are basically doing news, they're getting a lot of revenues from traffic reports and they're part of a bigger conglomerate, so their source and their way of actually getting to revenues is very different from what we have to do.

5595   If you look at our format and we say we're going to have a show discussing a certain topic in detail, the people who are interested in that are very different from the people who do normal radio advertising. These are not the retailers. These could be bigger corporate houses, which are traditionally not radio advertisers.

5596   Talk about a bank. If you're going to have a show and basically have a lot of discussion on the current economy and economic affairs, you may find one of the top five banks might want to sponsor that, who would typically not be spending revenues in advertising on local radio. And that is the key difference between our strategy, and that's why the percentage is different.

5597   M. TIETOLMAN : Il faut pas oublier une chose aussi. Les annonceurs à Toronto sont des auditeurs en même temps.

5598   Et quand vous avez un client qui peut vous écouter et aime bien que vous diffusez en ondes, ça devient un annonceur, une cible très facile et beaucoup plus facile de vendre une campagne publicitaire. Et on a preuve pour ça.

5599   CONSEILLÈRE POIRIER : Merci beaucoup. C'est tout, Monsieur le Président. Merci. Thank you.

5600   THE CHAIRPERSON: Okay, thank you very much. That completes our examination of your application.

5601   Hang on. We've got a follow-up question.

5602   CONSEILLER PENTEFOUNTAS : Si vous me permettez. D'abord à Montréal, pour retourner à Montréal brièvement pour suivre le questionnement, la ligne de questionnement de ma collègue, la première chaîne était « Première », jusqu'au moment où 98,5 commence à diffuser sur la bande FM.

5603   On a fait ce changement-là. Et il y avait de la concurrence sur la bande FM. Et ça a produit des résultats à Montréal.

5604   Oui, je comprends que c'est pas le même marché, mais c'est en partie...

5605   M. TIETOLMAN : Radio un fonctionne bien à Montréal côté programmation et côté sondage. Et le 98,5 fonctionne très bien en même temps.

5606   CONSEILLER PENTEFOUNTAS: Et 98,5 est en train de manger le lunch de... au niveau des BBM ou des cotes d'écoute.

5607   M. TIETOLMAN : Oui, mais il faut pas oublier une autre chose. Il faut regarder honnêtement la situation.

5608   Le gouvernement du Canada en ce moment a fait les coupures dans les budgets de la programmation d'autres choses à Radio-Canada.

5609   Il y a des personnages en onde très, très connus et très solides. Comme (inaudible), je pense qu'il n'est plus là. Peut-être il revient une autre journée, on sait pas. Mais quand on modifie la programmation qui est un succès, on va souffrir vraiment, directement et facilement et très vite avec l'auditoire qui écoute. C'est ce qui arrive.

5610   CONSEILLER PENTEFOUNTAS: Et est-ce que les stations à Toronto, traditionnelles, ont réussi à aller chercher de la clientèle publicitaire? C'est-à-dire des sous des comités culturels?

5611   M. TIETOLMAN : Ça, on a pas fait l'étude. On a pas fait l'étude, mais j'imagine, les gens dans les (inaudible) ont les mêmes besoins et les mêmes idées dans un certain sens. Pas tous à 100 pour cent, mais dans un certain sens, que le marché at large.

5612   Même chose que je veux mentionner en même temps, qu'on a oublié, étant donné qu'on est ici pour une demande de licence, c'est incroyable. Et on est fiers d'une chose. Certains de nos projets soumis dans la demande sont déjà copiés et utilisés par certaines stations électroniques dans des PTA.

5613   On est très fiers de ça, puis on est déjà une attaque, une influence sur le marché productif à Toronto.

5614   CONSEILLER PENTEFOUNTAS: Mais comment faites-vous pour concurrencer contre ce genre d'attitude? Parce que vous êtes pas prêts à lancer votre station avant...

5615   M. TIETOLMAN : Monsieur Pentefountas, pour chaque idée, nous avons soumis... on a dix autres idées encore mieux.

5616   CONSEILLER PENTEFOUNTAS: O.K.

5617   M. TIETOLMAN : Vous prenez ça.

5618   CONSEILLER PENTEFOUNTAS: Dernière question que j'ai oublié de poser. Va-t-il y avoir des synergies entre Montréal et Toronto?

5619   M. TIETOLMAN : Il y aura bien sûr correspondant à Ottawa, par exemple. Il y a certaines choses dans la gestion de l'entreprise.

5620   CONSEILLER PENTEFOUNTAS: Non, mais des synergies entre le ou les stations de Montréal et les...

5621   M. TIETOLMAN : Oui. Oui.

5622   CONSEILLER PENTEFOUNTAS: ...potentiellement une station à Toronto?

5623   M. TIETOLMAN : Sûrement. Dans la gestion, l'équipe de gestion, c'est sûr qu'on peut servir à plus que (inaudible).

5624   Deuxièmement, côté ventes et marketing, on a aussi un genre de combined effort qu'on peut faire là-dedans vis-à-vis certaines autres fonctions correspondant à Ottawa.

5625   On n'a pas besoin d'engager les deux. On peut avoir une personne solide qui pourrait fournir l'information quotidienne à toutes les stations, même.

5626   CONSEILLER PENTEFOUNTAS: Et d'autres synergies au niveau de la programmation?

5627   M. TIETOLMAN : Pas vraiment, non. Sauf si on voulait discuter une fois de temps en temps, de faire un échange. Et je peux donner la parole à Steve Kowch, parce qu'il a déjà fait ça.

5628   Il a gagné, comme on dit, national awards for broadcasting Montreal, Toronto content.

5629   MR. KOWCH: I think, sir, that what would happen, for example, with all the unrest in the student population, instead of relying on Canadian Press to feed us reports from Montreal that are heard on all the other stations here in the market, we would use our own people to do that type of reporting, just like if something major happened in Toronto, we would provide the information and reports to Montreal.

5630   COMMISSIONER PENTEFOUNTAS: But I also recall CJD and CFRB simulcasting at some point.

5631   MR. KOWCH: Yes.

5632   COMMISSIONER PENTEFOUNTAS: Is that --

5633   MR. KOWCH: We did a simulcast for a town hall meeting on same-sex marriages. We did a simulcast when it came to the inauguration of President Obama because as the national director of the news talk format for Astral, we were looking for ways of using each other.

5634   So we would -- you know, rather than take all our staff in Toronto and send them to Washington, we would cherrypick and take some of the best people across the chain to participate and also give them more experience.

5635   COMMISSIONER PENTEFOUNTAS: Okay. Thank you.

5636   Using each other in a good way.

5637   MR. KOWCH: Yes.

5638   MR. PANCHOLY: We will actually cross-feed if the issue is relevant in both cities at the same time.

5639   COMMISSIONER PENTEFOUNTAS: Yeah.

5640   Okay. Thank you.

5641   THE CHAIRPERSON: Thank you very much. We'll take a break for 15 minutes.

--- Upon recessing at 1037

--- Upon resuming at 1058

5642   THE CHAIRPERSON: Madam Secretary...?

5643   THE SECRETARY: Yes. Music, please. All right.

5644   We will now hear item 13 on the Agenda, which is an application by WorldBand Media, on behalf of a corporation to be incorporated, for a broadcasting licence to operate an English-language commercial specialty FM radio programming undertaking in Toronto.

5645   I would ask that you please introduce yourselves yourselves for the record to begin with and you will then have 20 minutes for your presentation.

PRESENTATION

5646   MR. SHEA: Good morning, Mr. Chairman, Commissioners and Commission staff. I am Kevin Shea in the back row here, Chairman of the Board of Directors of WorldBand Media Inc., OBCI.

5647   I would like to introduce the team that will be presenting this application to you today.

5648   Sitting directly in front of me is Prabha Selvadurai, President and CEO of WorldBand Media; to his left, Judy Tapp, General Manager; to her left, Carey Davis, Chief Operating Officer; to Prabha's right, Alyssa Schwartz, Chief Content Officer; and then Pierre-Louis Smith, our Regulatory Advisor.

5649   In the back row, to my right, is Brian Patterson, President and CEO of the Ontario Safety League. Next, Mr. Robert Steiner, Director of the Munk School of Global Affairs, and then Anne O'Hagan of AOH Communications. These three are interveners.

5650   Next is Chris Lecomte, TOUCH's Financial Advisor, and then Dr. Gerry Wall, our Senior Strategic Business Advisor.

5651   Now, to my right is Soroopi Shan, TOUCH's Project Manager, and finally, Brian Thomas, member of the Editorial Advisory Board.

5652   I am very very proud of my association over the past four years with this exciting and innovative company. I have watched this young telecom engineer cum entrepreneur, my friend Prabha, shape and execute an exciting media vision for WorldBand.

5653   From its head office right here in Toronto, this company is now operating radio stations in a growing number of U.S. markets. Today we present the next chapter of that vision, a multiplatform FM radio application for an all-English news/talk station for what we call this New Toronto.

5654   I will now turn it over to Prabha and our team. Thank you.

5655   MR. SELVADURAI: Thank you, Kevin.

5656   Bonjour, good morning, Mr. Chairman, Commissioners and Commission staff, and thank you for the opportunity to present our proposal to you today.

5657   I was barely 21 years old when I had the good fortune to come to Canada from a war-torn Sri Lanka. I embraced this country and it embraced me. More than anything else, my parents wanted me to have a good education. Canada gave me that: access to undergraduate and graduate studies at an outstanding university, with a good scholarship.

5658   Today, with my wife, we are raising our family here in English and in French. This is our home and I am absolutely dedicated to continue to build a great media company right here in Toronto.

5659   We believe that with your help we will make history. The time has come for Toronto to have its private English FM news/talk station. We propose TOUCH FM based on the compelling logical market realities, market dynamics and good public policy.

5660   MS TAPP: Good morning, Chairman, Vice-Chairman, Commissioners and Commission staff, I'm Judy Tapp, General Manager of TOUCH FM.

5661   Let's get right to the question: How can the last available FM frequency best serve Toronto?

5662   The answer is very clear: Toronto needs its first private FM news/talk format, not another music format.

5663   With due respect to other applicants, approval of another music format would squander and misuse the market's last FM frequency.

5664   Here's why...

5665   We all know that music listening is moving away from FM to iPhones, iPads, Androids and online. Hence, the overall FM audience is shrinking.

5666   We know that in markets all around us, in the United States, in Mexico, in Europe, FM stations are abandoning music formats and converting to news/talk formats to try and reverse the declining audience trend.

5667   We know the facts reported in CRTC data indicate that from 2006 to 2010 listening to music on radio in Canada has fallen 10 percent as listening to spoken word formats has increased by 8 percent.

5668   And there are more facts that we know. Music listening is down in Toronto and all across the country even though over 100 new music stations have been licensed between 2003 and 2010.

5669   We know that in Toronto the 18-54 demographic segment is the largest demo in the Toronto market at 52 percent. Women and visible minorities are the largest groups within this demographic.

5670   This is the New Toronto.

5671   We know the New Toronto is not listening to older male-skewed programming of Toronto AM radio talk formats.

5672   Ipsos research provides clear evidence that the largest demo in this market, the New Toronto, is looking for an intelligent news and talk station.

5673   We know that Ipsos research shows strong interest for a New Toronto news/talk station that is:

5674   - younger, inclusive, intelligent and independent;

5675   - living local, not just talking about it;

5676   - interactive from inception; and

5677   - integrated across all Web and mobile platforms.

5678   We call this radio station TOUCH FM.

5679   MR. SELVADURAI: Thank you, Judy.

5680   And who are we?

5681   WorldBand is the New Toronto in ownership and in management. Our company culture is all about delivering inclusive, innovative and intelligent content.

5682   To this proposal we bring the experience and commitment of a strong team, along with outstanding strategic partners dedicated to make it all happen.

5683   Let's hear from them.

--- Video presentation

5684   MS TAPP: I have worked in Toronto media, notably in media sales and marketing for more than 20 years and I am very confident in this business proposal.

5685   As you have seen in this video, I'm not the only one. TOUCH FM is driven by innovative ideas, ideas that ignite enthusiasm in veteran and savvy media figures like Doug Knight and Erica Ehm.

5686   Ipsos research shows that young people don't typically listen to AM radio and that occurrence is widespread across North America. AM's core constituency is 55-plus. FM is younger; 18-49 year olds devote 86 percent of their radio time to FM.

5687   The business case for supporting this proposal rests on numerous validated assumptions, including two tiers of comprehensive market research.

5688   First, Ipsos conducted field research to determine which of a group of different FM formats was preferred by respondents.

5689   Second, Ipsos did a demand study testing the programming proposed by TOUCH FM.

5690   The results are clear. Younger Toronto audiences, women and visible minorities show strong interest in TOUCH FM.

5691   This New Toronto audience is looking for an English-language news/talk radio station that serves as an on-air and online conversation hub.

5692   The research leads us to conclude that a strategic and intelligent radio service can reverse the downward decline in radio listenership in Toronto.

5693   In Toronto, the supply of private spoken word radio is nonexistent on FM and markedly lower overall when compared to other North American markets.

5694   It's time for a new independent radio voice for Toronto and it is hard data and research that confirms this opportunity. TOUCH FM is that new voice. It is the one proposal amongst all the applications before you that will do what no other can: bring in new audiences to radio.

5695   Alyssa...?

5696   MS SCHWARTZ: Good morning. I'm Alyssa Schwartz, Chief Content Officer at TOUCH FM. My career has taken me from traditional media to the digital space, where I led the editorial redesign and relaunch of msn.ca, one of Canada's biggest news online portals.

5697   TOUCH FM will create a new participatory style of radio that enhances and extends the text conversations that are already widely happening on social media platforms and enhance them with the emotion that comes with the on-air conversation of human voices.

5698   This is what we refer to as the conversation hub. It's a democratic meeting place where the diverse conversations of social and digital media in Toronto's communities can come together with TOUCH FM as the centerpiece.

5699   Our research tells us the future of FM radio in large markets is information-based, interaction-driven, multiplatform content.

5700   TOUCH FM is spoken word radio that is many things, but here's one thing it definitely isn't, it isn't angry old guys yelling at each other.

5701   Toronto's demographic reality, the New Toronto, is shaped by the 25-49 age group, with a median age of 38, and predominantly this population comes from outside of Canada.

5702   In mainstream radio are their conversations being heard? Are we serving them? Are we speaking to them? Most importantly, are we involving them? Not in English, no, were not.

5703   It's time for a new inclusive, intelligent and independent radio voice for Toronto, and TOUCH FM is that new voice.

5704   It is the one service amongst all of the applications before you that will do what no other can. It will bring in new audiences to radio and increase the engagement in our city.

5705   The New Toronto audience will be able to connect with TOUCH FM on their BlackBerry, on their iPhone, on their Android, in the kitchen, in the car, wherever they are. TOUCH FM will provide local Toronto news, regular weather, traffic, sports, and then the conversation begins. That is TOUCH FM.

5706   What's different about TOUCH FM? Let me give you five highlights:

5707   - for starters, we are an independent editorial perspective provided by New Toronto ownership and management;

5708   - a democratic editorial decision-making process driven by New Toronto online and on-air audiences;

5709   - programming conceived from inception to engage Web and mobile media audiences and FM news/talk listeners;

5710   - live programming from neighborhoods across our city every day;

5711   - content accountability sessions held in communities across the city to encourage face-to-face feedback and discussion.

5712   And that's only the beginning of TOUCH FM. There's much, much more.

5713   As Chief Content Officer let me tell you about my top priority. Success in radio and for all the digital extensions is not driven by technology, it's driven by people.

5714   My priority will be to find, develop and grow diverse local Toronto talent, both on-air and off the air. We will recruit and train to bring the voice and content of the lively, intelligent and engaging online discussions to air.

5715   Based on the research we are confident that this is what the New Toronto wants, programming that can best be described in just four simple words: inclusive, interactive, independent and intelligent.

5716   Thank you.

5717   MR. DAVIS: Good morning. I'm Carey Davis. I have 30 years of experience in managing news/talk stations in small and major markets across North America, including here in Toronto as a consultant on the successful design and launch of 680 News 19 years ago. Now, I'm Chief Operating Officer of WorldBand Media's SiriusXM satellite radio news/talk channel in Spanish.

5718   TOUCH FM will be on the air live 24/7, with a minimum of 22 hours of hard news programming every week, and 75 percent of that will be purely local. I like to think of it as all Toronto all the time across all platforms.

5719   We won't be satisfied just about talking about the city. TOUCH FM will literally live in Toronto's neighbourhoods and communities.

5720   We will hold content accountability sessions across the city to encourage face-to-face public feedback.

5721   TOUCH FM will define a new, vibrant, participatory and inclusive Canadian radio model.

5722   We thoroughly understand how a successful multiplatform service can be built around radio, and to achieve that our integrated system will ensure:

5723   - that online content consistently makes its way into on-air programming;

5724   - that on-air listeners can drill down for more and unique content by going online; and

5725   - that this conversation that we are talking about never ends, it's on-air, online or onsite.

5726   TOUCH FM is built around a carefully conceived stand-alone business model.

5727   On top of that, to enhance our content, marketing promotion and revenue opportunities, Commissioners, we have established outstanding strategic alliances.

5728   Our partnerships with legacy media icons "Toronto Life" and "Toronto Sun" give us extended reach, instant credibility, gravitas out-of-the-box in programming, marketing and sales synergies.

5729   We struck a novel arrangement with "iPolitics" to ensure TOUCH FM's audiences receive Toronto-specific perspectives on political news from the nation's capital.

5730   Alliances with online media such as Erica Ehm's "YummyMummyClub" and other bloggers will keep our radio listeners and multiplatform users engaged and connected.

5731   Why are these successful content partners so interested in working with TOUCH FM? Well, we saw it in the video and the answer is simple: They understand we will broaden their reach.

5732   Commissioners, I would like to change gears for one second and say a word about this question of the frequency signal impairment of 88.1.

5733   There is no doubt that a very compelling case supports the view that 88.1 should be awarded to a spoken word format. Like CBC Radio One, TOUCH FM will not need stereo. A clear mono signal significantly improves the audio quality of the signal, including the .5mV contour. Bang! From a technological standpoint this is the best way to go.

5734   MR. SELVADURAI: Thank you, Carey.

5735   Commissioners, before we close, I would like to recap our CCD initiatives.

5736   WorldBand Media will invest $1.75 million over seven years -- and that's over and above the basic annual requirements -- to support the Community Radio Fund and to support and develop Canadian radio broadcasters of the future, with particular emphasis on talented women, the youth and Canadians from ethnic communities.

5737   In conclusion, Toronto's younger audiences and its female and visible minorities, the New Toronto, are basically ignored by existing talk radio services.

5738   We see a compelling future for spoken word on FM in a dynamic combination with social media. They are natural media extensions of each other's reach and influence. And as a design engineer in broadcast and wireless technology, I can assure you that we will fully leverage tomorrow's technologies and today's technologies of smartphones, the next generation of wireless devices, to fully maximize the power of radio.

5739   Approving this application will introduce an independent new voice for the Toronto of tomorrow. We have experience and ambition, a solid business plan and an equally solid financial backing.

5740   Commissioners, we know that this hearing is proceeding under the skies of a recently announced transaction involving Bell and Astral. If anything, there should be more appetite now to introduce new blood into the system. In an age of consolidation of newsrooms and shrinking numbers of broadcasting voices, by approving this proposal you will be introducing a new player with a new independent voice in local news, information and conversation.

5741   Furthermore, assuming we have the honour of receiving your approval, we have every intention of seriously exploring any and all radio acquisitions or new licence opportunities that may lie ahead.

5742   Thank you for this opportunity. Merci sincèrement. We wait for your questions.

5743   THE SECRETARY: Thank you, sir.

5744   We will now hear your interveners in support.

5745   I will just remind the panel that they have 10 minutes collectively.

5746   You may now proceed with your presentations.

INTERVENTION

5747   MR. STEINER: Thank you.

5748   Bonjour, Monsieur le Président, membres et employés de la Commission. Je m'appelle Robert Steiner. I am Robert Steiner and I am Director of the Fellowships in Global Journalism at the Munk School of Global Affairs in the University of Toronto.

5749   With me today are Anne O'Hagan of AOH Communications, on my left, and Brian Patterson, President of the Ontario Safety League, on my right.

