ARCHIVÉ -  Transcript / Transcription - Halifax - Nova Scotia / (Nouvelle-Écosse) - 2004-03-03

HELD AT: TENUE À:

World Trade and World Trade and

Convention Centre Convention Centre

1800 Argyle Street 1800, rue Argyle

Halifax, Nova Scotia Halifax (Nouvelle-Écosse)

3 March 2004 3 mars 2004

Transcripts

In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

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

and staff attending the public hearings, and the Table of

Contents.

However, the aforementioned publication is the recorded

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

either of the official languages, depending on the language

spoken by the participant at the public hearing.

Transcription

Afin de rencontrer les exigences de la Loi sur les langues

officielles, les procès-verbaux pour le Conseil seront

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

membres et du personnel du CRTC participant à l'audience

publique ainsi que la table des matières.

Toutefois, la publication susmentionnée est un compte rendu

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

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

officielles, compte tenu de la langue utilisée par le

participant à l'audience publique.

BEFORE / DEVANT:

David Colville Chairperson

Vice-Chair of

Telecommunications

Barbara Cram Regional Commissioner for

Manitoba and Saskatchewan

Ron Williams Regional Commissioner for

Alberta and the Northwest

Territories

Jean-Marc Demers National Commissioner

Stuart Langford National Commissioner

ALSO PRESENT / AUSSI PRÉSENTS:

Pierre LeBel Hearing Secretary / Secrétaire

d'audience

Peter McCallum Senior Legal Counsel /

Conseiller juridique

principal

Sylvie Jones Conseillère / Counsel

HELD AT: TENUE À:

World Trade and World Trade and

Convention Centre Convention Centre

1800 Argyle Street 1800, rue Argyle

Halifax, Nova Scotia Halifax (Nouvelle-Écosse)

3 March 2004 3 mars 2004

PAGE / PARA NO.

PHASE I (cont'd)

PRESENTATION BY / PRÉSENTATION PAR

Halifax Jamz 95.7 Inc. 553 / 2866

Centre for Diverse Visible Cultures 651 / 3427

CKMW Radio Ltd. 723 / 3901

PHASE II

INTERVENTION BY / INTERVENTION PAR

Rogers 802 / 4391

Astral Radio Atlantic 803 / 4405

Maritime Broadcasting System Ltd. 813 / 4468

East Coast Broadcasting Inc. 821 / 4509

Halifax, Nova Scotia / Halifax (Nouvelle-Écosse)

--- Upon resuming on Wednesday, March 3, 2004 at 0904 /

L'audience reprend le mercredi 3 mars 2004 à 0904

2853 THE CHAIRPERSON: Order, please, ladies and gentlemen.

2854 We will return to our proceeding. Welcome back. This is day three of our proceeding into a number of radio applications for Halifax, Saint John, Moncton and Fredericton.

2855 Yesterday was a birthday day and one of the Members put the Secretary up to announce that it was my birthday. So to get him back, I am going to announce that today is his birthday: Commissioner Ron Williams.

2856 I don't know quite how old he is.

2857 As far as I know, we are not having one every day this week, but I am not quite sure.

2858 With that, we will return to the applications for Halifax.

2859 Mr. Secretary.

2860 MR. LeBEL: Thank you, Mr. Chairman.

2861 We will now hear Item 9 on the agenda, which is an application by Halifax Jamz 95.7 Inc., for a licence to operate an English-language FM commercial radio programming undertaking in Halifax.

2862 The new station would operate on frequency 95.7 MHz, on Channel 239B, with an effective radiated power of 22,100 watts.

2863 The applicant is proposing an alternative electronica progressive high energy dance music format.

2864 Mr. Michael Donovan will introduce the panel.

2865 You have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

2866 MR. DONOVAN: Thank you.

2867 Good morning. My name is Michael Donovan, and I am Chairman of Halifax Jamz 95.7.

2868 Let me join with Chairman Colville in welcoming the Commission and staff and many of the other applicants to Halifax. Haligonians care passionately about our city. We are proud to present a proposal which we believe is going to make it an even better place to live.

2869 Our pitch is diversity -- diversity in format, diversity in ownership.

2870 Let me introduce our team.

2871 To your far right is Bill Ritchie. Originally he was to my far left, but he objected to being described that way. So to your far right is Bill Ritchie, my mentor and partner in business.

