ARCHIVED - Transcript, Hearing 31 January 2014

Volume 5, 31 January 2014

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

SUBJECT:

To consider the broadcasting applications listed in Broadcasting Notice of Consultation CRTC 2013-568, 2013-568-1, 2013-568-2 and 2013-568-3

HELD AT:

Tynehead Ballroom
Sheraton Vancouver Guildford Hotel
15269 104th Avenue
Surrey, British Columbia
31 January 2014

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 2013-568, 2013-568-1, 2013-568-2 and 2013-568-3

BEFORE:

ALSO PRESENT:

HELD AT:

Tynehead Ballroom
Sheraton Vancouver Guildford Hotel
15269 104th Avenue
Surrey, British Columbia
31 January 2014

- iv -

TABLE OF CONTENTS

PAGE / PARA

PHASE III

INTERVENTION BY:

PHASE IV

REPLY BY:

PHASE I

PRESENTATION BY:

PHASE II

No interventions

PHASE IV

REPLY BY:

- vii -

UNDERTAKINGS

PAGE / PARA

Surrey, British Columbia

--- Upon resuming on Friday, January 31, 2014 at 0901

9552   THE CHAIRPERSON: Good morning.

9553   Madame la Secrétaire.

9554   THE SECRETARY: Thank you, Mr. Chairman, and good morning.

9555   We will now proceed to Phase III, in which interveners appear in the order set out in the agenda to present their interventions.

9556   We will begin with the presentation by Jim Pattison Broadcasting Group. Please introduce yourself and your colleagues and you will then have 10 minutes for your presentation. Thank you.

INTERVENTION

9557   MR. ARNISH: Thank you very much.

9558   Good morning, Mr. Chairman and members of the Commission and Commission staff. My name is Rick Arnish, Chairman of the Jim Pattison Broadcast Group Limited Partnership.

9559   Before commencing our formal presentation, I would like to introduce to you our panel.

9560   To my right is the President at the Pattison Broadcast Group, Mr. Rod Schween. Rod has been with the Broadcast Group since 2002 when we first acquired the Cranbrook radio stations. Rod was the General Manager in Cranbrook and he is intimately familiar with the Cranbrook/Fernie radio market.

9561   To my left is Slavi Diamandiev of KMPG Vancouver. Slavi worked with a team of experts at KPMG to prepare the market study which we filed with our intervention on November 28 last year. The résumés of the KPMG team are attached as Appendix "A" to our oral presentation. Slavi can speak to the details of the study.

9562   To Rod's right is our General Manager in Cranbrook, Leo Baggio, and to his right is Jason Caven, our Sales Manager in Cranbrook as well.

9563   In the back row is our legal counsel based in Vancouver, Chris Weafer of the law firm Owen Bird Law Corporation.

9564   I will now commence our presentation.

9565   The Jim Pattison Broadcast Group welcomes the opportunity to provide these comments regarding the applications. Pattison opposes the approvals of the applications for the reasons outlined in our written intervention which we filed on November 28, 2013. We will only highlight the submission today as we recognize the Commission has read our intervention.

9566   Pattison commissioned an Economic Impact Study of the Cranbrook/Fernie radio market by KPMG, which study is attached as Appendix A to our intervention letter. The KMPG Study concludes:

"Our overall assessment is that the Cranbrook market is relatively saturated and does not have the growth potential to support an expansion in local radio revenue. We find that an additional local commercial radio station will have a significant negative impact on the revenues and profitability of existing stations."

9567   The KPMG Study is comprehensive and self-explanatory and we urge the Commission to give significant weight to that study.

9568   The study's findings are also consistent with, and reinforced by, numerous letters of intervention opposing the applications which have been filed by community groups, elected officials and advertisers who urge the Commission not to approve the applications.

9569   The Jim Pattison Broadcast Group is one of the longest-serving radio groups in Canada. Our strategy has always been based on a "back-to-basics approach" to build our group through capital investment and through the work of our dedicated staff in each of the communities we serve. Our successes have allowed us to reinvest in the group and improve service in our markets.

9570   MR. SCHWEEN: Pattison submits that there is clear and convincing evidence that the Cranbrook and Fernie markets cannot support a new licence without causing material harm to our local stations and the valuable service we provide to these small communities.

9571   As evidenced in the financial information filed by Pattison with the Commission on an annual basis, our Cranbrook/Fernie stations are yet to return to levels of profitability achieved prior to the global economic meltdown in 2008.

9572   The licensing of new stations to serve Cranbrook and Fernie at this time, when "flat" revenues are the new reality, will result in the additional station pursuing "flat" revenues in the market. This will inevitably put pressure on our ability to service our communities at a level we have been able to maintain since we acquired the stations in 2002.

9573   The economic state of the Cranbrook/Fernie market is not nearly as strong as the applicants argue. In fact, it is a struggling local economy, as demonstrated by the KPMG Study.

9574   The intervention letters opposing the applications from government agencies, elected officials, community groups and advertisers provide persuasive and clear evidence to the Commission of the true economic state of the communities.

9575   We thank those interveners who took the time to acknowledge the high level of community support we provide through our stations in Cranbrook and Fernie.

9576   We would highlight the intervention of the Salvation Army of Cranbrook. There are few agencies as in touch with the economic situation in a community than the Salvation Army. Pattison asks the Commission to give consideration to their comments on the economic situation in Cranbrook and Fernie.

9577   We would also highlight the opposing intervention from the Honourable Bill Bennett, the elected Liberal Member of the British Columbia Provincial Legislative Assembly for Kootenay East. He highlighted concerns around the loss of service resulting from dividing an already challenged market. Mr. Bennett has a keen knowledge of the regional economy and he stated in his letter:

"I do not believe there are many businesses who do not advertise currently. I am sure any 'new' advertising dollars for a new station would come from our local stations, as well as newspapers and magazines. That would lead to job cutbacks at our current media."

9578   A wide variety of advertisers from local independent retailers to national franchise operators and car dealerships also filed letters opposing the applications.

9579   MR. DIAMANDIEV: My team was commissioned by the Jim Pattison group to conduct an economic study of the Cranbrook radio market and assess the impact of entry of a new station. To complete the study we analyzed a range of economic indicators, we conducted a comparative study of entry in other markets across both B.C. and Alberta, and analyzed a theoretical model to corroborate our empirical findings.

9580   Our three key findings were:

9581   - one, that the local economy does not exhibit a growth trend to justify an expectation for an expansion in radio revenue;

9582   - two, that the Cranbrook radio market is saturated with the existing two stations, which is evidenced by (a) comparing it to other markets in B.C. and (b) by the fact that local radio revenues have been flat for the last decade despite significant efforts to grow them;

9583   - thirdly, we find that the introduction of an additional station will have a significant negative impact on the existing stations and will push their revenues and profitability below the benchmark.

9584   Evidence for these key findings is provided in our filed written report, which I am happy to cover in more detail during the Q&A.

9585   We have also reviewed the replies to our report filed by Clear Sky and Newcap and I'd like to briefly respond to the key points.

9586   In the Clear Sky response, paragraphs 81 to 84 comment on the comparative study we completed, suggesting that out of the five markets we studied the only relevant market is Lethbridge and that in that market the incumbent stations have seen a growth in revenue during the period of entry.

9587   In response to this, I'd like to make four points:

9588   1. Clear Sky is looking at the gross revenue change for Jim Pattison's stations in Lethbridge, without baselining it against the overall radio market performance in the region, which was much stronger during this period. Specifically, Pattison's CHLB revenues grew by 3 percent while the average revenues of small markets in Alberta grew by 6.75 percent. This implies that CHLB was underperforming during the period of entry by more than 50 percent slower growth than average.

9589   2. Lethbridge is four times larger than Cranbrook, which means it is much better able to absorb an additional station. The negative impact on existing stations in Cranbrook will therefore likely be greater.

9590   3. In Lethbridge there were four existing stations prior to the addition of a fifth station. That means an increase in supply of roughly 25 percent. In Cranbrook there are only two existing stations, meaning a third one will be a 50 percent increase in supply. Again, this means the negative impact on existing stations will likely be greater.

9591   4. We do not believe it is appropriate to use a single data point from one market to draw conclusions about another market, especially when the two markets are materially different, which is the case of Lethbridge and Cranbrook. This is why our study includes nine stations from five different markets to ensure the results are reliable and just for the number of existing stations and the number of new entrants.

9592   In paragraph 90, Clear Sky challenges our findings on revenue impact as exaggerated because they were compounded by the economic downturn at the time.

9593   I'd like to clarify that in our analysis we baselined our impact estimates against the overall performance of the market, which means that our estimates are not exaggerated by the overall economic downturn.

9594   Clear Sky's reply references a number of other points in our study but does not contradict them and I would be happy to address any questions the Commission may have on other points during the Q&A.

9595   In the Newcap reply, the key objections to the conclusions in our report are set out in paragraphs 7 through 9, which suggest that to measure market competitiveness one should look at the number of operators and not the number of stations.

9596   Our study did not aim to measure the competitiveness of the market. What we analyzed was the ability of the local economy to support more than the existing number of stations, regardless of who would operate these stations. Based on our analysis, we believe the market is already saturated with the existing number of stations and is not exhibiting the growth trend to justify expectations for expansion in radio revenue.

9597   Newcap in paragraphs 18 through 20 suggests that we have minimized the positive retail sales per capita statistics in our study.

9598   Our study did not ignore the retail sales per capita figures. In fact, these are discussed extensively in the very first chapter. What we do believe, however, is that they should be interpreted carefully and in particular should not be compared between a city such as Cranbrook and the province of B.C. or Canada as a whole because tourism and out-of-city shopping skew the statistics for a city higher. We therefore find that the statement that Cranbrook's retail sales per capita are twice as high as the Canadian average is misleading, and I would be happy to elaborate on this point during the Q&A.

9599   Furthermore, we believe that the advertising demand from existing retail sales has already been absorbed by existing stations, as evidenced by the fact that Pattison's revenues have been flat for more than a decade, despite significant efforts to grow them.

9600   Combined with the low growth in retail sales projected by the Financial Post -- in fact, lowest of 13 other municipalities studied -- we do not see where any additional advertising demand would come from.

9601   In paragraphs 28 through 29, Newcap argues that we have misrepresented the target audience as 18-54 and that the real target audience, 25-44, is not declining but is rather flat over time.

9602   In our study we clearly state that we are using the 18-54 segment because it is the closest segment for which reliable data is available. In fact, the Cranbrook survey commissioned by Newcap themselves spanned exactly the 18-54 segment. Even if we accept Newcap's assertion that the true target demographic will be "flat" rather than declining, this does not support a conclusion of growing local demand for radio.

9603   MR. ARNISH: To sum up, the Commission's decision in the 2006 Radio Review, and more recently as evidenced by its refusal to issue a call in Saskatoon, reflects a strong commitment to pay particular attention to small market radio when assessing the ability of a market to support a new station.

9604   More stations or "signals" in the Cranbrook and Fernie markets will only serve to fragment the audience and dilute resources. As evidenced by the KPMG Study and the opposing letters filed by community organizations, elected officials and local advertisers, the local economy is challenged enough without the undue pressure of licensing an additional radio station.

9605   Accordingly, Pattison submits that the Commission should deny the applications by Newcap and Clear Sky. This is consistent with the objectives set out in the Broadcasting Act and is clearly in the best interest of the communities of Cranbrook and Fernie.

9606   That's our presentation, Mr. Chair, and we would be happy to answer any questions you may have.

9607   THE CHAIRPERSON: Well, thank you very much.

9608   Okay, interesting. Let's start with the format. Let's start with claims made by both applicants.

9609   I would suggest that the formats available in Cranbrook are neglecting the musical choices of women 25-44 or 18-54. Is there a format void and, ergo, we need a third player to fill that void?

9610   MR. ARNISH: Well, as we all know, the Commission doesn't license formats, but our rock station -- and our team here from Cranbrook will talk more about it in a moment -- our Rock station in Cranbrook is a full-service Rock station that plays Classic Hits and Classic Rock and Current Rock, Adult Rock, and our Country station obviously is a Country station playing today's Best Country as we call it, Modern Country.

9611   Yeah, there probably is a void in the format desire in Cranbrook but I guess you could say that in any market that someone is applying for a new licence.

9612   I'd like our team -- Rod, maybe you can elaborate a little bit more on that and what we're doing with the formats in the marketplace.

9613   MR. SCHWEEN: Certainly, and I'll certainly ask Mr. Baggio to provide his comments as well.

9614   I was in the market at the time when we decided on the two formats. We were an AC station back when we were operating CKEK as an AM station in that marketplace with a chain of repeaters and we did an extensive market study to decide where we would go with the musical choice, and at that time it was very clear that both Rock and Classic Rock were by far more popular than AC in that marketplace.

9615   So I think that, you know, is there a demand for AC? There probably is, but for either applicant to say that we ignore the female listeners in that marketplace is not accurate, because, as we know, we can look at our own JRfm here in Vancouver that is doing very well in the BBM ratings on the female side. You know, Country as a whole is always referred to as skewing female, and our Country station there is no different.

9616   Leo, anything that you'd like to add?

9617   MR. BAGGIO: Yeah. I think there's obviously a void. There isn't a Pop format there and there probably is some demand. But if you look at how 35+ females normally score with Rock music, we play a lot of the music that tests high with that 35+ demo.

9618   It was mentioned a number of times yesterday that The DRIVE, because we are in a smaller market, can be wide with our format.

9619   If you look at some of the softer, Bryan Adams, the Journeys, the Eurythmics, the Elton Johns, the Phil Collins, that all score with 35+ females, that might not be able to be played in a larger market like a Calgary or Vancouver where your formats need to be more narrowcast, we play that and they are core staples of our Gold Library.

9620   And I'll also reiterate what Rod said about Country. If you look at Country all across the country now, 18-34 female is doing very well with that format because of the Carrie Underwoods, the Kelly Clarksons, the Pistol Annies, the Dixie Chicks, the Taylor Swifts, and they are staple artists of our Country format.

9621   So if you look at the lower end of that 18-54 female demo, I think it's being served. If you look at the upper end, we're taking care of that as well. Is there a void somewhere in the middle? Certainly, but I think it's counterintuitive to express or to feel that the female demo is being totally ignored in our marketplace.

9622   THE CHAIRPERSON: And would we see some of that crossover/Popish Country on your playlists, Mr. Baggio?

9623   MR. BAGGIO: Absolutely.

9624   THE CHAIRPERSON: Okay. I think Mr. Caven wanted to add something or -- okay, great.

9625   MR. SCHWEEN: Mr. Chair, if I can just jump in just to sort of end off this portion.

9626   THE CHAIRPERSON: Sure.

9627   MR. SCHWEEN: It's interesting -- and we all know, Newcap and Clear Sky are professional operators and we're competitors, as you know, in other markets and we respect them, as they do us as well, but the industry knows that there's a real problem with younger tuning in radio across the country. In fact, it's a North American-wide phenomenon.

9628   And it's interesting when you look at this Cranbrook market that both of the applicants haven't skewed younger when that is -- they're talking about repatriation of listeners in the marketplace and bringing them back from satellite radio and iPhones and iPods and so on and so forth, but I think the real repatriation could very well be where is the format presentation for the younger demographic.

9629   One applicant is proposing an Adult Contemporary format. We have a Modern AC. I don't see anything that's been proposed here that really is skewing younger for the younger audience, to repatriate them, and that's where the radio industry really has to start seriously looking at how do we repatriate younger listeners.

9630   THE CHAIRPERSON: I was just about to get to repatriation, so we can stay on the theme.

9631   The numbers with respect to Sirius and the fact that there are a lot more Sirius listeners in the region that's before us today, that doesn't sway you, Mr. Arnish?

9632   MR. ARNISH: Well --

9633   THE CHAIRPERSON: And if there was an offering, an AC offering, a Popish offering, whatever we want to call it -- a lot of these sort of formats, you know, one blends into the other -- but isn't that a sign that there is a void there that isn't being filled and therefore you would need a third player to fill that void?

9634   MR. ARNISH: Well, I guess you could take that route. I guess you can look at what cost does that bring about too with licensing a third player in the market, and I'm sure we'll get into a discussion about that.

9635   But we look at the East Kootenay as being a fairly transient area. Our team here can talk about that in a moment.

9636   But with people moving in and moving out, working in the mining sector in the Elk Valley, we know there's a lot of people that come and work from Alberta and other parts of British Columbia. They're certainly travelling in and out of the marketplace, not being able to receive radio. So one way of doing that is obviously listening to satellite radio.

9637   Rod.

9638   MR. SCHWEEN: Yeah, I'll hop in on that topic because I think one thing you have to take into account in the East Kootenay market is, as it was noted yesterday, it is very mountainous terrain and we do have a series of repeaters in that area in order to get our signal across, but even with a series of repeaters it's still very difficult to hit the entire area.

9639   But I think it is very interesting that with no other out-of-market signals able to come in, and so the natural choice then is to go to a satellite service because that's what's able to be received, if you look at markets like Lethbridge and Kelowna that we talked about in our KPMG study and that some of the applicants made reference to and look at out-of-market tuning in those markets themselves, Lethbridge, for example, where there are five radio stations, the local markets, when you look at total hours tuned over the last number of years and in the last book specifically, the local stations garnered 72.8 percent of the total hours tuned in that market, and therefore, out-of-market tuning was 27 percent in the Lethbridge market.

9640   If you look at Kelowna where there are eight radio stations and supposedly a number of format choices available, local stations garnered 81.5 percent of the total hours tuned, and so, therefore, 18.5 percent went to out-of-market tuning.

9641   And I have other examples in Red Deer, et cetera. We see it. It's just the fact that in the East Kootenay you can't get an over-the-air terrestrial signal, and therefore, they're picking satellite radio.

9642   THE CHAIRPERSON: So it's more the question of topography and the limits --

9643   MR. SCHWEEN: Yes, absolutely.

9644   THE CHAIRPERSON: -- of transmitting more so than necessarily the format and the fact that there's a void there?

9645   MR. SCHWEEN: Absolutely.

9646   THE CHAIRPERSON: That will be your answer. Okay.

9647   You guys are hitting all our points here before we even ask them.

9648   That being said, you know, you mentioned transient and you mentioned tourists. Yes they're transient, yes they don't necessarily reside here, but they do shop here and that boosts the retail numbers. Shouldn't that be taken into consideration in terms of determining whether a market can absorb another player?

9649   MR. DIAMANDIEV: I can address the argument that's being made that the retail sales per capita locally are twice as high as the Canadian average.

9650   There's a real challenge with making such a comparison because essentially the retail sales per capita is a fraction, where in the numerator you've got the retail sales and you're dividing that by the residents of the local area.

9651   THE CHAIRPERSON: M'hmm.

9652   MR. DIAMANDIEV: Because you have all these effects of out-of-town shopping in a rural region like that and tourism compounding it, you're essentially adding to the numerator of that fraction and not to the denominator --

9653   THE CHAIRPERSON: M'hmm.

9654   MR. DIAMANDIEV: -- and that skews it higher when you compare it to Canada or B.C.

9655   An easy way to see that is to look at any other city in a rural region and compare that statistic to the Canadian average. You'll see much the same effect.

9656   THE CHAIRPERSON: No, I agree, but that doesn't take away from the fact that overall, globally, the retail number is pretty interesting.

9657   MR. DIAMANDIEV: I agree --

9658   THE CHAIRPERSON: I understand the per capita.

9659   MR. DIAMANDIEV: That's right.

9660   THE CHAIRPERSON: It's off because you have to choose the denominator given all the transient traffic. I understand that. But globally, the retail situation in the region is quite healthy.

9661   MR. DIAMANDIEV: Yeah. I would answer this two ways.

9662   I agree the retail situation is healthy. My belief is that the existing volume of retail in terms of advertising capacity has been absorbed by the two stations that are there because for the last decade those stations haven't grown, and Pattison can comment on all the things they've tried to do in terms of advertising campaigns and targeted activities to try to grow those revenues. The fact that they've been flat suggests that the market is saturated.

9663   The other reason we believe it's saturated is because we've compared it to 21 other markets in the province and it consistently scores in the top quartile.

9664   So that's in terms of the existing sales. I think what is really important is to look at the growth of those retail sales because that's the argument that's being made here is that the market is going to grow.

9665   THE CHAIRPERSON: Yes.

9666   MR. DIAMANDIEV: FP markets, which is the source that Clear Sky and Newcap have referenced, shows growth over the next five years of five percent in retail sales per capita. This is the lowest of 13 other municipalities and significantly lower than the BC average.

9667   So we simply don't see where growth is going to come from and we do not believe that there is an untapped demand because of what has happened over the last decade. Does that answer the question?

9668   THE CHAIRPERSON: No, it does. It does. The argument was also made that we have to look at the region and we have to look at the regional district of East Kootenay as a market and not strictly Cranbrook, which would change the population, transient and tourist population aside, would move it from 20-plus thousand to 60,000. How would you respond to that?

9669   MR. SCHWEEN: Well, I might start on this one and our team can jump in.

9670   THE CHAIRPERSON: We are sorting getting back to the denominator there that Mr. Diamandiev was speaking about earlier.

--- Laughter

9671   MR. SCHWEEN: Well, certainly. And we agree, I mean it's one of the reasons why we operate repeaters through that region. And I think, you know, certainly you have on hand our returns from the last number of years and you can see that in the Fernie marketplace, where we provide programming to, that operation has lost money for the last number of years.

9672   So, we encourage you to look at it as a region because you have to look at that entire operation as a whole and it is very hard to break that out because of the size of the operation.

9673   The other thing I think I would point out when you look at the East Kootenay as a whole, in 19 -- I tell a joke that when I moved to Cranbrook 25 years ago they told me two stories, and that was that, one, it would be 40,000 people in no time flat -- that one took me some time to figure out, it hasn't happened -- and they told me snow never stays. Well, that one I learned rather quickly, they get winter in the East Kootenay. But since 1996 the population over that area is virtually unchanged.

9674   The East Kootenay in 1996 was 56,366 people, in the 2011 Census it was 56,635. It is relatively unchanged.

9675   THE CHAIRPERSON: Stable. I gather you also don't see a potential stimulus from adding a third station, the classic, the more people that are in the market the more it will stimulate advertising revenues for radio stations?

9676   MR. SCHWEEN: No, absolutely not. And I think, you know, the strength of the letters of intervention from the advertisers in the market clearly state that.

9677   I mean, one of our concerns is the fact that, you know, if 35 percent of the revenue, first-year revenue is supposed to come from current advertisers increasing their current buys and our clients are telling us that's not going to happen, that leads us to believe that those revenues are going to come directly from our operation.

9678   And if you do the math on that, again you have our returns, you are going to see that our operations in the East Kootenay are quickly not going to be profitable.

9679   THE CHAIRPERSON: So, in the same way they told you there was going to be massive growth in the region almost 20 years ago, we had similar arguments yesterday that the region is going to grow tremendously over the next number of years, you don't buy that either, it's quite clear from your answer.