5750   We appreciate having the opportunity to be here today to tell you why each of us thinks TOUCH FM should be granted last FM licence in Toronto, but before I get to my reasons I want you to know that each of us is a proud supporter of the TOUCH proposal.

5751   Each of us thinks that WorldBand Media is a unique applicant with the potential to really be a game changer in Toronto media and one that will help ensure this city's place at the cutting edge of smart journalism around the world.

5752   I asked to appear before you today, Commissioners, because the Munk School of Global Affairs at the University of Toronto is pioneering a new way to cultivate outstanding journalism.

5753   Our Fellowship in Global Journalism is the first program anywhere in the world that recruits true experts in complex disciplines and teaches them to break news in those disciplines as reporters and in so doing deepen the quality of journalism serving Toronto, Canada and, as our international partners would attest, serving media around the world.

5754   We have just finished recruiting our first cohort of eight Fellows who will begin the program in September 2012. They include a Professor of Criminology who will learn to break news on crime and policing, a Professor of Engineering who will learn to break news on sustainable energy and technology, a Canadian scientist who is both a Rhodes Scholar and a Commonwealth Scholar who is returning to Toronto from Oxford because she wants to learn how to break news on environmental issues, climate change and science, and we have a lawyer who has worked at the Library of Parliament who will put her public policy expertise to work as a reporter on public policy in law.

5755   As we indicated in our support letter, our goal is to improve the coverage of complex disciplines like the environment, technology policy, migration and economics and to deliver that coverage to the Canadian media and media around the world in a nonpartisan way. In the process, we aim to raise Toronto's visibility as a global centre for outstanding journalism and serve Toronto deeply as a global city in its own right.

5756   We are excited to partner with WorldBand. The partnership would give our Fellows a unique platform to break news and to engage Torontonians directly on how to improve the coverage of stories that are vital for this city as a global city.

5757   Because the format focuses on engaging Torontonians deeply in well-thought-out conversations about important issues that affect their daily life, it lets us do something very different with journalism, something that is currently breeding exciting experiments in the U.K. and the United States but not yet very much in Canada, and that's called open journalism.

5758   Open journalism is practised in the U.K. by "The Guardian" and in the U.S. by a chain of local media called "Journal Register." It invites the audience to help shape coverage itself in an ongoing and sophisticated dialogue with journalists.

5759   To do open journalism well, you need two things: especially knowledgeable and humble reporters and especially thoughtful and engaged audiences.

5760   We at the Munk School will come with the reporters. WorldBand's application for 88.1 is the first broadcast application I have seen capable of generating that audience.

5761   Eighty-six percent of Torontonians listen to FM radio, but what we are talking about is the segment of that audience, the growing segment that wants to do more than just hear it passively in the car or at work. This is the portion that wants to help shape the content and collaboration with smart journalists.

5762   It is, as you have heard, the very opposite of shock talk, it is the very opposite of old folks yelling at each other and is not just another music station, it is a game changing idea that Torontonians deserve and that WorldBand has already pioneered elsewhere.

5763   Thank you very much for your time this morning, Commissioners.

5764   I will now turn the floor to my colleague, Anne O'Hagan. Anne...?

INTERVENTION

5765   MS O'HAGAN: Thank you, Robert and good morning, Commissioners. Bonjour, messieurs et Mesdames. Ça me fait plaisir d'être là aujourd'hui.

5766   My name is Anne O'Hagan and I am a communications professional and, like Robert, I asked to appear before you today to lend my enthusiastic support to WorldBand's radio licence application.

5767   I am here today to endorse WorldBand's plans to be the most interactive and hyperlocal news/information/talk radio station in Toronto.

5768   WorldBand's programming is designed to generate strong local and community-based content and deliver that content to Torontonians of all shapes, sizes, colours, through multichannels, namely of course radio, mobile and the Web.

5769   Now, I realize that other applicants are proposing to deliver their content using these platforms as well, but World Band's approach is different. WorldBand will be interactive every hour of each broadcast day. They aim to be Toronto's conversation hub.

5770   What's more, WorldBand proposes to interact with their listeners on several levels: through telephone polling, listener interviews, commentary and ideas posted on the Web site, as well as email and in-studio participation.

5771   Even more unique is WorldBand's intent to incorporate location-based services, allowing listeners to receive information on their smartphones from products and services featured on-air or from TOUCH's many sponsors.

5772   The details of the proposals, which I'm sure you are familiar with, are set out in paragraphs 236 two 241 of WorldBand's supplementary brief.

5773   I would also like to note that as an active volunteer tutoring high school students in the Toronto community of Regent Park, where the New Toronto couldn't be more apparent, I see firsthand the value of being connected through informative media and its potential transformational effects on all members of our community, especially Toronto's youth, future journalists included.

5774   As a woman, I am particularly excited about TOUCH FM's plans to produce programming that will address topics and issues that women deal with every day, both as mothers and working professionals. This will fill an obvious gap. I am not aware of any other talk station that devotes significant airtime to topics that are meaningful and relevant to women.

5775   What is also exciting about WorldBand's proposed programming is that it is designed to attract women of all ages and occupations. There are a number of talk radio stations in Toronto that respond to the tastes and interests of men, for example all-sports talk. It is time for a station that responds to the tastes and interests of women like me. That station is TOUCH FM.

5776   Thank you, Commissioners, and I will now turn the floor to my colleague, Mr. Brian Patterson.

INTERVENTION

5777   MR. PATTERSON: Thank you, Anne.

5778   Commissioners, I echo the positions expressed by my co-panellists in terms of the journalistic and community-building values that TOUCH FM's news/information/talk radio station would bring to the FM dial in Toronto.

5779   I am here today to talk to you about the value of public safety education, the Ontario Safety League's core mandate since 1913, and the power that radio has to communicate important safety messages that fall outside of the realm of what we would call emergency alerts but are just as essential.

5780   I know you are thinking any radio station could broadcast programs geared towards public safety messages, and you're right, but the truth is that outside of public safety announcements, whether mandated or volunteer, public safety issues really don't get a lot of airtime.

5781   They do in the shock jock world where using a safety message or a new piece of legislation is an opportunity to create a bit of a punching bag or to excite listeners who take a position that is, let's say, less than safe.

5782   We want to change that and we think that the news/information/talk station is the best venue to disseminate critical information about safety.

5783   We fully endorse WorldBand's application for a news/information/talk format station and are anxious to partner with them in those areas.

5784   Here's why.

5785   The audience WorldBand seeks to attract sustains listenership from young working Torontonians and second- and third-generation Torontonians from ethnic backgrounds, and women, including working and stay-at-home moms. This demographic does not listen to AM radio stations, if they are listening to radio at all.

5786   WorldBand wants to change that and we think their innovative programming and blue-chip journalistic reporting will attract and intrigue listeners.

5787   If TOUCH FM is approved, which we hope they are, we expect to work very closely with them and their news desk to work public safety tips and stories into their news programs, stories like the benefits of using winter tires for example or teen drinking issues that come up on a weekly basis, or managing an elderly parent or a loved one with Alzheimer's.

5788   TOUCH FM will be a platform to inform, educate Torontonians about important municipal, provincial and national legislation impacting their safety. This is just the beginning, but I think you get the picture.

5789   I'm confident that with the bright and innovative minds at WorldBand we will manage to weave safety news and information about many facets of public safety into their programming.

5790   The 88.1 signal reaches the core of Toronto without signal degradation. This cannot be said for AM stations. In an emergency other AM radio stations may not be in a position to broadcast life-saving information and FM stations may be insufficiently focused on breaking news.

5791   TOUCH FM has an opportunity to become a beacon and a lifeline for Torontonians for critical information, including public safety information.

5792   Another interesting feature about TOUCH FM's application is its ability to send in-car messages that display on most car consoles. For example, TOUCH FM could broadcast tornado warnings, snowstorm warnings, road closures. This is a feature that is only available on the FM dial and it's one that can save lives, much like the Amber Alert you are familiar with.

5793   With TOUCH FM's interactive features the messages we transmit and the conversations we start will be discussed and debated. This is what we want. We want the conversation and the debate because it shows that people are thinking about the subject and absorbing the message.

5794   I think that you will agree with me when I say that you cannot have enough community awareness when it comes to public safety, but the Commission's mandated public service announcements that drive home safety messages only address it to a point.

5795   Don't get me wrong, I'm not suggesting that they are not effective. However, our intent is to work with WorldBand to develop new programs that allow a safety topic to benefit from a more fulsome discussion, certainly one that is longer than 15- or 30-second spots.

5796   The Ontario Safety League supports the introduction of a news/information/talk station on the FM dial. We agree that the trends in Canada and around the world suggest that news and talk are gaining traction and may be the impetus necessary to repatriate listening back to the radio.

5797   I think the Commission should approve TOUCH FM's proposal because it will result in the best value of frequency, increased tuning, add diversity to the news voices and the ownership diversity in the market, and it will provide an important platform for the content such as public safety messaging and related issues.

5798   I thank the Commissioners and their staff and we are now prepared to answer any questions you may have.

5799   THE CHAIRPERSON: Thank you all very much.

5800   I would ask Commissioner Menzies to begin the questioning.

5801   COMMISSIONER MENZIES: Thank you. Thanks for your presentation, it's very interesting.

5802   I have a number of questions, so I'm going to ask you beforehand to try to be precise with your answers because I'm sure my colleagues have some questions too, and we will get squeezed. Anyway, just fair warning, if I cut you off I'm not trying to be rude, just I have heard the answer and I will move on to the next one.

5803   First of all, you talk quite a bit about multiplatform and that. Are you a new media platform with a radio portal or would you be a radio station with a social media platform?

5804   MR. SELVADURAI: Thank you, Commissioner, for the question.

5805   We are a radio station and we are a radio company. We know the power of the FM. On the same theme, we understand what the feature is, so we wanted to make sure from the get-go we have all the multiplatforms integrated into the FM. That's what we are trying to do.

5806   COMMISSIONER MENZIES: I'm interested -- my next question is regarding youth. We heard that earlier, too, but one of my questions is -- I'll just try to put a little bit of context.

5807   Years ago prior to new media, people could only engage in the public square either through a talk show, through a letter to the editor in a newspaper, maybe getting interviewed on the street or on TV. And then the blogosphere opened up and they can chat through Facebook, Twitter, that sort of stuff.

5808   There's an argument out there that says that young people have gone there, away from legacy media I will call them, and they are not coming back, that that is their new home and the best you can hope to be is an annex onto that home. I would like your response to that argument.

5809   MR. SELVADURAI: Thank you for the great questions.

5810   Before I pass it on to Alyssa as to how we plan to integrate them, if you're interested, but I will answer on a high level. That's what we want to do, we want to bring the younger audiences. And then we know they have moved to other nontraditional platforms online. How do we bring them to the on-air is our whole proposition.

5811   In our proposition we say the conversation is happening everywhere, online, on the ground and everywhere, but they are happening without a voice. We feel when you give the voice on an FM they will come home for the relevant information.

5812   I will ask Alyssa to expand, if you are interested, on how we expand.

5813   MS SCHWARTZ: One of the things that we are seeing happening online is, yes, there's tons of conversation, youth are incredibly engaged online, but one of the things that tends to happen is people follow people on Twitter who share their opinions, they read blogs that reflect the things that they already think. What's happening is we are becoming in a way more entrenched and siloed in our views.

5814   What TOUCH FM wants to do is we're building a hub and a bridge between these communities. We are bringing together these different conversations. There are commonalities that are happening across different communities.

5815   For example, one of the recent cuts in Toronto was to garbage budgets for nonprofits and charities. What does that mean? I mean that sounds like a line item.

5816   Well, in Regent Park it means that Central Neighbourhood House, which provides afterschool programming to youth, their garbage bill is now the equivalent of a staff member. You may have in another community a community kitchen where their garbage -- most of their food is donated, their manpower and volunteer, but their garbage bill now ends up being a massive operating cost.

5817   These conversations are happening individually and in silos and what we want to do is really tap into all of the different things that people in Toronto are talking about and bring them together in a way that really embraces this common experience that we all have living in this city.

5818   MR. SHEA: Commissioner Menzies, if I may, because I think it truly is the question of the market these days -- and I will be fast.

5819   My daughter Jamie just came back on Monday night after spending four years at McGill and we were having dinner and she said -- she grew up in media, she went to the YTV daycare with me. She said: "Daddy, what are you working on?" And I said: "We're actually working on an FM radio station application. We have a CRTC hearing." And she said: "What's FM?"

5820   And my daughter's a media kid, but clearly, young people have left AM and FM radio -- not for good though.

5821   There's two things that I ask you to think about, and that is -- as I say, if you really want to understand Toronto get on our subway system because it's a different Toronto underground than it is above ground. What I mean by that is the ethnic diversity. What's amazing is every kid has something plugged into his ear. Many of them are listening to podcasts of content that is of interest to them.

5822   The issue is there is no content that is inclusive and targeted at them, which is why we specifically went after the partnerships of "Toronto Life," of "Toronto Sun," of "iPolitics," authorities in content.

5823   Today, with media with kids it's about being social, it's about being -- it's about talking and it's about being interactive.

5824   And I will close with this: Today old media drives new media, new media drives old media. You can now see that Facebook and Google are going to be buying conventional advertising in old media. Wow! What a turnaround!

5825   The connected car and the smartphone with FM capacity -- in the next couple of years, the connected car, young people driving those cars --

5826   COMMISSIONER MENZIES: Ten seconds.

5827   MR. SHEA:  -- is all about interacting.

5828   COMMISSIONER MENZIES: Ten seconds. Thanks.

5829   MR. SHEA: I'm finished, sir.

5830   COMMISSIONER MENZIES: Okay, thank you.

5831   Yes, I take the train and nobody listens to the radio, but you're right, everybody is plugged in.

5832   I heard the word "intelligent" a couple of times and I heard the word "gravitas" and I'm curious about how you will make that work. I will use an out-of-country programmer as an example just because I don't want to use anybody in country, but of course I never watch any out-of-country programming anymore.

5833   But going back years, CNN when it first launched was highly intelligent and had a lot of gravitas and had people from diverse backgrounds discussing international issues and was in international places and it was very compelling and it made no money at all.

5834   And over the years it changed. And it changed to what some critics would describe as basically two old guys shouting at each other. And then it changed to two noisy women shouting at each other. And then it became more inclusive and had a woman, an older guy and an African-American guy shouting at each other. And it made money with people shouting at each other, where it didn't make money with intelligence and gravitas.

5835   To me that's your huge issue. Putting on a discussion between Jack Mintz and Jim Stanford on economic policy may have a lot of gravitas and intelligence, but I'm not sure anybody is going to stop when they are scanning through the dial to listen to that, and I would like to hear you address that as specifically as you can in terms of how you make yourselves enlightening and informative and entertaining without being pure infotainment.

5836   MR. SELVADURAI: First, I will ask Carey to talk about what radio is about and then I will ask Alyssa to talk about how we intend to do the intelligent in an entertaining way so people will listen to it.

5837   So I will ask Carey to talk about what drives the news, talk and information.

5838   MR. DAVIS: Right.

5839   The change that's going on in all the markets right now is this shift to news/talk on FM, and the reason for that is music is leaving. FM is losing steam and the music stations are going down in ratings. And so we have a situation now that nearly every week, every month, another station in North America, FM station, switches to news/talk.

5840   Three days ago in Philadelphia, 106.9 became available, they could choose any format they wanted to, there is no AAA in Philadelphia, there is no blues, and they switched to news/talk. This is now happening in eight out of the top 10 markets in the States.

5841   The reason stations are doing this is that they see an opportunity. Instead of going narrow niche like another music station, they are going big, all sports, all news, sports/talk.

5842   COMMISSIONER MENZIES: Okay. To be specific, my question is: How do you make gravitas -- how do you build an audience with gravitas?

5843   MR. DAVIS: Well, a combination of a great local news department and great people working together, with great partners like Sun and Life working together.

5844   MS SCHWARTZ: Let me give you a couple of examples of stories that we would have in a newscast.

5845   The first thing I want to say is, when we say intelligent we don't mean boring. We plan to get away from the theoretical and into really cool examples that are lighting up our city.

5846   For example, if you want to talk about the entrepreneurial movement in Toronto, there's really no better example than what's happening -- what we are seeing with food trucks across our city. You know, the city tried to implement a top-down solution to that a few years ago with the food cart. They licensed six food carts across the city, and it fell flat.

5847   What we are seeing -- what we are now seeing is a grassroots movement where entrepreneurs across the city have embraced this food truck concept that we are seeing in the States, we are seeing it in Vancouver, we are seeing it in Calgary.

5848   We haven't seen it in Toronto because it wasn't allowed, and yet, because of Twitter and because of the knowledge of these food trucks, which are really local mobile businesses that are giving Toronto fabulous lunch options, you know, they are setting up in private parking lots on the weekends and bringing families out.

5849   That's a really cool example if you want to talk about an entrepreneurial story in this city, and it is something that people on Twitter or people on Facebook are massively engaged with, but it hasn't really reached the mainstream.

5850   So we are going to tell these stories with really powerful, compelling, local examples.

5851   COMMISSIONER MENZIES: Okay. How will you -- specifically, what sort of ideas do you have in mind or plans do you have in mind to engage people in these multiple conversations?

5852   As was mentioned earlier, we tend to adopt our median sort of psychographic cultures these days because we always think the smartest people are the ones that agree with us, so that's where we go, but to have a healthy community you need places where people with contrasting ideas can debate them and respect -- empathize with each other's moves.

5853   Like your presentation is to engage audiences that aren't currently engaged in news/talk, I understand that, but what specifically do you do to engage those audiences? How do you get a conversation going between somebody from Regent Park and somebody from Bay Street and somebody from the Markham area, for example?

5854   What is going to draw them in?

5855   MS SCHWARTZ: Let me tell you about a role that we have on our team -- three roles, actually, and they are called community managers.

5856   If you take a look at Appendix 4, we have identified -- and this is really just scratching the surface. These are 150 Twitter influencers in Toronto. They are ranked by a service called Klout, which measures so-called influence online. That is the number of followers they have, the likelihood of their followers to take action, whether it's clicking on a link or attending an event, based on what these people say.

5857   These three community managers will be on staff. They will primarily be interfacing with the digital community, but they are also going to have an important seat at the programming table.

5858   What they do is, in some ways they act like a show host. They are interacting with, they are posing questions, they are engaging these influencers and their followers all the time. This role will be staffed all day and on the weekends.

5859   So they are fostering these conversations. They are building relationships with these people. They are talking to our partners' followers. They are bringing those stories to the table. They are finding the best tweets and comments on our website. They are finding people who have repeatedly posted really interesting and insightful comments, and inviting them to be part of our conversation on the radio.

5860   We see this as a really seamless process. As Carey said, online feeds radio and radio feeds online.

5861   COMMISSIONER MENZIES: What would be the marketing statement on the side of a bus that would say that?

5862   You don't have to answer right away, you can get back to me. I don't like to necessarily put people on the spot, and it is a bit of a "Gotcha".

5863   MS SCHWARTZ: It goes back to the conversation hub. We are building a conversation hub. Our online conversations are really driving what you are going to hear on the radio.

5864   COMMISSIONER MENZIES: Okay. Thanks.

5865   Just the next step -- and I was curious about the relationships with Toronto Life and iPolitics and the Toronto Sun. It kind of relates to -- there are multiple levels of diversity when you are having a conversation that you need to talk about, and one is engaging people from different cultural backgrounds and people with different histories and people of different races and that sort of stuff, but there is also intellectual diversity.

5866   I am guessing that you have engaged those partners to try to ensure that you are covering the full breadth of intellectual discourse, and you can either confirm that, or deny it, or say: Mr. Menzies, you have no idea what you are talking about. Let me explain.

--- Laughter

5867   MR. SELVADURAI: You have exactly hit the nail. We wanted to make sure that we include -- that we be inclusive of every idea, and this is just the start of our partnership building.

5868   You want us to show some examples as to how we reach out to them. I will just give you the stats on one of our partners, why we selected Toronto Life.

5869   As you can see from Doug Knight, Toronto Life has more than the Globe and the Post to put together their audiences, and their audiences exactly match our target audiences, and from 25 to 54 they have so many possible audiences.

5870   So the conversations happening there, we want to bring them, and conversations happening in an intelligent and entertaining way. I mean, they have stories, very in-depth analyses, investigative journalism. We want to bring them here and give them a voice.