2872 Bill and I will each hold 40 per cent of the equity in the new company.

2873 Our other partner is Manuel Canales, seated on my immediate left. This is Manuel's idea and his dream. Since immigrating to Canada in 1974, Manuel has been involved in all aspects of radio sales, programming, marketing and management. He has spent more than 18 years in this Halifax market.

2874 On my right is Earl Jive, who lives in Los Angeles. His passion is music and taking leading edge music to new radio formats.

2875 In the back row, on the right, is Bucky Adams. Bucky is familiar to many Haligonians as one of our finest musicians.

2876 Next to him is Magda De la Torre, whose expertise is marketing, events organization and promotion.

2877 Seated to her left is Wayne Plunkett, our regulatory consultant.

2878 Manuel.

2879 MR. CANALES: Michael has said this is my idea. This is my dream.

2880 Let me tell you a little bit about myself.

2881 I landed here from my native Chile in Dartmouth in 1974. I did not speak any English. I enrolled in an adult vocational sales representative and marketing course run by Canada Manpower. As part of my course, my internship was in 96 CHNS Radio.

2882 My first job was at CFDR Radio in Dartmouth. I was there for six years where I sold niche radio, without the benefits of favourable BBM audience ratings, achieving sales in the hundreds of thousands of dollars.

2883 Like most of us in radio, I moved on to other jobs in other markets.

2884 At one time I had the opportunity to manage CING-FM serving the Burlington-Hamilton-Toronto coverage with the then unusual format of dance. There I doubled the retained earnings of 20 years of that company in my first management year.

2885 Over the 19 months of my tenure at CING-FM our share slipped due to competitive pressure from 3.1 per cent to 2.7 per cent, but we managed to increase our national sales by 800 per cent, a rather difficult task while selling to sophisticated media buyers in an overly-researched market.

2886 I was then hired to manage a radio station in Los Angeles, the world's largest and most competitive radio marketplace. We grew the sales and doubled the ratings for the station in six months.

2887 I know radio.

2888 My home-landed town of Halifax is a market yet to be considered by the Commission as a major market, the definition of an eight-station market as per 1998 radio policy.

2889 Yet most business here is transacted in a relationship basis, which means "who you know".

2890 At Halifax Jamz, as the leading independent local applicant, we have a business relationship second to none. What Halifax Jamz has to offer more than anything is diversity: diversity in the choice of music format and diversity in the primary audience we hope to serve.

2891 In the last two days you have heard that the seven existing commercial stations do a fine job in programming to the musical tastes of the 25-plus demographic. All agree there is an underserved market of 12-to-35 demographic. We are very confident that we have the right programming mix to service our target audience.

2892 Our format may sound a little confusing to those of us over the age of 50, including myself that is, but it is essentially a blend of alternative and Electronica. We are an upbeat tempo. We think it is the right mix for the market. We have a healthy launch promotion budget of $300,000-plus. Our share projections and revenue forecasts are aggressive but realistic. We appreciate the tough market we are in and the hard work in front of us.

2893 MR. JIVE: Although Halifax Jamz will obviously be an intensely music driven station, we have not forgotten an important element of our programming mix, namely local news and community events.

2894 From our two-person news team we will feature relatively short but snappy newscasts with a very strong emphasis on local and regional items. Halifax Jamz will feature regularly scheduled newscasts of two or three minutes throughout the day and on weekends, totalling 4.7 hours per week.

2895 We will leave to the CBC and existing commercial stations in the market their in-depth coverage of national and international stories, but of course urgent breaking news would interrupt our regular programming with follow-ups in our regular newscasts.

2896 In addition to newscasts, we plan to integrate interactive foreground programming via telephones and the Internet. Halifax Jamz will have its finger on the pulse of the audience, dealing with many otherwise unspoken topics and taboos, making the station the sounding board for the audience.

2897 We estimate Halifax Jamz will feature 93 per cent music and 7 per cent talk, including long-form weekend discussion programs with listener phone-ins, on-the-street interviews and in-studio guests. We will feature programs such as the "Club Forum", "Friday Night High" and "Campus News".

2898 Also, we foresee daily features such as a "Who's Where" entertainment guide, entertainment and music news and a restaurant show.

2899 Also planned are live audience shows from clubs and interstitial recorded comedy, as well as an interactive Internet and computer show.

2900 It is highly possible that the proportion of talk programming will slowly increase over the seven-year licence term to about 10 per cent.