9680   You also don't agree, I would imagine, now that you answered that question, that there will be massive growth from a chunk of that $6 billion or $8 billion, whatever the figure is, of grow ops, especially if medical marijuana production ramps up to full speed?

9681   MR. SCHWEEN: Those of us from the East Kootenay normally blame that on the folks from the West Kootenay.

9682   THE CHAIRPERSON: Is that how it works?

--- Laughter

9683   MR. ARNISH: Can I add a comment?

9684   THE CHAIRPERSON: Notwithstanding that, you don't growth potential? I mean, it's not quite like discovering oil in East Kootenay, but --

9685   MR. SCHWEEN: No, and I think Slavi can talk to this point, specifically I think due to the number of jobs that were referenced yesterday that are supposedly going to grow in the region over the next number of years.

9686   MR. DIAMANDIEV: Commissioner, if I may, I am a numbers guy and I look at the numbers.

9687   THE CHAIRPERSON: We hadn't noticed.

--- Laughter

9688   MR. DIAMANDIEV: A lot of the figures that have been presented here are out of context and I would argue misleading. There was a $30,000 -- 30,000 new jobs number thrown out yesterday, I believe this comes from a BC government report.

9689   If you look at this number, for example, 75 percent of those jobs are turnover jobs from retirees, only 25 percent are new jobs. That's point number one.

9690   Secondly, the number is for the entire Kootenay area, of which the East Kootenays is less than half --

9691   THE CHAIRPERSON: M'hmm.

9692   MR. DIAMANDIEV: -- and the Cranbrook region is a much smaller fraction.

9693   Thirdly, this number is a 10-year projection, which means that of the remaining number you get you have to divide it by 10 to get an average annual growth in jobs. And, as any economist would tell you, those 10-year projections are not the most accurate out there.

9694   This is why our report looks at three-year and five-year projections. When we look at those numbers, there is no evidence for growth in personal income, household income, population, retail sales, housing, any of those kind of factors.

9695   THE CHAIRPERSON: Well, you have retail sales, but you just don't have unusually high retail sales growth?

9696   MR. DIAMANDIEV: That's right, the retail sales growth is --

9697   THE CHAIRPERSON: That's five -- I'm sorry. Go ahead, sir.

9698   MR. DIAMANDIEV: I was going to address that point, sir. Yesterday on the retail sales there was a fact thrown out that they will grow by 30 percent over 10 years. The FP market number is five percent over five years and it respectfully asks how would it be possible for that number to be 30 percent over 10 years.

9699   So, I think some of these numbers need to be put in context. When you look at a growth like five percent, you have to compare it to what else is happening in the province and use a benchmark to be able to determine if that is high growth or low growth.

9700   And I respectfully submit the five percent market, five percent growth in retail sales is one of the lowest in BC.

9701   THE CHAIRPERSON: Well, you made that point earlier.

9702   MR. SCHWEEN: Just before you move on, Mr. Chair, if I could circle back to your original comment about considering it as a region as a whole.

9703   I talked a little bit about our operation in Fernie and we are very proud of that operation. We have serviced that market through some very tough times, through mine closures over -- you know, through the early 90s. Even to this day we continue to have a staff member that works in that marketplace that does sales, does news reporting for us, covers hockey games. We do play-by-play of the local Fernie Ghostriders Junior hockey team.

9704   One of our concerns about this as well -- and if you would reference the letter from Target Broadcast Sales from November 28, it was one of the interventions -- Mr. Sienko talks about the fact that national advertisers might actually consider dropping market support in Fernie if a new licence is granted a free repeater.

9705   We do 40 hours a week plus of programming to that market and, you know, we count on the national advertising that we receive there and we charge additional for that market.

9706   Both of the applicants are proposing to put a repeater in that would carry the programming from Cranbrook and, therefore, the commercials from Cranbrook over and we face another potential threat in the fact that national advertisers would feel that they no longer need to buy the Fernie market separately because the free commercials would flow through from Cranbrook.

9707   So, that is an additional threat to us as well; while we are trying to maintain programming to a very, very small market and in a very mountainous terrain where, as noted yesterday, road conditions can be quite severe, we are trying to provide a service there that we don't think we will be able to provide anymore if you grant another licence in that market.

9708   MR. ARNISH: Mr. Chair, just to add to what has been discussed here on this particular subject matter, I know Cranbrook infinitely well, we have owned the station since 2002, but my wife was born in Cranbrook, she had grandparents there, I have relatives in Cranbrook. I have been going to that marketplace for over 40 years and I can remember back in the early 1980s, there's a big sign as you come into Cranbrook from Golden and Invermere and it says, "Welcome to Cranbrook, Home of the East Kootenay", population -- maybe at that time 18,300 people.

9709   So, here we are in 2014 and the same sign is there, "Welcome to the East Kootenay, Welcome to Cranbrook", population base, what is it, Jason, it's about 19,500 today?

9710   So, my point is that when you drive into Cranbrook there is not a lot of -- you don't see retail activity like you would see with the Alberta advantage in Alberta. If Cranbrook was in Alberta we probably would be having a different discussion, but when you drive into the marketplace and drive down the strip, there are a lot of empty buildings. The malls are not completely full, you don't see cranes there building hotels or condos or apartment buildings. And that has been like that for as long as I can remember going into Cranbrook.

9711   So, I just think from a personal reality check, we can talk about all the statistics we want about roads and so on and so forth, but when you are in the marketplace and see what the marketplace hasn't done over the last 35 or 40 years, it's as relevant today as it was back in 1980.

9712   THE CHAIRPERSON: Before I turn it over perhaps to Commissioner Simpson and Commissioner Shoan for questions, I just want to circle back, do some circling back on the notion that -- and I will put it bluntly -- that the reason the Pattison Group is not doing as well as they should be doing perhaps in Cranbrook is that you are not attracting female listeners given the format, that it is male skewed, even older male skewed and that a younger demographic could be attracted by the formats put forward, a younger female demographic is being ignored and could be attracted by the formats being put forward by the applicants that we heard yesterday.

9713   MR. ARNISH: I will start. Respectfully, I disagree with that point of view. I think it all comes down to the marketplace. We will go back to the marketplace again. You are going to be hearing from a couple of interveners later this morning about that very fact, that the marketplace is not growing and the advertising revenue is not growing and the advertisers -- and throughout the whole intervention process in our intervention to the applicants, and the great support that came from the community, with the advertisers and the community groups talking about the fact that the marketplace is really today not going to see any significant growth, I think, is very important in the decision-making process here on whether to licence a new station.

9714   We have two fully staffed stations in Cranbrook, full-service radio stations, we have staff over in Fernie and, I think, as you have read and will hear, the advertising pie is the advertising pie, it is not going to significantly grow in that market.

9715   And I guess if medical marijuana was going to be the big saviour of the Cranbrook and East Kootenay region and it was going to create, you know, 50,000 new jobs and everything else that goes with that, then that's one thing, but there is absolutely no way just because there is another station licensed in the marketplace, in our opinion, that all of a sudden the advertising pie is going to increase, in fact, it is going to be flat or it may decrease as well.

9716   Rod...?

9717   MR. SCHWEEN: I would point to the Newcap research that was presented to the Commission in their application and it shows 18-24 women listening to B104 at 33 percent, 25-34-year-old women listening to B104 at 39 percent as they are listened to most radio station. So, I don't know, you know, a lot of stations would love to have those kind of numbers.

9718   And I know from our advertisers, one of which is here today, they certainly want to attract females and they certainly get results from our radio station, so I don't see where the disconnect the applicants feel is between our stations and females.

9719   The other thing I would point out, too, even with our rock station, I think yesterday a comment was made that we were a hard rock station that was targeting young males and again, you know, at the same time it was referenced that because of where we operate and the fact that we are the only rock station in the market that we can be a lot broader.

9720   And, as you heard Mr. Baggio comment, that certainly has been the case. When we first did the research in that market it was a clear split between rock and classic rock and I remember filling out paperwork to send back to some of the magazines to define ourselves and we defined ourselves as an adult rock station at that time and nobody else was using that term at that point, and it's because we clearly went after both male and female listeners.

9721   MR. BAGGIO: Yes. I would add, too, if there is any underperformance it's economic. As I cited earlier, the upper end of our target on The Drive is female skewed, I mentioned some of the artists; the lower end is being served by our country station.

9722   I think -- and I talked with some of our team members back in Cranbrook about this last night, the economics of the situation -- the last couple of days it's been interesting and I would like to add briefly my perspective from someone who is on the ground in Cranbrook.

9723   There has been a feeling that we are almost operating in this robust economy and that the projections moving forward are robust and bullish and loaded with positivity. This is not interventionary rhetoric. Nobody in Cranbrook is feeling that. I talk with our advertising partners on a daily basis, nobody is feeling that kind of bullishness moving forward. I mean projections are one thing, anecdotal suggestions are another.

9724   When you look at reality, the Tamarack Mall has been cited a number of times in the last couple of days as the major shopping hub in the area. It runs at 25 to 30 percent vacancy, and that is reality.

9725   The Platzl in Kimberley, beautiful little town, that's the major shopping hub, 40 percent vacancy.

9726   You look at The Baker Street Mall -- and I'm not piling on here, this is reality -- at one time that store had 20 stores inside. Late 2012, Giant Tiger, its anchor store left. There are now four stores left in the Baker Street Mall, which is a mall just off the downtown core in Cranbrook. So that is reality.

9727   Projections are fine, grow ops and, you know, new revenue streams, great, but the reality is it's not there.

9728   THE CHAIRPERSON: It's the economy, it's not the programming?

9729   MR. BAGGIO: Absolutely.

9730   THE CHAIRPERSON: I just want to get back, Mr. Schween, and I will get back to Mr. Caven in just a moment. You mentioned Newcap's numbers, I believe it was eight percent satisfaction and 23 percent somewhat satisfied, which made a total of about 30-31 percent of people that are satisfied with the radio offerings in the region.

9731   Do you want to address that issue?

9732   MR. SCHWEEN: I was referring to the listened to most statistics that are there.

9733   THE CHAIRPERSON: Right. But just before that they had their numbers on satisfaction with the offerings, as is usually the case. If you want to take a look at that, we can get back to it.

9734   MR. SCHWEEN: Sure.

9735   THE CHAIRPERSON: Mr. Caven, you wanted to add something?

9736   MR. CRAVEN: I had a couple of points just on the local economy. I have been in the market 21 years, so I think I can speak to what the economy really is like on the street, about 16 of those years in sales.

9737   I wanted to touch on tourism spending has been a thing that has been thrown out the last couple of days. Many of the retailers in Fernie, especially Kimberley, tell us that the tourism numbers really are not real and relevant when it comes to actual on-the-ground spending. A lot of our tourists that come into the areas own condos, own timeshares at the Alpine resorts. These people, many are from Alberta, they fill up with their gas in Alberta so they don't have to pay the BC higher gas -- we are about 12-cents a litre higher. Many of them buy all their food in Alberta before they come so they don't have to pay higher prices at the grocery stores.

9738   And retailer after retailer tells us that local tourists actually are not doing a lot for our local economy. Certainly I don't have any numbers on that, but reality is what clients tell us.

9739   I think, you know, Cranbrook is a city where we haven't had a men's store for five years. If you want to buy a suit jacket in Cranbrook, you have to leave. Swanson's Menswear is a client that I had, 1929 is when they opened, a family operation, really struggled around '99-2000 with the change in the economy with players like Walmart coming into the economy. And they burned down, I think it was 2010, and the family decided to bail and get out of it and not open the store.

9740   The city of 19,000, area of 50,000 people, you cannot buy a pair of men's dress pants or a suit jacket in the East Kootenay.

9741   And I think as well we have taken many, many local sales initiatives to drive up our sales. We have had the Advantage Program three of the last four years, hundreds and hundreds of clients have come to these presentations offering special rates. Spring, 2010 we started on an auction that we do twice a year which gives local businesses an opportunity to trade with us. We sell their items in an auction. It also actually opened up a little bit of the tourism market for us to have local hotels and stuff to actually have a way to advertise with us.

9742   We offer numerous projects throughout the year, like Mining Week, BC Chamber Week, and I just wanted to add on that there are numerous initiatives that our sales department is doing to try to grow those numbers that have been flat.

9743   Thank you.

9744   THE CHAIRPERSON: Okay. Commissioner Simpson will continue. Thank you.

9745   COMMISSIONER SIMPSON: Good morning. A couple of lines of questioning. I want to drill down more on the economics and I would like to talk a little bit about retail shopping patterns and what happens or what was hoping would happen versus what may be happening.

9746   First off, Mr. Diamandiev, when you were doing your study, did you reference the Cranbrook Economic Development Strategy that was done for the trading area by the city?

9747   MR. DIAMANDIEV: I believe we did review that document.

9748   COMMISSIONER SIMPSON: Yes. Okay. Good. Great. It talked a lot in its game plan about -- and I know that it's not part of the record, but it's just, you know, if you would humour me for a second and if you dispute anything, just go right ahead -- but it referenced what we have always known about the East Kootenays that, you know, it makes sense when you look at it as a larger trading area; Cranbrook doesn't make economic sense to a lot of retail types if we just look at Cranbrook itself, and they were defining their trading area as something that also I was surprised, to include Creston, and I want to come back to talk about Creston in a minute, but they were throwing numbers around like 67,000 people.

9749   Now, it is not to dispute the numbers, but to understand how those numbers act and react when it comes to retail. So when Tamarack Shopping Centre was built almost 40 years ago, probably maybe even more than 40 years ago, it was a shiny new offering and it looks like not a lot has been done since and it is probably tired and then, as you say, Walmart comes along and it can be a category killer for a lot of stores.

9750   As Cranbrook and trading area around it reacted to its retail offerings, you know, this tired shopping centre and his brand-new shiny big box, did it change how the economic patterns of that retail catchment area were proposed to be happening, because 40 years ago the outlying areas were going to Cranbrook and now I'm hearing that Cranbrook is going to Lethbridge.

9751   Is it because of the sad state of the retail market in Cranbrook, or is it because of the tax avoidance, you know, is that why the market isn't as robust as it should be?

9752   MR. ARNISH: Well, I can start and then my colleagues can jump in here. I think it is all of that and more. I think one important point that has been missing here as well is a lot of shoppers from Cranbrook and that area, Kimberley and Fernie, and so on and so forth, going to the U.S. to shop.

9753   Now, the reality -- there will be a reality check if the Canadian dollar goes down to $.80 or whatever the case may be --

9754   COMMISSIONER SIMPSON: Sure. Yes.

9755   MR. ARNISH: -- but a lot of shoppers go to the U.S. to shop.

9756   COMMISSIONER SIMPSON: What, Spokane or --

9757   MR. ARNISH: Yes, Spokane or Whitefish, Montana.

9758   COMMISSIONER SIMPSON: Yes.

9759   MR. ARNISH: It's only like an hour, an hour and a half away. And a lot of people go to Lethbridge, and I think the reason being is because there is not the great mix of shopping of businesses that the average consumer wants to have the ability to shop at.

9760   You know, we heard a lot of comments yesterday about various stores and businesses being in Cranbrook and we are talking to our team here and saying, are they really there and they are saying, no, they aren't. So you have a lot of shoppers from that area going out of the market to shop because there is not that full-service business community.

9761   MR. SCHWEEN: Yes. And I would tag onto that that, you know, there was a La Senza in Cranbrook, for example, lingerie was mentioned yesterday, it is now closed. There were a number of local shoe stores, Swanson's, as the menswear store, carried pretty much the only selection of menswear shoes in that market, and that's been gone. Another little local shoe store opened up and, you know, now there is -- I think Payless is the only thing that's left for many.

9762   I mean, our retailers do a very good job, but as our team will tell you here, one of the key things that we work on as a radio station to help our retailers and are involved with our Chamber of Commerce on a regular basis is the out-of-town shopping scenario. It is a major concern for that area and we have been a big player in trying to keep people in the East Kootenay and keep them shopping.

9763   MR. ARNISH: Yes. We have had many -- and our team can elaborate on this -- we have had many, many campaigns, "Shop Local" in Cranbrook. Do you want to talk about that, Leo?

9764   MR. BAGGIO: Yes. Our "Shop Local" campaign is ongoing ad infinitum because it's -- I have been blessed to live in a lot of different communities across the country and in so many of them out-of-town shopping is a nuisance. In Cranbrook it's a chronic problem.

9765   I am only 15 months into the area so I spent the summer exploring a lot into Idaho and Montana, which border crossings are less than an hour away. It was absolutely shocking for me to see all of the targeted advertising to Canadian shoppers, once you got down there in Whitefish, Kalispell, Coeur d'Alene, Spokane, all shopping hubs in those American cities and a lot of money going down there, and it's problematic.

9766   COMMISSIONER SIMPSON: Okay, thanks. We've got to move on a bit because we're on the clock.

9767   We've talked about Cranbrook and what it's doing going to Lethbridge. We've talked about Cranbrook having an economic strategy that relies heavily on -- on the outlying areas, but let's talk about the outlying areas. You said that, you know, you're not making any money in Fernie. Now, in looking at what might happen with a third entry into the market, a third stick, you know, what would happen to those outlying areas as retail activity starts to occur in Canal Flats and -- and Sparwood and places like that? Does it -- are these markets that hold their own now and -- and what would more competition in those markets do?

9768   MR. SCHWEEN: Well, I think, you know, Canal Flats is a -- is an extremely small market, but if you -- if you look at some -- and you mentioned Creston a moment ago as being in the -- in the East Kootenay area and it's -- it was interesting that you mentioned that at the same time I was writing Creston, mys-- a note down to mention Creston because, you know, Creston is basically pulled in two directions. There is the chance to go to the West, although that can be problematic. You've either got to drive up to Kootenay Lake, which is a very twisted -- beautiful -- beautiful drive, love to do it on my motorcycle every chance I get, but it can be -- it can be problematic, and then you've got a ferry crossing as well. And then also you've got the Salmo Creston Pass, which we know can be closed at various times throughout the winter.

9769   The other thing I think I'd remind the Commissioners respectfully is that Creston was just licensed with a new radio station and that operation is yet to hit the airwaves yet. And I know that, you know, we looked at many times at the Creston market. We've looked at Invermere as well, but we're respectful of the fact that there are operators in those markets already and in some of those small markets, like we are, they're struggling to maintain their profitability and there is no -- there was no real strategic reason for us to go into those markets and -- and upset the radio market. And -- and quite frankly, not just the radio market but the media markets in those areas as well. We talk a lot about diversity of voices. We just saw recently in a city like Kamloops, where I am now headquartered out of, where the daily newspaper has shut down because of a lack of advertising revenue. Well, I can tell you that, you know, Kimberley is probably the smallest city left with a daily newspaper in the country. And if you license a new -- a new radio station for Cranbrook, I can just about lay a wager that there will be an editorial voice that will be lost in -- in Kimberley.

9770   The other thing, coming back to Creston for just a moment, I would -- I would say it being only an hour away, and I know if I was going to be the operator of that new radio station, Cranbrook would certainly be on my radar as a place that I would be going and saying, hey, you know, we've got people in Creston that'd love to come to Cranbrook and shop, you should be advertising on our new radio station to invite our people from Creston and that area to come and shop at your stores here in Cranbrook.

9771   COMMISSIONER SIMPSON: Thank you.

9772   Clear Sky had in their submission proposed that a sizeable percentage of their forecast was going to come from new advertisers. Can you tell me who you think they might be thinking of when they say that?

9773   MR. SCHWEEN: Well, that's our concern, they -- they cited 40 percent of their first year revenue would come from new radio advertisers. And as Mr. Caven spoke about, we've done numerous campaigns over the last number of years to specifically target to make sure that we aren't resting on our laurels in a -- in an area like Cranbrook, to make sure we're targeting the new small businesses that are out there. And we've brought an advantage program in at considerable cost to our operation, where we've invited hundreds of businesses to come. You know, in most cases we'd get 50 or 75 people out after making 4- or 500 phone calls and -- and personal invitations. And in the end, we've -- we've sold into those, but I don't see where there's $400,000 worth of -- or sorry, it'd be $300,000, I guess, of new revenue in that marketplace in year one for --

9774   COMMISSIONER SIMPSON: Yeah.

9775   MR. SCHWEEN: -- and we feel it's going to come from our operation.

9776   COMMISSIONER SIMPSON: Okay. National ad sales, the two applications we heard yesterday were -- were clearly divergent in their perspectives on ratios of national spend, and I think Clear Sky was by year seven looking at something like a third of their revenue coming from national. And Newcap was only projecting about 10 percent. Now, would you be comfortable in telling us what your ratio is? And if not, would you be prepared to do an undertaking to give us a year -- a year ratio?

9777   MR. ARNISH: Yes, we -- we will do that as an undertaking.

9778   COMMISSIONER SIMPSON: Thank you.

Undertaking

9779   MR. ARNISH: But can I just talk about that for a moment, Mr. Commissioner. I think the -- the radio industry across the country is very concerned about the secondary market situation with national advertising and, you know, we're very pleased as an industry. There is a radio review underway right now. There's -- the submission date was yesterday, and the CAB Radio Council, for example, which I sit on with other members of the industry, are very concerned where national advertising is going, along with a myriad of other scenarios as well. And, I mean, even in our own case in Cranbrook, put it on the public record, this past year our national advertising was down 10 to 12 percent and it's -- we see it continuing to go that route, and we're starting to see that in a bunch of other markets that we operate in as well because the larger markets, quite frankly, are sucking up all the revenue that used to go into medium and small markets.

9780   MR. SCHWEEN: Yeah, I'd tag onto that. Again, I'd point you back to the letter from Target Broadcast Sales. They've been selling in the Cranbrook-Fernie market since 1976 and they note in their letter that it's shown very little growth in the past decade, and the total national revenue for the 2012/2013 broadcast year completed is actually down from 2006/2007 and down more than 10 percent from the high of 2007/2008.

9781   COMMISSIONER SIMPSON: Staff, do we have data that gives us a chronology of the PBIT performance of the Pattison station since their coming on stream, or should we ask for that as an undertaking? You have -- we have that? Okay, great.

9782   MR. AGUIAR: Yes.

9783   THE CHAIRPERSON: We have that.

9784   COMMISSIONER SIMPSON: Super. Okay.

9785   That's it. Thanks very much.

9786   THE CHAIRPERSON: We have that. It's confidential.

9787   And just before I turn it over to Commissioner Shoan, Commissioner Simpson mentioned the Cranbrook Economic Development Plan or something to that effect, is that it? Economic strategy. It's not on the record and in the interests of fairness we're going to try and find it and put it on the record, and allow parties to comment on that plan. Maybe by Monday it'll be on the record and we can give you maybe 48 hours to do that. Maître Pinsky?

9788   MS PINSKY: Perhaps by -- we'll allow all parties to file additional submissions solely in relation to the document that has been placed on the record by the end of day Wednesday --

9789   THE CHAIRPERSON: Thank you.

9790   MS PINSKY: -- of next week.

9791   THE CHAIRPERSON: Yeah.

9792   (laughs) That's right, you are a troublemaker.