5871   And just to answer your former question of how you bring your people with intelligent -- I will give you an example. We understand radio, and the content has to be entertainment. The first filter is entertainment. Then we will go to the intelligent.

5872   Even though the CBC doesn't cover the audiences that we are, in the local way that we are covering, I would say that CBC is intelligent talk, and they have the largest share of the market. So that shows that intelligent talk will attract people.

5873   COMMISSIONER MENZIES: I understand.

5874   Your relationship with iPolitics, Toronto Life and the Toronto Sun, is it a commercial relationship or is it a cross-promotional relationship, or both?

5875   MR. SELVADURAI: We have an initial agreement as to what areas we are going to work on. They are content, marketing and promotional partners.

5876   And we have signed an initial LOI, but once we get the licence, we will do a full agreement. It is going to be a synergistic partnership.

5877   COMMISSIONER MENZIES: Okay. Thank you.

5878   What specifically -- and I need a specific, if I can -- would be different about your newsroom?

5879   When you talk about adding diversity, I want to challenge that a little bit.

5880   When there are this many radio stations and television stations and newspapers in a single market, adding two more people to the scrum doesn't necessarily add much to diversity.

5881   So what would you add to the diversity of news coverage, other than one more guy in the scrum with a microphone?

5882   MR. SELVADURAI: Commissioner, as we said in our opening presentation, we represent the new Toronto. The age group that we are targeting is 18 to 54, the female audiences, and the visible minorities.

5883   And our hiring practice will truly reflect our target audience and Toronto.

5884   And on how we intend to hire, and what are our other policies and everything, I would ask Brian, our advisory committee person, to comment on that, please.

5885   MR. THOMAS: Thank you, Prabha.

5886   Commissioners, I bring to this table 35 years of experience in radio broadcasting, a five-time news director for other markets, other than Toronto. I was with a major company here, CHUM-FM and CHUM, for 32 years.

5887   I have seen this city grow tremendously, and change tremendously, in all of these 35 years.

5888   What the market needs is an exciting new radio station that reflects the communities that are now underserved, and those communities definitely involve the visible minority communities, and women, and young people, who have abandoned talk radio.

5889   The newsroom of TOUCH FM will reflect all of that with a combination of professional people in the key areas, who have experience, and also we are bringing into the radio broadcasting spectrum, for the first time, people who perhaps have not had actual broadcasting experience, but people who reflect those communities, have something to say, can communicate, and can be trained.

5890   Now, in addition to my work as a news director --

5891   COMMISSIONER MENZIES: I understand that, and I am not diminishing it, but, to be fair, my question was: What would be the question --

5892   Having people from different backgrounds, I am not arguing that that's not of value. My point is, having another person of a different background, a more representative background of Toronto, is a good thing. Putting them in the scrum with everybody else would add diversity to the scrum, but I am not sure that it would change the report that came out of the scrum.

5893   Do you know what I mean?

5894   You have 16 mics in there; everybody gets the same clip, right?

5895   So, if there is one more person in there, what is different that comes out of it onto your radio station? What do I hear that's different, as opposed to what do I see that's different?

5896   MR. SELVADURAI: Commissioners, as I said earlier -- thank you for the question -- you will hear the real Toronto. You will have people from (inaudible) doing the mainstream stations.

5897   If we need to, we could ask Brian -- he is currently teaching 50 students from outside the country. We will have them on-air. We will give them the training.

5898   But we won't just hire them because they represent that community or this community, we will go for the merits, the quality and skill sets.

5899   But we will represent them in our staffing structure, and we will give them a program.

5900   For example, if we are doing a female show, Erika Ehm could be hosting the show.

5901   That's our mandate, and if you are interested in how we are integrating those stories into our morning shows and everything, Alyssa can go through it, if that's what your question is, Commissioners.

5902   COMMISSIONER MENZIES: Okay. Thanks. I am going to move on to a couple of other things now.

5903   You mentioned it at the end of your remarks here today, but I need to ask this -- and you have heard it before.

5904   Last year the CRTC amended section 15 of the Radio Regulations so that 15 percent of all basic CCD contributions must be directed to the Community Radio Fund.

5905   Were you aware of that, and will you comply if you are granted a licence?

5906   Say yes.

5907   MR. SELVADURAI: Commissioners, we have provided 15 percent to that fund.

5908   COMMISSIONER MENZIES: Thank you.

5909   The next question is sort of following on some of the earlier ones. You talk about the need for the real Toronto, or the new Toronto, and that sort of stuff, and it is interesting, but there are existing talk formats. Toronto is, maybe, one census away from being a city in which, similar to Vancouver, there is no visible majority any more. It has that sort of diversity.

5910   Why wouldn't we be able to assume that, as the nature of that market changes, the nature of the programming and the nature of the audience, there will be a market need for the existing talk providers to adapt?

5911   Right now, most of their listeners are guys who look like me, right? But we have a limited shelf life, and there is a new market coming forward. Wouldn't we be able to expect that the existing operators would have to adapt to that market or die?

5912   MR. SELVADURAI: That's a great question, Commissioner. For 50 years they haven't adapted to it, and this phenomenon of over 50 percent of the people born outside, and the diverse community, didn't happen in the last one year or two years. It's long-term, and they haven't done it, and we cannot sit and wait for them to do it.

5913   And this is the right opportunity, we will do it.

5914   COMMISSIONER MENZIES: Good. That was a good answer.

--- Laughter

5915   COMMISSIONER MENZIES: In paragraph 44 of your written submission -- and you don't need to refer to it -- you refer to engaging listeners who are new to Canada.

5916   Given the language barriers, how would you do that, and how is that different from the several third language ethnic operators in the market who might see that as their role?

5917   MR. SELVADURAI: Commissioners, I can say --

5918   COMMISSIONER MENZIES: In cases where there are language barriers. There isn't always a language barrier.

5919   MR. SELVADURAI: Commissioners, I can say -- I mean, there is a language barrier for new immigrants. I can assure you that I understand that market. I ran several ethnic stations here in Canada, and in the U.S., but the majority of the audience we are targeting, they are very fluent in English, and they work and they live, in a mainstream way, in the English language.

5920   They will be our listeners, and there won't be any language barriers.

5921   COMMISSIONER MENZIES: Tell me about your operations in the States and how you think that experience translates -- because you operate several, a handful at least, ethnic broadcasters in the States. How does that experience translate, in terms of preparation, to be able to compete successfully in this market?

5922   MR. SELVADURAI: Thank you for the question, Commissioner. It's a great question.

5923   I started that company -- I am an engineer. I came to this country, and I had a great opportunity to have a good education. But I see the power of media, and I know what it can do for the community from what I built in Toronto.

5924   I saw the opportunity in the U.S., and I launched my first stations -- first few stations -- in 2008, when everybody said I was crazy, going with a business plan to the U.S., no experience in the U.S., and going with the new technology of (inaudible) radio, coupled with other local FM and everything.

5925   They told me I was crazy, and the banks wouldn't give us the money.

5926   But I launched, in the midst of the recession in 2008, not one, but five stations together, in major markets -- New York, Chicago, L.A. and D.C.

5927   And here, today, we are having seven major markets -- they are all top 10 markets, targeting multicultural radio.

5928   I'm an entrepreneur. I know how a company is built around innovation and finding the right target market.

5929   We launched ethnic services for South Asian -- we felt the need there and the gap there.

5930   Then, the last -- in 2010 there was a competitive process that came from -- an FCC-mandated process when Sirius and XM merged. They said that you had to give some channels to some underserved audiences.

5931   There were 50 applicants. We were one of them. We are a Canadian company. Only one Canadian company.

5932   They awarded two people to do Hispanic channels. I don't know anything about Hispanic, but I understand the community need. We came up with a proposal. We competed with big people like InterVision. They have more than 30 stations in media markets. Our proposal was accepted because of the format. We chose the proper format, calling it the Inspiration Channel. That is not religious, but motivating, empowering people, entertaining and engaging people.

5933   We just launched three months ago, but we are five months away from -- at least, we proposed about 18 months to break even. Thanks to Carey, we are going to break even by August.

5934   COMMISSIONER MENZIES: Thank you.

5935   In your proposal -- and it was mentioned earlier by your panel -- you mentioned the trends in the States toward FM talk and that sort of stuff.

5936   If it's such a good idea, why hasn't anybody else in this market done it?

5937   MR. SELVADURAI: That was a surprise to us.

5938   COMMISSIONER MENZIES: That will do.

--- Laughter

5939   MR. SMITH: May I add something? To flip from a music station to a talk station, you need to have CRTC approval, so...

5940   COMMISSIONER MENZIES: We get 800 decisions, or something, a year, so I am just...

5941   MR. SMITH: No, I understand, but I am just explaining that it's different in the States than here, that's all.

5942   COMMISSIONER MENZIES: Ah, I get your point.

5943   Your news and commentary plans are, as we have mentioned, ambitious, and they appear virtuous, but they are also really expensive.

5944   I mean, original enterprise news reporting requires a lot more resources than, you know, rip-and-read, or "Guess what I just heard on Twitter?"

5945   How do you compete with the additional expense of that? Are you confident that that's not too great a burden to bear in what can be a pretty challenging market? It's very attractive, but it can be a pretty challenging market.

5946   MR. SELVADURAI: We are very confident that we will do what it takes, and we see this as the future of radio -- news and current information on FM stations. So we are absolutely dedicated to put all of our efforts in there, and we have enough financial resources, and we have a carefully crafted business plan.

5947   On top of that, we have a great partnership to bring, the immediate success to bring the promotional and marketing and all of those things.

5948   And we have a great team here. What you see here are the people who are going to be running the station, Commissioners.

5949   Carey was one of the two people consulted to launch 680, which is a very successful station, and he ran the largest billing station in the entirety of North America.

5950   And, Judy, she has launched a few stations in Toronto.

5951   And we came up with an innovative idea, and a different idea, when we selected the people.

5952   We know that digital is going to play a crucial role in our content, and we hired Alyssa.

5953   We've got the team. So we have the experience here, in Toronto. We understand Toronto. We understand local. And we have the financial capacity, and we have the expertise.

5954   And if you want me to go through our allocations of the resources for the various operations, I am happy to pass it on to Chris.

5955   COMMISSIONER MENZIES: No, that's good for now, but specifically on some of your financial projections, I wanted to know how you came to your conclusions on your market share projections.

5956   MR. SELVADURAI: That's a question for Gerry.

5957   MR. WALL: Thank you, Commissioner.

5958   The market share projections started from our market research. We tested, as you are probably aware, a concept stage to determine which talk format would be best received, in particular by our target audience, the 18 to 54 age group.

5959   When it was determined that, in fact, the only concept that tested significantly different than the others, and positively, was the TOUCH format, we moved on to do a more intensive demand study, and through the course of that study we asked those who would be interested in listening to our content what they would do with their listening time, and approximately a third -- more than a third -- said that they would bring new listening to the market.

5960   In other words, they wouldn't take away or detract from their existing listening to other stations in the market, they would add, roughly, a third or more of listening to the market.

5961   We also asked and got information on the amount of listening hours that would be taken away from stations, and, in fact, which stations they would be.

5962   So we took that data and we calculated, on average -- we had to make some assumptions. These are projections, but we calculated that you would get 2.3 hours a week of listening to TOUCH FM. That would be divided between new listening hours and some substituted away from others.

5963   So taking that estimate of hours of listening, we converted that over the reach, over the population, determined what that number would be, and divided it by the market size -- total listening hours -- to come up with the market share -- or tuning share, excuse me -- and that was 2.8.

5964   COMMISSIONER MENZIES: Thank you.

5965   THE CHAIRPERSON: Could I interrupt? I have a request for an urgent health break. Could we take two minutes, please?

5966   COMMISSIONER MENZIES: Sure.

5967   THE CHAIRPERSON: Thank you.

--- Pause

5968   THE CHAIRPERSON: I'm sorry, Commissioner Menzies. Please proceed.

5969   COMMISSIONER MENZIES: Great, thanks.

5970   I just need to go back to another technical question, to clean up, before I continue with the financials.

5971   There is a small math issue regarding your CCD initiative. In the scholarship program, "Develop visible minorities management skills in broadcasting" -- it's on page 60, and it states that you will devote $437,000 over seven years, or $62,500 per year, but seven times $62,500 adds up to $437,500.

5972   Are you following me?

5973   MR. SELVADURAI: That's right.

5974   COMMISSIONER MENZIES: It's a math issue, right? And it's a small issue but because these become part of conditions of licence we have to make sure they are right.

5975   So, really, all that has to happen here is you have to agree that the annual contribution in each of the seven years will be $62,429 for a total of $437,000.

5976   You could agree to make it $437,500 if you wanted. I'm trying to save you 500 bucks. So if you say yes to the first question, we are good.

5977   MR. SELVADURAI: I would rather do $437,500 so it gives us $1.75 million.

5978   COMMISSIONER MENZIES: Okay, so it's $62,500 per year for a total of $437,500 over seven years.

5979   MR. SELVADURAI: That's right, Commissioner.

5980   COMMISSIONER MENZIES: Okay. That will slightly adjust your total CCD contribution up by $500 too which goes on to your investors, which is my next question.

5981   You have filed financials with us that are good but you have also got very high expenses in the first couple of years, very high in terms of that because it's an ambitious project.

5982   What happens? The best way to ask this: Do you have agreements in place already with your investors for future injections of cash if needed?

5983   MR. SELVADURAI: Thank you for that, Commissioner.

5984   I am an entrepreneur. I told you I know how to raise funds. I have raised it during the recession to launch five stations. My investors -- I have access to additional high network people. On top of it while we are preparing this one, we approached a private equity firm.

5985   But I was able to quote from my existing investors. They are the investors I have provided $14.5 million as an equity firm. That's why I have been able so far to build this company as an equity.

5986   I did get -- I did submit that additional $5.5 million, a loan from a private equity firm. If you want to have that on file, I can file that as well.

5987   But as --

5988   COMMISSIONER MENZIES: Sorry, I just missed that last sentence. The private equity firm, just what you said about that.

5989   MR. SELVADURAI: Yes. I mean, I'll just repeat my answer again so that it's clear.

5990   So our business plan needs somewhere around $12 million and then I was able to raise $14.5 million as an equity fund.

5991   In the meantime I was working on the fundraising I also had a commitment from a private equity firm for an additional $5.5 million as a loan but I didn't submit that because I thought I raised enough.

5992   But if you want -- I mean to answer your question, funding is not an issue. Yes, I can get additional commitment if you want it or I can provide the loan financing from an equity firm which I have it.

5993   COMMISSIONER MENZIES: It's not necessary. But thank you for the answer.

5994   MR. SELVADURAI: Thank you.

5995   COMMISSIONER MENZIES: Your revenue per market share projections, I just wanted to touch on that, they are not seriously out of line with --basically from what we know of industry data with what they might normally be, but they are a little high in terms of revenue for market share. And given that you would be a standalone I was just wondering how you came to your conclusions on your numbers regarding revenue per market share.

5996   MR. SELVADURAI: Before I pass it on to Chris for market share, I think in terms of market share Gerry has one comment and then he will pass it on to Chris.

5997   DR. WALL: Yes, thank you, Prabha.

5998   It's just that when we had our last conversation you left me at 2.8 which is the derivation from the market research.

5999   COMMISSIONER MENZIES: Right.

6000   DR. WALL: In fact, what we used for our first year is 1.4 market share.

6001   COMMISSIONER MENZIES: Right, and then you go up to 3.5.

6002   DR. WALL: That's correct over the time period.

6003   Thank you.

6004   MR. LACOMTE: To answer your question with regards to what and how we came up with our revenue numbers, we went at it on a number of bases.

6005   First of all, we had a look at what the market itself, the Toronto radio market had been doing over the past seven or eight years, and then looked at what we anticipated it would do, going forward.

6006   For the purposes of the projections, we have assumed that the Toronto radio market would continue to grow by about 2 to 3 percent.

6007   With regards to specifically what revenue we would be able to garner from our ratings of 1.4 percent in the first year, we did a couple of analyses.

6008   COMMISSIONER MENZIES: I just want to be specific to make sure I get an answer to my question. The revenue per market share --

6009   MR. LACOMTE: Yes.

6010   COMMISSIONER MENZIES:  -- it was specific in terms of that. And the background to it was you would be earning more per market share than others and I want to know why you think you can do that.

6011   MR. LACOMTE: Well, again, if I could just continue, and I will get to the answer to your question --

6012   COMMISSIONER MENZIES: Okay.

6013   MR. LACOMTE:  -- we did a couple of other things. We did a fill rate analysis, again looking at what we thought we could sell our spots for and the amount of inventory we could have and what kind of fill rate we would need.

6014   Specifically, when we look at the first year of operations we have estimated that our revenues were going to finish around $3.5 million. We were going to have a share of 1.4 percent of the market which represents -- 3.5 million represents what we estimate is 1.4 percent of the revenue of the market, similarly to our share.

6015   So in the first year of operations we have anticipated that we would get our fair share of revenue for that fiscal year.

6016   As we continued to grow the business and went from a 1.4 share to a 3.5 share, there is a concept in the marketplace with regards to, depending on the format that you are offering you can overshare in your share of ratings on the revenue side called the power ratio.

6017   Traditionally, certainly, if we look at the Toronto radio market there are clearly the three AMs who, based on information that we have available, are all oversharing in their share of market share with regards to audience. They are oversharing on the revenue side.

6018   And we have anticipated that to happen not in our first year, not in our second year, but we begin in our third year to start getting a power ratio above one where we get a greater share of revenue dollars versus audience.

6019   COMMISSIONER MENZIES: Okay. Thank you.

6020   Did you discount at all, in doing your projections? Did you basically say this is the number we think we are going to get but, for the sake of this, we will take it down by 10 percent or 15 percent or anything?

6021   MR. LACOMTE: I think we have done it in two places.

6022   We have done it, one, in estimating the actual share of audience that we would get, based on the survey and the research that was done. It would indicate that we would get more than a 1.4 share. So we have already taken a discount there.

6023   With regards to our analysis on the revenue --

6024   COMMISSIONER MENZIES: So you have exercised prudence on both points?

6025   MR. LACOMTE: Yes.

6026   COMMISSIONER MENZIES: Okay, thank you.

6027   In terms of your -- one last question on that -- your revenue projections again, you projected that 50 percent of your revenue would come from the existing radio market. And given that these are all well-embedded experienced players, I want to know how you think you are going to get away with that because they will compete. They are experienced competitors.

6028   I want some assurances to what sort of plans you have made, knowing what could happen in terms of discounting and battling for advertisers. I want you to enhance my level of confidence that you are able to compete for the cash.

6029   MR. SELVADURAI: Thank you for the question.

6030   So the answer is two -- before I pass you on to Carey, there is two reasons.

6031   One is how are we going to get the dollar revenue? We are thinking we are going to get it.

6032   And also in terms of the sharing, because our target audience is a younger audience we are not just totally getting it from talk show formats. We are getting it from multiple stations.

6033   If you want to know who we are getting it from Carey can go through, but in terms of how are we going to compete with the existing people -- and we are not here to undercut the pricing. But we are here to make sure that our strategy works, our programming works through our partnership and we are going to do it.

6034   Carey, I mean, he has done -- this station is in a very competitive market. Without undercutting each other -- Carey, can you go through your experience, please?

6035   MR. DAVIS: Sure. The news talk format is very sales friendly. Retailers love it. It's great in big category, automotive, retail, financial, health.

6036   And a lot of the advertisers to current news talk radio stations want also to reach a younger audience, and that's what we will provide. It's the most effective format for advertising for many, many advertisers.

6037   COMMISSIONER MENZIES: Okay, thank you. No more questions for me.

6038   DR. WALL: Commissioner, if I could just add, on the research front it was reported that 4 percent of those people who currently don't listen to radio, don't listen at all, would listen to Touch.

6039   And then, as I mentioned before, 37 percent of those likely to listen to the station would in fact add new listening hours in.

6040   COMMISSIONER MENZIES: Sure. Okay, thanks.

6041   I just wanted -- the question was about how you are monetizing that. Anyway, thank you very much.

6042   Back to you, Mr. Chair.

6043   THE CHAIRPERSON: I think many of us have got some questions. I'll start.

6044   When I look at your first year of operation on your statements, it appears to be 2014. So are you saying that if we issued you a licence now it would take 18 months or more to go up into operation?