2901 At all times beats and music will be played in the background and to tie the elements together.

2902 Our minimum talk commitment of 7 per cent is composed of approximately 4 per cent newscasts and 3 per cent for other talk programs. This overall approach to news and spoken word is consistent with programming to this demographic.

2903 One of the hallmarks of our application is our substantial commitment to the development of Canadian talent. Not only do we have the second-largest total number of dollars of all applicants earmarked for our various initiatives, but we genuinely feel that our direct CTD support of $1,165,000 is truly outstanding for an independent applicant.

2904 All of our initiatives are targeted to encourage artists at the local level.

2905 Jamz is also committed to spending $250,000 over the first licence period to support Kaleidoscope. Kaleidoscope is a community radio station which is also applying for a licence at this hearing.

2906 I believe you will be hearing more from them later this morning. The money is in addition to mentoring and training the Jamz management and staff will offer to this worthwhile initiative.

2907 Support for Kaleidoscope is in addition to our committed CTD funds.

2908 Bill.

2909 MR. RITCHIE: Thank you.

2910 Good morning and welcome to Nova Scotia. I hope you will have a chance to look around a little bit, those of you who have not been here before. I know the Chairman has been here from time to time.

2911 I appear before you this morning really as an investor and as a supporter of the new radio station Halifax Jamz-FM.

2912 My own background encompasses -- it hard to believe -- over 50 years in the investment industry, a major part of which was as a co-owner of two investment dealers: the first when I was relatively young, starting out in Fredericton with a company called George W. Brown for a short two years; and then later on, with a partner, a company called Scotia Bond Co. Limited here in Halifax, which we operated from 1963 until it was sold to Midland Walwyn in 1990.

2913 Scotia Bond was a member of the Toronto Stock Exchange, the Montreal Stock Exchange and the Investment Dealers Association of Canada. For seven of those years we acted as a fiscal agent for the Province of Nova Scotia in their fund-raising activities in Canada and the United States.

2914 My decision to be part of the Halifax Jamz is based on the management and of course the other owners, their experience and their records of success over the past two decades. I have known and have been a partner with both Michael and Manuel individually in different ventures for about that same period of time, 18 to 20 years, and in my view they are both -- I hate to say this, but they are both highly intelligent, deeply motivated and they have a burning desire to succeed in whatever they get involved in.

2915 Michael and I in particular are well established in the Nova Scotia business community. We both believe very strongly in local ownership, as well as in community involvement. We believe that local owners not only have the best knowledge of the Halifax scene, but we are both only too familiar with the changes that can take place within companies that are owned or controlled by those at a distance.

2916 I am confident that our station will succeed and in closing would ask that you endorse our application. We will not let you or Nova Scotia down.

2917 Thank you very much.

2918 MR. CANALES: Mr. Chairman, we believe our application is the best response to your call. Our programming is aimed to underserved 12-to-35 demographic. Seventy-five per cent of the music we will play is not aired in the market at the moment. Our Canadian content will be 40 per cent and 50 per cent of our music selection will be new.

2919 We will be a 100 per cent locally owned independent news voice in the community. Our proposed station will have a minimum impact on existing stations, and we can co-exist with almost any combination of newly licensed scenario.

2920 Our Canadian Talent Development initiatives are generous and imaginative by any standards, even more so for a start-up stand-alone.

2921 We pledge to support Kaleidoscope, a community radio station which will make a complementary addition to any future radio market mix.

2922 Michael.

2923 MR. DONOVAN: That's our pitch. We are proud of our application, and we are confident that the market will welcome this programming. We think it does respond to your call for applications, and we welcome your questions.

2924 THE CHAIRPERSON: Thank you, Mr. Donovan.

2925 I will turn the questioning over to "birthday boy", Commissioner Williams.

2926 COMMISSIONER WILLIAMS: For the record, I am under that 50 age demarcation point. So I have some chance of understanding your presentation.

2927 MR. DONOVAN: 36?

2928 COMMISSIONER WILLIAMS: No; 48 actually.

2929 Thank you, Mr. Donovan and Halifax Jamz' presentation team.

2930 Mr. Canales, for convenience, I will be directing my line of questioning to you as the president of this new company, and you can of course answer or direct them to the most appropriate responder from your team.

2931 In your application you label your proposed format as being both alternative electronica progressive high energy dance and alternative electronica dance, and in your December 5, 2003 deficiency you refer to your format as progressive alternative dance.

2932 Other youth oriented radio formats are labelled more simply; for example, urban, modern rock, CHR, rhythmic CHR, even though each format will often include a number of music sub-genres within its overall mix.