9793   Thank you. Commissioner Shoan.

9794   COMMISSIONER SHOAN: Thank you. One question on the general theme of potential new advertisers. I'm trying to get a feel for a retail industry in Cranbrook specifically tailored to women focused on women, women's products and women's services. And I don't know if this is information that you have, but do you have any notion of how much of the advertising done in your stations is done by retailers specifically targeting women?

9795   MR. SCHWEEN: No, I don't think we do, but I think specifically you have an intervener appearing before you shortly that I'm sure, as -- as any of us know that are married, if you're buying furniture usually our wives have a -- a big say in the furniture purchase in the home. And I -- I think Mr. Bridge will be able to give you some insight into that in his presentation.

9796   COMMISSIONER SHOAN: Great. Thank you.

9797   THE CHAIRPERSON: Anything else? That's it. I think that's it.

9798   MR. ARNISH: Can I -- can I add just --

9799   THE CHAIRPERSON: Yes, certainly.

9800   MR. ARNISH: -- one concluding item?

9801   THE CHAIRPERSON: Certainly. Certainly.

9802   MR. ARNISH: You know, again, we started off our presentation we respect Newcap and -- and Clear Sky immensely; good operators, good competitors. But it is interesting to note -- you know, when we look at various -- and there hasn't been a lot of calls, but when there is calls for markets that we are interested in, we do our economic analysis and we look at the marketplace and -- and grab statistics and so on and so forth but we use a lot of common sense as well. And it's interesting to note, in our opinion, that there could have been many other applicants for Cranbrook. I think -- as I mentioned before, if this -- Cranbrook was in Alberta and we had the Alberta advantage, you'd probably have seven, maybe six, seven applicants in front of you for a new station, Harvard, Roco Radio, Golden West, even Vista, who just got a station in the area, chose not to apply for Cranbrook. And talking to not all but some of those companies, they said can't support another station. And I think it's very important to note that those size of companies and perhaps others have not applied for Cranbrook.

9803   THE CHAIRPERSON: I appreciate the hearsay evidence.

9804   Anything else in closing?

9805   MR. ARNISH: No. Thank you very much for allowing us to appear.

9806   THE CHAIRPERSON: We thank you very much. I think we had a good --

9807   MR. ARNISH: We did.

9808   THE CHAIRPERSON: -- discussion and I think you made your point.

9809   MR. ARNISH: Thank you.

9810   THE CHAIRPERSON: And we will be hearing from other interveners after the break, Madame la secrétaire? I'm telling you, I'm getting soft in my old age. I'm aging by the day.

--- Laughter

9811   THE CHAIRPERSON: So let's do --

9812   MR. WEAFER: Mr. Chairman --

9813   THE CHAIRPERSON: Yes.

9814   MR. WEAFER: -- can we just be clear on the undertaking with respect to local and national advertising, when you want it by and -- and is it for the last year or for -- how many prior years?

9815   THE CHAIRPERSON: Let's do -- Maître Pinsky, what would be the appropriate number of years?

9816   MS PINSKY: For the past --

9817   COMMISSIONER SIMPSON: It's just a ratio between the two we're looking for, so --

9818   MS PINSKY: For the --

9819   COMMISSIONER SIMPSON: -- it's not ...

9820   MR. WEAFER: For -- for last year, is that fine?

9821   THE CHAIRPERSON: Let's do three years. We usually do three years on --

9822   MS PINSKY: Yes.

9823   THE CHAIRPERSON: -- on most things to get a -- a better feel, so let's do the last three years. And strictly the ratio. You wouldn't have that by the end of the day? Let's put that up to Monday as well. That's fine. Is that okay Monday?

9824   MR. WEAFER: Thank you, sir.

9825   MR. ARNISH: Thank you.

9826   THE CHAIRPERSON: Great. Thank you so much.

9827   Anything else Maître Pinsky?

9828   MS PINSKY: No, that's it.

9829   THE CHAIRPERSON: Great. Thank you. We'll be back in let's make it 10:15. Thank you so much.

--- Upon recessing at 0959

--- Upon resuming at 1016

9830   THE CHAIRPERSON: Good morning.

9831   MR. BRIDGE: Good morning.

9832   THE CHAIRPERSON: Madame la secrétaire.

9833   THE SECRETARY: Thank you, Mr. Chairman. We will now proceed with the presentation by Bridge Interiors. Please introduce yourself and you have 10 minutes for your presentation.

INTERVENTION

9834   MR. BRIDGE: Thank you very much. Good morning, Mr. Chairman, members of the Commission and the Commission staff. My name is Ken Bridge. I'd first off like to apologize for my presentation. I sell furniture and I don't normally do this; all right? So, bear with me. I look forward to any --

9835   THE CHAIRPERSON: You're doing great.

9836   MR. BRIDGE: (laughs) I look forward to any questions you guys have at the end to sort of fill in the blanks that I've -- I've missed.

9837   Myself and my wife are owners of Bridge Interiors. It's -- the building is 44,000 square feet. We occupy 36,000 square feet of it. We have about 0,000 square feet of showroom, so it's -- it's not a small undertaking.

9838   We're in Cranbrook, B.C. We've had our furniture store there in the East Kootenays ...

9839   It's flashing. Is that bad?

9840   THE CHAIRPERSON: Turn that one off. Maybe turn that one off. Oh, there we go. And maybe turn -- there we go. Now.

9841   MR. BRIDGE: This is just kind of the week it's been for me. So ... Oh, turn this one off.

9842   THE CHAIRPERSON: There we go. That's perfect.

9843   MR. BRIDGE: There we go.

9844   So we've been in -- we've been in the furniture business. We've had the store for 15 years. The -- the previous owner of the store had shut the store down. Three months later we went in and -- and took it over. So we didn't actually start from scratch, there was a client base there already.

9845   Our business has been recognized by the local Chamber of Commerce as Retail Business of the Year three times. We have also been honoured as Company of the Year. We have been recognized as Marketer of the Year for three -- three times, and most recently I had the honour of being Citizen of the Year for 2013.

9846   I am very involved in our community. Our community is the only thing that keeps our business alive. That's it.

9847   I was talking to the morning guy, B-104, Derek Kortschaga. I do all my radio spots with him. We voice them together, so they're sort of very unique, very colourful. And he -- he was the one that sort of informed me that this -- we might be getting a new station in.

9848   I have no extra funds for advertising. I'm afraid what this is going to do is going to take my advertising dollars and make them less effective because now I have to spread them over more of a market or if I choose not to advertise on the new station, there's just -- there's simply no money out there right now. You know, we've had tons and tons of very successful campaigns over the years with the Jimmy -- Jimmy Pattison and the local advertiser papers.

9849   Since 2008 our business is down 30 percent. That's to the end of our last fiscal year. You know, I mean, like, I'm not a statistician or an economic-type person. I -- these are just facts. This is my business. Talking to other people in town, other business people in town, they're in similar situations. Business is not going through the roof. I mean, I'd love to tell you that it's great; I wouldn't be here.

9850   I haven't had a rate increase since 2002, but instead with both the paper and the radio station, I challenged them to -- you know, how can you value add to my advertising dollars and make me want to keep spending my budget, you know, so it's -- it's been tight.

9851   I once had four -- I used to have two full-time delivery trucks with four full-time delivery drivers. I'm down to one truck and two drivers. We had four full-time salespeople, now I'm down to two full-time salespeople and four part-time salespeople. This is a reality.

9852   I'm involved in many community events. The last one I was involved in we did it in conjunction with the Pattison Broadcast Group and Black Press. They spent thousands of dollars in advertising -- donated thousands of dollars in advertising to make this a success. I actually boxed a local car dealer salesman/manager and we raised $27,000, of which just shy of 23,000 went back to the community. Now, the Pattison Group also stepped up and donated two Dean Brody tickets and a 1500 dollar advertising package to be auctioned back off to go towards the community. You know, these are -- these are things that they do and they're involved in.

9853   You know, people are going to Alberta to save the sales tax. Now, yesterday when I sat in on the meeting, these are my words, they're the applicants, you know, they're -- they're telling you this as well. You know, they didn't mention the States, and a lot of people are going to Montana and Idaho, and even Washington. We're, like, right there on the border.

9854   Everyone -- everyone talks about community support, the Pattison Group has shown it. It's easy to talk about it, but the bottom line is the bottom line. And, I mean, if -- if it -- you know, when we have the other stations come in, it's an unknown. So if that erodes, then the money just simply won't be there and that's a huge concern to me. You know, it's great that everybody projects all this stuff, but I'm dealing with the facts and I'm dealing with right now. I've got it great with Black Press and the Pattison Group. They support everything I support, which is huge.

9855   I have recently seen cuts to the local advertiser print outlet. Black Press has bought both papers. They let go one publisher, and there's one less salesperson at the advertiser. You know, and these are -- these are friends of mine, they're not numbers or ... You know, Darcy Wiebe was the publisher of the paper, they let him go, and the publisher from the Townsman do both papers now. The -- the advertiser -- the salesman there quit, went to sell cars because the pie was just getting too thin for the -- for the three of them, and so they have just stayed with salespeople at the advertiser. I don't do a ton with the Townsman, so I'm not sure what's happening on that side. You know, even their production staff has been reduced over the years. So, you know, that's what concerns me. You have -- you have people coming in and it's like I say.

9856   I was born and raised in Cranbrook, and the population has roughly been 20,000 and the East Kootenays have roughly been 60,000. I've been there my whole life. I -- I never left to go to school. I -- this is my home.

9857   The applicants talked about projections and what could be and what might be. I have tried taking that to my bank. They don't care. They want the dollars and cents at the end of the day, not what could be and what might be. It scares me when people talk about this type of thing.

9858   You know, we voice our -- like I said, me and Derek voice our own radio ads, so they're very unique and very colourful, some would say. You know, I strongly -- I strongly disagree that women aren't listening to the radio. You know, I -- I don't know if you guys are married or not, but when was the last time you came home and said, honey, I bought a couch? You know, I mean, it doesn't happen. Women are very, very involved in that. And with me doing my own radio spots with Derek, I get lots of feedback from the community, both women and men saying I can't believe you said that on the radio and got away with it. That's the just way it is.

9859   For these reasons and the others I mentioned in my letter, I cannot support another station. There is simply no money. I felt strongly enough from this that, the Vegas Furniture Show was on this week, I cut my trip short and came to these meetings, you know, because I just -- advertising dollars are so precious and now to try to introduce something else into the market, where I have to try to diverse and figure out how I'm going to do this, it's going to be tough. You know, and all these other advertising dollars that they're supposedly coming up with, the local advertiser, Black Press didn't replace a salesman; you know what I mean? These people are beating the -- they're all commission salespeople. So it's not like they're not out there beating the bushes trying to get. It's just not there. You know, my rates haven't changed with Black Press either. The only reason I sort of maintain the volumes that I maintain in advertising is because I'm afraid if I give my rates up, when you go back to renegotiate, they're going to be a lot higher. So instead, like I say, I keep getting value added to keep my budget where it's at.

9860   That's kind of everything I have to say. If you have any questions, I'd love to answer them, please.

9861   THE CHAIRPERSON: I won't ask you any questions on married life.

--- Laughter

9862   THE CHAIRPERSON: Commissioner Shoan.

9863   COMMISSIONER SHOAN: Good morning, Mr. Bridge. Thanks for being here. Did you win the -- did you win that boxing match?

9864   MR. BRIDGE: I came in really -- I was in the top two.

--- Laughter

9865   COMMISSIONER SHOAN: Good for you. Good for you.

9866   So I just wanted a point of clarification. You said your business has been down 30 percent since 2008. Is that sales or revenues?

9867   MR. BRIDGE: That's just gross. Gross.

9868   COMMISSIONER SHOAN: Okay, thank you.

9869   It strikes me there might be a bit of a disconnect here between some of the statements you're making, so maybe you can close the loop for me. You acknowledge that 80 percent of furniture buying decisions are made by women of the house.

9870   MR. BRIDGE: That's in my opinion.

9871   COMMISSIONER SHOAN: I -- frankly, I would likely agree with you.

9872   MR. BRIDGE: Okay.

9873   COMMISSIONER SHOAN: I mean, I think it's probably around there anyway.

9874   MR. BRIDGE: Yeah.

9875   COMMISSIONER SHOAN: And yet here we have two applicants who want to come into the market, provide a radio station specifically targeted towards women. So that would be a platform for you to reach out to the -- basically your constituents, the ones who are making the furniture buying decisions.

9876   MR. BRIDGE: Yes.

9877   COMMISSIONER SHOAN: And there's been an acknowledgement by the incumbent in the market that there is perhaps a format void in the sense of perhaps there isn't a radio format specifically targeting women. So given that these applicants want to come in here and provide you a platform to reach out to women, isn't that something that would be of appeal to you?

9878   MR. BRIDGE: It would appeal to me, but where does the money come from? You know, like, I -- I would have to take it out of a budget if I chose to go there.

9879   COMMISSIONER SHOAN: Uh-huh.

9880   MR. BRIDGE: And it just so happens that I married a woman and she's 50 years old, and she listens to The Drive. I listen to the country station. And I have -- I have two daughters. One has recently moved back to town. She listens to The Drive. You know what I mean? These aren't, like, me asking them what they listen to. This is me climbing into their cars and them having their radios on because whenever I get in I change it; that makes them really happy.

9881   COMMISSIONER SHOAN: So I want to ask you about your -- your radio listening habits. Do you have satellite radio?

9882   MR. BRIDGE: I used to have satellite radio. I don't anymore.

9883   COMMISSIONER SHOAN: Okay.

9884   MR. BRIDGE: And the reason that I -- that I --

9885   COMMISSIONER SHOAN: Okay.

9886   MR. BRIDGE: -- don't have it anymore is I -- I use my iPod a lot more.

9887   COMMISSIONER SHOAN: Okay.

9888   MR. BRIDGE: And for the most part, when we go out, like, I have jet boats, side by sides, I spend a lot of time in the bush, and the minute you get off any type of a beaten path you lose radio signal. Like, there's just no -- you can't -- you can't get a signal to the radio. We live in a very mountainous terrain and it's just the way it is. We -- we -- our delivery truck goes to Creston, Fernie, Sparwood, Elkford, Panorama, sometimes even as far as Golden, and there's huge blank spots where they can't get the radio and that's just because of terrain. And it's the same with cell phone coverage. There's just ... The mountains are in the way.

9889   COMMISSIONER SHOAN: Okay. I think we heard that a little bit earlier as well and obviously the geography of the area is a challenge from a technical standpoint.

9890   You're a retailer in the area. You obviously focus on women because they are the furniture buyers typically of a family. In your view are there other retailers in the area, in the Cranbrook area, that specifically target women as their primary focus that perhaps aren't taking advantage of the options available to them in terms of advertising?

9891   MR. BRIDGE: I -- I think the biggest problem that we have right now with people taking advantage of what's going on out there is there's just -- there's not the revenues anymore, you know. And simply, you know, I used to have people mow my -- mow the lawn for the store, I have a large lawn out front. We do that ourselves now.

9892   COMMISSIONER SHOAN: M'hmm.

9893   MR. BRIDGE: You know, people have cut back as far as they can and it's -- it's not that we don't want to advertise, it's just that we don't have the revenues to advertise. You know, like, something as simple as -- as the front page of the advertiser is worth $15 -- or pardon me, $1500. You can buy a page inside for $500.

9894   COMMISSIONER SHOAN: M'hmm.

9895   MR. BRIDGE: I've given up a lot of my front pages and gone inside the paper just to help save revenue. Now, what I've done is is I really haven't cut my budget but instead of having a front page a month or two front pages a month I have four full-sized pages inside the paper.

9896   COMMISSIONER SHOAN: Right. So you reallocated.

9897   MR. BRIDGE: I re-- I reallocated, you know. I mean ... And -- and I've been -- I've been very lucky. People have been very good to us in our community. Like, very good to us. And, you know, there's lots of people that I know that haven't been as lucky or as fortunate as we have.

9898   COMMISSIONER SHOAN: Okay. Thanks -- thanks very much coming in today, Mr. Bridge.

9899   MR. BRIDGE: I appreciate your time.

9900   COMMISSIONER SHOAN: Thank you.

9901   THE CHAIRPERSON: Thank you. Could somebody get the phone? Is that us? Is that some ... It's done? Great, thank you.

9902   Commissioner Simpson.

9903   COMMISSIONER SIMPSON: Just -- just one question.

9904   MR. BRIDGE: Sure.

9905   COMMISSIONER SIMPSON: It may be a long answer or not, but I think that if you've made the effort to come here I'd like to hear what you -- what you know. I've been asking a lot about shopping patterns. We see numbers which describe population; we see numbers that describe economic activities, but we're hearing that the shopping patterns of people who live in and around Cranbrook vary. They might go down to Spokane, they might go to Lethbridge, people from Fernie might come to Cranbrook. Can you give -- can you paint me a picture of what you're seeing? I know that you're in, you know, a higher end durable goods business, but from the standpoint of your own experience and what you know as a retailer, can you sort of paint me a retail picture of what's happening in Cranbrook?

9906   MR. BRIDGE: You know, it's -- it's tough because we -- we keep -- we keep trying to find, you know, the goose that's laid the golden egg and try to get back on track. Before -- before I opened our store 15 years ago, I -- I managed the other furniture store in town for 10 and worked there for six. We used to do a lot of deliveries up the valleys in the '80s and the '90s, up to the coal mines and, you know, sort of Fernie, Sparwood, Elkford, we were up there all the time. Now -- now our delivery truck is up there maybe every two to three weeks. We're still up in Kimberley every week, where in Creston, where it used to be a lot more, we're in Creston every probably maybe three to four weeks. You know, Panorama, Invermere, we're up there probably every two weeks. We don't go much past that. Occasionally we'll dip into Radium and up there, but very occasionally. So, you know, the -- the patterns have definitely changed. The reason we're up in Panorama quite a bit is because we're really tight with one of the contractors up there and a lot of the international money that's coming in that are buying and building up there, that these people are doing, they actually bring them down by the hand and say this is where you buy your furniture, which is awesome. And then they've talked to their friends and their friends. So we really quite built the clientele up that -- up that valley. And it used to be up -- up in Fernie at the ski hill a lot, but that seems to have tapered off. You know, talking to my brother, who is a retired pulp mill fellow, he just can't wait to get down to the States to buy everything way cheaper.

9907   COMMISSIONER SIMPSON: What -- I can't imagine that people would go to Lethbridge or Spokane to buy a sofa, but what about the other stuff? You know, you want to do a major apparel shop or -- or go looking for electronics and stuff, what -- what do you do?

9908   MR. BRIDGE: The U.S. has definitely cut into a ton of that, you know. I mean, the U.S. and big box and -- and even ... You know, it's hard to believe but where we live everybody has a pickup truck or has a friend with a pickup truck. So it's -- you know, I had a customer in, and this was quite a few years ago, that came back and they walked into our store and looked at a stove and said that was cheaper than I just bought it for. I'm like yeah, you know, what's sort of ... They had gone to Lethbridge, bought the -- bought the stove, were driving back, it blew out of the back of their truck, smashed, so insurance was replacing the stove. But what happens is is people get caught up. You know, they're -- they're going -- they'll see a promotion on at Leon's or whatever in Lethbridge or Calgary or down in the States and they've already made their mind up they're going down there to buy it. So even the one they look at, that doesn't work out to be the one they want, but they're there to spend their money, so they're not coming home without it, you know. So people do spend their money abroad and, like I say, even for larger items like ours.

9909   Right now they're building -- they're building -- like, windows, doors, drywall, that industry is just getting hammered by the U.S. market. Like, people are taking trucks and trailers down there and bringing back all the doors and windows for their homes they're building in Cranbrook and other building supplies as well. Because even with the duties and the taxes and their time, they're still saving a ton of money. It's -- it's unbelievable. You know, this is -- this is, like, feet on the ground. This is what we're experiencing, you know, and it's -- it's not because we haven't tried different ad campaigns and different things and ... You know, I'm very involved in our community, so our community sees -- you know.

9910   Like I say, we've been very fortunate. I -- I feel like we're getting our -- our market share, but it's -- it's tough. You know, I'm -- I'm very much a capitalist. Like, this kind of goes against everything I believe in, you know, because, hey, if you can bring it in and do it bigger and better, great, but I'm concerned with the -- you know, with what could happen. You know, now I've got to figure out where to put my dollars.

9911   COMMISSIONER SIMPSON: So we've heard -- we've heard that -- what I think I hear you saying is that people have got a preconceived idea of what they're going to find in other markets and so they go out of market, but the last question I've got for you and just if you can sort of sum it in a brief manner, is it also because there isn't selection in Cranbrook?

9912   MR. BRIDGE: There -- there's -- I mean, it depends on what you're looking for and so on. You know, I mean there is in some things. In, like I say, men's clothing and different things, there's not much selection. I mean, you have -- you have Walmart. They -- they commented on Payless Shoes. Payless Shoes has shut down in Cranbrook too, I believe, now. So a lot of the big boxes that have come have tried have gone. La Senza came, tried, and left. Now there's, yeah, Tiger, Giant Tiger came in. I mean, they basically renovated the -- the old Cranbrook mall. It used to be a lot longer. They cut it short, put Safeway at one end, put at the other the Giant Tiger, sort of the anchor and we're going to do that. They're gone, you know. So people keep telling me how this town is going to grow and -- and so on. Like I say, I was fortunate because the furniture store that I went in, the fellow had shut it down. It had been there for many, many years. So the market share was there, I just simply went in, sort of redesigned what we were doing, leased out part of the building to help pay for the taxes and so on, and there was already a clientele there ready to go. You know, since we've been there The Brick and several other stores have opened.

9913   COMMISSIONER SIMPSON: Okay. Thank you very much.

9914   THE CHAIRPERSON: Thank you, Mr. Bridge.

9915   MR. BRIDGE: Thank you.

9916   THE CHAIRPERSON: Mr. Cartier.

INTERVENTION

9917   MR. CARTIER: Good morning, Mr. Chairman, fellow Commissioners and Commission staff. My name is Bob Cartier and I have been in Cranbrook for the past 15 years in the East Kootenays. I own A&W in Cranbrook and Kimberley, and I also partner -- and I'm also partner in the A&W in Invermere.

9918   I have filed a written intervention, but would like to highlight and address some of the key points, and I'm available for questions afterwards.

9919   I now have one location in Cranbrook. It was a much different story just five years ago. At that point, I had three A&Ws in Cranbrook alone.

9920   Unfortunately, due to the high expenses of running a restaurant in BC and a poor economic client we had in the last few years, I had to shut down two of those locations.

9921   First we had to close our restaurant in Tamarack Shopping Centre, you know, due to competitors -- or due to big box stores coming in. The traffic went way down on us there.