6045   MR. SELVADURAI: Well, no question if we get the license in September we will be launching in 2013, September. I think Chris mentioned the financial year ending as 2014. So we will launch in 2013, September.

6046   THE CHAIRPERSON: So how much time do you need from when a licence is issued for you to start up if you were successful?

6047   MR. SELVADURAI: Maximum one year from the issuing of the licence.

6048   THE CHAIRPERSON: 12 months, okay.

6049   When I look at your financials, as well, I think you said that you would dig a hole for yourself that reaches $11.5 million. Is that what your cumulative losses and capital investments are?

6050   MR. SELVADURAI: That's right, Commissioner.

6051   THE CHAIRPERSON: And you have provided support for up to $14 million at this point in time.

6052   MR. SELVADURAI: That's right, Commissioner -- Chairman.

6053   THE CHAIRPERSON: Okay.

6054   What is the payback period for your business strategy? When I look at your financials it doesn't payback over seven years so it must go long beyond that. At what point in time have you recovered your investments, your losses? How many years out?

6055   MR. SELVADURAI: I mean the answer to that question is this investment for our company it's more of a strategic investment than a payback investment as a primary. This is a very -- an opportunity, a privilege for us to start FM station here. That's a strategy important for us. That's where the industry is, there.

6056   But if we build it right and we know we will build it right, the news take more -- news talk station makes more money than any other station in the long term. That's what is happening everywhere else. In the U.S., the WTOB is the highest billing of $65 million -- that's in Toronto.

6057   So even though the payback for a short period of time it may not be there but we know it will payback big in the longer term.

6058   But more than that it's a strategic investment and investors are willing to pay. They are long term investors, Commissioner -- Chairman.

6059   THE CHAIRPERSON: That's not the answer that I'm looking for. I want to know how long it will take, based on your model, to breakeven and payback.

6060   MR. SELVADURAI: Sorry. I will Chris to go through the financial details, Commissioner -- Chairman.

6061   MR. LACOMTE: Thank you, Prabha.

6062   It will take eight years. Within the beginning of the eighth year or at the end of, sorry, of the eighth year we will have fully recouped our capital investment as well as the losses incurred over the first four years of operations.

6063   THE CHAIRPERSON: And what would your cumulative capital investment be over the eight years?

6064   MR. LACOMTE: Capital including operating losses?

6065   THE CHAIRPERSON: No, just capital.

6066   MR. LACOMTE: Just capital currently we have budgeted a capital budget of 1.3 plus pre-operating costs of just under $500,000, so just under $2 million will be capitally spent on that operation over the first term of the licence.

6067   THE CHAIRPERSON: Okay.

6068   Your operations in the U.S. that were built up during the recession how are they doing today? I understand that they are not in English talk but they are in Spanish, I guess.

6069   But if you can expand upon how profitable they are, how many are profitable, are any profitable and how long it's taken to turn them into viable businesses.

6070   MR. SELVADURAI: The ones we launched originally in 2008 and 2009 they are all profitable. And one we launched in March of this year, the channel we were awarded last year, is going to be profitable in another three or four months. So as a company we are profitable.

6071   THE CHAIRPERSON: Okay. Let me try and ask the question a different way.

6072   If you pick Los Angeles as an example or New York how much have you invested in those markets? How long has it taken to turn around?

6073   If you are telling me that you started something in 2008 and it's already profitable today, which is five years, I guess my question is why is it taking eight years to turn Toronto into a profitable enterprise?

6074   MR. SELVADURAI: This is a different model, Commissioner, as what we did in the U.S. We went after the niche format. It's highly demanded from there. And our operational cost is low because we build a network model and even though we have several stations the model of the program it's a network model. So the cost is lower there.

6075   But building a new station it will take a longer time. We know it's slow growth, news talk.

6076   Carey can explain to you. It's a long build and that format is totally different.

6077   THE CHAIRPERSON: Okay. I just want to understand the format you have got experience in today.

6078   So you started New York and Los Angeles in 2008. How many years of losses did you have there given you are already profitable and how much investment did you have? And what was the bottom before you started turning it around?

6079   How much money did you actually lose cumulatively based on losses, operating losses in capital before you turned it back up again?

6080   MR. SELVADURAI: We lost -- we invested about 3 million and it took us three to four years to profitable. But keeping in mind, if we had an FM station or AM station -- FM station in another market we would have been profitable earlier. But we went with a different approach; HD technology, which was not available when we launched -- I mean all the things.

6081   Then we added small FM stations. So it took us a little longer, like three to four years for that format. But usually if it is a regular ethnic channel it will be profitable much, much earlier than that.

6082   THE CHAIRPERSON: So when you say $3 to $4 million is that per city or is that cumulative for all the cities?

6083   MR. SELVADURAI: The total of all the network.

6084   THE CHAIRPERSON: So you only sustained operating capital losses in all those six markets -- is it six markets? Is that what you're in right now?

6085   MR. SELVADURAI: Seven markets, Commissioner.

6086   THE CHAIRPERSON: Seven markets. Cumulatively loses and capital of $7 million -- of $3 million -- $3 to $4 million before you turned it around.

6087   And here you are looking at an $11 or $12 million bottoming out, if I can call it that, and an eight-year payback.

6088   MR. SELVADURAI: As I say, it's totally different. I mean our biggest loss in our South Asian radio network we created and the program format is not very costly as the Toronto market. I mean that was an entertainment plus a little bit of talk. So the cost is very low.

6089   And then we repurposed the programming in all the cities. But the undertaking we are doing it in Toronto it needs bigger capital and then we are going to have to compete with other people. So we understand the loss.

6090   THE CHAIRPERSON: So explain to me HD radio a little bit better because obviously the investment in HD radio is far less than the investment in an FM frequency.

6091   MR. SELVADURAI: I mean when I say HD radio that's one part of the distribution channel. What we did is we went with -- sorry, HD radio. This is a digital radio format in the U.S. -- how we adapted that to HD radio -- the FCC announced it's seven or eight years. Now, it's available in all the cars and almost 100 manufacturers are coming up with HD radio. It is getting traction there.

6092   We went after this niche format of providing no service -- South Asian market with HD plus low-power FM and digital apps and everything.

6093   So we have created our content and delivered it on multiple platforms in a cost-effective way. That's what our company is building, innovative content, innovative partnership and innovative distribution. That's how we build our company.

6094   With respect to Hispanic channels it's a talk format, 24/7 talk format. We have been extremely good.

6095   And with respect to Toronto I think we have the experience and the capacity to execute this.

6096   THE CHAIRPERSON: Okay. Why have you not considered digital audio broadcast in Canada?

6097   MR. SELVADURAI: I mean first of all it's not available in the HD format. HD radio is not accepted here and we are not going after a niche market here like a multicultural or any other market.

6098   This is a mainstream market we are going after and then we need the bandwidth of the FM power and FM station. We understand the FM. FM will make the news talk format very successful as all the other U.S. media broadcasters are converting them.

6099   THE CHAIRPERSON: But your expertise in the U.S. is in South Asian and ethnic radio using an innovative technology and you want to come to Canada and come to Toronto and provide mainstream English-language FM classical service.

6100   MR. SELVADURAI: I mean as a company, my experience, personal experience is I'm a builder and I'm an entrepreneur. I'm a media entrepreneur. What format goes -- we go after is based on the need of the market. We understand the multicultural was underserved in the major markets. We went there so we picked that.

6101   And when Sirius XM gave us a chance we figured out the Hispanic community and the nationwide they don't have the spoken format. We proposed it for 51 million people. We went there.

6102   And now we think in Toronto we need a spoken word English-language format.

6103   And to experience, I'm not going to be on there. I'm an entrepreneur. I'm a builder and I have people here they have built talk format. He built 680 here. He ran the number one station in terms of billing in the U.S. He has experience. He is my chief operating officer for my company and he is going to carry on.

6104   When are you moving here?

6105   MR. DAVIS: When am I moving? In a New York minute.

6106   MR. SELVADURAI: In a New York minute he will be here. Judy is our station manager and she is a content partner we build the team around.

6107   On top of it we have Chairman Kevin who has been a mentor and helping me for the last four years.

6108   We have the access to the expertise, the capital and the infrastructure we need to get it going. This is very privileged for us.

6109   And we have grown from a Canadian company, only one company selected to program 24/7 news talk format in Hispanic for 51 million people. That shows something that we are passionate and we can deliver.

6110   THE CHAIRPERSON: I find it interesting that you started your entrepreneurial business in broadcasting in an ethnic or non-English format and what we have heard this week from other parties obviously is the need to recognize the ethnicity of this country being as multicultural as Toronto is, probably -- maybe not as much as Vancouver but, clearly, one of the leading countries in the world with multicultural residents in here as well. And you come in and you want to provide English talk.

6111   MR. SELVADURAI: That's a great question. I'm thankful -- thank you for the question.

6112   I think it's time that we target this Toronto multicultural audience in a franchised and mainstream way and talking their issues and their success and their celebrations in a mainstream way than serving them in a side lots. Then we have enough channels doing that in the side lots. We want to integrate them as a mainstream and franchise them as mainstream.

6113   That's what we are all about and Toronto needs it. New audiences they need it and they need a mainstream service targeting their -- what they believe is important for their Toronto.

6114   THE CHAIRPERSON: Okay. Those are my -- go ahead.

6115   MR. SELVADURAI: Sorry, Chairman.

6116   And we are not an ethnic -- our target audience is not just ethnic. Our target audience is 18 to 54 mainstream Toronto people but happen to be visible minorities and female audiences -- comprise large portion of that. So our format is 18 to 54.

6117   THE CHAIRPERSON: Okay, great. Thank you. Those are my questions.

6118   Commissioner Pentefountas...?

6119   COMMISSIONER PENTEFOUNTAS: Yeah.

6120   In terms of content I get the -- there seems to be an awful lot of the content that will come from third parties. You mentioned some of them, papers, magazines. Is there an agreement in place with respect to that content provision and, if so, is it public?

6121   MR. SELVADURAI: Commissioners, to answer your question, we don't have an agreement yet but we have an LOI, letter of intent. But they are our strategic content, marketing and promotional partners, not just the content partners.

6122   But what we provided to you as a business plan is a standalone business plan with our investments, a standalone structure to do all of the content. We haven't included their content contribution or marketing or promotional contribution into the business plan.

6123   So it's a standalone business plan, Commissioner.

6124   COMMISSIONER PENTEFOUNTAS: Is your letter of intent part of the record?

6125   MR. SELVADURAI: No, it's not part of the record but we can provide it.

6126   COMMISSIONER PENTEFOUNTAS: Okay.

6127   And was that part of your initial submission, this relationship with third parties for content and promotion and marketing?

6128   MR. SELVADURAI: We made sure, before we put their name in the supplementary brief as to how their content can embrace our audiences and then help us in terms of sales marketing and content. We want to make sure we enter into an LOI for that purpose.

6129   As soon as we get the licence we will provide the full agreement for that, Commissioner.

6130   MS SCHWARTZ: One thing I just would like to clarify.

6131   COMMISSIONER PENTEFOUNTAS: One at a time.

6132   MS SCHWARTZ: Sorry.

6133   COMMISSIONER PENTEFOUNTAS: Maybe close your mike, Mister -- yeah, that's right.

6134   MS SCHWARTZ: When you say third party content, I just want to make it very clear that everything that you will hear on Touch FM will be 100 percent original to Touch FM. It will be produced by Touch FM producers. It will be in-house Touch FM content produced in conjunction with our partners.

6135   So we will be tapping into their expertise. We will be tapping into Toronto Sun's sports reporters who have been reporting on baseball since.

6136   COMMISSIONER PENTEFOUNTAS: Yeah, but I'm trying to understand the nature of that relationship.

6137   MS SCHWARTZ: So for example, if you look at our programming clock in the morning, which is Appendix 5, you'll see different blocks that are called "conversation hubs".

6138   You know, if we were talking about the NDP -- the poll about NDP surge, we might tap our partners at Ipolitics to come in and talk about what that really means from a Toronto point of view.

6139   For our young mommy club, they will be leading the conversations with moms. They have an engaged following of 80,000 moms and dads online.

6140   COMMISSIONER PENTEFOUNTAS: Will they be paying for that air time?

6141   MR. SELVADURAI: No, Commissioners. We are envisioning a synergetic partnership, and to answer your -- the question of how -- what sort of partnership. We are looking at them as a strategic sales, marketing and content partners and we don't --

6142   COMMISSIONER PENTEFOUNTAS: So they're not for profit partners.

6143   MR. SELVADURAI: I mean, if there's a synergetic partnership, there will be eventually a profit for both side, but that's -- is that the question you asked?

6144   COMMISSIONER PENTEFOUNTAS: Yes.

6145   MR. SELVADURAI: Yes.

6146   COMMISSIONER PENTEFOUNTAS: Yeah.

6147   MR. SELVADURAI: It will be profitable for both sides to get this.

6148   In the world of the media, integrations -- I mean, it's good for them to partner with the radio if they don't have a radio to get their content out and promotion. The same thing, we feel they have a great content, access to great content, access to great marketing. We want to get benefit out of it.

6149   COMMISSIONER PENTEFOUNTAS: But you haven't fleshed out the nature of that relationship and the nuts and bolts of that relationship as yet.

6150   MR. SELVADURAI: Not --

6151   COMMISSIONER PENTEFOUNTAS: Okay.

6152   MR. SELVADURAI: Not yet.

6153   COMMISSIONER PENTEFOUNTAS: How will this partnership help you franchise the multi-cultural communities?

6154   How does the Toronto Sun or any of the other sources you mentioned help you with that?

6155   MR. SELVADURAI: And to answer your question, I mean, our target audience is 18 to 54 mainstream Toronto, and as I said, Toronto Live target audience 75 percent lies in 25 to 54. That's our prime target. And they have the content.

6156   And I mean, and to answer -- I mean, The Sun, we are specifically going after some sports content. So this is just a building of the partnership.

6157   And in terms of targeting to the multi-cultural organization, there are hundreds of content providers there and then we know how to build that partnership. We have done it before, and then we can do it.

6158   But we just want to show our ability to empower other people to become as a partner, Commissioner.

6159   COMMISSIONER PENTEFOUNTAS: Okay. How many people will be employed by --

6160   MR. SELVADURAI: I think, Chris, could you answer --

6161   COMMISSIONER PENTEFOUNTAS:  -- by Touch, sorry.

6162   MR. LACOMTE: In the plan before you, we have anticipated hiring 57 full-time equivalents for the operations of the radio station.

6163   COMMISSIONER PENTEFOUNTAS: How many; sorry?

6164   MR. LACOMTE: Fifty-seven.

6165   COMMISSIONER PENTEFOUNTAS: Fifty-seven?

6166   MR. LACOMTE: Yes.

6167   COMMISSIONER PENTEFOUNTAS: Full-time employees.

6168   MR. LACOMTE: Sorry. I should say 47 full-time employees, 10 part-time employees, 54 -- 57 positions.

6169   COMMISSIONER PENTEFOUNTAS: All remunerated positions.

6170   MR. LACOMTE: Yes.

6171   COMMISSIONER PENTEFOUNTAS: Okay. On the sort of HUB theory, and it's interesting, but why not just go to Facebook for that?

6172   MR. SELVADURAI: There is no voice there, Commissioner. We want to make -- give them the voice. But we'll be -- I mean, we'll be partnering with Facebook and we will have Facebook and everything, but here we are building something with voice.

6173   The conversation happening in the Facebook with electronic text space, we want to give them a voice.

6174   COMMISSIONER PENTEFOUNTAS: Explain to me your partnership with Facebook?

6175   MR. SELVADURAI: Sorry. I didn't say we have a partnership with Facebook. I said we will have Facebook. Sorry.

6176   COMMISSIONER PENTEFOUNTAS: Oh, sorry. That's what I heard.

6177   I'm just trying to wonder who you're not partnering up with.

--- Laughter

6178   MS SCHWARTZ: And just further to that point --

6179   COMMISSIONER PENTEFOUNTAS: Grab everything.

6180   MS SCHWARTZ:  -- it's about bringing a voice, but it's also bringing all of these individual conversations that are happening online together, to finding the commonalities in our different experiences and between communities and to finding the best representatives of those conversations and talking about them on the air.

6181   COMMISSIONER PENTEFOUNTAS: Okay. At one point were you talking about sort of including people -- maybe people with accents on the radio? Did I hear that?

6182   MR. SELVADURAI: Yes, Commissioner. I'll ask -- I'll wait for your question.

6183   COMMISSIONER PENTEFOUNTAS: Oh, no. So speak to me on that, I guess.

6184   MR. SELVADURAI: I mean, what I wanted to see is we will truly reflect the right Toronto.

6185   I'll ask Brian to go through as to why that is important in the radio and how we intend to do it.

6186   MR. THOMAS: Commissioners, we'll have a mix of people, certainly, in the cornerstone areas, in morning and afternoon drive. There will be people who have lots of experience and who are perhaps known in this market already, but they will be new voices brought into TOUCH FM who perhaps don't have any broadcasting experience and we will, probably for the first time in mainstream radio, actually have some people with accents.

6187   This is a reflection of the communities that we are serving, a reflection of those people who are under served. So there will be a mixture of people which we will train, actually, to become broadcasters who already have some ability or talent to communicate.

6188   That'll be one of my main functions for TOUCH FM, is to make sure that we've got the right kind of people and the kind of people that -- of the audience that we're reflecting.

6189   COMMISSIONER PENTEFOUNTAS: Okay. Just briefly, one -- I know it's been raised before, and the revenue per share is troublesome. It seems unrealistic, especially in your year one.

6190   And some of this information is sensitive and confidential, but when you compare yourselves with other people in the market, some of whom have been around for 50 years, it does seem exorbitantly high, your revenue per share, given that you're only calling for a 1.4 share in year one.

6191   I'm not talking about further on down the road, but specifically as it relates to year one.

6192   I also understand that you may have a five share and you may be able to get eight or 10 percent of market revenues. I mean, the more your share, it grows exponentially. But at 1.4, the chances are you're not going to get 1.4 percent of the $270 million Toronto market.

6193   Do you want to just have one more crack at that revenue per share?

6194   MR. SELVADURAI: Chris?

6195   COMMISSIONER PENTEFOUNTAS: It's troublesome. I can't remember who the financial person was.

6196   MR. LACOMTE: Thank you.

6197   I think -- definitely I understand your question and the concern you have. I think there -- we've taken a number of different approaches to coming up with this revenue number.

6198   Again, we have used the market analysis and where we anticipate the market to go. The fill rate analysis, we've used very reasonable numbers. Spot rate numbers that are very consistent with the marketplace today, and sell-out rates that are totally achievable.

6199   Lastly, you know, we've also looked at the various individual stations and how they're performing across the market and how well they're over-sharing.

6200   I think there's one added point that I would add, which is, really, our relationships with these partners and our ability to really get out of the gates very strongly.

6201   COMMISSIONER PENTEFOUNTAS: I still don't have anything concrete on that relationship, so you keep coming back to it, but it's fine. I think you've had a crack at it.

6202   But there is no over-sharing at a 1.4 market share. You agree with me on that.

6203   MR. LACOMTE: No. And we have not projected to do that, either.

6204   COMMISSIONER PENTEFOUNTAS: Well, that revenue per share looks high.

6205   At any rate, last comment and I will close.

6206   MR. SHEA: I want to answer your question, perhaps, in a different way.

6207   COMMISSIONER PENTEFOUNTAS: Sure.

6208   MR. SHEA: I'm on the advisory board of McLaren Advertising, and it's interesting; last year their biggest area of growth is specific streamed ethnic advertising in Toronto.

6209   COMMISSIONER PENTEFOUNTAS: Third language.

6210   MR. SHEA: Third language.

6211   COMMISSIONER PENTEFOUNTAS: Yeah.

6212   MR. SHEA: Third -- I'm sorry. Both.

6213   So specifically, T-D Bank -- I'm using it hypothetically -- advertising in English to the Chinese market but using different cultural aspects and so on to reach that market.