2933 I note that all of your various format descriptions end with the word "dance". So this is the beginning of my next request. Would you be comfortable if we shortened your format description and simply referred to the proposed format, for the purposes of this questioning period, to the "dance" format?

2934 MR. CANALES: That's fine. We have been troublesome in trying to identify with a short name that would be slick enough to remember and to be recognized. The format is composed of two major existing formats. One of them is alternative, and I describe in my correspondence all the sub-genres on that; and the electronica dance, which is presently something that is being played on radio stations in certain hours of programming, not on a 24-hour basis.

2935 So dance is fine.

2936 COMMISSIONER WILLIAMS: Dance is fine? We recognize, of course, that it is more than Dance, as you have just described. It is just for ease of the questioning.

2937 Referring to your proposed format, you supplied a sample music play list as part of your December 5th deficiency response that we take as being an accurate reflection of the artists and music you will program on your station, if licensed.

2938 The day part of the music list shows a distinct dance or club music orientation. However, I am curious about a two-hour sample play list you submitted under the header "Another Play list". This play list, its article selections, is more representative of a CHR or rhythmic CHR format and of course represents quite a different sound than what is suggested by your day part example music list.

2939 Could you explain to the Panel why you included this particular type of sample play list as being representative of how the station would sound, especially when compared to the station sound suggested by your day part list.

2940 MR. CANALES: Thank you. I am going to answer that question in two parts, and I am going to ask Earl to answer part of it.

2941 First of all, we are dealing here with a mixture, if you will, of two formats. It is a new format that we are creating, a hybrid if you can say. What we did, in order to basically serve right to the development of this whole thing, is we retained three music consultants and different parts of their expertise in electronica, dance and alternative formats to develop the actual mix.

2942 The actual final description of the play list, it would certainly be based on the Halifax sound because our plan is to develop the ultimate play list, if you will, based on the sound that will be attractive and play and include local musicians in the Halifax area.

2943 To answer that, the only difference that there would be on the two lists is that two different consultants suggested this, and some of them may have a slightly different view.

2944 The sound of alternative electronica is the world sound. You have a huge portion of that in Europe and you have some of them in North America. We have to include our Canadian content, and when we are trying to do that it creates an adjustment.

2945 We are cognizant of the fact that we will play 75 per cent of music that is not played here right now. We have I think about 18 sub-genres on the two mixtures that we can choose from.

2946 We don't aim to be a CHR radio station, and perhaps the play list that was suggested was a little bit too much in the mainstream. But again, as you said, it was suggested as another play list. It wasn't intended to be the main sample. It was just to be another sample. So we provided one sample and another sample.

2947 The main sample you have here with all the requirements you asked for, and the other one was slightly another mix and not necessarily would be strictly representative. We are not trying to be a CHR. Let me put it that way.

2948 COMMISSIONER WILLIAMS: That was the next part of my questioning.

2949 To what degree would you program urban and R&B music as part of your mix?

2950 MR. CANALES: I am glad you asked that question. We will have no urban mix in the mix. When we looked at the format, we looked at what are the trends and the tastes of younger people all over North America, as we are influenced by airwaves all over the place. We found that there were three trends, if you will, three styles of music that are predominantly styles of music that was appealing to the under 34 market.

2951 One of them was alternative, and we knew some success stories with that. We know that electronica dance wasn't a 24-hour format, other than when perhaps I ran it in Toronto at CING-FM. And we also knew urban was there.

2952 We looked at the roots of those sounds and where they come from and the mixtures of those sounds, and we found that the alternative and electronica dance had more of an affinity in terms of what we are trying to do and at the same time it would leave room, if you will -- and I am not suggesting anything -- for any other radio station that would want to play urban so that we can co-exist. If you were going to license another station that had an urban component under the same demographic, we would not see that as a threat.

2953 COMMISSIONER WILLIAMS: I know amongst the Panel Members we were wondering whether we were going to get a demonstration of this music this morning.

2954 MR. CANALES: The thought crossed our mind.

2955 COMMISSIONER WILLIAMS: I think one of the artists was known as Lederhosen Lucil. We just wanted to see some of the product that these artists were producing.

2956 I would like to talk about DJ spinning and turntablism for a moment.

2957 The additional information on that topic that you supplied in the 5th of December deficiency suggested that DJ spinning would account for a fair amount of this station's weekly music programming. I would like to explore this programming element with you in a bit more detail so the Panel can be comfortable in its understanding of your proposal in this area.