9922   First we -- okay, just a sec. And most recently, we closed our doors at our location at the Cranbrook Rec Complex, and that's where the Kootenay Ice of the WHL play their hockey games.

9923   My reasons were simple. There just wasn't enough business to sustain those locations, and the cost of running both was increasing every year.

9924   This is the reality of my story for my businesses in Cranbrook. In less than five years, we've gone from three locations to one.

9925   I do own a small satellite store in Kimberley, again, and the store has been flat in terms of sales. Another sign that the proposed tourism that Kimberly was to see, has not happened.

9926   With how poor restaurant sales has been and the rising costs of operating the businesses, there's no way I can support a new media provider.

9927   I used to be a large account at the station when I had a sufficient national budget. That has disappeared slowly over the past 10 years. In 2013, we were down in national totals to 10 percent of what we received in 2009.

9928   As for Invermere, it is a unique community where it is either boom or bust. The town sees a huge influx of Alberta tourism on the weekends during the summer, and then only on long weekends the remainder of the year. Outside of that, the town is about three to four thousand people that actually live there.

9929   My point is that when the tourists leave, we definitely notice a huge drop in our business there.

9930   As far as community support goes with the local station, you know, they're always there to lend support with on-air promos, vehicles and boom box on site, on-air interviews and on site to lend a hand with events like the MS Day that A&W does every August.

9931   We have an annual A&W teddy bear toque and mitten toss at the Kootenay Ice games where we collect toques, mittens and teddy bears that we donate to our local Salvation Army to give out.

9932   And in November, when the terrible typhoon hits at the Philippines, I want to try and do something to make a difference for our Filipino families who had been tragically affected that were employed by us. I called the station on a Thursday and told them what I was thinking of doing. Instantly, they offered to partner with me, supplied on-air support, on-site support. And by the next Friday, we had raised over 8,500 for the cause. And at this point, a couple days later, it increased to $11,000.

9933   I can't say enough about support the station has provided to our business and to our community over the past 25 years.

9934   As a long-term business owner in the East Kootenays who has lost two locations in the biggest city in the area, I agree with the economic study commissioned by Pattison and would politely ask, "How can a new station even be considered here?"

9935   My biggest concern is what will happen to long-term employees of the Drive and B104. They are home owners, taxpayers, volunteers and a vibrant part of the fabric of our -- of this community. I would hesitate to see job reductions and local radio services cut back based on new musical choice.

9936   In today's world, satellite radio and the internet is available for listeners who want something not offered on the dial. Don't bring a new licence just to appease a few.

9937   This is a decision that could have long-term negative impacts on our business and the community.

9938   Thank you.

9939   THE CHAIRPERSON: Thank you, sir.

9940   Commissioner Shoan.

9941   COMMISSIONER SHOAN: I'm okay.

9942   THE CHAIRPERSON: It was pretty clear. Thank you very much.

9943   MR. CARTIER: You're welcome. Thank you.

9944   THE CHAIRPERSON: Thanks to both of you. Thanks for coming in today.

9945   THE SECRETARY: Thank you, Mr. Chairman. This completes Phase 3 for Items 14 and 15 on the agenda. Thank you.

9946   THE CHAIRPERSON: Thank you.

--- Pause

9947   THE SECRETARY: We will now proceed to Phase -- actually, one moment please.

--- Pause

9948   THE CHAIRPERSON: So just to give applicants a chance to prepare themselves, we'll maybe take a five-minute break and we'll come back and proceed to Phase 4.

9949   Is five minutes enough, or do you need more time than that? You're ready to go?

9950   MR. ARNISH: Ready to go.

9951   THE CHAIRPERSON: Great. So let's take five minutes. Let's make it 10 to 11:00. Thank you.

--- Upon recessing at 1042

--- Upon resuming at 1052

9952   THE CHAIRPERSON: Good morning. Madame la secrétaire.

9953   THE SECRETARY: Thank you, Mr. Chairman.

9954   We will now proceed to Phase IV in which applicants can reply to all interventions submitted on their applications. Applicants appear in reverse order.

9955   We will begin with Newcap Inc. Please reintroduce yourself for the record, and you have 10 minutes for your presentation.

9956   Thank you.

REPLY

9957   MR. MURRAY: Thank you. Good morning.

9958   Mr. Chair and members of the CRTC panel, thank you for the opportunity to comment on interventions to our application. My name is David Murray.

9959   The Pattison Broadcasting Group has supplemented its written intervention with an oral one objecting to both applications on economic feasibility.

9960   We have reviewed the KPMG economic study submitted with the written intervention in great detail. The study is extensive and the data contained within is accurate, but misleading.

9961   The study notes that the revenue for the Pattison stations are keeping pace with inflation, which is what one would expect in a monopoly situation where competition does not exist to spur activity.

9962   The study indicates that profitability has declined for the Pattison stations since the recession. FP Markets data for the period tells us that retail sales are up 11 percent, disposable and household income are up 15 percent, and the population is up three percent.

9963   If the Pattison stations have experienced a lack of growth in profitability since 2008, it is not due to economic conditions.

9964   The study draws comparisons to the Alberta market. But if Alberta is set as the standard for economics in Canada, the Commission would probably never issue another licence outside that province.

9965   The study dismisses retail sales, which are double both the provincial and national per capita averages, as related to tourism and, therefore, not reliable. But they can't just be wished away. They're real and they're double.

9966   The study ignores the possibility that increased competition could grow the market due to the large unserved portion of the market who do not have a local radio station playing their music.

9967   Newcap has entered many markets where there is an established incumbent in a monopoly situation. What we have found is that the incumbent gets too comfortable and service to the public suffers. When we enter, service dramatically improves as competition makes the incumbent better. The public wins twofold.

9968   The research is clear. Cranbrook and area residents are turning away from radio unless they are classic rock or country fans. Very high levels of tuning to satellite radio show that there's a need for a new local radio station.

9969   The Commission has clearly stated that its focus is service to consumers. If that is true, and I certainly believe that it is, then your decision is an easy one. You can either protect the profits of a multi-billion dollar corporation who is completely responsible for their disappointing results or you can give consumers, creators and citizens of the East Kootenay region more radio choices.

9970   We are ready and able to provide that service.

9971   Thank you for your attention.

9972   THE CHAIRPERSON: Thank you, Mr. Murray.

9973   Commissioner Simpson.

9974   COMMISSIONER SIMPSON: Thank you very much.

9975   I just want to go into one area of questioning, and this shouldn't take too long.

9976   The nature of the marketplace has been more of a preoccupation with me than the normal metrics and analysis we do on looking at a radio entrant. You know, you know how we normally go about it. We do an economic analysis and make some basic assumptions.

9977   But my warning bells are going off here that from what I know of the market and what I'm hearing that the market has some different consumer behaviour and different patterns that we have to consider as part of our determination on this application.

9978   The most specific is not to do with the merits of -- under the radio offering. I mean, more radio usually brings about more competition. It's good for retail. It usually gets advertisers thinking radio more, often at the expense of newspaper and other medium.

9979   So you know, everything I've learned about the addition into a marketplace is usually a good thing, although it just means more competition to your point.

9980   But in Newcap looking at this marketplace, have you really dug deep on the retail patterns and to the extent that you're still convinced that this is good for the marketplace as a whole or, more appropriately, that this would be a financial undertaking for you that'll be a good thing, given what we're hearing?

9981   MR. MURRAY: Yeah. We -- you know, we're concerned that, you know, there's retailers coming here saying we don't want competition. That's extremely unusual.

9982   I'm sure there -- you know, there could be many others that could come and say that, you know, they'd love to have it but, you know, retailers don't have a lot of time to be coming to CRTC hearings, I would think.

9983   But no, we haven't -- we haven't lost our desire to be in the market. We -- clearly the market needs more diversity and more diversity of format, diversity of voice. And we're not at all afraid. This is a 60,000 population regional market we've entered in, as we've said. We've entered Sidney recently a couple of years ago. That's an 80,000 -- there's 80,000 people in the coverage area.

9984   You know, we now dominate that market. Our sales are $2.5 million.

9985   We entered into Cantville (phon) is 80,000 population area as well. And you know, we're doing better than two million there. We're number one in that market.

9986   And you know, what I would say to the retailers that were here, you know, we would provide creative solutions for them, you know, within their budgets and, you know, fill their store with customers. Absolutely no question in my mind. It's not rocket science.

9987   COMMISSIONER SIMPSON: One more area, and then I'm done.

9988   The surrounding area -- I'd referenced the economic zone earlier, and we have that document going on the record.

9989   That economic zone, the catchment area outside Cranbrook is -- you know, swells the numbers substantially. And I'll let everybody read that report and also the KPMG and other stuff that you've been looking at to come to your own determination. But you know, it virtually doubles the population beyond what exists within Cranbrook.

9990   And where I'm going with this is the repeaters. I'd questioned you yesterday and I'm going to ask the same issue of Clear Sky, that your numbers were -- varied greatly on the national advertising side.

9991   And it's starting to look to me like this may be linked to the cumulative numbers that a station can get by having more re-broads. It's not just the exercise of the technical challenges of the terrain, but if you -- the bigger your footprint by number of re-broadcasting stations, it makes your offering to a national advertiser much more attractive.

9992   And I'm curious as to why you went with as few re-broads as -- or significantly less than what Clear Sky seems to think they want because Clear Sky's projections on national advertising seem to correlate to the number of re-broads.

9993   MR. MURRAY: Yeah, that's a difficult question because I -- you know, like once again, I just asked our engineer to, you know, look for the best solution from a technical standpoint, and they came up with, you know, 2,600 watts in Cranbrook, as I said yesterday, 360 in Fernie.

9994   COMMISSIONER SIMPSON: Yeah.

9995   MR. MURRAY: Clear Sky's -- you know, I don't fully understand exactly the difference and what precisely is the coverage. I didn't study that.

9996   I felt that, you know, we're -- we cover, you know, 40,000 people in our, you know, .5 millivolt curve. It sounds like the -- you know, the terrain's probably not going let you get a whole lot more where, you know, quite often in Alberta you'd -- you know, you'd actually cover a lot more than the .5.

9997   But I don't think I can give you a real -- I could ask our engineers to comment on it if --

9998   COMMISSIONER SIMPSON: Sure.

9999   MR. MURRAY: -- you liked.

10000   COMMISSIONER SIMPSON: Well, it's not so much the engineering, but just whether you tie the economics of your pro forma to the footprint of the station of looking at how your national ad sales would look because assuming that -- let's take for the sake of argument that the retailer is not as good as it could be or should be. It would put a greater dependence on national advertising to make the radio station accomplish its bids, and it seems to me there's correlation that -- and that's exactly why I asked Pattison if they would submit their ratio of national because it's like the Goldilocks thing. I think you have one re-broad. We're looking at three or four with Clear Sky. And Pattison, I think, has two.

10001   So somewhere in there is the Goldilocks formula, and I'm trying to understand.

10002   MR. MURRAY: Yeah. I don't -- I don't understand Clear Sky's percentage. You said they were 31 percent? I didn't --

10003   COMMISSIONER SIMPSON: Yes. It's about 31 percent. It's about one-third and yours is one-tenth.

10004   MR. MURRAY: They're not going to get anywhere near that, for sure. It's got nothing to do with re-broads. It has to do with how many people they cover.

10005   There's -- it's not going to be a rated market and they're going to buy spots based on how many people they think the transmitter covers. They --

10006   COMMISSIONER SIMPSON: Well, that's kind of my point.

10007   MR. MURRAY: No, but they only cover, you know, 44,000 or something. We cover 39. So it's --

10008   COMMISSIONER SIMPSON: So you're just more efficient with your engineering.

10009   MR. MURRAY: Yeah. It doesn't matter that they have four. It's -- like I say, the national advertisers will just look at that and buy -- buy a number of spots.

10010   You'll get -- you'll get a better ate because it's not rated than you would if it was rated, but, you know, they're not going to depend on national. National will be -- you know, you might get to 15 percent, but you're never going to get to 30 percent in that size of a market.

10011   COMMISSIONER SIMPSON: Okay. Thank you very much.

10012   THE CHAIRPERSON: Your understanding is that their footprint is not significantly increased --

10013   MR. MURRAY: No, it's right there in the application.

10014   THE CHAIRPERSON: -- given the additional number.

10015   MR. MURRAY: No, it tells -- it's right in the application.

10016   THE CHAIRPERSON: And you don't see anything beyond that.

10017   MR. MURRAY: It gives you the population that their transmitters cover, as ours does.

10018   THE CHAIRPERSON: Okay. Great.

10019   Thank you, Mr. Murray.

10020   MR. MURRAY: You're welcome.

10021   THE SECRETARY: I would now invite Clear Sky Radio Inc. to come forward.

10022   Please reintroduce yourself for the record, and you have 10 minutes for your presentation.

REPLY

10023   MR. LARSEN: Thank you, Madam Secretary.

10024   Mr. Chairman, Commissioners and staff, good morning once again. I'm Paul Larsen, President of Clear Sky Radio.

10025   I apologize for not having prepared notes for you. I have scribbled notes, and I'm having that I can make sense of them as we go through.

10026   So I appreciate the opportunity to address interventions presented. As you're obviously aware, Pattison and the two that appeared today filed written, and we responded with a lengthy written reply, so I'm confident that a lot of that is on the public record. But there were some points that I just did want to address that were brought up today.

10027   You know, in terms of opposing interventions versus supporting interventions, you know, I certainly appreciate and respect that there are a number of opposing written interventions on the record.

10028   You know, we have an equal amount of supporting interventions from many of the same business categories. And I wanted to sort of emphasize that, you know, where two car dealers submitted letters in the Pattison intervention suggesting the market wasn't robust enough.

10029   You know, the owner of four dealerships wrote us a support letter saying that the market is robust enough, so you're going to have a lot of conflicting information because we're on two sides of the same fence there.

10030   You know, it's sort of been suggested let's talk about super serving the female audience and whether or not Pattison's ignoring females. And I wanted to be clear that we didn't intend to suggest or say that the Pattison stations completely ignore every woman or female resident that lives in the region, simply that some women prefer country music, some prefer rock music and some like Beyonce and Adele and One Direction and Bruno Mars and Maroon 5. And if we give them that format choice, that a significant female-skewed audience will have a radio choice to listen to.

10031   And it's easy to say when you get in your car in Cranbrook -- and my wife and daughters turn on the rock or the country station. Well, it's because it's the only choices that they have, so if they have a pop station to tune to, it's perhaps likely, if that's their music choice, that that will become their new station of choice.

10032   So it's -- it really, to me, is a lot about consumer choice. And I understand that consumer choice can't come at the peril of the incumbent broadcaster. And we just honestly don't believe that it will.

10033   Mr. Shoan talked about out of market tuning a little bit in Lethbridge and referenced 72 percent, roughly, local market tuning in Lethbridge and correlated that to 28 to 30 percent out of market tuning, but not comparing apples to apples with the numbers that we gave because in that 30 percent in Lethbridge is including the CBC and the CKUA and CBC-2 and the Golden West Christian Station and a community camps radio station.

10034   So that out of market encompasses a lot of that where our numbers that we referenced in our application specifically talk to the tuning to Sirius satellite radio and others.

10035   CBC has a 15 percent market share, approximately, from our research, in Cranbrook, so the local tuning of the two Pattison stations, by our research, is roughly 61 percent versus 72 percent local tuning to all the Lethbridge stations.

10036   So there is significantly less local tuning. And if you, you know, factor out the CBC and CKUA -- we did a market study for internal purposes in Lethbridge recently that I'd be prepared to file as a document of interest if the Commission were interested that would show specifically the Sirius satellite XM percentage in that out of market in a comparative market just for interests' sake, is there was interest there.

10037   You know, speaking to the business community, you know, we have -- I, personally, have spent quite a bit of time in Cranbrook. I've been there three times and have had specific meetings with politicians, the Mayor, business owners, the Chamber of Commerce, Saint Mary's Indian Band, Tamarack Centre. You know, it's -- it is impossible to believe that every single business that operates in the marketplace is currently advertising on the Pattison stations.

10038   There is, for whatever their personal reasons, businesses that do not advertise on radio. And some of those have indicated to us that they would try radio, you know, if our station came to town.

10039   And some of it is they've tried radio and didn't believe it worked. Some of it is maybe they just don't want to support that particular ownership.

10040   Whatever their reasons, there are businesses that don't currently use radio, and we believe that some of them will.

10041   You know, the Chamber of Commerce represents, you know, a membership of 450 local businesses. And in discussion with, you know, the Chamber manager and the President and some others that were in the meeting with us, you know, those people that are members of the Chamber are business owners and suggested -- you know, some of them suggested that yes, we would increase our advertising budget because we believe that if we can advertise to this new, larger audience that that investment we make in this additional advertising will translate into more sales.

10042   And that's the whole thing with advertising, is to grow your business. And you know, we fully respect that some businesses are not going to increase their budget. Some have exceptional long-time relationships, and we know that.

10043   We have businesses we think should advertise on our current stations that will not because they've advertised with their favourite station for 25 years. And seven years in, we're still trying to convince them.

10044   So we know that not every business will, but some will. A significant number will increase, and it won't come at the detriment of the incumbent.

10045   When we talk about these sort of large numbers that have been bandied about about growth, I wanted to clarify just quickly for the record what we said about growth.

10046   So we didn't say the population is going to grow substantially. We didn't say that there's going to be 30 percent growth in everything. We quoted the numbers from FP Markets specifically concerning the growth of retail sales over the next four years. And we say on the record it's between 3.5 and 5.5 percent growth in retail sales.

10047   We fully comprehend and understand that the population is not growing rapidly and has been stagnant for quite a long time, but that is not to say that there's still 25 percent of that existing population that's been there for 40 years that doesn't desire and want an additional radio service.

10048   Our business plan is not predicated on exceptional population growth, nor is it predicated on 30 or 40 percent retail sales growth. It's built on what we know, that retail sales are likely to increase somewhere between 3.5 and 5.5 percent.

10049   You know, we referenced in our written support -- and again, this is only to show that there's a counter-point to every point that's made. You know, the Ford dealership just built and opened a brand new multi-million dollar, state of the art facility. The GMC dealership has expanded and renovated. The Kia dealership has expanded and renovated.

10050   You know, we pointed out some 30 business headlines from the Kootenay business newspaper that indicate new restaurants opening, you know, things sort of happening in town that were positive economic signs in terms of local businesses.

10051   And again, those are all contained in our written submission, and we know that you've had a chance to review and likely will review further as you do your deliberations.

10052   Tamarack Centre has been brought up a number of times. Commissioner Simpson, I know you have personal experience with the Tamarack Centre.

10053   And you know, I only point out and reiterate, that was one of our meetings and we had a really engaging meeting with both the Centre manager and the marketing director and got a really good understanding of the challenges that that centre has had in terms of occupancy and the types of businesses that come and go and ebb and flow and also that, you know, there's been a period of time in the last decade when mall traffic overall has declined.

10054   And their point of view is that, you know, this traffic coming back to -- people are going back to indoor malls. They're getting better anchor tenants, Target being the one that's coming to Cranbrook.

10055   Bentall, which is one of the largest retail shopping centre owners has purchased that mall so you see an investment by a large, out of town conglomerate that must see some signs of economic future in that shopping centre to make a substantial purchase.

10056   Repeaters -- Commissioner Simpson, I'm not sure if he intended to ask some questions after the point so I might just steer clear of that, assuming that we may have a quick back and forth dialogue on that just to clarify some numbers and points.

10057   The Creston market is one that I just wanted to specifically address because we did not propose a repeater in Creston. The reason being Creston, in layman terms, is in the East Kootenay. We understand that. It's not in the Regional District of East Kootenay.

10058   And further, we respect that Vista was just awarded a local full service radio station that it hasn't launched. So we understand that Creston is kind of part of the region but specifically steered away from it for those two reasons.

10059   National revenue, I do want to clarify on national revenue.

10060   So first, though, something that Mr. Murray from Newcap said yesterday. There is one key difference in our organizations and that is the Calgary sales force. So they have a local direct agency seller that serves Calgary. All of our Calgary and Edmonton business is sold by CBS.

10061   So we're going to have more business that's coded national versus local for that specific reason. So that helps account for some of the difference in our national projections.

10062   But more importantly, I want to clarify -- and again, I would file this as a document on the record if requested to do so -- in our application our national ratio to total revenue in Year 1 is 13 percent. It's 14.8 percent in Year 2, 16.9 percent in Year 3 and at Year 7 tops at 18.75 percent. So it's not 30 percent of the total. It's 18 and three-quarters percent in Year 7 of our national to total revenue ratio.

10063   By comparison, our Lethbridge station in the fiscal year that just ended August 31st, 2013, the national to local ratio is 23.5 percent and in Medicine Hat it's 30.7 percent.

10064   So we feel that we're being conservative in our national projections in terms of the ratios in looking at Cranbrook and specifically because there is less national business in the Cranbrook and East Kootenay region. And you know, perhaps again we'll get into the dialogue briefly in the question and answer on the repeaters.

10065   There is not a lot of national business in places like Invermere and Sparwood. Those repeaters are not going to leverage any additional national business but, simply, those businesses are not there. You know, there is no Home Depots and there is no Lowes and there is no Nissan Canadas and whatnot. So the repeaters are not going to help leverage our national revenue. Again, we think we have been kind of conservative in international projections.

10066   About public service and how we serve the community, again I'll just very briefly touch on it. We are a good broadcaster. Pattison has pointed that out; Newcap. We all respect each other. We all do great work.

10067   For the community organizations that wrote letters of support in the belief that there is going to be job losses and cutbacks to public service if we come to town, we compete with Pattison in Lethbridge and Medicine Hat and, again, only speaking from personal experience and not knowing the ins and outs of their operation, as an outsider looking in but as a very observant competitor, I can't think of one person that's lost their job or that any service got cut back in our markets.

10068   When we came to town the exact opposite happened. They ramped up their community service and tried to really solidify the relationships they built over a long time because they don't want to lose them easily to a new competitor. If you just give up and say, "I'm going to cut back and go home" then the new guy has an immediate advantage".

10069   I only want to say to the public record, to the community citizens, trust that we will be a good community provider and help with all the charity and non-profit that happens.

10070   THE CHAIRPERSON: Can I ask you to wrap it up, Mr. Larsen?

10071   MR. LARSEN: Yes, sir.

10072   THE CHAIRPERSON: You are past your 10 minutes.

10073   MR. LARSEN: Thank you.

10074   THE CHAIRPERSON: Just in the interest of fairness.

10075   MR. LARSEN: Yeah, absolutely.

10076   It feels right that we have the final word. We started this Cranbrook phase by being the triggering applicant. So I appreciate the opportunity to appear in Phase 4.

10077   Again, I just refer to the written reply that we made to interventions. It's very detailed and I'm sure you've already had a chance to read it.

10078   Thank you.

10079   THE CHAIRPERSON: Yeah, and notwithstanding the fact that you did not deposit something in writing, we have got the transcripts and we'll be able to take a look at your reply.