6214   I'm sorry, Mr. Pentefountas.

6215   COMMISSIONER PENTEFOUNTAS: On a third language broadcaster.

6216   MR. SHEA: No, using --

6217   COMMISSIONER PENTEFOUNTAS: A broadcaster that's broadcasting in a third language, not English or French.

6218   MR. SHEA: Using all aspects of media, whether that be print or -- in other words, they've created a division at McLaren specifically to target various -- the diversity of the ethnic market in Toronto. And it is their biggest area of growth.

6219   Why? Because of the size and the diversity of the ethnic market.

6220   So we bring -- we bring that back to, you know, we are going to be a combination of mainstream with targeted at women and the ethnic opportunity because it is the largest area of growth.

6221   Finally, whether you're in the television business today, the magazine business today, what the client is asking for is an integrated sale.

6222   So the reason why Toronto Life and Toronto Sun are very interested in this proposition is they need to be able to present to their clients integrated marketing opportunities. They have no relationship with a radio group in Toronto.

6223   These are -- you know, specifically Toronto Life because I'm well versed on the management and the ownership of that company. For them to agree, both on screen and in writing, to form a content-sharing and marketing and promotion relationship, which almost every major media company in North America is doing today, I think gives a lot of credence to prop up.

6224   COMMISSIONER PENTEFOUNTAS: Well, we'll have to wait and see.

6225   I don't know if anyone else has questions, Mr. Chairman.

6226   THE CHAIRPERSON: Yeah, thank you.

6227   Commissioner Molnar?

6228   COMMISSIONER MOLNAR: Thank you.

6229   Good afternoon. There's been a very comprehensive discussion regarding your programming strategy and your business plan, and so as in your opening statement I want to change gears for a minute. And I just want to focus back on the comments you made related to the frequency where you said there's no doubt that a very compelling case supports the view that 88.1 should be awarded to a spoken word format.

6230   As you know, there are many applications in front of us for spoken word and for other uses of this frequency, and I wondered if there was something particular that you could expand upon here that would say to us yes, there is, in fact, something technically that ties it, or what is it you're meaning by that term?

6231   MR. DAVIS: That we don't have to broadcast in stereo, that a spoken word station can -- like CBC Radio One can broadcast in mono. And when you broadcast in mono, you increase the listenability of the signal in the contour area. You get a better signal in the contour area, so therefore, this would be the better use of the 88.1 signal because it would be providing, in a monaural signal, better listenability for the contour coverage.

6232   COMMISSIONER MOLNAR: So you're not accessing a greater number of people within the community or anything. You're just saying the quality of the signal relative to what's required.

6233   MR. DAVIS: FM begins to have -- well, here's the engineer.

6234   COMMISSIONER MOLNAR: I thought we did have some engineers here, and I thought if there was something technical that -- it's fair enough.

6235   Those who came forward with music platforms have looked at the signal and viewed it to be adequate, so I'm just wondering, is there something technical that would say it fits a certain format better than others.

6236   MR. SELVADURAI: At least one question I can answer on my engineering background. Thank you.

6237   So what, technically, that does is, Commissioner -- I mean, music needs stereo; talk doesn't need mono. I mean, most of the markets, CBC does mono because to reach a good quality signal.

6238   So what that means is, the same transmitted power -- we are not changing the transmitted power or contour. We're turning off the stereo.

6239   What that means is at the -- let's say we have provided a very comprehensive and one of the good enduring format with -- in terms of how many people in the .5 millivolt coverage. If there is any doubt because when I sat in the back from the other conversation, they were raising about the lack of reach and everything.

6240   I mean, even if the coverage -- if there is any doubt that people are not going to listen to that station in the .5 millivolt, we can scientifically prove and engineering provide another diagram showing that the receivers -- the radio receivers will listen better at the mono.

6241   Let's say if in that contour if there's an issue for the receivers because the stereo becomes a noise for the receiver, so you turn it off, the stereo. There is no noise. So the receiver will receive pretty good.

6242   So what we are saying is, we will guarantee our listeners in the contour will be able to listen, so this is a technical argument that this is the better frequency usage for the frequency if you think this frequency is small. So better way to use the FM frequency.

6243   COMMISSIONER MOLNAR: To ensure I understand, can you make that same argument with every frequency?

6244   MR. SELVADURAI: All --

6245   COMMISSIONER MOLNAR: Because you don't require stereo, you can guarantee its reception, so it's nothing particular to this frequency; it's just an argument for spoken word.

6246   MR. SELVADURAI: It's an argument for an FM frequency when they're transmitting mono. And when it's a spoken word, you don't use stereo. It's a mono-generated signal, so it's an argument for all of the frequencies which -- FM frequencies which can go on mono.

6247   COMMISSIONER MOLNAR: Thank you.

6248   THE CHAIRPERSON: Any other questions?

6249   Commissioner Patrone.

6250   COMMISSIONER PATRONE: Just on that point. And people listen to FM because they have stereo because they can access audio in stereo. And presumably you're going to have bumper music, you're going to have music in various parts -- or, you know, separating parts of your content.

6251   Are you not depriving your listeners of one of the best things about FM radio?

6252   MR. SELVADURAI: Before I pass it on to Carey, I mean, yes, the bumper music and everything, but currently most of the spoken word format on FM, they are doing it, including CBC, because turning off the stereo doesn't change your fidelity.

6253   It's -- but music -- spoken word is not generated at stereo signal. It's a mono signal coming out, so it's an unwanted need for the things unless you want to listen to some music on the advertisement. But it's happening everywhere.

6254   Carey himself had an experience in New York. Carey, you wanted to say something?

6255   MR. DAVIS: Sure. We did it in New York and -- on an FM station that had what's called a rim shot in over the five burroughs. We took off the stereo signal. We had an increase of half a share over the period of the next year on an FM station where we used mono.

6256   So it's used a lot as all of these stations that are flipping now are also turning off the stereo button to go mono. It just -- it's a way to reach more people through a ratings aspect. I don't say engineering, but from a ratings standpoint because of the listenability of the signal.

6257   COMMISSIONER PATRONE: But the power is -- your power is the same.

6258   MR. DAVIS: Absolutely the same. That's right.

6259   COMMISSIONER PATRONE: But you reach more people.

6260   MR. DAVIS: You -- because you have a more listenable signal. It's a better audio quality because it does not have the degradation of the stereo signal at the fringes.

6261   MR. SELVADURAI: Commissioner, if you want, I mean, we can provide --

6262   COMMISSIONER PATRONE: No, it's okay. Thank you.

6263   MR. SELVADURAI: We can provide a detailed engineering study.

6264   COMMISSIONER PATRONE: No, I'm not an engineer. I just wanted some clarity around that. Thank you.

6265   THE CHAIRPERSON: Thank you. I think that completes our questioning.

6266   Thank you very much.

6267   Madam Secretary, we're going to break.

6268   THE SECRETARY: Yes. We will come back at 2:15.

6269   MR. SELVADURAI: Thank you, Chairman and thank you, Vice-Chairman, and thank you, Commissioners, for the chance.

--- Upon recessing at 1252

--- Upon resuming at 1418

6270   THE CHAIRPERSON: Madam Secretary, are you going to start us?

6271   THE SECRETARY: Thank you, Mr. Chairman.

6272   We will now hear Item 14 on the agenda, which is an application by Tosan Lee on behalf of a corporation to be incorporated for a broadcasting licence to operate an English-language commercial specialty FM radio programming undertaking in Toronto.

6273   I would like that you please introduce your panel for the record, after which you have 20 minutes for your presentation.

PRESENTATION

6274   MR. TOSAN LEE: Thank you.

6275   Mr. Chair, Members of the Commission, Commission staff, fellow applicants, members of the public, good afternoon and thank you for the opportunity to present our application today.

6276   My name is Tosan Lee, currently CEO of All TV, a category 2 ethnic television station dedicated to the Korean community in Canada.

6277   On my right is Toro Lee, who is President of the same company. On my left is Bernard Charlton, who has provided invaluable assistance for our proposal.

6278   It's not written here, but as a supporting intervenor we have HooJung Jones from the Korea Veterans' Association of Canada in Hamilton.

6279   I'd like to, before we begin, just say that due to time restraints, my colleague, Bernard Charlton, needs to pick up his child and needs to leave at 3:30, so please excuse him if this goes beyond that time. Thank you.

6280   Today we will outline the key points of our application. First, there will be a general overview of the proposed channel format and our principal objectives.

6281   Second, we will describe the target market. Third, a video will be shown to provide a clear understanding of both the music format and the types of listeners.

6282   Finally -- fourth, we will discuss how our application could help improve Toronto. And finally, we will close by summarizing some key differences from other applicants.

6283   We are proud to submit our application to operate a new commercial FM radio station to serve the greater Toronto area. Our application is unique in that it appropriately reflects the changing nature of Toronto and thus will help to solidify and burnish Toronto's reputation for multi-cultural leadership.

6284   Asia FM will empower the English-speaking East Asian and Southeast Asian community in Toronto by correcting the under-exposure of Asian music and viewpoints in the current media landscape.

6285   The music format of Asia FM will primarily consist of popular artists and bands from Korea, Japan, China, Vietnam and the Philippines. Heavy emphasis will be placed on giving Asian-Canadian artists significant broadcast exposure.

6286   The major spoken word broadcasting components will be in English. There will be a non-English broadcasting component, specifically the Korean language, up to a maximum of 14 percent.

6287   Our application has multiple levels of benefits. Our principal objectives can be still -- distilled to the following.

6288   (1) Deliver a uniquely Asian-Canadian point of view on all issues. The benefit is serving an under-served market.

6289   (2) Provide broadcast exposure for Asian-Canadian musicians. This will not only increase Canadian content, but increase it for musicians who have no other chance.

6290   (3) Create new employment opportunities for Asian-Canadians in broadcast media and journalism. This will increase long-term diversity in the media industry.

6291   (4) Broadcast in-demand music that is currently unavailable on the public airwaves in Canada. By delivering an entirely new genre, we can revitalize the current radio spectrum.

6292   (5) Make Asian music accessible to a broad spectrum of listeners via an English-language broadcasting platform. Our hope is to increase cross-cultural understanding, which can only be done through the English language.

6293   (6) Encourage cross-cultural integration with both the Asian community and the broader Canadian community as a whole. Optimistically, this will result in Toronto becoming a better place.

6294   This new channel will serve two major groups. First, the Asian audience is comprised of English-speaking East Asian and Southeast Asian Canadians. Backgrounds of these groups include Chinese, Korean, Japanese, Vietnamese, Filipino and more.

6295   The second group is non-Asian Canadians who have an interest in the Asian music and culture. This group is growing rapidly amongst the younger demographic.

6296   Globally, Facebook "likes" and Youtube "views" for these Asian music stars have been increasing at a rapid pace. These are not originating from any one country or culture. In fact, in conducting our own research, 34 percent of the respondents to our survey were non-Asian.

6297   Now we'd like to present a video that will help everyone understand the music format more clearly. My colleague, Toro, will take over for this portion of the presentation.

6298   MR. TORO LEE: Asian music includes music from China, Japan, Vietnam and the Philippines, but the most popular and the most successful Asian music is currently coming out of Korea.

6299   K-pop, or Korean pop, features a compelling mix of upbeat songs, easy to sing choruses, dynamic dance routines and attractive young performers. It embraces the universality of pop, and essentially kids really love this stuff!

6300   To give you an idea of what K-pop is I have put together a medley of the most popular artists. Please notice the YouTube views. It's coming.

--- Off-record discussion

--- Video presentation

6301   MR. TORO LEE: In 2011, SM Entertainment, the largest record label in Korea, held for the first time two concerts in Paris, France. The following is an excerpt from a short documentary about these concerts. Please keep in mind that Paris has a Korean population of only 15,000 people.

--- Video presentation

6302   MR. TORO LEE: Actually, SM Entertainment only planned for one show which sold out in 15 minutes. They were persuaded by the fans to hold one more show. This is a flash mob or social media inspired gathering held outside the Louvre which convinced SM to hold a second concert. It sold out as well.

--- Video presentation

6303   MR. TORO LEE: K-pop has found similar mainstream success in North America, with sold-out concerts at the STAPLES Center in L.A., Madison Square Gardens in New York, and Overpeck Park in New Jersey which drew over 40,000 fans.

6304   And they are not your ordinary fans. To put it mildly, the fans are crazy about the music. Not only will they memorize the songs, which are in Korean, not English, but they will spend hours and hours learning the latest dance moves.

6305   The following is a clip of an audition for a K-pop cover dance competition being held in Toronto. Once again, that's cover dance, not cover song. Mixed Seouls is a group of friends from Toronto in their twenties whose love of K-pop is evident.

--- Video presentation

6306   MR. TORO LEE: As you can see, it's not just Koreans or Asians that are passionate about this music.

6307   Recently, Girls' Generation, the most famous of K-pop groups, appeared on "David Letterman" and "LIVE! with Kelly." I would like to finish off the video portion with a clip from these appearances.

--- Video presentation

6308   MR. TORO LEE: The other Asian pop, Chinese pop, Japanese pop, et cetera, are equally as dynamic and exciting but also have a definite style.

6309   I hope now you will have a better understanding of what Asian music is and why it is so popular with young Asians and non-Asians alike.

6310   MR. TOSAN LEE: Thank you.

6311   Asian FM's vision is about more than simply being a radio station that plays a specific genre of music via a narrow playlist to a tightly targeted demographic who may then purchase products from advertisers.

6312   While the popular Asian music we have discussed may seem like a niche music format, there are deeper connections and benefits that can arise by bringing it to a variety of cultural groups by a nonexclusive English-language platform.

6313   We have a unique opportunity to go beyond supplying music that is "in demand," which, quite frankly, can be easily replaced by an iPod.

6314   The opportunity is this. We have a new popular music from Asia that is infiltrating many other cultures. These fans are friendly and open. They care more about the music than the country they or their ancestors came from. The success of one country also permeates the others and the fans are open to all cultures. There is a positive feedback loop that is created as racial and cultural lines are blurred or ignored.

6315   When I visit some of these Asian music concerts, I see Canadians of Chinese, Korean, Caucasian, Persian, Indian and African descent, all ethnicities enjoying music together. There is a true mixing of cultures and a true breakdown of racial barriers.

6316   We operate an ethnic television station that is targeted towards Koreans, All TV. Without a doubt, ethnic media services are great and they truly serve their respective communities. Despite such tangible benefits, however, they do not bring together diverse communities.

6317   Operating All TV since 2001, I have witnessed firsthand the propensity for ethnic media to look inward and create an echo chamber effect. It is a struggle to present a properly Canadian inclusive multicultural outlook in such a format. This is where we believe Asia FM has a chance to succeed and we hope the Commission will see this as a desirable goal.

6318   There are many qualified applicants for this rare frequency. The Commission's task to select one, just one, is daunting. I would just like to highlight a few key points that differentiate our application.

6319   First, our proposed channel introduces an entirely new and in demand music genre to the Toronto radio landscape.

6320   Second, we hope that our proposed channel can help in some small way to unite diverse cultures through shared musical experiences. The youth are doing this and they have chosen Asian music as a medium to grow together. It would be nice to try to help nurture this.

6321   Finally, and most importantly, we are trying to provide a voice for English-speaking Asian Canadians on the public airwaves. Asian Canadians simply have limited role models in broadcasting.

6322   Asian Canadians are the largest group in Toronto. It is time for us to have a voice and a presence on mainstream radio.

6323   Naturally, Asian pop music is popular with Asians, and now, thanks to the Internet, it is gaining traction with non-Asian audiences all over the world. MTV in the States has created an all K-pop channel, MTVK. Billboard has created a separate K-pop chart and YouTube has now included K-pop as an official music genre alongside alternative R&B and jazz.

6324   Toronto is the ideal city to launch a groundbreaking Asian music radio station. It not only has a significant Asian population which is hungry for this music but it is also a culturally diverse city which is highly tolerant to world music.

6325   Once again, I would like to thank the Commission for this opportunity and we would be pleased to answer any questions you may have.

6326   THE SECRETARY: Thank you very much, Mr. Lee, for your presentation.

6327   We will now hear your intervener in support -- I'm sorry for mispronouncing your name -- Ms HooJung Jones from the Korea Veterans Association of Canada, Hamilton Region.

6328   Ms Jones, you have five minutes to present your intervention.

INTERVENTION

6329   MS JONES: Thank you very much for the kind introduction. My name is HooJung Jones from Korea Veterans Association, Unit 26 Hamilton.

6330   Dear Canadian Radio-television and Telecommunications Commission Committee, I would like to send my sincere appreciation to the Committee members and staff of the CRTC for their continuous efforts to serve the public.

6331   This letter is to support the Asia FM that serves the needs of the East Asian community by providing the first English-language Asian music radio station. It will unite younger generations who speak English throughout the East Asian community and enjoy listening to the world music, including C-pop, K-pop, J-pop, P-pop, V-pop and M-pop, Korea, Japan, China, Vietnam and Philippines.

6332   Currently, there is no radio station serving the East Asian community in English. It will mark the history of the radio in Canada as they are focused on high-quality music, informative news and educational programs to deliver journalistic voice of East Asian communities.

6333   Many Canadians also enjoy the world music. However, language barriers prevent them to freely appreciate the popular Asian world music and artistic expressions.

6334   Canada truly encompasses diversity of many cultures. The past contributions of the East Asian community are an integral part of Canada's unique cultural mosaic and economic development. Recently, I was overwhelmed with the passive responses from various East Asian and other communities regarding an exciting quest of future mission of Asia FM.

6335   Asia FM, Tosan Lee and his dedicated staff will be able to deliver unique and essential services to benefit the community, providing radio services in English, which will further enhance the quality of many citizens and bring the world close to Canada.

6336   Thank you for allowing me to voice my opinion and I ask your support on behalf of the East Asian community.

6337   Sincerely, HooJung Jones, Project Coordinator of the Korea Veterans Association Unit 26; Past President of the Hamilton Folk Art Heritage Council "It's Your Festival"; Director of Hamilton's Signal Association and Friends of HMCS HAIDA.

6338   Thank you very much.

6339   THE CHAIRPERSON: Thank you very much.

6340   I would ask Commissioner Molnar to begin the questioning.

6341   COMMISSIONER MOLNAR: Thank you.

6342   Good afternoon. Just a couple questions for Ms Jones first. Are you a resident of the Toronto GTA or do you live in Hamilton?

6343   MS JONES: I live in Hamilton, but I used to live in Toronto for almost 15 years and I travel to Toronto quite often and help organize one of the Korean Dano Spring Festival.

6344   COMMISSIONER MOLNAR: Okay. And you are supportive of their station and I wonder if it is the availability of the music that you are supportive of or are there other elements? What to you was the key factor that caused you to support this application?

6345   MS JONES: I have spoken with a number of veterans who fought during the Korean War and also the veterans who actually gave their blood to many peacekeeping efforts. They are absolutely happy for me to come out and they do support, because simply, older people, including me, came from South Korea and a lot of people from Hong Kong and Philippines. It's all due to brave Canadian heroes.

6346   And one thing that really intrigued me was English-speaking. My son is half Korean, half Welsh, so he speaks English fluently and limited Korean as well. And for him to grow up understanding different Asian background music, speaking in only Korean, it has a limited understanding. But when Toro explained to me about the English Asian FM, I really understood the concept.

6347   As I said, I am also representing the Hamilton Folk Art Heritage Council, which is one of the largest Canada Day festivals in Canada and I used to be the Past President of the festival, organizing over 2 million spectator festivals for 10 years.

6348   So I do understand the very importance of Canadian top entertainment, also the opportunity for the second generation to have the diversity to network together, but there is no station that I can approach to play this kind of music when he came and approached that in English.

6349   And we have the blessing of many veterans in many diverse communities which I have consulted before. Thank you for allowing me the opportunity to speak on behalf of them.

6350   COMMISSIONER MOLNAR: Okay, thank you.

6351   Maybe I will direct my other questions to the front row, to the applicants.

6352   Just following on the availability of East Asian music in Canada today, are there any of the ethnic stations here in Toronto that do provide some exposure to this music?

6353   MR. TOSAN LEE: Not that I'm aware of. I would presume that for example Fairchild may once in a while play a certain popular Chinese artist, that there may be overlap with our channel, but not in this -- not like this.

6354   In general, the ethnic stations are more geared towards the parents and the first-generation immigrants. This proposed channel is dedicated to the youth, the English-speaking youth.