2958 You indicated that most radio stations now offer some DJ radio music programming at times, pointing to live spinning from clubs and lounges as an example, and you have indicated that your DJ-based programming would include delayed or live-to-air DJ spinning originating from live club or live party broadcasts, live in-studio mix shows on Friday and Saturday nights, regular scheduled DJ mix segments throughout all day parts and continuous DJ mixing from 10:00 p.m. weekdays and weekends.

2959 When it comes to radio, many people think of a DJ as a radio personality who hosts a specific programming slot and plays records. When you talk about the station using DJ spinners or mixers, are we talking about the same type of traditional radio DJ?

2960 Perhaps you could clarify this point for us, as well as outline briefly what role traditional style DJs and DJ spinners would play at your station.

2961 MR. CANALES: Yes, by all means.

2962 First of all, in the radio world there are different definitions for what we will call DJs. We refer to them as on-air announcers and in the States they refer to them as "jocks". DJ is a general term for people to assume that you will be doing some spinning, but to give some credibility to the announcer --

2963 COMMISSIONER WILLIAMS: So the DJ person does the spinning and the on-air personality or jock would do the more traditional role.

2964 MR. CANALES: Yes. There would be a DJ spinner and on the rare occasion the DJ spinner, which is something we are trying to balance, would also be the on-air personality. If you ever have seen or --

2965 COMMISSIONER WILLIAMS: Actually, at the Kitchener hearing we had a demonstration of turntablism.

2966 MR. CANALES: You can see that it is a busy bee trying to play the music and --

2967 COMMISSIONER WILLIAMS: Yes, it's a big job.

2968 MR. CANALES: For them to pay attention to what the audience would be saying in terms of talking and interaction, it takes away from it. So normally we say it takes a two-person team. The person on-air would be an announcer, and we would have either resident DJs, so they are part of the radio station's employment, or it would be guest DJs. They will come in and they will spin either by way of spinning live or provide us with a prerecorded mix set.

2969 COMMISSIONER WILLIAMS: Thank you, Mr. Canales.

2970 Am I correct to assume that it is quite different than just an uninterrupted suite of normally presented music suite type programming? Are you mixing various -- and this is more for the benefit of the record, because I think what you are doing is you are mixing up two or more different sounds at the same time.

2971 Is that correct?

2972 MR. CANALES: Yes, that is exactly the idea. This is why it makes this format such a fresh format. To a certain degree you can control the output of the format, and we have some concerns that we have addressed in terms of the control, with a couple of Canadian content going into it, and so on.

2973 The creativity never stops. DJs do not mix the same set the same way twice.

2974 COMMISSIONER WILLIAMS: It is different each time just by the nature of it.

2975 MR. CANALES: It creates the expectation of the listener. It enhances the listening experience. If you listen to a live set versus a prerecorded set, it's the equivalent of buying the CD. Or if you are viewing this live in a club or something like that, you don't know to what degree it will go on, and so on.

2976 To the first part of the question in terms of the different styles of music, usually what you have in a mixed set from a DJ is like a trip, if you will, where you start at a certain point and you kind of enhance the audience experience as it grows in momentum, and then when it comes to a certain point it starts kind of unveiling down and sort of chilling out, as it is called, to come down to a point where you are ready to go to a commercial and then perhaps start another mix after the commercial.

2977 That kind of long musical experience is what is receptive to the younger demo, as opposed to a multiple interruption type of thing with commercials and talk and so forth.

2978 I would like to see if Earl has additional comments to that.

2979 MR. JIVE: I wish you had asked me earlier when I had something to say, but I will try to come up with something.

2980 The spinner is more like a club disc jockey and the experience you would get in a club, whether he is in a club or at a party or at the radio station spinning live. It is more by the seat of your pants type of radio and putting music together.

2981 I have done this all my life as a disc jockey, but not within the dance genre, at CHUM-FM and CFNY in Toronto. The audience is like a blank pallet. You give them one thing and then you follow it with something else and you lead them down a little trail, sort of a theatre of the mind, in this case musically. So the spinner is doing something like this for these specific shows.

2982 The announcer, who is also a disc jockey, would play the play list and would have the regular rotation of music, which is more traditional within the way we look at radio station programming.

2983 COMMISSIONER WILLIAMS: Mr. Canales, on average how many hours per broadcast week would the station devote to DJ mixed radio as opposed to the standard type DJ hosted music suite programming?