10080   MR. LARSEN: Thank you.

10081   THE CHAIRPERSON: Commissioner Simpson?

10082   COMMISSIONER SIMPSON: I think you have done a pretty thorough job in your reply. I really don't have any questions.

10083   And I do stand corrected because, you know, when I do the math you're right. You know, it's closer to 23 percent rather than 30. So I stand corrected. But I also take your point that it is -- it also has a distortion in it because of how you sell and how you categorize yourselves

10084   MR. LARSEN: Sure.

10085   COMMISSIONER SIMPSON: So that's understandable.

10086   MR. LARSEN: The only other point, if you don't ask the question that I'd like the leeway to make?

10087   COMMISSIONER SIMPSON: Yeah.

10088   MR. LARSEN: Is just in the audience numbers that our frequencies will total because there has been some misinformation there.

10089   COMMISSIONER SIMPSON: Yes.

10090   MR. LARSEN: So we propose four repeaters as you know or, sorry, four originating transmitters at Cranbrook and then Fernie, Sparwood, Invermere.

10091   COMMISSIONER SIMPSON: M'hmm.

10092   MR. LARSEN: Cranbrook and Fernie together, those two, the 0.5 millivolts covers 39,658 and when you add Sparwood and Invermere the total jumps to 47,559.

10093   So it's significantly greater coverage of the Regional District of East Kootenay than the Newcap proposal with only one repeater and that is of course in our technical information on the record and in our application document in terms of the populations and exactly where those repeaters go.

10094   And again, with the repeaters, I stress, you know, our idea with the repeaters was to bring service and, you know, the public warning system addressable to those areas and whatnot. So that was the reason behind the repeaters, not to jack up national --

10095   COMMISSIONER SIMPSON: Yeah, but it's your take that there really isn't any appreciable economic activity that comes out of being there, other than audience --

10096   MR. LARSEN: Not appreciable. I will say, I mean, there are some national clients there, Tim Horton's --

10097   COMMISSIONER SIMPSON: Sure.

10098   MR. LARSEN: -- and you know, the A&Ws and that type of thing.

10099   But there is not substantial business that comes out of those repeaters. Our business is not going to be made or broken even if you grant our licence without some of those repeaters where we're at which is excellent.

10100   COMMISSIONER SIMPSON: Thank you very much.

10101   MR. LARSEN: Thanks.

10102   THE CHAIRPERSON: Thank you, sir. Thanks again.

10103   THE SECRETARY: Legal counsel?

10104   THE CHAIRPERSON: Madam Pinsky?

10105   MS PINSKY: Thank you.

10106   Just for the convenience of all parties and to ensure that everyone can access the document referred to earlier as easily as possible, I'd like to cite the title of the document that Commissioner Simpson referred to when he was questioning the Pattison Broadcasting Group. And as well, I will provide the internet link.

10107   THE CHAIRPERSON: Great.

10108   MS PINSKY: So the title of the document is "Technical Background Report, Cranbrook Economic Development Strategy" 2010 to 2014. It is dated September 2009.

10109   And again, for the convenience of all parties and for the purpose of the record, the link to this document is:

10110   And I'd be happy to provide that to anybody again, if they so ask.

10111   Thank you very much.

10112   THE CHAIRPERSON: Madame la Secrétaire.

10113   THE SECRETARY: Thank you. This completes Phase 4 and the considerations of items 14 and 15 on this hearing.

10114   THE CHAIRPERSON: Very well. We'll take a 10-minute break and be back with the Salt Spring dossier.

10115   THE SECRETARY: Correct, Mr. Chairman.

10116   THE CHAIRPERSON: Thank you.

10117   Thank you all.

--- Upon recessing at 1120

--- Upon resuming at 1134

10118   THE CHAIRPERSON: Madame la Secrétaire.

10119   THE SECRETARY: Thank you, Mr. Chairman.

10120   We will now proceed with Item 16 on the Agenda and the presentation by Salt Spring Island Radio Corp.

10121   Salt Spring Island Radio Corp. is the licensee of the specialty FM radio programming undertaking CFSI-FM Salt Spring Island. The licensee is controlled by Sukhdev Singh Dhillon through his wholly owned subsidiary Satnam Media Group (BC) Ltd.

10122   Legal counsel?

10123   MS PINSKY: Thank you, Madam Secretary. Thank you, Mr. Chair.

10124   I would just like to take a few minutes this morning to comment on the nature of mandatory orders which the panel was considering for Item No. 16 this morning, Salt Spring Island Radio Corp. as well as the possibilities of suspensions and non-renewal that the Commission has advised through the Notice of Consultation that it will be considering for this licensee.

10125   Under section 12 of the Broadcasting Act the Commission may inquire into here and determine a matter where it appears that a person has failed to do any act or thing that the person is required to do, pursuant to any regulation, licence, decision or order of the Commission and issue a mandatory order to ensure compliance with any such regulation licence decision or order.

10126   If a mandatory order is issued the Commission has the ability to register the order with the Federal Court upon which it will become an order of the Federal Court.

10127   If the licensee subsequently fails to comply with such an order the Commission could provide evidence to the Federal Court of the failure to comply and a show cause hearing for contempt of court would take place before the Federal Court of Canada. The licensee would be entitled to present a defence and, if found guilty of contempt, could be subject to a fine as set by the Court.

10128   As indicated in the Notice of Consultation, Salt Spring Island Radio Corp. would take place before the Federal Court of Canada. The licensee would be entitled to present a defence and, if found guilty of contempt, could be subject to a fine as set by the court.

10129   As indicated in the Notice of Consultation, Salt Spring Island Radio Corp. is in apparent non-compliance with the regulations identified and has been asked to appear at this hearing to show cause why a mandatory order should not be issued and why the Commission should not suspend or revoke its licence.

10130   This means that the licensee has the burden of convincing this Panel why the Commission should not issue a mandatory order relating to the matters of the alleged non-compliance or should not suspend or revoke the licence.

10131   You may now introduce yourselves after which you have 20 minutes for your presentation.

PRESENTATION

10132   MR. DHILLON: Thank you. Good day Chairman Pentefountas, Commissioner Simpson and Commission Shoan and Commission Staff.

10133   I am Sukhdev Singh Dhillon, owner of Salt Spring Island Radio Corporation and Satnam Media Group (BC) Ltd. and the licensee of CFSI-FM. To my left is our consultant, Mr. Forsythe.

10134    The circumstances of my appearance at this hearing brings me no happiness but does allow me to give the Commission an update on the situation of the station since acquisition of the license was approved a year and 10 days ago.

10135   I am glad to have this opportunity to address the issues at hand, clarify my situation and ultimately hope to persuade the Commission that CFSI-FM should still continue to operate to the benefit of the community of Salt Spring Island under the existing ownership and terms of licence. Please allow me to begin with the background that leads us to this hearing.

10136   Over the course of several years technical upgrades for the signal and ultimately the addition of a repeater on Mount Bruce were granted in an attempt to improve coverage for the entire population of the Island.

10137   The Commission approved of the license by my company, Satnam Media Group B.C. on January 21, 2013.

10138   I knew going into this venture that there would be difficulties. The station was not operating in a positive manner on several fronts.

10139   As the Commission noted in its approval of the transfer, CFSI-FM had been operating in a negative financial situation for some time. This is one of the reasons the former owner wished to relinquish the license.

10140   One of the other issues mentioned in the approval was non-compliance with regards to CCD payments and financial returns for several years. This speaks to self-admitted "lack of oversight".

10141   It is this point of "mis" or perhaps better described as "under" management that has caused much of the problems we are facing today. Due diligence told me about the financial problems which I accepted and believed that implementing more professional operating and sales standards would improve that situation. That said, I did underestimate the chaos that existed at the operational level.

10142   I know a community-based volunteer supported radio station is a difficult scenario to orchestra in most settings because of my 20 years of experience in this field. It is human nature to want to be rewarded for one's efforts.

10143   In the community, radio fulfilment of the passion for music, appreciation for arts and the magic of spoken word is often the only reward available.

10144   To motivate volunteers without a sense of or some form of compensation is a challenge. Filling in logs, completing paperwork, meeting quotas appear to some to get in the way of performing their art. We have implemented systems that make this process as easy as possible.

10145   Again, in acquiring the station I did not think that all staff, clients and audience would all embrace a new owner, let alone one from off the Island with open arms and great enthusiasm. What I did not anticipate was the immensity of the blow back from the original core of the station.

10146   Given the change in ownership there is bound to be some resentment and a feeling of exclusion by those close to the former owner of the station, especially as they were not financially invested. Their attitude appears to be that I have stolen their station away through a closed door process.

10147   As you know, the transaction took place following the Commission's public rules and procedures. The station staff's disappointment over the sale of CFSI-FM appears to have been transferred to the new ownership.

10148   This has created an air of bad will based on old relationships. At a point I did suggest to this group that if they felt they had manifested destiny to own and operate the station, I would consider an offer. That said, my involvement with CFSI is 10 months old and I am positive that the changes we are making benefit the station, our community and the client base.

10149   As we move forward from March 23, 2013 it became apparent the transitional operations team did not meet the professional standards anticipated. Important documents such as SOCAN reporting logs were circulated through the operation manager's home address.

10150   The CRTC's self-assessment report airplay grid was completed with barely legible handwriting, as another example. This sloppy approach impacted operations, listener and client relationships, technical staff and management of compliance and other bureaucratic obligations.

10151   Much of the day-to-day operations were not completed to the level I expect. I have made efforts to be onsite more frequently to give a personal overview to the running of the station. I am onsite two to three days a week keeping the operations active, while conducting a search for a qualified replacement for the operations manager -- operations manager took longer than anticipated.

10152   We are still in an interim situation but I feel progress has been made as of the fall of last year.

10153   In the midst of this turbulence and less than two months after taking possession of the station, we received the request for loggers, audio, programs and music logs from the Commission. This request was sent to the previous operations manager who had retired six months earlier.

10154   Once directed to the then operations manager we requested an extension to gather the data. As noted in Appendix 2 of the "Call to Hearing" the Commission did grant an extension for the submission of these materials.

10155   Through the period from the initial request to July 10th, noted in CRTC Appendix 2, evidence documents A to E, I was relying on the new Operations Manager to supply the requested material.

10156   It was only during this time that I became aware of technical issues which hindered rendering the historical data requested. Attempts were made to recover the data and what was available was submitted.

10157   It should also be noted that from the time I arrived onsite there appeared to be frequent reliability issues with equipment in the studio with items such the mixing board, CD players, logger, recording units and the like. I have been in the broadcasting business a very long time and the damage did not look like it was from the typical wear and tear associated with day to day use.

10158   With regards to telephone messages, as noted in CRTC Appendix 2, evidence document "F", the telephone system that I use for my various businesses was not functioning properly and I did not receive that message. I have since revised the system and now have a number designated for direct access by the Commission.

10159   In terms of the CRTC letters sent on September 18 and November 7th, as noted in Appendix 2, evidence documents "G" and "H" these documents were sent to my former office. I was not aware these letters were signed for and accepted on receipt. I was not made aware of their existence. In fact I have them now in my hand, still unopened.

10160   To fix these instances of outdated or lapsed contact information I have since supplied the Commission with updated contact material for me at both Salt Spring Island and my primary Surrey address.

10161   To deal with the requirement for the retention of logs, music logs and audio recordings for submission to the Commission, to moderate and oversee compliance and to ensure effective communication I have taken these steps:

10162   I am glad to announce we have hired a new General Manager, Dan Miller. Mr. Miller, an experienced Vancouver broadcaster, has been a resident of the Island for 40 years. He has been involved with the station for some time and is aware of our obligations to you, the CRTC and to his community, Salt Spring Island. His knowledge of the internal workings of operations and programming will benefit the station.

10163   Dan will work with Radha Fournier who joined our operations team in November. The management team is revitalised and I can say that I feel confident that the day-to-day management of the station has the goals of the community and station prioritized.

10164   I have had the opportunity to develop new broadcasting talent over the last 20 years, some of whom now appear in front of you at this week's hearing. Training and supporting new broadcasters is one of my most satisfying ventures.

10165   We have made substantial investments in new digital systems for programming, sales and backroom operations to provide a much more efficient and effective service to all concerned.

10166   I have retained Mr. Forsyth who is here with me today to provide input on compliance, programming and operational efficiencies for all my undertakings.

10167   I recognize and understand the cost in dollars and resources to the CRTC when dealing with these matters. Obviously situations like this create an additional cost of business for licensees as well. This is a self-afflicted expenditure that is not necessary.

10168   These issues are preventable and I am working towards ensuring all aspects of this operation simultaneously meet both our standards and your requirements to the highest degree. This is a learning curve but the return on our investment will be demonstrated by compliance driven by constructive communications with the regulators.

10169   Satnam is committed to CFSI-FM. I am thankful to the interveners who have written on our behalf. They understand that this transition has not been easy and see that our goal is to have a service that reflects the spirit of the Island by providing interesting, informative, entertaining and diverse content for the community, conversations with alliance of former volunteers were exploratory. The determination to carry on with the station and serve Salt Spring Island is backed by letters of positive encouragement.

10170   I am humbled by this support and remain more determined than ever to continue supplying the residents of the Island with its own distinct radio service.

10171   I am providing contact information with a direct phone number and email address and office location for myself and a secondary contract information for Mr. Forsyth. This material will be submitted to the Hearing Secretary.

10172   I understand the requirement under Section B -- under Section 8 of the Radio Regulations that the loggers, audio traffic logs and music play list must be available to the Commission at any time.

10173   I am prepared to comply with these obligations going forward.

10174   If it pleases the Commission, I am also provide the CRTC with quarterly updates on our programming service and community involvement.

10175   Most importantly, I am aware of and understand the obligation in the Broadcasting Act that all persons who are licensed to carry on a broadcasting undertaking have a responsibility for the programs they broadcast.

10176   I trust this addresses your concerns, and ask the Commission to exclude suspension, the revocation of licenses for CFSI-FM in your decision.

10177   I am glad to answer any questions you may have.

10178   THE CHAIRPERSON: Thank you, sir. It brings us no happiness either to be here, you can be rest assured of that.

10179   When did you acquire this broadcaster, sir?

10180   MR. DHILLON: January 21st, 2013. And I took over the operation the operation on March 23rd, 2013.

10181   THE CHAIRPERSON: Okay. In between January and March you were involved and you took a good look at the station in question?

10182   MR. DHILLON: Yes.

10183   THE CHAIRPERSON: And prior to January 21st you performed due diligence, did you not?

10184   MR. DHILLON: Yes, I did.

10185   THE CHAIRPERSON: Okay. And you were granted access to the station?

10186   MR. DHILLON: Not as often as I would like to because they were scared that the programmers and the people who were looking after the station would get scared and, indeed, the previous owner had not informed the people who were working there that the station was being sold.

10187   THE CHAIRPERSON: While you were there doing your due diligence, you informed the people, the employees?

10188   MR. DHILLON: I was informed by the owner not to say anything, just have a look at the equipment.

10189   THE CHAIRPERSON: M'hmm.

10190   MR. DHILLON: And we will walk through and then just leave.

10191   THE CHAIRPERSON: Okay. And what did you notice about the equipment when you were doing your due diligence?

10192   MR. DHILLON: By just looking at it, everything looked fine.

10193   THE CHAIRPERSON: Okay. And how many employees were -- how many people were employed at the station?

10194   MR. DHILLON: At that time when I took over, there was only one paid employee.

10195   THE CHAIRPERSON: Only one?

10196   MR. DHILLON: Only one.

10197   THE CHAIRPERSON: And while you were doing your due diligence there was only one paid employee?

10198   MR. DHILLON: Yes. That was in January of 2013.

10199   THE CHAIRPERSON: And that paid employee was working 24 hours a day?

10200   MR. DHILLON: No, he was working eight hours a day.

10201   THE CHAIRPERSON: Okay.

10202   MR. DHILLON: And the owner was on site, also.

10203   THE CHAIRPERSON: And the owner was on site.

10204   So there was only one employee at the time?

10205   MR. DHILLON: When I took over the station, yes.

10206   THE CHAIRPERSON: Okay. And while you were doing your due diligence there was only one employee, is that correct?

10207   MR. DHILLON: There were volunteers.

10208   THE CHAIRPERSON: Volunteers.

10209   MR. DHILLON: Who were coming in, doing their program for one hour, two hours and -- but then they would leave.

10210   THE CHAIRPERSON: Okay. And was someone there during the entire day, seven days a week?

10211   MR. DHILLON: The owner would be there the rest of the time.

10212   THE CHAIRPERSON: And there was only one employee there, is that correct?

10213   MR. DHILLON: That's what I was told, one employee.

10214   THE CHAIRPERSON: Did you think about visiting the station when the employee was not there?

10215   MR. DHILLON: I did go there once to look at the equipment. And I was told that this is the equipment, and I went through it, just visually had a look at it. And I went to the transmitter site and I looked at that. Everything looked fine.

10216   THE CHAIRPERSON: How much did you invest in this property, sir?

10217   MR. DHILLON: I invested over -- close to $250,000.

10218   THE CHAIRPERSON: That was the total purchase price?

10219   MR. DHILLON: No. The total purchase price was $205,000 plus there was 6% -- the 6% that was to be paid to the Commission.

10220   THE CHAIRPERSON: That's right.

10221   MR. DHILLON: Yeah.

10222   THE CHAIRPERSON: Okay. So, you would be investing $250,000. And how much time did you spend in the station doing your due diligence before remitting this $250,000 -- or, $205,000 to the previous owner?

10223   MR. DHILLON: I was there a couple -- in the last -- before I took over, I made about five trips --

10224   THE CHAIRPERSON: Okay.

10225   MR. DHILLON: -- to the Island.

10226   THE CHAIRPERSON: And the employee was always there for those five trips?

10227   MR. DHILLON: Yes.

10228   THE CHAIRPERSON: Okay. Did you make arrangements to see the facility when the employee was not there so that you could properly examine the facilities?

10229   MR. DHILLON: Yes, I did.

10230   THE CHAIRPERSON: You did?

10231   MR. DHILLON: The facilities, yeah. I went to the transmitter site by the owner -- with the owner.

10232   THE CHAIRPERSON: M'hmm.

10233   MR. DHILLON: And when I asked for the records, some of the records he said was at his house. And then I went to his house to check some of the records. Then he said some of the records were at his accountant's office, so I tried to get the meeting done with the accountant to get all the records, and we did that.

10234   THE CHAIRPERSON: And you saw the records?

10235   MR. DHILLON: Then I was emailed most of the records.

10236   THE CHAIRPERSON: Okay.

10237   MR. DHILLON: But I didn't physically see them at the time I went to see them.

10238   THE CHAIRPERSON: You received an email and you examined those documents?

10239   MR. DHILLON: Yes.

10240   THE CHAIRPERSON: Okay. Would you say that the previous owner hid something from you?

10241   MR. DHILLON: Uh, yes, on a couple of occasions. He had taken some advance money from a couple of the advertisers, years in advance, which he never disclosed, which I found out when I took over the operation.

10242   THE CHAIRPERSON: Okay. And you took over the operation in March, is that correct?

10243   MR. DHILLON: Yes.

10244   THE CHAIRPERSON: Okay. So, in March.

10245   When did you realize there was a problem with the equipment? Let's start with the equipment, the physical equipment at the station. You mentioned you thought it was damaged?

10246   MR. DHILLON: It wasn't damaged. I think that sometime some of the wires were loose and I physically went into the studio to make sure all the wires were plugged in properly, the way they were supposed to be, and I informed the station manager. I said, "Everything looks good, but make sure nobody unplugs any cables," so this --

10247   THE CHAIRPERSON: Okay. So, the plugs and cables you saw once you took possession of the radio station were no different than what you saw while you were doing your due diligence, is that correct?

10248   MR. DHILLON: Yes.

10249   THE CHAIRPERSON: So, why were you so surprised? Where is the surprise factor?

10250   What did you not see prior to acquiring the business?

10251   MR. DHILLON: For example, the logging computer --

10252   THE CHAIRPERSON: M'hmm.

10253   MR. DHILLON: -- when I went to see it, it was working fine. And then the next day I went to see it, they say, "Oh, we're having some problems."

10254   THE CHAIRPERSON: When is this, now?

10255   MR. DHILLON: This was a month later.

10256   THE CHAIRPERSON: A month later. In March, you mean?

10257   MR. DHILLON: In April.

10258   THE CHAIRPERSON: In April.

10259   MR. DHILLON: Right.

10260   THE CHAIRPERSON: So did you check the logger facilities?

10261   MR. DHILLON: Yes.

10262   THE CHAIRPERSON: The equipment, before purchasing the radio station?

10263   MR. DHILLON: Yes, I did. Well, it was working but you know I saw the logs were there.

10264   THE CHAIRPERSON: Yeah.

10265   MR. DHILLON: And then when we received this request, I tried to turn the computer on and he said, "Oh, it died a couple of days ago, that's what my manager told me."

10266   THE CHAIRPERSON: What did he tell you, your manager?

10267   MR. DHILLON: He goes, "The computer died."

10268   THE CHAIRPERSON: "The computer died," okay. Where is -- who is this manager, sir?

10269   MR. DHILLON: Dave Gordon.

10270   THE CHAIRPERSON: Is the manager you hired?

10271   MR. DHILLON: No.

10272   THE CHAIRPERSON: The manager that was previously there?

10273   MR. DHILLON: That's right.

10274   THE CHAIRPERSON: Okay. And you also mentioned that it didn't look like typical wear and tear. Are you suggesting there was damage done to the equipment?

10275   MR. DHILLON: I think somebody intentionally did something, because what happened was, when I brought in the new logging machine somebody also tried to sabotage that machine. Somebody tried to take the cables off, the audio cables that were going in. And so when I went back to check, I said, "You know, who took this audio cable out?" He goes, "I don't know, I didn't do it." I said, "Well, the audio cable is out."

10276   So, then I plugged the audio cable in. And then I told him it happened at this certain time, because after that there was no audio.

10277   Then I tried to put a camera there to make sure I can see, you known, even if I'm not there. They put the camera up on the roof towards the -- you know, so they moved the camera around and they made a big issue out of this, of why I installed this camera. And they had meetings about it.

10278   THE CHAIRPERSON: Did the camera show anyone damaging the equipment?

10279   MR. DHILLON: No. It had no recording on it, just for me to check and to see -- you know, when I'm calling the studio office line, and I was supposed to -- I expected the manager to be there. And the camera would be turned the other way and there was no answer.

10280   THE CHAIRPERSON: So no one was at the station?

10281   MR. DHILLON: Yes.

10282   THE CHAIRPERSON: Okay.

10283   MR. DHILLON: So, then I called Dave Gordon, and he said, "Oh, I just stepped out for five minutes. I'll be back."