6355   COMMISSIONER MOLNAR: Okay, I understand that and certainly the song on "David Letterman" appears quite mainstream. Are you hearing this on any of the mainstream commercial stations?

6356   MR. TORO LEE: I have heard reports that once in a while Korean K-pop gets played, but it's very infrequent. I think maybe CBC Montreal has played it once or twice, but generally, mainstream you will never hear it. I have never heard it personally.

6357   COMMISSIONER MOLNAR: Fair enough.

6358   Tell me, your application meets the basic requirements that we have as it regards the level of Canadian content on the airwaves and you have committed to the very basics. And I suppose I understand given the direction that you are seeking to go here in bringing South Asian music into Canada, but again, one of our requirements and certainly an objective is to provide space for Canadian artists.

6359   So what is your source for achieving the 35 percent Canadian content and your commitment to 10 percent emerging artists? How would you see meeting that requirement within the genre that you are proposing?

6360   MR. TOSAN LEE: I think most of the artists we would play really come from the response we get from the fans.

6361   In our application there is a list of Canadian artists and, to be honest, I don't know a lot of them. These are generated by the people -- the youth that want to hear these artists. So it really is more of an interactive kind of thing going on, where we will just play what the kids demand, not by some BBM chart or something like that.

6362   COMMISSIONER MOLNAR: But you feel confident you can maintain the levels of Canadian content required and still meet the needs of your audience?

6363   MR. TOSAN LEE: Yes.

6364   MR. TORO LEE: If I could add to that, I think the question, from what I understand, can Canadian-Asian talent -- is there enough Canadian-Asian talent to fit 35 percent, and, to be honest, we don't know.

6365   We have a list of basic -- a basic list of potential artists. Our plan is to have as many of those artists as possible but also have -- a component of our programming is not just Asian-Canadian but Canadian as well. So it will be a mix. So we can top up per se with non-Asian Canadian artists.

6366   COMMISSIONER MOLNAR: Let me understand. One of the areas of your application when I was reading through it appears that you have committed to providing 42 hours of local programming per broadcast week, but you didn't specify, or at least I did not see how you were proposing to source the other 84 hours a week of content.

6367   So can you tell us how it is you are proposing to source that other 84 hours?

6368   MR. TORO LEE: The 42 hours per week is a minimum, so a minimum of one-third. I believe that is a requirement.

6369   If you look at our program schedule, I believe in the supplementary brief or the actual application you have a tentative schedule of what we have planned.

6370   And if you look at, let's say in terms of local content, morning drive, the evening drive, Asian pop, urban Asia would probably be the first ones that would go local. So if you look at just those programs, that actually comes out to 72 percent.

6371   So we are aiming for more local content, but the 42 is a minimum requirement that we would achieve.

6372   COMMISSIONER MOLNAR: So whether it's 42 hours or 72 percent, it's not 126 hours or 100 percent. So what fills in your schedule?

6373   MR. TORO LEE: The remaining programs would -- we have programming agreements with Adidan(ph) from Korea. They have English-language programming that covers Asia. So it's basically foreign content we would fill the rest.

6374   COMMISSIONER MOLNAR: And then you would also have 14 percent Korean-language programming. That would be locally produced Korean-language programming?

6375   MR. TORO LEE: That's correct.

6376   COMMISSIONER MOLNAR: And when would that run?

6377   MR. TORO LEE: Our current plan is to have the Korean-language program during the morning drive.

6378   COMMISSIONER MOLNAR: So your morning drive would not be English language in an English-language station?

6379   MR. TORO LEE: That's correct. The evening drive would be in English.

6380   COMMISSIONER MOLNAR: Okay.

6381   I have a couple of questions about your business plan.

6382   You projected relatively modest revenues and modest tuning estimates, but as I understand they were based on market analysis that was conducted online and I think you referenced that within your opening statement, that a number of people who responded to your survey were not of East Asian descent, and very fair when you are going to sample a market and not any specific segment of that market. You would be serving the Toronto market in whole.

6383   However, it does not appear that your survey even limited its respondents to the Toronto market. Is that correct?

6384   MR. TORO LEE: That's correct. We can break down the numbers a little bit more detailed for the GTA.

6385   COMMISSIONER MOLNAR: Because you have it right there?

6386   MR. TORO LEE: Yes. To be honest, we should have put in the GTA numbers really. That was a misstep on our part.

6387   COMMISSIONER MOLNAR: Yes. I think at this time it's -- we are not in a position to allow you to enhance or change the application that you filed.

6388   MR. TORO LEE: I understand.

6389   COMMISSIONER MOLNAR: But you have the numbers, so I am going to ask you that based on that, was it based on the market numbers that you provided to us and responses are based on the responses of the GTA upon which you established your tuning and revenue estimates?

6390   MR. TOSAN LEE: I'm sorry, could you repeat?

6391   COMMISSIONER MOLNAR: I'm trying to understand. That survey -- that was an open online survey with no geographic boundaries -- was the basis, at least as I understand it, for establishing your tuning estimates for the station as well as establishing your revenue estimates for the station?

6392   MR. TOSAN LEE: No, they weren't used as a basis for the tuning estimates.

6393   COMMISSIONER MOLNAR: What was the basis for your tuning estimates?

6394   MR. TOSAN LEE: The tuning estimates would be based on an extrapolation of our business experience in the Korean market.

6395   COMMISSIONER MOLNAR: But you have proposed that this station would not be limited to the Korean population, certainly not the Korean population, not even the Asian population, but would be a way of opening --

6396   MR. TOSAN LEE: Opening doors.

6397   COMMISSIONER MOLNAR:  -- the culture to all people in Toronto.

6398   MR. TOSAN LEE: Yes.

6399   COMMISSIONER MOLNAR: Okay. Okay, I'm just going to leave that alone.

6400   I will ask another question about your revenue estimates. You had estimated that 70 percent of your revenue would be coming from new revenue sources. Could you tell me the basis of that estimate?

6401   MR. TOSAN LEE: Our business plan -- you had mentioned that we have a Korean portion in the morning drive time and there was some scepticism about that, I understand, but essentially we are leveraging our experience and our expertise in the Korean market to help drive this market forward.

6402   So in the early stages, the Korean market that we know, the businesses that we know will help generate the revenues to push forward with more of the English-Asian-language programming -- sorry, English-language programming.

6403   COMMISSIONER MOLNAR: So that's the basis of your 70 percent? It is basically your advertising base for All TV -- I believe it's called -- that you're relying on to support this? Is that the basis of your estimate?

6404   MR. TOSAN LEE: Not just our current advertisers, but we do -- you know, when our salespeople go around, our product may not fit but they are looking for a place to advertise to reach a different market and we need to just make that available to them.

6405   These are unsophisticated, for all intensive purposes, small business owners who aren't looking at ratings numbers and can't afford to be on the edge 102.1 or anything like that.

6406   COMMISSIONER MOLNAR: Fair enough.

6407   You mentioned your advertisers are not sophisticated, and while you are in the broadcasting industry this is a new game and you would be playing against some very, very large, experienced, well-financed competitors in the English language, you know, competing for the same audience.

6408   Just tell me how you believe that you could overcome some of those challenges to actually be successful, to launch and become successful in what is really a new venture, against large and experienced competitors with a relatively -- well, it's a specialty channel, and specialty by its nature is niche in its popularity.

6409   MR. TOSAN LEE: I would say that is the answer to the question. This target market is not being reached by current -- not really being reached in this highly targeted fashion. So if an advertiser wants to target youth Asian Canadian market, where do they go? I don't know if there is an answer to that.

6410   So by providing a really highly targeted product we will be able to convince some advertisers to come over, but obviously from our revenue projections we don't actually have a lot of competing. We don't have, you know, a line for national advertisers because it's almost -- we are presuming we are going to fail against them, but we are not.

6411   COMMISSIONER MOLNAR: Can you remind me of the number you are targeting here, young -- the young Asian community, the English-speaking, young English-speaking Asian community within the GTA? Could you remind me of the number?

6412   MR. TOSAN LEE: Seven hundred thousand, eight hundred and fifty-two.

6413   COMMISSIONER MOLNAR: Okay.

6414   I'm going to move on to some more technical clarifications we need with your plan and that is related to your CCD commitments.

6415   If you have been listening over the period of this hearing we have been asking most applicants a question about basic CCD and the fact that for any revenue over $1.25 million there is a requirement that 15 percent of the basic CCD goes to the Community Radio Fund of Canada. Would you be prepared to accept that?

6416   MR. TOSAN LEE: Yes, we will accept that as a condition of licence.

6417   COMMISSIONER MOLNAR: Okay.

6418   On your over and above CCD, I just have a couple of questions related to specific initiatives that you have.

6419   One of them is $5,000 that you would direct to music production services. I just need to understand when you are talking music production services, I would understand that that is funding studio time or production services.

6420   Just to clarify, that would be studio time and production services outside of studio and production available at your station if you were to be successful?

6421   MR. TOSAN LEE: That's correct.

6422   COMMISSIONER MOLNAR: So that's all independent second-party outside of All TV as well?

6423   MR. TOSAN LEE: Yes.

6424   COMMISSIONER MOLNAR: Okay. Thank you.

6425   One more question about your CCD. You plan on contributing $2,000 annually to the Reel Asian Film Festival for best Canadian soundtrack. And it does say Canadian soundtrack, but I would just like to confirm that in fact it would be a prize that would be awarded to a Canadian for Canadian music?

6426   MR. CHARLTON: I believe we addressed that in the deficiency response. Yes, that is exactly what we would do.

6427   COMMISSIONER MOLNAR: Okay. Thank you very much.

6428   Another question. You are proposing to have an open-line talk show. Are you aware that there is a Commission policy regarding open-line programming?

6429   MR. TORO LEE: Yes.

6430   COMMISSIONER MOLNAR: Yes. And so you would put in place the measures to ensure that your station would meet all the guidelines set out in that policy?

6431   MR. TORO LEE: Yes.

6432   COMMISSIONER MOLNAR: Okay. Thank you very much. I have just one question left.

6433   You are, as I said earlier, new to the radio broadcasting game and did not in your application file any information related to your financial capability to support this station.

6434   There is obviously some risk when you go into a new venture with a new genre and what is potentially inexperience in the industry, and so I wonder if you could give us some assurance that you would have both the financial capacity as well as the willingness to pursue this and stick with this until it can be successful.

6435   MR. TOSAN LEE: Well, while we may be new to the FM band, actually not really. We started a -- we were pioneers of the SCMO frequency, in 1988 I believe, with a 24-hour Korean radio channel with our father. So at that point in time we knew nothing about SCMO and we dug in and worked hard and learned it and succeeded.

6436   In 2001, when digital television came around, we knew nothing about that as well and we put in our hard work, figured it all out, and here we are today, still operating and serving the community. We are very confident in our ability to figure it all out as we go along and learn it.

6437   MR. TORO LEE: On top of those two examples, we did run, I guess, a brokerage hour on AM 1430 for many years. That was during the drive time as well. When we started television --

6438   COMMISSIONER MOLNAR: I'm going to re-ask my question.

6439   Your financials suggest that you will be PBIT-positive in year two. And while you are very confident, you know, maybe if you were to sensitize those numbers you would rapidly be not PBIT-positive in year two. You will be having an over $300,000 loss in year one potential should your business plan not execute as effectively or as quickly as you had proposed, negative PBITs in year two as well.

6440   And what I would like is some assurance you have the financial capacity because nothing has been filed on the record to say that you have the financial capacity to carry through with these losses and further losses, if required.

6441   MR. TOSAN LEE: Just to address the financials, I know you have heard this many, many times, that everyone's numbers are conservative. Ours are and this is why.

6442   We have not included any national advertising in there even though we do already have relationships through our television channel with national companies such as Kia, Hyundai, Korean Air, LG, Samsung. These are all Korean national companies that support us.

6443   So those revenues are there to, you know, help with obvious possibilities of drops in advertising of, you know, even 20 or 30 percent. We know that that's possible, so we are ready for that.

6444   In addition, because All TV is functioning right now and in a firm position, All TV will be obviously able to help support if there are further complications in revenue receipts.

6445   At the same time, we do have personal equity in this and it will essentially be all of us. You know, one thing we can say is we are a family business since 1988. We don't have -- we aren't playing with stocks here. You know, if it goes down $100,000 we are not pulling our investment and running away.

6446   This is our life. We are putting our life on the line here and we are ready to commit 100 percent. We would not be here if that commitment wasn't there.

6447   COMMISSIONER MOLNAR: Okay. I want to make sure I heard. This is funded through personal investment backstopped by All TV?

6448   MR. TOSAN LEE: Personal equity, not All TV.

6449   COMMISSIONER MOLNAR: Okay. Those are my questions.

6450   THE CHAIRPERSON: Thank you.

6451   I just want to pursue this one step further. Do you have controlling interest in All TV?

6452   MR. TOSAN LEE: No.

6453   THE CHAIRPERSON: What percent of All TV do you control?

6454   MR. TOSAN LEE: Twenty-four percent.

6455   THE CHAIRPERSON: So how can you leverage All TV if you ever needed to?

6456   MR. TOSAN LEE: It is currently owned 24 percent, 24 percent and 52 by our father. So he is 100 percent behind us.

6457   THE CHAIRPERSON: Okay.

6458   MR. TOSAN LEE: So essentially a family business.

6459   THE CHAIRPERSON: Is he a partner to this business?

6460   MR. TOSAN LEE: No, he's not.

6461   THE CHAIRPERSON: He's not.

6462   MR. TOSAN LEE: Yes.

6463   THE CHAIRPERSON: Okay. Is All TV currently profitable?

6464   MR. TOSAN LEE: Yes.

6465   THE CHAIRPERSON: For how many years has it been profitable?

6466   MR. TOSAN LEE: It's difficult to say because in 2008 we were profitable, but with the global recession it was a bit of a hard time, but we are coming back up to profitability last year.

6467   THE CHAIRPERSON: So you weren't profitable in 2009 or 2010?

6468   MR. TOSAN LEE: Essentially a breakeven type of scenario.

6469   THE CHAIRPERSON: Okay. Those are my questions.

6470   Anybody on the panel? Okay.

6471   Thank you very much, that completes our questioning.

6472   MR. TOSAN LEE: Thank you very much.

6473   THE CHAIRPERSON: We will take a short 15-minute break.

6474   THE SECRETARY: Fifteen minutes, yes. Thank you.

6475   THE CHAIRPERSON: A short 15-minute break.

--- Upon recessing at 1507

--- Upon resuming at 1528

6476   THE CHAIRPERSON: Madam Secretary, let's begin.

6477   THE SECRETARY: Thank you, Mr. Chairman.

6478   We will now hear Item 15 on the agenda, which is an application by Trust Communications Ministries, a not-for-profit organization, for a broadcasting licence to operate an English-language specialty FM radio programming undertaking in Toronto.

6479   Mr. Andrew Hamilton will lead the panel. I would ask that you please introduce your panel for the record, after which you will have 20 minutes for your presentation.

PRESENTATION

6480   MR. HAMILTON: Thank you.

6481   Good afternoon, members of the CRTC, fellow applicants and Toronto residents. My name is Andrew Hamilton. I am the Chairman of the Board of Trust Communications Ministries.

6482   We are so happy to have this opportunity to present this application to you for a Christian format to serve listeners in Toronto.

6483   Please allow me to introduce my colleagues. Sitting next to me is Drew Brown, a local Christian recording artist. Beside Drew is Janice Baird, the bookkeeper for TCM. Next to Janice is Scott Jackson, the Executive Director of TCM and Station Manager of our station in Barrie, LIFE 100.3.

6484   On his left is Steve Jones, Program Director of LIFE. To his left is Maria Lopez, morning show co-host and news anchor with LIFE.

6485   Next to Maria is Fazal Karim. He is the Publisher and Editor of The Christian Herald.

6486   On the far right is our Broadcast Technician, Paul Firminger.

6487   In the back row is Reverend Ginette Howse, from Malvern Christian Assembly in Toronto.

6488   Before we present our application which explains how our new FM will serve Toronto, we would like to present a short video which explains why we see a need for a Christian format.

--- Video presentation

6489   MR. HAMILTON: By the way, the video was produced by AJ Martin, one of our announcers in Barrie.

6490   The video has shown you why Toronto needs a Christian format, and now my colleagues will help explain how we intend to make that possible.

6491   Let's have the ladies first.

6492   MS LOPEZ: Hi, I'm Maria Lopez. Our news department will report regular news, not religious news. It's news that is relevant to Toronto, and we will include local interviews.

6493   The difference between our news and news on other Toronto stations is that we will try to use non-sensationalized phrasing, so the style of our presentation is consistent with the uplifting music.

6494   MS BAIRD: Hi, I'm Janice Baird. Our advertisers will not be typical radio advertisers. The bulk of our clients will probably be churches and other parachurch ministries who don't use secular radio, primarily because they can't afford Toronto rates.

6495   Most churches have never tried radio advertising, so our client list will not take away revenue from mainstream radio, but these new clients will instead increase the number of ad dollars spent in Toronto.

6496   Last month, Missionfest Toronto was held at Global Kingdom Ministries in Scarborough. This is one of the largest Christian conferences in Ontario. It runs for three days, with thousands of people attending, and our Barrie station was the only Canadian station on-site.

6497   TCM is one of the sponsors at WonderJam at Canada's Wonderland this June. We are an advertising partner with Wonderland and have been for several years. WonderJam is the largest annual Christian concert event in the GTA, but there is no representation by any GTA station. Our new FM would attract Torontonians to more shows like this.

6498   MR. JONES: Hi, I'm Steve Jones. Several businesses wrote letters of support and hope to be advertisers. These letters are part of our application, which include Gord Evans Financial Solutions in Pefferlaw, D.L. Deeks Insurance in Markham, and Duca Financial Services in Toronto. We have endorsements from Christian education institutions, including Tyndale University College in Toronto.

6499   One of Toronto's main promoters of Christian concerts is Unite Productions, and company president Paul Kelly sent along a letter of support, as did Martin Smith, the President of the Gospel Music Association of Canada.

6500   You may have noticed the letter of support from Hockey Hall of Famer Mike Gartner, who enjoys Christian radio and endorses our application.

6501   And if I could draw your attention to the letter sent from Catherine Robertson of Eagle-Com Marketing, whose company provides various long-form programs to radio across Canada, Ms Robertson says that they have shows airing on CJYE in Oakville and WDCX in Buffalo, and "both of these stations do not effectively cover the GTA and it is impossible to reach the audience that we know want to hear our programming."

6502   MR. BROWN: Hi, I'm Drew Brown. I'm a GTA resident and a member of the 88.1 Advisory Committee.

6503   I have lived here for over 20 years, and I joined the committee because I like what TCM has done with Christian radio in Barrie. It's slick and very supportive of Canadian artists.

6504   Around the year 2008, there was a turning point in Canada in terms of Christian music. The quality of the production was the main thing, but as artists we realized that radio works with formats -- AC, CHR, hip hop and rock. So as artists we began recording with the mission of being radio-ready.

6505   Maybe it's still too soon to call ourselves the "Christian music industry", because we have a long way to go before we can be compared to the mainstream market.

6506   Mainstream radio thinks of Amy Grant when they think of Christian music, and she hasn't been a major artist for more than a decade.

6507   Myself and most artists work in music only part-time, because the "industry" is not able to financially support us full-time.

6508   In our radio application, we are committing to playing 12 percent CanCon each week, which is 2 percent over and above the Category 3 requirement.

6509   MR. FIRMINGER: Hi, my name is Paul Firminger, and at the present time there are no full-time Canadian FM Christian music stations serving Canada's largest city, Toronto.

6510   WDCX in Buffalo, U.S.A., is Toronto's only choice for FM Christian music, and many Torontonians think of WDCX as their only local FM option.

6511   88.1 is a limited directional signal which cannot produce a large signal footprint of 50,000 watts or more. However, with 800 watts we can serve the GTA with a strong, reliable signal.

6512   And because TCM is a charity, and is not controlled by shareholders who need dividends every quarter, we can operate with significantly lower operational expenses.

6513   We will still use professional broadcast equipment to provide the best quality signal, but making a profit is not what drives this mission.

6514   MR. JACKSON: Hi, I'm Scott Jackson. Christian radio is unique. People love this format so much that they write cheques and make donations to support it.

6515   Why do they do that? Well, it's because we represent something that is important to them. Some people like the aspect of it being family friendly, there are no provocative or drug-based lyrics, and there are no lyrics promoting violence in Christian music.

6516   There are many charities vying for donations. We have found that people give to things they believe in. If you love animals, you might give to the Humane Society. If you have a heart for children, you might support a child in a third world country. And also on that list is Christian radio. Donations account for nearly half of our budget.

6517   Even during the recession a few years ago, our annual Barrie Sharathon fundraiser not only reached the goals, but exceeded the goals.

6518   Our new FM is also listener-supported under the umbrella of Trust Communications Ministries. Donations are a revenue source that I believe doesn't impact any Toronto station.

6519   How many radio stations in Toronto can say that people give them money just because they like them?

6520   MR. KARIM: Hi, I'm Fazal Karim. I, too, am a GTA resident, a member of the 88.1 Advisory Committee, and the Publisher of a monthly Christian newspaper available in more than 500 churches across the GTA. It's a resource containing Christian information and advertising, and I see this radio station doing the same thing.

6521   It's not about being Protestant or Catholic. We are not bound by denominations.

6522   To serve Toronto listeners and guide our station before and during start-up, we developed an Advisory Board. This board serves to advise TCM about Toronto.

6523   We can provide contacts with Toronto churches with whom we already have a relationship.

6524   We will introduce them to Canadian artists, and direct them to potential advertisers and donors whom we consider to be a vital part of our ministry.

6525   MS LOPEZ: We will design several programs to reach the local audience. "Toronto Today" is a 30-minute news magazine show that will air on Saturdays. It's not a spiritual show, but rather a summary of the week's news stories and longer versions of interviews.

6526   How often have people said, "There's never any good news"? Well, now there is. The "Good News Patrol" is a soft news story about people who overcame adversity. It's a good transition to wrap up a newscast.

6527   MR. JONES: Having seen the video, you saw the testimonials from Torontonians who passionately want Christian radio to come to the GTA.

6528   Before producing the video, we hired two secular research companies to help us assess the listener demand for this format. Leger Marketing did an OMNI survey which told us what we already knew, that people with children are more likely to listen and value a Christian radio presence.

6529   We then hired Bray Partners Communications to assess the market in terms of potential market share and potential revenue. Bray's research encouraged us to pursue the application.

6530   More than the findings from these research companies, we have discovered the following: Christians who aren't familiar with Christian music don't know if they like it until they hear it. But once they hear it, they become fans, and Christian radio becomes a part of their day.

6531   MR. BROWN: Our music meetings will utilize the research of Canadian music charts, but to maintain the identity of Toronto, we will conduct focus groups and music tests with Toronto listeners. The focus groups invite listeners together to fill out report cards about our features, our DJs and our music.

6532   We will ask listeners specific questions about our news coverage, the style of music, and the relevancy of our DJs.

6533   These focus groups will be ongoing, to help shape our station.

6534   MS BAIRD: We are big believers in giving back to the community. Not only will our team be available to speak to the next generation of broadcasters in college radio programs, but we have two $500 awards to present to Humber College students in the broadcasting program each year.

6535   Part of the TCM budget is allocated to helping others. Over our 13 years we have financially supported every not-for-profit Christian station in Canada. We have helped them during start-up. We have helped them during their fundraising campaigns.

6536   Several of us have gone on location to provide training and to exchange ideas. Our Station Manager, Scott Jackson, has visited almost every Christian station in the country, with the purpose of giving back.

6537   So, giving back to other stations is part of our mandate as an organization.

6538   MR. KARIM: I'm a Canadian who grew up outside the country, and can personally testify to how difficult it can be to plug into the Christian community after immigrating to Canada. Many immigrants often look to the church for support when coming to a new country, but often do not know where to begin.

6539   Our station will serve as a starting point for many people to become aware of the richness and diversity of Toronto's Christian community, which includes many vibrant churches from the city's Korean, Chinese, Spanish, Caribbean and many other ethnic communities.

6540   MR. JACKSON: I love radio. When I was a teenager, just getting into music, I would go to bed with my radio on, listening to 1050 CHUM every night. I knew all the songs, all the words, but when I got into radio as a career, I realized why I loved CHUM so much. It was because CHUM built listener loyalty.

6541   I was more than a listener, I was a fan, and the DJ was like my friend. The whole station made me feel good. It was my companion.

6542   When I design radio stations, I try to re-create that personal vibe, to make us like a friend to the listener, tell them the weather so they can plan their weekend, give them information about things they care about, go on location where you can actually meet them.

6543   I guess it may sound like the golden days of radio, but the theory still works for us, and that's the feeling we want to create with our station in Toronto, a station that lives the life we talk about and DJs who love the music just like the listeners.

6544   MR. HAMILTON: Thanks, Scott.

6545   At the beginning of our presentation, our video showed why Christian radio is needed in Toronto, and now you know how we intend to accomplish it.

6546   With hopes of bringing Christian Radio 88.1, here is our top 10 list which we hope sets our application apart from and above our competitors.

6547   Number 1, listeners will get a music format not available on Toronto FM radio station today.

6548   Number 2, Canadian artists will get air play because no other Toronto station is dedicated to the development of Christian music.

6549   Number 3, we represent a new, diverse voice where there are already dozens of publicly-traded broadcasting companies.

6550   Number 4, we're offering 12 percent Can con, which is over and above the regulation.

6551   Number 5, we're not obligated by regulation to provide any CCD funding because of our charity status, but we're very happy to offer artist support of $97,000 over seven years and $20,000 a year every year that follows.

6552   Number 6, our impact on other stations in Toronto will be negligible. Our revenue source really is unduplicated.

6553   Number 7, our decision of local programs like Toronto Today makes us relevant to the Toronto audience.

6554   Number 8, TCM has a 12-year history of staying in the black every year, not needing a loan, always debt free.

6555   Number 9, our station keeps Canadian advertising dollars in Canada instead of losing them to a station in the United States.

6556   And number 10, we'll bring back people to the radio from their mp3 players, from their satellite radio and from internet radio.

6557   Thank you for your time. I hope we've provided you with the evidence that you were expecting from us, and we look forward to your questions.

6558   THE SECRETARY: Thank you very much.

6559   We will now proceed with the presentation from Rev Janet Howse from the Christian Assembly in Toronto.

6560   Rev Howse, you have five minutes for your presentation. You may now proceed.

6561   REV HOWSE: Thank you.

6562   The vision of Canadian Radio-Television Telecommunications Commission is to promote competition, innovation, consumer choice and Canadian reflection in order to foster a world-class communications system benefitting all Canadians.

6563   I am before you today in support of that vision and on behalf of Trust Communications Ministries in their application for a Toronto radio licence. I'm grateful for the opportunity to share with you today some of the reasons why the plans and vision of Trust Communication furthers your own CRTC vision.

6564   In my capacity as a senior pastor of a large, multi-ethnic Toronto congregation, I am constantly connecting with individuals of all ages, backgrounds and walks of life. The most recent demographic survey of our congregation revealed members from over 45 different nations meeting together regularly for worship and fellowship.

6565   My church, Malvern Christian Assembly, on the corner of Neilson and Sheppard in Scarborough, is representative of thousands of congregations meeting at least weekly across this diverse city. Stats Can statistics confirm that more than two-thirds of the population of Greater Toronto claim some form of Christian affiliation.

6566   The challenge for me, and perhaps for all of us here today, is to determine how we facilitate the CRTC's vision of "benefitting all Canadians" when approximately four million GTA listeners have no spot on the radio dial at present that adequately meets all of their listening needs.

6567   What does it mean to foster a world-class communications system? Looking at other world class cities like New York, Los Angeles and Chicago, all of them provide the style of broadcasting that Trust Communications is applying for today. Even Buffalo has WDCX where, incidentally, Toronto businesses are already spending advertising dollars.

6568   We like to think of Toronto as a world-class city, but currently this style of broadcasting is absent from Toronto airwaves. There are 41 Christian radio stations presently in operation across Ontario from Wawa to Apsley, yet none in Toronto.

6569   The experts on the panel today know better than I how difficult, in fact virtually impossible, it is for Torontonians to pick up any of these stations.

6570   Trust Communications has successfully operated LIFE 100.3 from their Barrie, Ontario location for the last 13 years. They have developed a family values format which attracts listeners of all ages, a format that has stood the test of time already and attracted a broad audience. Their programming style does not include songs containing lyrics riddled with sex, drugs, violence and misogyny. It seems to be working.

6571   At MCA, we became aware of LIFE a few years ago when several people from our church who, because of work or travel plans, were able to listen to 100.3, began asking why no similar broadcasting was available in the city where they lived and attended church.

6572   They loved the format; they identified with the style and the on-air hosts. They questioned why such great programming was only to be found outside the city of Toronto.

6573   We got connected with Scott Jackson and Ben Davy, morning men at LIFE, and learned of their vision for expansion in the Toronto market. Our Board was moved to consider LIFE as one of the candidates eligible to receive Missions funding from donations by MCA members. That was three years ago.

6574   Our membership is overwhelmingly in support of their plans now and we have made, so far, two substantial contributions, with more planned in the future.

6575   The CRTC can take comfort that Trust Communications intend to bring a tested, commercially viable product into Canada's largest radio market, providing the consumer choice that you advocate in your vision. In addition, the new station will be a registered charity, similar to the Barrie operation, with local churches standing alongside to provide encouragement and financial support.

6576   With a presence in Toronto, more local churches can be expected to catch the vision and support this initiative, particularly in their critical early years.

6577   Larger Toronto churches are always looking for more effective advertising vehicles for regular services, events, concerts and community involvement. To date, we are restricted to community newspapers and flyers. Radio has proven to be much more effective, and many of us are looking forward to advertising opportunities with this new venue in Toronto.

6578   What is innovation if not the introduction of a new sound, a new style and a new format into the Toronto radio market? With Trust Communications, you have that opportunity.

6579   We have been fortunate at Malvern Christian Assembly over the years to have worked with Christian recording artists like Mark Masri, Hiram Joseph and two-time Juno award winners, Toronto Mass Choir. These are all world-class talents and topnotch reflections of Canadian content. But surely we could agree their opportunities have been somewhat muted while they try to remain faithful to their roots, despite no easy access to the largest market.

6580   They are but three examples of a host of gifted Canadian artists who would benefit from increased exposure and enhance CRTC's desire to showcase Canadian talent.

6581   I've been fortunate as a pastor to witness the positive impact that Christian music has made in the community surrounding our church.

6582   Throughout the year, we host a number of different community events inside and outside the building; Canada Day, International Festival, Taste of Malvern, to name a few. One of the main features at all of these events is upbeat and uplifting Christian music.

6583   LIFE 100.3 has established a pattern of community involvement in and around Barrie. We can safely assume a similar level of engagement by the new radio station on an even grander scale throughout the GTA.

6584   If you will give Trust Communications the opportunity to deliver this same type of music in this city, I am confident we will see the same positive impact that we have experienced in the Malvern community.

6585   In conclusion, I come back to where I started. You are a powerful agent of the government of Canada with a great vision.

6586   While I do not have your broadcasting background or expertise, what I do know is this. Every week between 1,300 and 1,500 people of widely diverse cultures and origins gather together joyfully and enthusiastically at 6705 Sheppard Avenue in Scarborough. Visitors often exclaim, "This is just like the UN" when they experience firsthand so many different nationalities all together, enjoying each other's company and truly caring for one another.

6587   The music is glorious and uplifting but, sadly, it is all kept within the building. Until now. You have the power to change that; perhaps not for all Canadians overnight, but certainly for four million of us.

6588   Thank you. Merci.

6589   THE CHAIRPERSON: Thank you all very much.

6590   I would ask Commissioner Patrone to lead the questioning.

6591   COMMISSIONER PATRONE: Thank you, Mr. Chairman.

6592   And thank you very much for your presentation today. And Rev Howse, it was interesting to hear that you have such a great diverse collection of people who are attending your services.

6593   You certainly all have a very strong passion for Christian radio, and I think you should be applauded for that.

6594   Applicants who've been appearing before us, as you're probably aware, have spoken about the need to fill a void in the Toronto market, and that void may be musical, it may be talk or local reflection related. It may be ownership diversity or certain ethnic appeal.

6595   Now, you have spoken a little bit about the need for Christian radio station, but I'd like you to address the matter of diversity and how you're going to bring diversity to the Toronto market through your radio station.

6596   MR. JONES: Yeah. I think in our presentation we referred to how difficult it can be for Christians who move to Toronto from other countries and initially where to start, and sometimes it can be as difficult as finding a church to attend, as Pastor Janet was just speaking about.

6597   I think through our public service announcements, through our interviews that we've also promised that we can -- all they have to do is turn on the radio and they can be pointed in a direction of what is the Spanish church doing, what is the Caribbean church doing, and through our public service announcements and those interviews, that can point them in the right direction, for sure.

6598   COMMISSIONER PATRONE: I think I addressed you as Rev Howse. Is it Pastor Howse?

6599   REV HOWSE: That's correct.

6600   COMMISSIONER PATRONE: It is "Reverend". Thank you.

6601   As you noted in your video and you just brought it up, Toronto's ethnic and religious make-up is very diverse. And given that diversity, why would a Christian station get the last slice of radio spectrum?

6602   MR. JACKSON: Well, we've seen that there's so many Christian radio stations across the country even in smaller cities, and they're successful doing that. We just think that the largest city in the country with so many people, it's filling a void that is -- it's void here now.

6603   COMMISSIONER PATRONE: Yeah. Where I was going with that was just in relation to the many different faiths that are currently available in Toronto. And how is it that you can help us understand why we should address the needs of the Christian community?

6604   MR. JACKSON: Yeah, sure.

6605   In our research, we found out through Stats Canada that 65 percent of Torontonians consider themselves Christians. As we went down the religious list to see what the components, the religious components of the city would be, we found that Islam was 5.5 percent, Hindu is four percent and so on.

6606   So 16 percent have no religion affiliation, but with 65 percent of the population claiming some form of Christianity, we think that we've got a large audience to serve.

6607   COMMISSIONER PATRONE: Yeah, you're talking about two-thirds, according to the Stats Can figures, which might suggest that there is a pent-up demand for Christian radio, but you must agree that there aren't that many people packing the churches.

6608   We don't have two-thirds of the population in Toronto attending Mass or other Christian services every Sunday.

6609   Is there a disconnect between those who consider themselves Christian, you know, for the sake of a Stats Can survey and those who believe and live the faith to the degree that they would listen to your radio station?

6610   MR. JACKSON: Well, I'm sure that there's people -- Christians have different levels of their faith, how they're living it out. Some are new Christians, some are mature Christians. Some take it more seriously than others. Some would attend church every week, maybe twice a week. Some maybe only go at Easter and Christmas.

6611   But that doesn't mean that they're not Christians or they don't have faith, and we've seen that from going to concerts they flood concerts in Toronto. I think we would get maybe more people at concerts, maybe for a second night, if they were exposed to the music. But it's just -- it's for all Christians of any amount of faith.

6612   MS BAIRD: I -- we are hoping that we will get Christians that are maybe just not enthusiastic about their faith excited again and back into the churches. That is what we're hoping, so that they'll get reunited with their God and want to go back to church.

6613   COMMISSIONER PATRONE: It's about saving souls.

6614   MS LOPEZ: If I could add, Christian radio is very family friend. There's no provocative lyrics. There aren't any songs that worship drugs, and most of the content is about benefiting your community, being a good person. That's the type of music that Christian radio plays.

6615   I have worked at Christian radio stations in other cities. Out west, in Edmonton, Calgary I have spoken with listeners who are not even Christian and they listen to Christian radio just because of the format of the music, that they feel comfortable that they can have their children in the cars when they have the radio on.

6616   So I think that even if it is a Christian station and that is the type of music that we play, even non-Christians will be able to relate because of the family friendly programming.

6617   COMMISSIONER PATRONE: I want to talk a little bit about format a little later, Ms Lopez.

6618   First off, however, I'd like to talk about your financial forecasts because they're fairly optimistic, a positive PBIT margin as of year two and reaching 36 percent by year seven.

6619   That's fairly optimistic given the state of -- the financial state of what we would say is the majority of Christian specialty stations in Canada. Many of them, as you're probably aware, do struggle to maintain -- to get the level of profitability that would help them, you know, continue doing what they do.

6620   How are you going to do what other Christian stations are having such a hard time doing right now?

6621   MS BAIRD: Well, first of all, Scott Jackson has over 30 years in the business. He's a radio broadcaster, and a lot of them -- we know personally a lot of the other Christian radio station owners and they do not have radio backgrounds.

6622   So first of all, we have that.

6623   He is also an amazing businessman. He builds a budget every year and salaries alone are around 500,000 in Barrie, and he hits it within 5,000 every single time. He's just an amazing businessman.

6624   So these projections are based on our 13-year history. We've never -- as you heard, we never needed a loan or anything like that. We've always made a profit.

6625   Even in those hard economic times two or three years ago, we still hit our goals, so we are totally confident that we can hit these goals on this piece of paper.

6626   COMMISSIONER PATRONE: You're proposing a not for profit, listener supported station.

6627   MS BAIRD: Correct. We can take donations because we are a charity, and we also have advertising dollars.

6628   COMMISSIONER PATRONE: Your start-up costs will be covered through donations as well?

6629   MS BAIRD: A lot of them, yes.

6630   COMMISSIONER PATRONE: How long do you expect it will take to generate enough money through donations to bankroll a start-up in Toronto?

6631   MS BAIRD: We're guessing less than 12 months. It only took Scott about five months to do it for Barrie, and he didn't know anybody.

6632   Now we know half the population in Barrie and they can tell their friends on Facebook please donate to this new Toronto station and we can have the word out in an instant. And we have no worries that we will get the donations that we need quickly.

6633   COMMISSIONER PATRONE: So you have a 12-month target for launch?

6634   MS BAIRD: Yeah, between 12 and 24. We're hoping for earlier, but you never know. But we're hoping for 12.

6635   COMMISSIONER PATRONE: Have you already begun taking pledges in anticipation of perhaps being licensed in the future?

6636   MS BAIRD: We have not asked for donations yet, but we already have some.

6637   COMMISSIONER PATRONE: Is there a back-up plan; in other words, is financing available through other sources or -- if you find that those donations are not up to snuff?

6638   MR. JACKSON: Yes, we would -- we are starting a fund-raising position in Barrie which we have just started so that the idea there is to find new dollars beyond advertising and beyond donations.

6639   These would be business donations from businesses in our area, and we would do the same thing in Toronto.

6640   COMMISSIONER PATRONE: You project that half your add revenue will come from churches and ministries who do not currently advertise on secular stations because of the -- what you term as the astronomical rates. Is that correct?

6641   MR. JACKSON: Yes.

6642   COMMISSIONER PATRONE: So you'll be selling ad time on deep discounts. Is that a fair assessment of your business plan going forward?

6643   MR. JACKSON: I'm not sure about the deep discounts, but at a lesser rate than like a CHUM FM would be charging, certainly.

6644   It would be affordable for churches and small businesses.

6645   COMMISSIONER PATRONE: Is there a business case based on rates that no commercial station would charge?

6646   I mean, you'll still be operating in Toronto, which is an expensive place to do business, and so my question is, on the revenue side, where you're offering discounts -- discounted rates for clients whom you say don't want to pay exorbitant rates that they would have to on secular stations.

6647   MR. JACKSON: Right.

6648   COMMISSIONER PATRONE: So if your revenues as far as ad sales are concerned are not going to be at the level that -- and I'm talking about revenue numbers are going to be at the level that a commercial station would charge, but yet you're operating in an environment where your expenses are still going to be what they are and working and operating in Toronto.

6649   MR. JACKSON: Yes.

6650   COMMISSIONER PATRONE: How are you going to make those ends meet? Can you help me understand that?

6651   MR. JACKSON: Sure. Our expenses will be less because we don't have to pay the top talent price that they would have to pay at a major station in Toronto.

6652   We would have three different levels of advertising revenues. The first would be retail. The second would be for not for profit organizations, and the third would be for churches, churches being about $10 a commercial, which is about as much a church can afford. It even allows a church to get on the radio.

6653   COMMISSIONER PATRONE: I noticed that on page 7 of your oral, you spoke about your CCD contributions, which I believe staff has noticed that it is $500 less in your oral commitment than it was in your written.