10284   And you know the day I -- in February when the people found out that I have taken over the station they started having meeting how to take over the station. And they --

10285   THE CHAIRPERSON: These are the volunteers, right?

10286   MR. DHILLON: Yes.

10287   THE CHAIRPERSON: Okay.

10288   MR. DHILLON: And then I had a meeting with them.

10289   THE CHAIRPERSON: M'hmm.

10290   MR. DHILLON: I said, "If you're serious and you would like to have the station back, I have no problem."

10291   THE CHAIRPERSON: Well, they never owned it in the first place. They can't get it back, right?

10292   MR. DHILLON: I know. I said, "I can..." you know, "...whatever I paid, if you offer me the same price, I'll give it to you. But, please, you know, don't try to sabotage anything. Or, if you have any concerns, feel free to come and talk to me."

10293   THE CHAIRPERSON: And did you call the police and open up a file as to the sabotage?

10294   MR. DHILLON: No, I didn't.

10295   THE CHAIRPERSON: No.

10296   MR. DHILLON: Because I took that computer that would not start and I brought it here. I took it to the technicians and they said the hard drive is gone on this machine.

10297   THE CHAIRPERSON: The hard drive is gone?

10298   MR. DHILLON: Yes. I still have the hard drive with me.

10299   THE CHAIRPERSON: So it wasn't damaged?

10300   MR. DHILLON: Somebody deleted all the files on the hard drive.

10301   THE CHAIRPERSON: Oh.

10302   MR. DHILLON: And the computer would not start. So I thought I would just take the hard drive out and put it in a different computer and try to see if something was on it, it was all blank.

10303   THE CHAIRPERSON: Okay. And is that hard drive functional since then?

10304   MR. DHILLON: No. I still have the hard drive but it's not functional.

10305   THE CHAIRPERSON: And have you reinstalled new equipment at the station?

10306   MR. DHILLON: Yes, I did.

10307   THE CHAIRPERSON: And is that equipment functional?

10308   MR. DHILLON: Yes.

10309   THE CHAIRPERSON: Okay.

10310   MR. DHILLON: We have all the logs from that day onward.

10311   THE CHAIRPERSON: Well, what is that day?

10312   MR. DHILLON: That was, I believe, in -- I think it was sometime in July. I will just check my records. But then we bought new equipment, a new computer and new logging software and then we started logging.

10313   THE CHAIRPERSON: In July?

10314   MR. DHILLON: I have to check. It's either June or July.

10315   THE CHAIRPERSON: Well, that's pretty important to know when the equipment went in?

10316   MR. DHILLON: I can supply you with the dates.

10317   THE CHAIRPERSON: Okay. And up until that date you have nothing on tape, no logger tapes. Nothing was working, is that correct?

10318   MR. DHILLON: I did try to hook up another computer to log.

10319   THE CHAIRPERSON: M'hmm.

10320   MR. DHILLON: And left that on. And whenever I'd go back it would be turned off.

10321   THE CHAIRPERSON: Right.

10322   MR. DHILLON: Then I asked Dave Gordon, I said, "Dave what is going on?" Because, Dave was the person -- you know, he organized the coalition, when I took over the station, who had all of these volunteer meetings going on.

10323   THE CHAIRPERSON: Right.

10324   MR. DHILLON: And then I thought, you know, if I fire him or let him go, they will damage -- there would be more damage.

10325   THE CHAIRPERSON: More damage, yeah.

10326   MR. DHILLON: Yes.

10327   THE CHAIRPERSON: Yeah.

10328   MR. DHILLON: So, I had to see what ways I have to handle him. So, on October 18th, I went to the Island and gave him a termination notice.

10329   THE CHAIRPERSON: Okay. Can I ask you a question?

10330   MR. DHILLON: Yes.

10331   THE CHAIRPERSON: When did you take possession of the radio station?

10332   MR. DHILLON: March 23rd.

10333   THE CHAIRPERSON: March 23rd. Did you check the logger tapes to see if they worked on that date?

10334   MR. DHILLON: Yes.

10335   THE CHAIRPERSON: They worked?

10336   MR. DHILLON: Yes, they were working.

10337   THE CHAIRPERSON: Okay. And when did you notice they were no longer working?

10338   MR. DHILLON: When I asked -- when we got this letter for --

10339   THE CHAIRPERSON: Do you know when you got the letter?

10340   MR. DHILLON: It was -- I will check the exact date -- the requirements --

10341   THE CHAIRPERSON: Take your time. If you have some paperwork that can refresh your memory, please feel free --

10342   MR. DHILLON: Thank you.

10343   THE CHAIRPERSON: -- to consult it.

10344   MR. DHILLON: May 7th.

10345   MR. FORSYTH: Yeah, May 7th, that's correct.

10346   MR. DHILLON: Yes, On May 7th, Mike Cherry forwarded an email to Dave Gordon.

10347   MR. FORSYTH: Mr. Chairman, just for clarification --

10348   THE CHAIRPERSON: Yes.

10349   MR. FORSYTH: -- Mr. Cherry was the former operations manager who had retired in December of the previous year.

10350   THE CHAIRPERSON: Okay. And he sent an email to --

10351   MR. DHILLON: The current general manager, Dave Gordon.

10352   THE CHAIRPERSON: And who was he?

10353   MR. DHILLON: Dave Gordon. Dave Gordon.

10354   THE CHAIRPERSON: Dave Gordon, that's right. Okay. So Mr. Cherry received the email from the Commission?

10355   MR. DHILLON: Yes.

10356   THE CHAIRPERSON: On May 7th?

10357   MR. DHILLON: Mike Cherry received a letter from the Commission.

10358   THE CHAIRPERSON: On May 7th?

10359   MR. DHILLON: Just let me check. Uh, that's the original. Yes.

10360   THE CHAIRPERSON: Why would Mr. Cherry receive the letter from the Commission since he was no longer employed by the station since December of the previous year?

10361   MR. DHILLON: I have no knowledge of that, and why he received it. He shouldn't have received it. That should have come to the station.

10362   THE CHAIRPERSON: It should have come to the station.

10363   MR. DHILLON: On my email.

10364   THE CHAIRPERSON: And to your knowledge it didn't come to the station or to your email?

10365   MR. DHILLON: No.

10366   THE CHAIRPERSON: Okay. Okay. And Mr. Cherry sent it to you in May. And that's when you looked at the logger tapes and saw that everything had been erased?

10367   MR. DHILLON: Yes.

10368   THE CHAIRPERSON: When -- when was it erased?

10369   MR. DHILLON: It was the beginning of -- we received this on the 7th.

10370   THE CHAIRPERSON: M'hmm.

10371   MR. DHILLON: And I went on the Island after a couple of days.

10372   THE CHAIRPERSON: M'hmm.

10373   MR. DHILLON: So it must have been around the 10th of May, I went in. I said, you know, "This is what we have received," to Dave Gordon.

10374   THE CHAIRPERSON: Right.

10375   MR. DHILLON: "That's for the data from the computers I need to collate."

10376   THE CHAIRPERSON: Yes.

10377   MR. DHILLON: "I need you to file this right away."

10378   THE CHAIRPERSON: And?

10379   MR. DHILLON: And then he said, "Okay, I will start working on it." And then he asked for an extension which was also granted.

10380   THE CHAIRPERSON: Okay. But I'm asking you, when did you realized that the logger tapes had been erased?

10381   MR. DHILLON: That was the middle of May.

10382   THE CHAIRPERSON: The middle of May?

10383   MR. DHILLON: Yes.

10384   THE CHAIRPERSON: And they had been erased forever up until the beginning of May?

10385   MR. DHILLON: There was nothing on there.

10386   THE CHAIRPERSON: Nothing on there?

10387   MR. DHILLON: Nothing on there.

10388   THE CHAIRPERSON: And do you have any evidence that something had been on there at some point?

10389   MR. DHILLON: I do have the hard drive. I can present it to the Commission.

10390   THE CHAIRPERSON: Well, there's nothing on it.

10391   MR. DHILLON: My technician told me even when I took it to the computer store to check it out, that there was nothing on it.

10392   THE CHAIRPERSON: And would you have to be erasing that hard drive on a daily basis?

10393   MR. DHILLON: No. Even right now, I do not erase any of the logging tapes.

10394   THE CHAIRPERSON: Okay. So May 10th, the hard drive --everything is erased, is that correct?

10395   MR. DHILLON: Yes.

10396   THE CHAIRPERSON: Okay. And what did you do subsequently?

10397   MR. DHILLON: I right away got a new computer.

10398   THE CHAIRPERSON: Yes.

10399   MR. DHILLON: And bought new software.

10400   THE CHAIRPERSON: M'hmm.

10401   MR. DHILLON: And started logging.

10402   THE CHAIRPERSON: Yes.

10403   MR. DHILLON: And then I started working with Dave Gordon finding the log sheets.

10404   THE CHAIRPERSON: M'hmm.

10405   MR. DHILLON: And the cue lists.

10406   THE CHAIRPERSON: So when did we start logging? When do you have logger tapes, starting when?

10407   MR. DHILLON: I have to look in my software when it was installed.

10408   THE CHAIRPERSON: M'hmm.

10409   MR. DHILLON: I can confirm that with the Commission later in the day.

10410   THE CHAIRPERSON: We've called you here on this hearing. It's a very important hearing, you understand that?

10411   MR. DHILLON: Yes.

10412   THE CHAIRPERSON: And your consultant is here with you. The core of the problem are the logger tapes and the lack thereof. And you come to the hearing unprepared?

10413   MR. DHILLON: Well, I just checked, and my logging machine was working fine. I check remotely, now.

10414   THE CHAIRPERSON: Right.

10415   MR. DHILLON: Almost on a daily basis to make sure there's no problems.

10416   THE CHAIRPERSON: If we asked for logger tapes for the week of May 10th, would we get logger tapes? May 10th, 2013?

10417   MR. DHILLON: I do not have the logger tapes or the audio tapes.

10418   THE CHAIRPERSON: M'hmm.

10419   MR. DHILLON: But I can file -- I have provided the rest of this information.

10420   THE CHAIRPERSON: M'hmm.

10421   MR. DHILLON: And we have -- if the Commission requires, we can provide last week's logger tapes, and all the information that was requested.

10422   THE CHAIRPERSON: As of when can you provide logger tapes? As of what date? May 10th? May 11th? July 10th? September 10th? October 10th?

10423   MR. DHILLON: I will have to go into the logging machine, to the audio files to see what date I can provide.

10424   THE CHAIRPERSON: But you told me that -- you told the Commission that on May 10th you had gotten new software, a new computer, and you were logging again. You were taping again. Is that not correct?

10425   MR. DHILLON: I have to check the computer to see what date we started logging, the exact date.

10426   THE CHAIRPERSON: Roughly? You bought the equipment in early May 2013?

10427   MR. DHILLON: I have to check. I --

10428   THE CHAIRPERSON: Do you have a receipt for those purchases?

10429   MR. DHILLON: I can provide that.

10430   THE CHAIRPERSON: You didn't come with those receipts?

10431   MR. DHILLON: No, I wasn't --

10432   THE CHAIRPERSON: Why not?

10433   So, to the question as of when you had logger tapes available, we have no answer. It could be May; it could be June; it could be July; it could be January 2014, we don't know, is that correct?

10434   MR. DHILLON: Yes.

10435   THE CHAIRPERSON: Okay. You mentioned that when you aquired the property, you started spending two or three days a week there, as of March, 2013?

10436   MR. DHILLON: No, that was -- at that time I was doing a weekly trip.

10437   THE CHAIRPERSON: Once a week?

10438   MR. DHILLON: Once a --

10439   THE CHAIRPERSON: And when you went there on a weekly basis what did you look at, while you were on site?

10440   MR. DHILLON: I looked at -- I met the volunteers.

10441   THE CHAIRPERSON: M'hmm.

10442   MR. DHILLON: And I had meetings with some of the volunteers. I requested Dave Gordon to arrange the meetings so I can meet with all the volunteers.

10443   THE CHAIRPERSON: M'hmm.

10444   MR. DHILLON: So some of them I would meet on one trip, and some on the other trips.

10445   THE CHAIRPERSON: Did you ask about logger tapes, the program logs, music lists?

10446   MR. DHILLON: Yes. And he said, "Everything is up to date. We keep logs. This is where the logs are." And that's how we proceeded.

10447   THE CHAIRPERSON: And you took him on his good word?

10448   MR. DHILLON: Yes.

10449   THE CHAIRPERSON: This is Mr. Gordon, right?

10450   MR. DHILLON: Yes.

10451   THE CHAIRPERSON: Okay. Where could we find Mr. Gordon?

10452   MR. DHILLON: Pardon me?

10453   THE CHAIRPERSON: Where could we find Mr. Gordon? Do you have his address?

10454   MR. DHILLON: Yes, I do.

10455   THE CHAIRPERSON: But he's not here today?

10456   MR. DHILLON: No.

10457   THE CHAIRPERSON: Okay. And when did you stop taking Mr. Gordon on his good word?

10458   MR. DHILLON: That was in -- sometime in the middle of July.

10459   THE CHAIRPERSON: In July?

10460   MR. DHILLON: But the only problem that I cannot let him go, because I could not -- I did not find a replacement and I knew the problem would aggregate, you know, the people would --

10461   THE CHAIRPERSON: Yeah. But in May you knew there was a problem with the logger tapes?

10462   MR. DHILLON: Yes. And he just kept telling me he's working on them, he was working on them. And then finally he sent me an email and says, "I've never did this kind of stuff." And that's when I figured I needed to step in and do something.

10463   THE CHAIRPERSON: You're an experienced broadcaster, you mentioned that, you know, you've got twenty years of experience.

10464   MR. DHILLON: In broadcasting?

10465   THE CHAIRPERSON: Yes.

10466   MR. DHILLON: Yes.

10467   THE CHAIRPERSON: In running radio stations?

10468   MR. DHILLON: Yes.

10469   THE CHAIRPERSON: And you've been a mentor and you've trained many people, many of whom we saw here earlier this week?

10470   MR. DHILLON: Yes.

10471   THE CHAIRPERSON: Okay. So you must understand the importance of logger tapes?

10472   MR. DHILLON: Yes.

10473   THE CHAIRPERSON: Okay. And you didn't decide to act earlier?

10474   You took him on his good word in March. May came around, he told you he was working on them. And by July -- why did you decide to act in July? And what happened in July?

10475   MR. DHILLON: In July I started looking for a new replacement for him.

10476   THE CHAIRPERSON: Okay. And in May when you saw that there were no logger tapes you didn't start looking for a new replacement for him then?

10477   MR. DHILLON: In May?

10478   THE CHAIRPERSON: Yeah. You told us that in May you saw that there were no logger tapes?

10479   MR. DHILLON: That's right.

10480   THE CHAIRPERSON: You bought new equipment to ensure that there would be logger tapes?

10481   MR. DHILLON: See, I -- he says he did not damage the computers.

10482   THE CHAIRPERSON: I understand. But you bought new equipment?

10483   MR. DHILLON: Yes.

10484   THE CHAIRPERSON: Right. And you made sure that that equipment worked?

10485   MR. DHILLON: Right.

10486   THE CHAIRPERSON: So as of mid-May you should have logger tapes, is that correct?

10487   MR. DHILLON: I should have. I'm trying to check on the computer and see what date that I started logging.

10488   THE CHAIRPERSON: Okay.

10489   MR. DHILLON: And --

10490   THE CHAIRPERSON: Okay. So, why did you decide to look for a new manager in July?

10491   MR. DHILLON: Because every time I tried to ask him to set up a meeting you know with other volunteers he would only bring four or five people all the time. You know, I would ask him to send out emails that I'm coming and I'd like to see everyone. And then I find that, you know, things are not working out. So, on October 18th, I sent him a termination notice.

10492   THE CHAIRPERSON: Okay. But from May to July you wanted to have meetings with the employees and he wasn't cooperating, is that correct?

10493   MR. DHILLON: Yes.

10494   THE CHAIRPERSON: And what did you do between May and July to make sure that the logger tapes were working and in proper order?

10495   MR. DHILLON: I'm trying to see if I can log into the computer and see what date we have logs available right now.

--- Pause

10496   THE CHAIRPERSON: Is there someone else that can help you with that that's in the room?

10497   MR. DHILLON: No. I could supply the data, if you like, later on.

10498   MR. FORSYTH: Perhaps, Mr. Chairman, I don't know -- I understand that you have a very tight schedule but perhaps between this presentation and Phase III, if there was a short timeout, Mr. Dhillon might have the opportunity to look this information up with a little less duress.

Undertaking

10499   THE CHAIRPERSON: Yeah. Okay.

10500   MR. FORSYTH: We appreciate that this is information we would have expected but that might help us move forward.

10501   THE CHAIRPERSON: Very well.

10502   So, let's get back to when you started to when you started spending two-three days a week at the radio station, sir. When did that start? When did you go from one visit a week to two-three visits a week?

10503   MR. DHILLON: That was in May. That's not two-three visits. I would say two-three days.

10504   THE CHAIRPERSON: That's what I have here.

10505   MR. DHILLON: Yeah.

10506   THE CHAIRPERSON: Two-three days a week in May. And when you were making sure that the logger tapes were working properly?

10507   MR. DHILLON: In May -- I think that I bought the equipment in June. That's when I started to make sure that the logger tapes were working fine all the time.

10508   THE CHAIRPERSON: Okay. So, in May, you discovered that the logger tapes were erased, you examined the hard drive and there was no content on it, you bought new equipment --

10509   MR. DHILLON: Yes.

10510   THE CHAIRPERSON: -- in May or in June?

10511   MR. DHILLON: In June.

10512   THE CHAIRPERSON: In June. When in June?

10513   MR. DHILLON: That's what I'm checking right now.

10514   THE CHAIRPERSON: Okay. And why didn't you buy the equipment in May?

10515   MR. DHILLON: Well, I was waiting for the technicians to look at the computer. Maybe I could use that same computer.

10516   THE CHAIRPERSON: How long did that take?

10517   MR. DHILLON: It takes about a week and a half.

10518   THE CHAIRPERSON: And what technicians are these?

10519   MR. DHILLON: 02 Computers.

10520   THE CHAIRPERSON: I'm sorry? Can you spell that?

10521   MR. DHILLON: 0 --

10522   THE CHAIRPERSON: Yes.

10523   MR. DHILLON: -- 2 (T-w-o) -- 2 Computers in Surrey.

10524   THE CHAIRPERSON: Okay. Could you provide an address before Phase III?

10525   MR. DHILLON: Yes.

Undertaking

10526   THE CHAIRPERSON: Okay. And it took them a week and a half to tell you there was nothing on the logger tape or there was nothing on the hard drive?

10527   MR. DHILLON: Yes.

10528   THE CHAIRPERSON: Okay.

10529   On May 7th when you received that letter from the Commission --

10530   Are you with us, sir?

10531   MR. DHILLON: Yes.

10532   THE CHAIRPERSON: Okay. When you received the letter from the Commission May 7th, did you respond to the letter?

10533   MR. DHILLON: I asked Dave Gordon to get the extension.

10534   THE CHAIRPERSON: M'hmm.

10535   MR. DHILLON: And --

10536   THE CHAIRPERSON: And...?

10537   MR. DHILLON: That was on May 28.

10538   THE CHAIRPERSON: M'hmm.

10539   MR. DHILLON: The extension was granted.

10540   THE CHAIRPERSON: Okay. And by then you had news from 02, the technicians?

10541   MR. DHILLON: I have to check my dates. I'm sorry.

10542   THE CHAIRPERSON: And how do you know the extension was granted, sir?

10543   MR. DHILLON: I got an email from Elaine (sic) Kenney.

10544   MR. FORSYTH: From staff member Alain Kenney.

10545   MR. DHILLON: That was on May 28.

10546   THE CHAIRPERSON: And how did she get that email to you? What address did she -- were you able to receive that email?

10547   MR. DHILLON: It came to Dave Gordon.

10548   THE CHAIRPERSON: M'hmm.

10549   MR. DHILLON: And then Dave Gordon forwarded it to me.

10550   THE CHAIRPERSON: Okay.

10551   MR. DHILLON: And he said, "Dave, this just came in. The pressure's off a bit."

10552   THE CHAIRPERSON: Okay.

10553   Now, besides having problems with your hard drive and the fact that no tapes exist prior to May and maybe beyond that, you also had a problem with your telephone system from what I understand?

10554   MR. DHILLON: That was my personal telephone because the area 11, sometimes they don't have a proper cell phone service.

10555   THE CHAIRPERSON: M'hmm.

10556   MR. DHILLON: So sometimes, you know -- and on the Island, when I'm on the Island, there's not really good cell phone service.

10557   THE CHAIRPERSON: Okay. Other people were trying to reach you and couldn't get in touch with you; is that correct?

10558   MR. DHILLON: Yes.

10559   THE CHAIRPERSON: When did you realize your telephone system that you used for all your businesses wasn't functioning properly?

10560   MR. DHILLON: When I realized that --

10561   THE CHAIRPERSON: M'hmm. When did you realize that your phone system or its improper functioning was hurting all of your businesses?

10562   MR. DHILLON: That was in November.

10563   THE CHAIRPERSON: November 2013?

10564   MR. DHILLON: Yes.

10565   THE CHAIRPERSON: Okay. Do you know if the Commission tried to reach you by phone prior to November 2013?

10566   MR. DHILLON: Yeah. I got the information, yes.

10567   THE CHAIRPERSON: Do you know when they tried to reach you? Do you have that information with you?

10568   MR. DHILLON: When they tried to reach me?

10569   THE CHAIRPERSON: Yeah.

10570   MR. DHILLON: That was July 3rd, 2013.

10571   THE CHAIRPERSON: Okay. And any other occasions that they tried to reach you by phone?

10572   MR. DHILLON: On July 16.

10573   THE CHAIRPERSON: Any other occasions?

10574   MR. DHILLON: No.

10575   THE CHAIRPERSON: No. Do you know how many letters were sent to you --

10576   MR. DHILLON: Yes.

10577   THE CHAIRPERSON: -- signed by the Secretary General of the Commission?

10578   MR. DHILLON: Yes. There were two letters --

10579   THE CHAIRPERSON: M'hmm.

10580   MR. DHILLON: -- on September 18th --

10581   THE CHAIRPERSON: Yes.

10582   MR. DHILLON: -- and November 7th --

10583   THE CHAIRPERSON: M'hmm.

10584   MR. DHILLON: -- and they were sent to my previous address and I had no information that they were there until --

10585   THE CHAIRPERSON: What was that address, sir?

10586   MR. DHILLON: It was Suite 207 --

10587   THE CHAIRPERSON: M'hmm.

10588   MR. DHILLON: -- 8334 128 Street, Surrey, B.C.

10589   THE CHAIRPERSON: Okay. And is that a business address for you, a residential address? What kind of address is that?

10590   MR. DHILLON: That used to be my old office address.

10591   THE CHAIRPERSON: Your old office address. Okay. And when was that no longer your office address?

10592   MR. DHILLON: That was December, end of December -- middle or end of December 2013.

10593   THE CHAIRPERSON: Okay. So while it was still your business address, the Commission sent you two letters --

10594   MR. DHILLON: No, sorry -- no, no, 2012.

10595   THE CHAIRPERSON: Two thousand twelve?

10596   MR. DHILLON: Yes.

10597   THE CHAIRPERSON: December 2012?

10598   MR. DHILLON: Yes.

10599   THE CHAIRPERSON: Okay. And as of when did you have a new business address?

10600   MR. DHILLON: Right away.

10601   THE CHAIRPERSON: M'hmm.

10602   MR. DHILLON: We moved into Suite 107, 12827 76 Avenue.

10603   THE CHAIRPERSON: As of what date?

10604   MR. DHILLON: Middle of December 2012 --

10605   THE CHAIRPERSON: All right. And when you --

10606   MR. DHILLON: -- we moved from there to the new address.

10607   THE CHAIRPERSON: Okay. And when you bought this property, what was your listed address in January of 2013?

10608   MR. DHILLON: In January 2013 the listed address with the Commission?

10609   THE CHAIRPERSON: Yes.

10610   MR. DHILLON: It was this address but that was filed -- this was filed in I believe November sometime --

10611   THE CHAIRPERSON: Okay.

10612   MR. DHILLON: -- the application with the transfer.

10613   THE CHAIRPERSON: Okay. You're an experienced broadcaster, are you not? You are an experienced broadcaster of 20 years. I would consider that to be an experienced broadcaster.

10614   MR. DHILLON: Yes.

10615   THE CHAIRPERSON: Okay. So you understand that it's important to advise the regulator as to any changes in your status, address and so on?

10616   MR. DHILLON: Yes.

10617   THE CHAIRPERSON: Did you advise the Commission of your change of address?

10618   MR. DHILLON: No, I did not.

10619   THE CHAIRPERSON: Did you apply that the mail from the previous address be forwarded to your new address?

10620   MR. DHILLON: I used to go there every week to the old address to pick up my mail and I did that for three-four months.

10621   THE CHAIRPERSON: Oh! Notwithstanding that, you never received the letter from the Commission?

10622   MR. DHILLON: Yes.

10623   THE CHAIRPERSON: Who was at that old address after you moved?

10624   MR. DHILLON: It's Ideal Immigration, some company there.

10625   THE CHAIRPERSON: And you had an arrangement with them to set your mail aside?

10626   MR. DHILLON: Yes, I did.

10627   THE CHAIRPERSON: Okay. And you didn't think to invest $35 or $50 with Canada Post to have your mail forwarded to your new address?

10628   MR. DHILLON: Well, the procedure I know is they do it for three-four months or six months and after that they don't do that.

10629   THE CHAIRPERSON: Right. Well, this happened -- they can do that. You can have it for a year or six months or --

10630   MR. DHILLON: Okay. I'm not aware. But what I did was --

10631   THE CHAIRPERSON: Okay.

10632   MR. DHILLON: -- I got a mailbox, so where all my mail from all the companies go there.

10633   THE CHAIRPERSON: Okay.

10634   MR. DHILLON: So that's --

10635   THE CHAIRPERSON: And why again did you not inform the Commission of your change of address?

10636   MR. DHILLON: It was an oversight, sir.

10637   THE CHAIRPERSON: Okay. Don't you have other licences? I think the FCC has granted you a licence in the U.S., have they not?

10638   MR. DHILLON: No. I have a licence in Wetaskiwin.

10639   THE CHAIRPERSON: Okay. And did you inform the regulator of your change of address?

10640   MR. DHILLON: It's always been the same address. I've been there for seven years.

10641   THE CHAIRPERSON: No, your business address. Do you have a licence for a radio station in Wetaskiwin?

10642   MR. DHILLON: Yes.

10643   THE CHAIRPERSON: Okay. Where is that?

10644   MR. DHILLON: Alberta.

10645   THE CHAIRPERSON: Alberta. Okay. And did you inform the regulator?

10646   MR. DHILLON: No. I always had the same address there for my business there the last seven years.

10647   THE CHAIRPERSON: You just told us you changed your business address in December 2012.

10648   MR. DHILLON: That's for the Surrey office.

10649   THE CHAIRPERSON: Okay.

10650   MR. DHILLON: Yeah.

10651   THE CHAIRPERSON: So the other office is fine, you're still there?

10652   MR. DHILLON: Yes.

10653   THE CHAIRPERSON: How many offices do you have, sir?

10654   MR. DHILLON: Two.

10655   THE CHAIRPERSON: Two, okay.

10656   And what was the problem with your telephone system?

10657   MR. DHILLON: The voicemail normally gives me notification --

10658   THE CHAIRPERSON: M'hmm.

10659   MR. DHILLON: -- that I received a voicemail --

10660   THE CHAIRPERSON: The voicemail wasn't working?

10661   MR. DHILLON: It wasn't working.

10662   THE CHAIRPERSON: Okay. And you repaired that?

10663   MR. DHILLON: Yes, I did, and now if somebody leaves me a voice message, it converts into a text and I get a text right away.

10664   THE CHAIRPERSON: Great! And when did you do that?

10665   MR. DHILLON: That was done a couple of months ago.

10666   THE CHAIRPERSON: Two months ago. Okay.

10667   MR. DHILLON: And also, two months ago I bought a new line --

10668   THE CHAIRPERSON: M'hmm.

10669   MR. DHILLON: -- specifically for Salt Spring --

10670   THE CHAIRPERSON: M'hmm.

10671   MR. DHILLON: -- with a Salt Spring number so I can -- they can easily access me --

10672   THE CHAIRPERSON: Okay.

10673   MR. DHILLON: -- 24/7.

10674   THE CHAIRPERSON: Now, when did you -- you were told in May that the Commission was asking for your logger tapes. You realized in May of 2013, right?

10675   MR. DHILLON: Right.

10676   THE CHAIRPERSON: You were informed --

10677   MR. DHILLON: Yes.

10678   THE CHAIRPERSON: -- by the manager?

10679   MR. DHILLON: Yes.

10680   THE CHAIRPERSON: Okay. And the manager got an extension?

10681   MR. DHILLON: Yes.

10682   THE CHAIRPERSON: I think it was till May 28th.

10683   MR. DHILLON: No. It was one -- hang on.

10684   MR. FORSYTH: I believe it was for one week, Mr. Chairman.

10685   THE CHAIRPERSON: For one week, yeah. So what date does that get us to?

10686   MR. DHILLON: That would be the first week of June.

10687   THE CHAIRPERSON: The first week of June. Okay.

10688   MR. DHILLON: Yes.

10689   THE CHAIRPERSON: And did you respond by the first week of June?

10690   MR. DHILLON: I believe my manager did.

10691   THE CHAIRPERSON: You believe, sorry, who?

10692   MR. DHILLON: My manager.

10693   THE CHAIRPERSON: Your manager did?

10694   MR. DHILLON: He compiled the list of --

10695   THE CHAIRPERSON: Did you sign a response letter to the Commission, sir?

10696   MR. DHILLON: Yes.

10697   THE CHAIRPERSON: In June of 2013?

10698   MR. DHILLON: Yes.

10699   THE CHAIRPERSON: Okay. Do you have a copy of that letter?

10700   MR. DHILLON: I can find it.

10701   THE CHAIRPERSON: Okay.

10702   MR. DHILLON: I think it was not -- it was before the -- it was in 2013, yes.

10703   THE CHAIRPERSON: I'm sorry, it was 2000 what?

10704   MR. DHILLON: It was 2013.

10705   THE CHAIRPERSON: Yes.

10706   MR. DHILLON: Last year I did that, yes.

10707   THE CHAIRPERSON: When?

10708   MR. DHILLON: I believe it was the middle of November.

10709   THE CHAIRPERSON: Middle of November. So --

10710   MR. DHILLON: When I filed my annual returns.

10711   THE CHAIRPERSON: When you filed your...?

10712   MR. DHILLON: Annual returns.

10713   THE CHAIRPERSON: Annual returns, okay. Okay. But with respect to the question that was asked about the logger tapes, when did you respond to the Commission?

10714   MR. DHILLON: That was June the 10th.

10715   THE CHAIRPERSON: June 10th, you responded to the Commission?

10716   MR. DHILLON: Yes.

10717   THE CHAIRPERSON: Okay. And what was your response?

10718   MR. DHILLON: I provided the -- except the audio logs, I provided everything else.

10719   THE CHAIRPERSON: You provided everything else except for the logs?

10720   MR. DHILLON: Audio logs, yes.

10721   THE CHAIRPERSON: Okay. And why not? Why not the logs?

10722   MR. DHILLON: Because we did not have the audio logs for that week.

10723   THE CHAIRPERSON: Okay. Did you explain to the Commission why you did not have the audio logs for that week?

10724   MR. DHILLON: We -- I believe that was during the time that I took the computer for repairs to try to retrieve them.

10725   THE CHAIRPERSON: Okay. And when did you finally answer the query of the Commission as to the logger tapes, the audio logs? July, August, September, October, November?

10726   MR. DHILLON: I'm not sure because I know on July 10th we -- I emailed the logs, the paper logs, everything.

10727   THE CHAIRPERSON: When?

10728   MR. DHILLON: July 10th.

10729   THE CHAIRPERSON: July 10th, okay. And did you communicate with the Commission to make sure everything was in order?

--- Pause

10730   MR. FORSYTH: May I have a word with my client, Mr. Chairman, just to help clarify the response? I think he's getting some of his dates a little confused.

10731   THE CHAIRPERSON: You can have a word with your client. But he's here, he understands what we're here for.

10732   MR. FORSYTH: Yes.

10733   THE CHAIRPERSON: He understands the severity of the process.

10734   MR. FORSYTH: Yes.

10735   THE CHAIRPERSON: Okay.

10736   MR. FORSYTH: As do I.

--- Pause

10737   MR. FORSYTH: Thank you for your patience.

10738   MR. DHILLON: Yes, I had asked Dave Gordon to contact the Commission and let them know that we are working on the logger tapes and once we have them or -- the logger tapes we will provide.

10739   THE CHAIRPERSON: Did he contact the Commission, to your knowledge?

10740   MR. DHILLON: Not to my knowledge if he did or he did not.

10741   THE CHAIRPERSON: You don't think it was important to make sure that the Commission was abreast of the situation?

10742   MR. DHILLON: Yes, I think it was.

10743   THE CHAIRPERSON: Mr. Gordon is still gainfully employed by you?

10744   MR. DHILLON: Pardon me?

10745   THE CHAIRPERSON: Is Mr. Gordon still employed by you?

10746   MR. DHILLON: No.

10747   THE CHAIRPERSON: Is he in this room today?

10748   MR. DHILLON: No. He was let go -- he was given termination notice on October 18th.

10749   THE CHAIRPERSON: And who was hired to replace him?

10750   MR. DHILLON: Dan Miller.

10751   THE CHAIRPERSON: Diane Miller?

10752   MR. DHILLON: No. Dan.

10753   THE CHAIRPERSON: Dan Miller?

10754   MR. DHILLON: Yes.

10755   THE CHAIRPERSON: And is Dan Miller here today?

10756   MR. DHILLON: He's not.

10757   THE CHAIRPERSON: Okay.

10758   And you cannot tell us -- if we asked you for logger tapes for June 2013, would you be able to provide those?

10759   MR. DHILLON: June 2013?

10760   THE CHAIRPERSON: Yeah.

10761   MR. DHILLON: I have to check -- like I said before, I have to check what date the logging started --

10762   THE CHAIRPERSON: M'hmm.

10763   MR. DHILLON: -- and I can give you that date in the next phase.

10764   THE CHAIRPERSON: Okay.

10765   Did you ever receive the letters the Commission sent you, the ones dated September 18th and November 7th?

10766   MR. DHILLON: I did not receive them, but on December 4th when I got the email from the Commission --

10767   THE CHAIRPERSON: M'hmm.

10768   MR. DHILLON: -- I received that email and right away I went to the office there and then that's when I picked us these two letters.

10769   THE CHAIRPERSON: You picked those up at the old office?

10770   MR. DHILLON: Old office on December the 4th.

10771   THE CHAIRPERSON: December the 4th. And do you know how long they had been there?

10772   MR. DHILLON: Since they had arrived.

10773   THE CHAIRPERSON: Since they had arrived. And who signed for them?

10774   MR. DHILLON: Somebody there. They have no idea. They said, you know --

10775   THE CHAIRPERSON: Someone at your old office?

10776   MR. DHILLON: Yeah. The tenant that's there at the old office.

10777   THE CHAIRPERSON: Was he authorized to sign --

10778   MR. DHILLON: No, he wasn't.

10779   THE CHAIRPERSON: -- letters for you?

10780   MR. DHILLON: No. That's why I told him -- I said, you know, they should have called me or they should have returned them back. And they said, "Well, we don't..."

10781   THE CHAIRPERSON: Is that one of your businesses that's in that old office?

10782   MR. DHILLON: No.

10783   THE CHAIRPERSON: No?

10784   MR. DHILLON: No.

10785   THE CHAIRPERSON: Was it two different people or the same person that signed both documents?

10786   MR. DHILLON: There's a -- that is a shared office by two or three different businesses.

10787   THE CHAIRPERSON: M'hmm.

10788   MR. DHILLON: And so -- and I went there and asked them was there any mail for me. So they went through some paperwork and said, "Here's two letters for you." Had I received these earlier, I wouldn't be here. I would have replied right away.

10789   THE CHAIRPERSON: Okay. We have to a little bit of housekeeping, so we're going to take a 10-minute break.

10790   MR. DHILLON: Okay.

10791   THE CHAIRPERSON: And we'll be back in 10 minutes, okay?

10792   MR. DHILLON: Sure.

10793   THE CHAIRPERSON: Thank you, sir. Let's say 12:40.

--- Upon recessing at 1231

--- Upon resuming at 1342

10794   THE CHAIRPERSON: Hi, Mr. Dhillon. So you mentioned earlier that community radio is a challenging enterprise.

10795   MR. DHILLON: Yes.

10796   THE CHAIRPERSON: And you consider the station on Salt Spring Island to be a community radio station?

10797   MR. DHILLON: Well, it is a very small community, so in that sense it is a community station.

10798   THE CHAIRPERSON: Oh. Would you be surprised to know that you are licensed as a commercial radio station?

10799   MR. DHILLON: I tried to explain to the volunteers that it's a commercial station, but nobody believes me and they said, no, this is a community station. I said there is different rules and regulations for a community station, but this is a commercial station.

10800   THE CHAIRPERSON: They think it is a community station?

10801   MR. DHILLON: Yes.

10802   THE CHAIRPERSON: The volunteers?

10803   MR. DHILLON: Yes.

10804   THE CHAIRPERSON: Is it their station?

10805   MR. DHILLON: That's what they think, that's why --

10806   THE CHAIRPERSON: They think, oh. Okay.

10807   MR. DHILLON: And I have the dates for you, sir, for -- regarding the logging, when it was started. I have the logs from July 4th, 2013 until now.

10808   THE CHAIRPERSON: Okay.

10809   MR. DHILLON: I kept all the logs.

10810   THE CHAIRPERSON: Great.

10811   MR. DHILLON: And yes, we did inform the Commission that we were having -- there were some issues with our logging machine.

10812   THE CHAIRPERSON: When was that?

10813   MR. DHILLON: And that was on May 28.

10814   THE CHAIRPERSON: And subsequent to that, when did you communicate again with the Commission?

10815   MR. DHILLON: Most of the time I had asked Dave Gordon to communicate and let them know what was happening.

10816   THE CHAIRPERSON: Right. You yourself, though?

10817   MR. DHILLON: And he had indicated -- we said, please send all inquiries to me in the future.

10818   THE CHAIRPERSON: Okay. Do you have a copy of the documents that you sent to the Commission? You mentioned that you gave everything to the Commission.

10819   MR. DHILLON: Yes, we have. Yes, we do.

10820   THE CHAIRPERSON: Okay. And what was that? What did that include? You mentioned that the only thing that wasn't included were the logger tapes; is that correct?

10821   MR. FORSYTH: That would appear to be the case, Mr. Chairman. What I do have is a copy of an Excel file that was forwarded to the Commission at that point in time and --

10822   THE CHAIRPERSON: Is the music list on that?

10823   MR. FORSYTH: Yes. And, in fact, Mr. Chairman, just to sort of clarify, if you like, it is a sequential log which contains all of the information by time, so it contains all of the category elements that were aired in that timeframe.

10824   So, that would include the music, the commercials, the promotions, et cetera.

10825   THE CHAIRPERSON: Did you communicate by phone with a staff member of the Commission, Mr. Dhillon; do you recall, the summer of 2013?

10826   MR. DHILLON: In regards to...? 2013?

10827   THE CHAIRPERSON: The logger tapes.

10828   MR. DHILLON: Yes, on July 3rd.

10829   THE CHAIRPERSON: July 3rd?

10830   MR. DHILLON: Yes, I spoke to the staff.

10831   THE CHAIRPERSON: And...?

10832   MR. DHILLON: And then I had asked that I will get Dave Gordon to -- I asked Dave Gordon to get all the details what's happening with the -- you know.

10833   THE CHAIRPERSON: Had you promised to call back following that phone conversation?

10834   MR. DHILLON: Yes. And I asked Dave Gordon to call them in the morning. It was the afternoon here.

10835   THE CHAIRPERSON: Right.

10836   MR. DHILLON: There's a three-hour time difference, that's why. And I believe Dave Gordon spoke to them.

10837   THE CHAIRPERSON: Do you recall writing to the Commission in the summer of 2013?

10838   MR. DHILLON: Yes. I personally sent on July 10th the -- when I found out they had not received anything from Dave Gordon on July 3rd, and then on July 10th I sent an e-mail to --

10839   THE CHAIRPERSON: July 10th or June 10th?

10840   MR. DHILLON: Sorry. Yeah, okay, that was June 10th I sent all the information.

10841   THE CHAIRPERSON: You also in that letter mentioned that the program logs were attached to the e-mail.

10842   MR. DHILLON: Yes. Not the audio logs, but the paper log, because we had already informed before that we had problems -- difficulty with the audio logs in the e-mail on May 28th.

--- Pause

10843   THE CHAIRPERSON: You stated that you sent the CFSI logs; is that correct?

10844   MR. DHILLON: Yes.

10845   THE CHAIRPERSON: Would you be surprised to know that we never received those logs?

10846   MR. DHILLON: Well, first, I also contacted Elaine and that's what he said. He goes, "I never received it", and then I resent it to him again, he goes, "I'm sorry that somehow I overlooked it. I received your previous one and this one."

10847   THE CHAIRPERSON: And you also promised to send the logger tapes a few weeks thereafter --

10848   MR. DHILLON: Yes.

10849   THE CHAIRPERSON: -- in that same letter, the June 10th letter?

10850   MR. DHILLON: Yes, I did.

10851   THE CHAIRPERSON: Did you do so?

10852   MR. DHILLON: I had asked Dave Gordon to reply to them that we have technical problems and we cannot provide --

10853   THE CHAIRPERSON: You already told us in the letter that you had technical problems --

10854   MR. DHILLON: Yes.

10855   THE CHAIRPERSON: -- and that you would be sending us the logger tapes within a couple of weeks.

10856   MR. DHILLON: And I asked Dave Gordon to reply that we cannot send the logger tapes because of the problems with the logging machine.

10857   THE CHAIRPERSON: Did you write this letter yourself, the June 10th letter?

10858   MR. DHILLON: Yes. June 10th, was it?

10859   THE CHAIRPERSON: Yes.

10860   MR. DHILLON: Yes.

10861   THE CHAIRPERSON: So why would you reply on June 10th and not reply a few weeks thereafter? Why would you have Mr. Gordon do that?

10862   MR. DHILLON: Well, sometimes I would be busy and I would ask him to reply and cc me on it.

10863   THE CHAIRPERSON: Would it be correct to say that you had already lost confidence in Mr. Gordon, sir, at this point?

10864   MR. DHILLON: Not at this point.

10865   THE CHAIRPERSON: No?

10866   MR. DHILLON: I still, you know, believed in him that he could, you know, try to understand this is a commercial station, not a community station and then, finally, you know --

10867   THE CHAIRPERSON: But did he not -- he understood that; did he not, Mr. Gordon?

10868   MR. DHILLON: No, he didn't.

10869   THE CHAIRPERSON: He didn't either?

10870   MR. DHILLON: No.

10871   THE CHAIRPERSON: So the volunteers didn't understand and Mr. Gordon didn't understand?

10872   MR. DHILLON: Exactly.

10873   THE CHAIRPERSON: And when were you made aware of the fact that he did not understand that it was a commercial station?

10874   MR. DHILLON: I tried from day one.

10875   THE CHAIRPERSON: From day one. That would be March, 2013?

10876   MR. DHILLON: Yes. I tried to explain it to --

10877   THE CHAIRPERSON: And in June, 2013 he still didn't get it?

10878   MR. DHILLON: No.

10879   THE CHAIRPERSON: And, notwithstanding that fact, you continued to believe in him?

10880   MR. DHILLON: I explained it to him and I had no choice, because I don't live on the Island --

10881   THE CHAIRPERSON: Right.

10882   MR. DHILLON: -- and there could be more damage and I did not want that to occur. So, I thought, okay, I just, you know, be nice to him and let him carry on what he was doing, but come there more -- spend more time at the station and slowly start finding a replacement.

10883   And then I tried to talk to Ralph Pingel, ask him if he wanted to come to the station.

10884   THE CHAIRPERSON: Right. Tell me something, June 10th, why didn't you ask Mr. Gordon to communicate with the Commission; you communicated yourself?

10885   MR. DHILLON: Pardon me?

10886   THE CHAIRPERSON: On June 10th, you mentioned earlier that you had sent a letter in response to the Commission. Why didn't you ask Mr. Gordon to do that?

10887   MR. DHILLON: No, June 10th, I did that.

10888   THE CHAIRPERSON: Yes, I know. Why didn't you ask Mr. Gordon to do it? He was the General Manager.

10889   MR. DHILLON: Because he forwarded everything to me, I wanted to make sure that all the information that was to go out was there in that file.

10890   THE CHAIRPERSON: So, why did you stop making sure after June 10th that all the information was going to the Commission? Why would you trust Mr. Gordon to do that?

10891   MR. DHILLON: Well, this is the material that needed to reach and, you know --

10892   THE CHAIRPERSON: As did subsequent material need to reach. You are an experienced broadcaster, you know the responsibility ultimately lands with you. You realized that on June 10th, why did you not continue to communicate with the Commission, you yourself and not your Manager?

10893   MR. DHILLON: Well, I have never been in this kind of situation ever in the last 20 years and this is the first time this has happened.

10894   THE CHAIRPERSON: You understand logger tapes, you understand --

10895   MR. DHILLON: Yes.

10896   THE CHAIRPERSON: -- playlists, you understand all these things?

10897   MR. DHILLON: Yes.

10898   THE CHAIRPERSON: You understand the hardware, you understand hard drives. This is not new to you. You mentioned in your document that there is a learning curve. You have been in the business 20 years, you have trained half the people we saw this week testifying before the Commission.