6654   And I just wanted some clarity. Is it 97,500 over seven years or 97,000 over seven years, as is stated in your oral presentation?

6655   MR. JACKSON: We'll have to multiply that one more time. Whatever it is for each year, that's what we are committed to. Perhaps we added the tally wrong.

6656   COMMISSIONER PATRONE: It's just a difference in numbers of $500 between what we saw in your written application as what we have here in your oral, so we'd just ask for some clarification around that.

6657   Do you want to come back and file that later, if that helps?

6658   MR. JACKSON: Certainly. We'll do that.

Undertaking

6659   COMMISSIONER PATRONE: What news or staffing synergies are you expecting to exploit with respect to your Barrie station?

6660   MR. JACKSON: Well, in the beginning, or do you mean ongoing? To start?

6661   COMMISSIONER PATRONE: Yes.

6662   MR. JACKSON: Okay. Well, the expertise right now in Barrie, so we would help get it started by casting vision, by hiring the people that we need. There'd be some synergies, certainly, with bookkeeping to get us started. And then once we grow into, hopefully, the second year or the third year, that's when we can hire staff and it would be more stand-alone other than accounting.

6663   COMMISSIONER PATRONE: Okay. So you're talking about human resources, admin, those types of synergies. Do you anticipate they would come into play?

6664   MR. JACKSON: Yes, they would.

6665   COMMISSIONER PATRONE: In terms of exchange of content between your Barrie station and your Toronto station would you expect that there would be swapping of news stories, for instance?

6666   MR. JACKSON: Yes, sir. I hope they would. Two heads are better than one.

6667   So more people would be contributing and if there is a story that comes out of Toronto that can be used in Barrie then we would be happy to use that and swap stories.

6668   COMMISSIONER PATRONE: Yes.

6669   MS LOPEZ: And because there is only one newsperson to start in Toronto, of course that newsperson would then be making all the contacts within the community whether that be with the school boards, with the health boards, getting all the contacts for the police.

6670   In Barrie they have all their established contacts there, so by having them as a friend to be able to contact with if there was something going on, let's say, in York Region, like I think recently there was that whole orange fiasco in the news. It was something that was out of York Region.

6671   However, it was a story, a top story that was being run in Toronto and because we have the resources in Barrie to be able to contact the local officials in York Region or Stouffville which is where that orange story had occurred, then they would be able to perhaps even pass on some of those interviews to the Toronto station.

6672   And vice-versa, if there was something on in Toronto that was a big news story it would be able to feed the Barrie station. So they would work in that synergy.

6673   COMMISSIONER PATRONE: And did I hear you say that there was just one staffer in Toronto?

6674   MS LOPEZ: For the beginning, yes, for the news. And they would be doing the morning news and the noon newscast as well.

6675   COMMISSIONER PATRONE: Well, that individual is going to be busy.

6676   MS LOPEZ: They will be very busy.

6677   MS BAIRD: If I can interrupt for one moment, the 97.5 in our application is correct. The 97,000 was just a typing mistake.

6678   COMMISSIONER PATRONE: Thank you, Ms Baird, I appreciate that.

6679   The Barrie station derives some tuning from parts of the GTA currently, is that correct?

6680   MR. JACKSON: In the GTA as far down as Newmarket, yes, if Newmarket is included in the GTA. The boundary seems to be a little blurred.

6681   COMMISSIONER PATRONE: I realize -- yes.

6682   Did you derive any revenues from what you would say the Newmarket area?

6683   MR. JACKSON: Yes, we do. Commercial revenue, yes, we do.

6684   COMMISSIONER PATRONE: And do you, further to that, anticipate cannibalizing part of your own Barrie tuning revenues with the Toronto station?

6685   In other words, do you see a potential for sort of undermining your own revenue source as currently being derived from the Newmarket area, assuming you were to get a licence to Toronto?

6686   MR. JACKSON: I anticipated that question.

6687   I think perhaps in the first year there will be some businesses that cannot expand their budgets but after that, after they have seen the success in the listenership of the new Toronto station then many of them will expand their budgets.

6688   In Barrie none of them had radio budgets for Christian radio to begin with, yet here we are. So once they saw the success then they put it in their budget.

6689   COMMISSIONER PATRONE: I want to shift gears and talk a little about programming. You are committing 42 hours of local programming per broadcast week?

6690   MR. JONES: Yes, that is the minimum.

6691   COMMISSIONER PATRONE: Can you tell me a little more about what you intend to air in the remaining 84 hours?

6692   MR. JONES: Sure.

6693   Yeah, we do have a plan to have a live morning show. Initially we would voice-track the midday show. Afternoon drive would be live and evenings would be live and local too.

6694   So eventually we would like to go live 24 hours a day but the initial plan is mornings live, afternoons live and evenings live.

6695   COMMISSIONER PATRONE: Voice track, so everything that you air in the afternoon is going to be canned?

6696   MR. JONES: Middays.

6697   COMMISSIONER PATRONE: Midday, sorry.

6698   MR. JONES: Yeah.

6699   COMMISSIONER PATRONE: And any plans to bring in syndicated programming at all?

6700   MR. JONES: We do have one program that we mentioned in our application, CT-20. It's across Canada, a countdown show.

6701   COMMISSIONER PATRONE: As you know Joy 1250 is in business. You have spoken to a great degree about the lack of a Christian station in Toronto, and I understand that. But to what degree is Joy, as you see it, providing a Christian service that is accessed by at least some of the Toronto market?

6702   MR. JACKSON: Yes, they are definitely providing a Christian service. It's mostly talk programming with some music whereas we would be a music service.

6703   But they don't serve all of Toronto. I could not pick them up in Scarborough.

6704   COMMISSIONER PATRONE: And so you feel that your service is needed to fill out the rest of the GTA?

6705   MR. JACKSON: Yes, but I think it's a bit of a different animal because we are on FM and when people are looking for music they generally gravitate toward FM and AM which, I guess, died about 20 years ago, has come back with talk programming.

6706   They seem to be very successful at doing that. And we know them quite well. We are good friends with them.

6707   COMMISSIONER PATRONE: And I guess as you spoke about it, Mr. Brown, Christian radio is somewhat unique in that it's distinguished by its lyrical content more so than its instrumental part. You know what I'm saying? I mean you can have heavy metal Christian. You can have kind of folk Christian. I don't think there is any punk Christian but, you know, it's possible.

6708   Do you intend to sort of have a range of musical genres as they approach the music side of the operation, if you know what I'm saying, or are you going to have sort of one style of sort of rock or pop, that kind of --

6709   MR. BROWN: I am going to have to defer that question to you.

6710   COMMISSIONER PATRONE: Okay.

6711   MR. JONES: Yeah, sure.

6712   During the day we plan to have -- so basically from the morning until seven o'clock at night it will be more of a hot adult contemporary format. In the evenings it will switch to target teenagers and young adults to be more of a CHR format which would be a mix of rock, pop and hip hop.

6713   COMMISSIONER PATRONE: Okay.

6714   As you know CCD initiatives must be deemed to be eligible in order to receive CCD funding. In your application you indicated that as part of your CCD initiatives you would fund the recording sessions and CD productions of a new independent artist who produced contemporary Christian music.

6715   Could you please confirm that the studios used for these recording sessions would be those of a third party, not recorded in-house?

6716   MR. JACKSON: Yes, absolutely.

6717   COMMISSIONER PATRONE: Okay. That's almost all my questions.

6718   I did have a question; however, as you spoke a little bit about lost tuning to the Buffalo station. It got me wondering whether you had any numbers or even anecdotal reports of people that you were aware of here in the GTA who were tuning into the Buffalo station.

6719   I don't know if you have spoken to anyone like that, Reverend Howse, or whether anyone on the panel wants to discuss lost tuning?

6720   MR. JACKSON: Well, we have heard from listeners who commute to Toronto from Barrie because it tends to be a bedroom community and when they lose our signal around Canada's Wonderland area then they tune to WDCX.

6721   We hear about it a lot. It's kind of a thorn in our sides. We wish we could provide for them but they are listening to an American station. We hear it all the time.

6722   REV. HOWSE: If I could address that as well --

6723   COMMISSIONER PATRONE: Please.

6724   REV. HOWSE:  -- our church, as I said, is very large, anywhere from 1,300 to 1,500 attend every Sunday and I would say the majority do listen to WDCX. They all have their bumper stickers on their cars and are so looking forward to one in Toronto.

6725   I guess the sad thing as well is even in our church, as I mentioned, some of the Canadian artists -- Mark Masri lived and was born in Malvern Christian Assembly and is a fantastic artist that is now gone to the United States to be a more successful recording artist.

6726   The sad story is that they cannot remain here. They cannot expand. They cannot continue to grow as artists because there is no one that would play their music here in Toronto.

6727   COMMISSIONER PATRONE: Yeah.

6728   REV. HOWSE: And also if I could add, your comment about people attending churches, I think often we go with what we see on T.V.

6729   And it's one of my pet peeves that all of the newscasts will always go to a little tiny church to see the crowds at Christmas and Easter and you will probably recall that most churches are empty and those that do have people are usually grey-haired people. That could not be any more false or further from the truth. My church is located at Nielson and Sheppard. There are 1,500 of us.

6730   The church down the street, Global Kingdom Ministries, has 1,500 people attending every Sunday and the one five minutes away at Kennedy and Finch has 2,400 people attending every Sunday. And Queensway Cathedral on the Queensway has over 3,000 people attending every Sunday.

6731   And so there are many, many Christians who attend church and also who are great citizens of the city of Toronto that I believe deserve to have a place where they can enjoy music, news, family values, good news and a program and a radio station that promotes a positive lifestyle and positive impact on their life.

6732   COMMISSIONER PATRONE: Well, I wish you continued success.

6733   REV. HOWSE: Thank you.

6734   COMMISSIONER PATRONE: Thank you very much for your presentation.

6735   REV. HOWSE: Thank you.

6736   COMMISSIONER PATRONE: Mr. Chairman...?

6737   THE CHAIRPERSON: Thank you. I have got a couple of questions and perhaps my fellow Commissioners do as well.

6738   I want to take a look at your start-up capital expenses just to understand it. There was a submission that you made that actually had -- it was called "Total Pre-Operating Costs of $186,958". Do you have that?

6739   MR. JACKSON: Yes.

6740   THE CHAIRPERSON: Can you explain to me the two items on here that I'm concerned about particularly, the transmitter costs of $53,000 and the transmitter tower?

6741   It says two months for $10,000. I gather that's a rental. Is that for for rent?

6742   MR. JACKSON: It's leasing space on the tower.

6743   THE CHAIRPERSON: Okay. And the cost of the transmitter is $53,000?

6744   MR. JACKSON: That's correct.

6745   THE CHAIRPERSON: Have you identified a location where you are going to putting that up?

6746   MR. JACKSON: Yes.

6747   Paul, could you address that?

6748   MR. FIRMINGER: Yeah. The engineering brief is based upon the First Canadian Place in Toronto. It would probably be Tower Two on the rooftop there.

6749   THE CHAIRPERSON: And they would charge you -- it will cost you only $53,000 to put that up?

6750   MR. FIRMINGER: No, the rental there is about $60,000 per year. Scott is just talking about the basic item, the transmitter and the processor.

6751   If you recall, it's only 800 watts. So it's a very small transmitter. The cost is not expensive.

6752   THE CHAIRPERSON: Okay.

6753   My other question is on your ownership data, Appendix 2 I guess it is, of your filing. You have got a list of three people that are on the board of directors, a secretary, a treasurer and a chairperson. And then there is a footnote that says that the chairperson has an additional vote.

6754   So basically, does that mean the chairperson automatically has veto power over every decision that's made by this board?

6755   MR. JACKSON: I guess if it came down to a final decision then, yes, they would have the extra vote. We tend to be unanimous with the decisions, though.

6756   THE CHAIRPERSON: But I mean, given that it's a three person board then the only way that that chairperson could exercise his second vote is if both the secretary and the treasurer voted against him and then he I guess, exerts his second vote so now it's a tie of 2-2.

6757   So my question then to you is does he also have the deciding vote as well?

6758   MR. JACKSON: We'll have to look into that and get back to you.

6759   THE CHAIRPERSON: Okay. Those are my questions.

6760   Commissioner Simpson, I think, had some questions first?

6761   COMMISSIONER SIMPSON: Yes, thank you very much, just a couple.

6762   On your Top 10 list, I was just curious on number two. You say Canadian artists will get airplay because no other Toronto station is dedicated to the development of Christian music.

6763   Did you mean to say Canadian Christian artists or is there something -- it seems an incongruous statement that because this will be a Christian radio station Canadian artists will get airplay, implying that other stations won't be playing Canadian.

6764   MR. HAMILTON: That's a great question. I would agree with you. It is Canadian Christian artists, is our focus on that.

6765   COMMISSIONER SIMPSON: Okay.

6766   The only other question I have got goes to the Buffalo station. In item nine you are saying the station -- "Our station keeps Canadian advertising dollars in Canada" which is a good thing "instead of losing them to a U.S. station".

6767   Do you have any idea of what the migration of Canadian advertising dollars is to that station? You know I know that you have got revenue projections to yours but I'm just curious about what that dollar amount currently is, because obviously you have identified it as part of your revenue.

6768   MR. JACKSON: No, I don't know the dollar amount and some of it could be cash, some of it could be contra. So it's difficult for us to tell.

6769   COMMISSIONER SIMPSON: M'hmm, okay.

6770   MR. KARIM: Could I weigh in on that for a minute?

6771   COMMISSIONER SIMPSON: Yes, please.

6772   MR. KARIM: Our newspaper works closely with Christian events and the Canadian advertisers -- a lot of the Canadian advertisers that go to WDCX are listed on their website. They have a section for --

6773   COMMISSIONER SIMPSON: I'm looking at it right now.

6774   MR. KARIM: Yeah, and I know that certainly one of our advertising partners is Faith Family Books which is the largest Christian newspaper -- sorry, the largest Christian bookstore chain in the province. And they are an advertising partner.

6775   And WDCX also comes up here regularly to do in-store events and also they were at the MissionFest Conference -- that they are regularly at the MissionFest Conference that was mentioned in Janice's presentation. So they would take a lot of advertising from a lot of those ministries that --

6776   COMMISSIONER SIMPSON: Yeah, I have noticed that, you know, in the listing of advertising support I would say that of the quantum of that listed about 50 percent seem to be coming from the Ontario supporters.

6777   MR. KARIM: Yes, several years back I remember just anecdotally hearing reports that actually they took more advertising out of Toronto than they did in Buffalo.

6778   COMMISSIONER SIMPSON: Yeah, I wouldn't be surprised. I noticed you know your masthead is indicating WDCX is appealing to Buffalo, Toronto and beyond since 1963.

6779   Just a last question. I always have a bit of a programming bent in the questioning that I go into.

6780   In implying that this radio station is really other than our Barrie friends, you know really the only single source for any type of Christian programming, my inclination as I was listening to it last night actually -- but what I found interesting is that it's predominantly talk. It's predominantly syndicated talk like very recognized veteran broadcasters like Chuck Swindoll, you know, who I have heard his program "Insight for Living" on a lot of stations across America.

6781   This seems to be a syndicated talk-type radio station that is very typical of all types of commercial and non-commercial offerings in the States.

6782   Do you feel that the music format that you are offering to go with your news information content is going to be sufficient to bring people to your station getting their inspiration, if you like, from music rather than the type of talk that perhaps gentlemen like Swindoll offers?

6783   MR. JONES: Yeah. I think what we have realized, even in Barrie, is that you tend to have -- just like anybody else there is -- Christians are the same as everybody else. Some people like talk shows. Some people like music.

6784   And so we have realized that when the talk shows are on people will listen but there is a real hunger for music. As we said in our presentation, a lot of people are unfamiliar with Christian music, especially in Toronto right now.

6785   We could name some of the Top 10 artists who are on the American charts right now and they would have no idea who they were. We could name the Top 10 Canadian artists and they would have no idea who they were.

6786   So by introducing Christian radio in Toronto, it would be a completely new, exciting development for people who have never heard it before, similar kinds of music that they are used to hearing on the radio but with a different message.

6787   COMMISSIONER SIMPSON: Okay, thank you.

6788   That's the total of my questions.

6789   COMMISSIONER POIRIER: Hello.

6790   Your revenue relies a lot on donations or listeners of support, 58 percent. Total amount is $610,000. It's a lot of money.

6791   Okay. How reliable is that amount of money because you never know --

6792   MS BAIRD: Can I say something?

6793   COMMISSIONER POIRIER:  -- if you are good, if you are not good, if the economy is good, doing well; not doing well. What?

--- Laughter

6794   MS LOPEZ: Christians are very charitable.

6795   COMMISSIONER POIRIER: No, but I mean it's 58 percent of the total amount of money. It's a lot of money and you have to convince us that indeed it's an amount of money you can rely on.

6796   REV. HOWSE: If I could address that? Just our church alone has a budget of $2.5 million a year and the churches that I have mentioned to you are even greater.

6797   We are committed to supporting the station. So, really, you know we have hundreds -- really, hundreds of churches in the Toronto area that are that large to reach this budget that you have mentioned is not difficult at all.

6798   MS BAIRD: So we have an annual share-a-thon, we call it. It's like a telethon but we -- it's on the radio and, as we mentioned, we have succeeded our goals even in the hard economic times. So we will do that in Toronto.

6799   We have budgeted a certain amount in Barrie for walk-in, off the street donations and we surpass that every year. These are people we don't solicit. We don't know who they are. Half the time they just drop off an envelope and they leave. They don't even want a receipt. It's just something we can budget for because it's been on-going since the start.

6800   And then we also have the fundraising position that Scott mentioned. So I have no doubt that we can reach that number, no doubt whatsoever.

6801   COMMISSIONER POIRIER: Okay. I'm asking the question because many campus and community radio stations rely on that same kind of funding and it's getting harder and harder to get that amount of money. So you are fully trustful that you will get the first year that amount of money?

6802   MS BAIRD: Yes, based on our experience in Barrie, no question.

6803   COMMISSIONER POIRIER: Okay, okay.

6804   My second question, I have heard a lot about positive news and, yesterday I was questioning Family FM. They had the same kind of vocabulary.

6805   So I wonder, how much do you differentiate yourself from Family FM who is in competition with you?

6806   MS LOPEZ: With news you have to present the facts. However, the way that it is presented on a family station, I think, would be very similar to on a Christian station because you have to mention exactly what happened but the phrasing that you use is not if it bleeds it leads. That's not our motto. We basically want to present the information in a way that is factual; however, it does not get into the gruesome details.

6807   COMMISSIONER POIRIER: Okay, but let's say I'm not talking only about the news. I'm talking about the attitude of the host, the kind of programming you have it is some kind of a positive programming you have.

6808   So how can it differentiate itself from one of your competitors, Family FM, who said exactly the same thing: We want to bring Toronto good news and a positive way of seeing life with good values and so on?

6809   So it's not only about the news I'm talking. It's about the programming.

6810   MR. JONES: Yeah, I think what we have noticed is -- and we mention it in our presentation about how our listeners, as we just mentioned, are willing to give to something to believe in or something they believe in.

6811   In this case it's music that points to a higher power. And when they hear music like that they initially get attracted to it and they are excited about it, so much so that they are willing to give to keep it on the radio.

6812   COMMISSIONER POIRIER: But they too rely on their lyrical content to try to attract listeners. So I was wondering. You see not much of a difference with their content then.

6813   MR. JONES: I see it as completely different. The content of their playlists and the content of our playlists would be different.

6814   COMMISSIONER POIRIER: Okay. So the musical content is, okay, different.

6815   MS LOPEZ: And also in terms of the announcers that would be speaking on the radio, they talk about that higher power, whereas in a family FM station they would probably not refer to that.

6816   COMMISSIONER POIRIER: Thank you very much.

6817   THE CHAIRPERSON: I think that completes our questions. Thank you very much for appearing before us and submitting your application.

6818   Madam Secretary?

6819   THE SECRETARY: This concludes the hearing, Mr. Chairman. We will adjourn and reconvene tomorrow at nine a.m.

--- Whereupon the hearing adjourned at 1635, to resume on Friday, May 11, 2012 at 0900

REPORTERS

Benjamin LaFrance

Jean Desaulniers

Karen Paré

Sue Villeneuve

Monique Mahoney

Date modified:

2012-05-10