10899   MR. DHILLON: Yes.

10900   THE CHAIRPERSON: This is not new. This is not rocket science. Regulators didn't start asking people to maintain logger tapes in 2013; is that correct?

10901   MR. DHILLON: Yes.

10902   THE CHAIRPERSON: Okay. You have experience with logger tapes?

10903   MR. DHILLON: Yes.

10904   THE CHAIRPERSON: Okay. The importance of logger tapes?

10905   MR. DHILLON: Yes.

10906   THE CHAIRPERSON: Okay.

10907   MR. DHILLON: And that's why, you know, we never erased any of our logger tapes since July 3rd, we have them all.

10908   THE CHAIRPERSON: Why didn't you advise the Commission of that? On July 3rd, the Commission Member called you on your cell phone, you answered, you told him you would get back to them, you never got back to them.

10909   The first sign of life the Commission has of you since June 10th is January 31st, 2014, seven months. Am I wrong?

10910   MR. DHILLON: I had believed that Dave Gordon had communicated with them that we had lost the logger tapes, audio logs.

10911   THE CHAIRPERSON: Who communicated with them?

10912   MR. DHILLON: Dave Gordon.

10913   THE CHAIRPERSON: Okay. Why didn't you do it?

10914   MR. DHILLON: I should have done it.

10915   THE CHAIRPERSON: Okay. When did you replace Dave Gordon?

10916   MR. DHILLON: I gave him termination notice on October 18th by giving him two weeks' notice.

10917   THE CHAIRPERSON: And when was the new Manager coming in. What's the name, Miller, when did Mr. Miller come in?

10918   MR. DHILLON: Last week. Ah, sorry, this week. This week.

10919   THE CHAIRPERSON: And who was running the station from October to January?

10920   MR. DHILLON: From November 1st until now I was there most of the time and I had Radha Fournier looking after the station and Peter Harnisch.

10921   THE CHAIRPERSON: So why didn't you call the Commission on November 1st?

10922   MR. DHILLON: Because I was under the impression that he already called them and everything was fine.

10923   THE CHAIRPERSON: Did he tell you that, that he had called them?

10924   MR. DHILLON: I don't recall.

10925   THE CHAIRPERSON: You don't recall? So how did you have that impression?

10926   MR. DHILLON: Because I didn't receive any communication after, you know --

10927   THE CHAIRPERSON: Right.

10928   MR. DHILLON: -- for so long.

10929   THE CHAIRPERSON: Right.

10930   MR. DHILLON: Had I had known the September 18th letter, I would have replied right away that this was the issue at hand.

10931   THE CHAIRPERSON: Those FedEx documents that you received, I think you said December 4th?

10932   MR. DHILLON: I picked them up on December 4th, yes.

10933   THE CHAIRPERSON: Did you open them?

10934   MR. DHILLON: At the same time I had received an e-mail from the Commission --

10935   THE CHAIRPERSON: Yes.

10936   MR. DHILLON: -- with all the documents that are in here.

10937   THE CHAIRPERSON: When did you receive that?

10938   MR. DHILLON: Pardon me?

10939   THE CHAIRPERSON: When did you receive that e-mail?

10940   MR. DHILLON: I believe it was December 4th.

10941   THE CHAIRPERSON: Okay. Did you answer that e-mail?

10942   MR. DHILLON: Yes, I did.

10943   THE CHAIRPERSON: When?

10944   MR. DHILLON: The same day that I received it, it said "Please acknowledge" and I did acknowledge that I received the e-mail.

10945   THE CHAIRPERSON: Did you read the e-mail?

10946   MR. DHILLON: Yes, I did.

10947   THE CHAIRPERSON: Did you call the Commission to address the issues that were raised in that e-mail?

--- Pause

10948   MR. DHILLON: Because I was under the impression that we have been called to the hearing to explain the situation.

10949   THE CHAIRPERSON: Okay. And what gave you that impression?

--- Pause

10950   MR. DHILLON: Because that's what the letter said, that we have to appear before the --

10951   THE CHAIRPERSON: Okay. Mr. Dhillon, what was your thinking in buying this station, Salt Spring Island Radio Corp? Why did you buy the station? Was it profitable at the time?

10952   MR. DHILLON: It was not profitable.

10953   THE CHAIRPERSON: Has it been profitable since then?

10954   MR. DHILLON: No.

10955   THE CHAIRPERSON: You are not in the business of being in business to lose money; I don't think?

10956   MR. DHILLON: Nobody is.

10957   THE CHAIRPERSON: Nobody is, yes.

10958   MR. DHILLON: Yes. But I haven't lost in this station, but I know I'm very confident that I will rebuild this station now, I have the proper people there managing it and I plan to be there more often looking after the sales situation there.

10959   THE CHAIRPERSON: Is anyone responsible for sales at that station? Since you acquired it, has anyone been responsible for sales?

10960   MR. DHILLON: Well, I had Bobby McGee.

10961   THE CHAIRPERSON: You had who, sorry?

10962   MR. DHILLON: Bobby McGee.

10963   THE CHAIRPERSON: Yes.

10964   MR. DHILLON: And Bill Nash.

10965   THE CHAIRPERSON: Are they employees of that station?

10966   MR. DHILLON: They are volunteers --

10967   THE CHAIRPERSON: Oh.

10968   MR. DHILLON: -- and they get commission when they bring in the advertisements. It's a small island of 10,000 people approximately.

10969   THE CHAIRPERSON: Okay.

--- Pause

10970   THE CHAIRPERSON: You also mentioned the substantial investment in new digital systems for programming in your opening statement.

10971   MR. DHILLON: Yes. I replaced most of the computers there --

10972   THE CHAIRPERSON: Yes.

10973   MR. DHILLON: -- the automation system --

10974   THE CHAIRPERSON: Yes.

10975   MR. DHILLON: -- and we have ordered a new mixing board --

10976   THE CHAIRPERSON: Okay.

10977   MR. DHILLON: -- to go along with that.

10978   THE CHAIRPERSON: Okay.

10979   MR. DHILLON: And most of the computers are new now and the logging machine is brand new, that I can check remotely every time now. That's what I did, logged in --

10980   THE CHAIRPERSON: Okay.

10981   MR. DHILLON: -- checked everything was working fine.

10982   THE CHAIRPERSON: Would you be willing to supply the Commission with receipts for all these acquisitions?

10983   MR. DHILLON: Yes, I would be.

Undertaking

10984   THE CHAIRPERSON: What kind of delays would we be looking at, Madam Pinsky?

10985   MS PINSKY: Could you provide them by Monday, at the end of day on Monday?

10986   MR. DHILLON: Yes.

--- Pause

10987   THE CHAIRPERSON: Commissioner Simpson?

10988   COMMISSIONER SIMPSON: No, I have no questions.

10989   THE CHAIRPERSON: Have you in any way, shape or form changed the nature of the programming on the station, Mr. Dhillon?

10990   MR. DHILLON: Pardon me?

10991   THE CHAIRPERSON: Since acquiring the station; the programming, has it changed?

10992   MR. DHILLON: No.

10993   THE CHAIRPERSON: And what kind of programming are you offering on that station?

10994   MR. DHILLON: There is Category 3.

10995   THE CHAIRPERSON: Yes.

10996   MR. DHILLON: And some Category 2 music and Radha Fournier has exclusive authority to program according to our mandate for the CRTC.

10997   THE CHAIRPERSON: And who -- and none of these people are on salary; everyone is a volunteer except for Mr. Miller?

10998   MR. DHILLON: Dan Miller and Radha are -- well, you can say one and a half paid employees.

10999   THE CHAIRPERSON: And who is in charge of ensuring logger tapes, music lists and program logs?

11000   MR. DHILLON: It was Radha Fournier.

11001   THE CHAIRPERSON: Yes.

11002   MR. DHILLON: Now it will be Dan Miller and Radha, both of them combined. And we had requested from Radha to give us one week of playlist complete with logs and everything. She did provide us within one week.

11003   THE CHAIRPERSON: Okay.

11004   MR. DHILLON: And we can provide that to the Commission, if you allow us.

11005   THE CHAIRPERSON: You are familiar with Mr. Pingel's intervention?

11006   MR. DHILLON: Yes.

11007   THE CHAIRPERSON: Mr. Rob Pingel?

11008   MR. DHILLON: Yes.

11009   THE CHAIRPERSON: Okay. He states that there was -- there is no -- there was no regular staff with regular hours. And you mentioned yourself that as of, I think it was late October, Mr. Gordon was no longer at the station himself.

11010   MR. DHILLON: From November 1st.

11011   THE CHAIRPERSON: From November 1st.

11012   MR. DHILLON: Yes.

11013   THE CHAIRPERSON: So from November 1st until last week -- or when was Mr. Miller hired?

11014   MR. DHILLON: He was hired on Monday.

11015   THE CHAIRPERSON: On Monday?

11016   MR. DHILLON: Yes.

11017   THE CHAIRPERSON: So for November, December, January, for three months there was no permanent staff at the station?

11018   MR. DHILLON: No, I was there --

11019   THE CHAIRPERSON: Okay.

11020   MR. DHILLON: -- and also Radha was there and Peter Harnisch was there, and Lynette.

11021   THE CHAIRPERSON: Okay.

11022   MR. DHILLON: And Bill Nash.

11023   THE CHAIRPERSON: Okay. Since arriving in March, have you sat down with staff, even though they are volunteers --

11024   MR. DHILLON: Yes.

11025   THE CHAIRPERSON: -- and explained to them the importance of correctly formatted music lists and program logs?

11026   MR. DHILLON: Yes, I did. I even e-mailed Dave Gordon, I said this is a sample list, I would like you to have every host spell it out -- fill it out whenever they finish a program and keep track of them.

11027   THE CHAIRPERSON: Do you have any contingency plans in case there is another breakdown in the hardware and we are once again without logger tapes?

11028   MR. DHILLON: Yes, I plan to keep a logger tape. Here in Surrey also I have a remote, like you call iCloud, so that way, whatever is being saved on that logger will automatically be saved in Surrey --

11029   THE CHAIRPERSON: Okay.

11030   MR. DHILLON: -- as a backup. And I have asked Dan Miller, every week compile all the logs, paper logs and send it to that server. So, that way it's saved here and there.

11031   THE CHAIRPERSON: Mr. Dhillon, at the end of the day -- I'm going to give you one last sort of opportunity to explain to the Commission why we shouldn't issue a mandatory order and/or revoke your licence completely, given the behaviour that we have been witness to since you acquired the station.

11032   MR. DHILLON: Well, since I acquired the station, the community and the programmers, like I said, we're calling -- thinking that this was a community station and they had all the right to do whatever they can.

11033   And then I informed them, this is a commercial station and we have to abide by -- there are a lot of rules and regulations that we have to follow.

11034   THE CHAIRPERSON: Mr. Dhillon, you are the employer, you are the boss, and they are not even getting paid. It's not like you can -- I mean, it's your station, you decide what you are going to do with it.

11035   MR. DHILLON: Yes, that's when --

11036   THE CHAIRPERSON: And offering then to purchase the station is not a solution.

11037   MR. DHILLON: You see, when I tried to change the programming, say okay, I want to have paid employees from 12:00 to 2:00, 2:00 to 4:00 --

11038   THE CHAIRPERSON: That's not programming. I asked you earlier if you were planning on changing -- if you had changed the programming at all since acquiring the station and you told me you had not changed the programming.

11039   MR. DHILLON: No, no, I'm not talking about the -- I thought you were asking about the content.

11040   THE CHAIRPERSON: Yes, I was.

11041   MR. DHILLON: The content is going to be the same.

11042   THE CHAIRPERSON: I know, but right now you said, I told him I was going to change the programming. You mean, you were going to change the --

11043   MR. DHILLON: The content. For example, we will have, in the morning local programming news.

11044   THE CHAIRPERSON: That content hasn't changed; is that right?

11045   MR. DHILLON: No.

11046   THE CHAIRPERSON: Okay, that's fine.

11047   MR. DHILLON: Yeah.

11048   THE CHAIRPERSON: So go on. With respect to your employees, you are the employer, you are the boss --

11049   MR. DHILLON: Now I --

11050   THE CHAIRPERSON: -- and you are the one that is responsible for the respect of the conditions that are applied by the regulator.

11051   MR. DHILLON: Well, we have put a lot of mechanisms in place, for example, weekly updates. Radha is a paid employee.

11052   THE CHAIRPERSON: Yes.

11053   MR. DHILLON: Dan Miller is an experienced broadcaster, he used to work at 1040 CKST AM here in Vancouver --

11054   THE CHAIRPERSON: Right.

11055   MR. DHILLON: -- for a number of years and now he will be looking after all of our social media, Internet and making sure the transmitter and SDL, all the equipment is in order and signing off every day on it.

11056   So that way, you know, we are always in compliance and if there is ever need of any -- even if we can give you monthly information, whatever is required to the Commission to make sure we are fulfilling the mandate we were given to do.

11057   THE CHAIRPERSON: And what if the volunteers refuse to co-operate in the future, as they have in the past?

11058   MR. DHILLON: No, those people have already left. There were way too many volunteers, there were over close to 40 volunteers. It is very difficult to keep that many volunteers. And then I tried to have only 20, now those people are really supportive of the station and looking forward on broadcasting as volunteers and now we have Radha and Dan Miller looking after the whole day-to-day business and I, myself, am there three days making sure everything is running smoothly.

11059   THE CHAIRPERSON: Madam Pinsky...?

11060   MS PINSKY: Thank you, Mr. Chairman. I would just like to clarify your current contact information. I'm not sure the one you provided is that which we have on record.

11061   MR. FORSYTH: We can provide that to you, counsel.

11062   MS PINSKY: Could you just please provide it for the record?

11063   MR. FORSYTH: Certainly. Mr. Dylan's contact information, his mail address is 7728-128th Street, Unit 104, Box 188, Surrey, British Columbia, V6W 1L3.

11064   The Salt Spring office address is Suite 19A, 315 Upper Ganges Road, Salt Spring Island, V8K 2X4. There are two phone numbers: 250-221-2363 and 604-345-3510. Mr. Dhillon's e-mail address is ssd@greenfm.ca. I have also my information if you require that as well as a backup.

11065   MS PINSKY: No, thank you very much. Have you provided that address to the Commission prior to providing it right now, that most recent address?

11066   MR. DHILLON: Yes, I did. That's where I got my letters now. That's where I picked up my last correspondence from the Commission.

11067   MS PINSKY: Okay. And you indicated that by the end of Monday you would provide the receipts for the acquisitions that the Chair has asked you to provide.

11068   In addition, you had committed to provide the address for the computer store that you referred to.

11069   MR. DHILLON: Yes, we have the address.

11070   MS PINSKY: Okay, thank you. You can provide that in writing. Thank you.

Undertaking

11071   THE CHAIRPERSON: Mr. Dhillon, what assurances can you offer the Commission that in the future you will respect the rules?

11072   MR. DHILLON: Well, first of all, I am going to be planning on spending more time in Salt Spring Island being involved in the community on the day-to-day business and I have been looking for a residence there to move into.

11073   I have acquired the services of Mr. Forsyth to be involved in my broadcasting, so that way we are always in compliance.

11074   THE CHAIRPERSON: Okay. Madam Pinsky, anything else?

11075   MS PINSKY: No, thank you.

11076   THE CHAIRPERSON: Great. Thank you, sir.

11077   MR. DHILLON: Thank you very much.

11078   THE CHAIRPERSON: Thanks for coming in today.

11079   MR. DHILLON: Thank you.

11080   THE CHAIRPERSON: Madam la Secrétaire...?

11081   THE SECRETARY: This completes Phase I of item 16 on the agenda. Phase II, presentation by interveners.

11082   For the record, the Commission did not receive any request to appear from interveners for this item, therefore, this concludes Phase II of item 16 on the agenda.

11083   THE CHAIRPERSON: Anything else?

--- Pause

11084   THE CHAIRPERSON: Would you need a break before interventions, Phase III?

11085   MR. DHILLON: No, we are fine. We are good.

11086   THE CHAIRPERSON: You are fine? Okay.

11087   THE SECRETARY: Thank you. We will now proceed to Phase III in which the licensee can reply to all interventions submitted on this item. You have 10 minutes for your presentation.

REPLY

11088   MR. DHILLON: Thank you.

11089   Thank you, Chairman Pentafountas, Commissioner Simpson and Commissioner Shoan and Commission Staff for this opportunity to respond to the 10 interventions posted on the public file with regards to CFSI-FM.

11090   I will begin by responding to the comments put forward by the four interveners who oppose the manner in which the station is being run, specifically interventions 9331, 9338, 9342 and 9347.

11091   These interveners have all been with the station in one role or another, all as volunteer programmers and one as a co-founder and a Program Director at the inception of CFSI-FM.

11092   Collectively, they are a disgruntled bunch who paint a picture of a wonderful concept that was taken away from them by a "hostile takeover". That said, there does not seem to be much love for the former licensee either who is described as "a hapless owner". In fact, the previous management team is given short praise and I quote:

"The first, (owner) after first hiring then firing one of the most competent radio men in the business and ridding himself of his co-founder/program director, to run the station single-handedly and so ineptly as to bring us to your attention."

11093   The intervener speaks of himself as the victim in this.

11094   This intervention raises several issues: There was not a hostile takeover. The Commission approved a corporate agreement between two broadcasters in a public process. The previous licensee made a business decision to sell to my company as was his right. He did have the opportunity to offer the station to his staff, co-founder and volunteers. This was not his choice.

11095   In fact, the station was on the market for six months. This was public knowledge, however, there were no buyers, either on or off the Island. However, I negotiated an agreement with Mr. Brooks and the Commission approved on the basis of this transaction being beneficial for the public good. No one coerced any deal.

11096   It appears that this group of interveners has been upset about the management of CFSI-FM since very near the beginning of its existence. They are frustrated that the control of the station rests with someone other than themselves.

11097   They did not raise the funds to initiate or acquire the station and they feel shut out.

11098   One of the interveners claims to speak on behalf of all of the volunteers and former staff members. His inclusive "we" is used in the intervention. It could be construed to mean there is a unanimous desire to see Satnam ousted from Salt Spring Island.

11099   The fact that the five positive interventions come from current or past station programmers undermines that notion.

11100   Another intervener who has, along with a co-founder of the station, created a coalition with the intent to operate the station asks the Commission to choose the best candidate to run CFSI-FM.

11101   The Commission did do this in a competitive hearing in 2007 and granted the licence to the previous owner. He in turn, through the auspices of the Commission's public process, gave me the mandate to carry the licence forward.

11102   We have been proactive in addressing complaints such as having staff available to the public and advertising clients within regular business hours by hiring our new General Manager.

11103   I fully expect that with full-time management in place we will be better able to address technical issues, especially transmitter outages, a point raised by one of the interveners.

11104   We have learned from these interventions by reviewing their specific points and I have taken steps to address operational issues such as: Computer usage and assignments for logging and recording, providing an e-mailed template for the volunteers to ensure consistent playlist information and enhanced computer networking.

11105   As I stated in the last phase of this hearing, I am humbled by the support we have received by those who believe in the vision of CFSI-FM and its place in this unique community. They attest to the positive changes that the station has provided them and, in turn, the karma that is the changes that we bring to the station.

11106   I have spent over 20 years in this business helping several dozen new broadcasters find and develop their talent. It is this positive environment that helps foster new talent. Even icons like Canada's Folk singing legend Valdy, a long-time resident and a computer kinologist and a volunteer, acknowledges the opportunities afforded him at CFSI-FM. He says:

"I have developed skills as an engineer, program designer, and host. I wish to continue to apply these skills to both inform and enlighten my community of things cultural and political, hopefully broadening the base of knowledge that helps a community to grow and prosper."

11107   Even our supporting interveners recognize that this is not an easy path, but they encourage us to do better despite the occasional setbacks. We listen to the audience, both positive and negative. In fact, two of the negative interventions are from people who still volunteer at the station every week. We only improve by listening to and acting upon the negative feedback.

11108   In response not only to our interveners, but also as part of our plan to improve the operations and service on CFSI-FM, we have addressed these issues: On-air equipment, logging and recording equipment, staff communication, on-site management, public accessibility, music programming, sales and back office software, staff access.

11109   As mentioned in my presentation, we have come a long way in a short time. There is still a lot to do, but I am confident we have the support of the community we serve to continue providing unique programming for a unique Island.

11110   Thank you for your time and attention. I would be glad to answer your questions.

11111   THE CHAIRPERSON: No questions. Thank you, sir.

11112   MR. DHILLON: Thank you.

11113   THE CHAIRPERSON: Madam la Secrétaire.

11114   THE SECRETARY: Thank you, Mr. Chairman.

11115   This concludes Phase III of item 16 on the agenda. I would like to indicate for the record that the interveners who did not appear and were listed in the agenda as appearing interveners will remain on the public file as non-appearing interventions.

11116   Also, there is one non-appearing application on the agenda of this public hearing. Interventions were received for this application. The Panel will consider these interventions along with the application and a decision will be rendered at a later date.

11117   This completes the agenda of this public hearing.

11118   Thank you, Mr. Chairman.

11119   THE CHAIRPERSON: Before we complete the agenda. Mr. Dhillon, the last e-mail you gave us, it is the first time we have seen that e-mail. How many -- I mean, how many different e-mail addresses have you gone through in the last year?

11120   MS PINSKY: Mr. Chairman, the address as well, the location, the physical location.

11121   THE CHAIRPERSON: The physical location?

11122   MS PINSKY: The postal address, yes.

11123   THE CHAIRPERSON: Is not the same?

11124   MS PINSKY: We don't have that on record.

11125   MR. DHILLON: Well, I had e-mailed. I have a sent copy which I can present to the Commission.

11126   THE CHAIRPERSON: And your physical address, okay.

11127   MR. DHILLON: Yes.

11128   THE CHAIRPERSON: Okay.

11129   MR. DHILLON: Thank you.

11130   THE CHAIRPERSON: Thank you, sir. Thank you.

11131   Are we done, Madam la Secrétaire?

11132   THE SECRETARY: Yes, we are.

11133   THE CHAIRPERSON: Thank you so much. I really want to thank staff and I want to thank my fellow Commissioners.

11134   We had an interesting week, a very tight schedule. I know that people were pushed early on just in case something went wrong later on so that we could finish up before the end of the day today, because it is not like we could come back tomorrow or stick around until Monday, budgetary pressures, and we thank you so much for your effort and your time.

11135   Most of us are also spending time away from our families, and I think the Commission deeply appreciates your effort and your commitment to the Commission and the broadcasting system as a whole.

11136   Thank you all so much. Thanks.

--- Whereupon the hearing concluded at 1320

REPORTERS

Kristin Johansson

Ada DeGeer-Simpson

Monique Mahoney

Jean Desaulniers

Karen Paré

Date modified:

2014-02-03