2984 MR. CANALES: We program specifically in some morning mix, a noon mix, a driving home mix, and in the evening will more likely be from a club or it will be from a studio mix type of thing; so around three or four intensive blocks of mixing specifically by a DJ.

2985 They are traditionally again in terms of trying to reach the audience. Normally radio stations will do something for lunch. They do like a "lunch box" or a "lunch oldies". We do a lunch mix.

2986 COMMISSIONER WILLIAMS: So they make up what percentage do you think of your typical broadcast?

2987 MR. CANALES: On a regular weekday we are looking at five hours a day. In terms of weekends or let's say Thursday, Friday, Saturday kind of a thing where the action will move into the clubs, that will extend an additional three or four hours, where we will go on until 3 o'clock in the morning or something.

2988 COMMISSIONER WILLIAMS: Do you expect your DJ mixed radio music programming would be presented mostly as montage style music programming, regular music suite programming where selections are played in their entirety, or would it be some combination of the two?

2989 MR. CANALES: There has been a degree of concern, and we have gone down this route before because we have done this programming in other stations and so on. It is mostly related as it goes to the level of Canadian content that is on the mix.

2990 How we have been able to focus into the -- and I am just going beyond the montage. There will be a montage, but what we do is we provide the play list that the montage will be generated from.

2991 I can't tell you with exactitude where they will mix from one record to the other, other than we want to make sure that as they do have the mix it is a proper level of Canadian content on it.

2992 COMMISSIONER WILLIAMS: I have a question coming up in that area.

2993 You have said your DJ spinners would be featured in live-to-air studio and club settings.

2994 Will the station have any mechanisms or guidelines in place to ensure that programming content created by your DJ spinners will be of a high standard and not breach any industry codes or Commission policies; and if so, who will be responsible for ensuring these mechanisms and guidelines are met?

2995 MR. CANALES: I am glad you asked that question.

2996 First of all, the people who do the spinning, most of it, are supervised by personnel. They either work for the radio station or they will have supervised personnel from the radio station. Let's say in the case of a club where it is noisy and it is uncontrollable or perhaps unpredictable, we would have station personnel, announcers, operators, technicians, or so on, and our program or music director would look over the play list that will take place on the event prior to the event going on.

2997 To answer your question in terms of the responsibility, we take the ultimate responsibility for anything that goes on air.

2998 I also must say this is something that is done just about every day. It may seem like an unusual occasion here in Halifax, but in other cities -- like in Toronto it is going on by a multitude of radio stations on an ongoing basis.

2999 So it is controlled by the radio station.

3000 COMMISSIONER WILLIAMS: You have also stated in your 5th of December deficiency that the mixing techniques employed by DJ spinners allow them to create their own versions -- and we have spoken about that this morning; that it is almost always unique to some extent -- of previously unmixable songs, allowing them to have one continuous mix of music.

3001 Let's assume for a moment that you are licensed, and you are operating now in the Halifax marketplace. The Commission requests your station's logger tapes and music lists in order to do a Canadian content analysis.

3002 How would you present the songs used in these DJ music mixes on the station's music lists? Would they be listed as individual music selections or as part of a montage? Why might you opt for one type of method of listing the DJ mix selections as opposed to another?

3003 How would you present your logger tapes?

3004 MR. CANALES: I will ask Earl perhaps to answer that question.

3005 MR. JIVE: That is a good question. What are my choices again?

3006 COMMISSIONER WILLIAMS: As a montage or as individual?

3007 MR. JIVE: Well, the montage would have specific selections in it, and anything that would exceed a minute would be listed and would have the word "excerpt" put at the end of the title. So you may see 20 songs in a one-hour program, and if you played them back to back you would not be able to get 20 songs in that hour.

3008 Some of these songs are seven minutes long, and two minutes will overlap between song No. 7 and song No. 8. So at that point, I guess that would be a montage. Those selections would be listed on the list.

3009 Does that answer your question?

3010 COMMISSIONER WILLIAMS: It gives us an idea on your understanding of how you would present it. Staff may follow up a bit closer for more detail on that at the end.

3011 MR. JIVE: Okay.

3012 COMMISSIONER WILLIAMS: You say the station would control the play list the DJ spinners use and DJs would be required to play the play list with the corresponding Canadian content.

3013 What sorts of mechanisms do you have in place to ensure that the Canadian content levels would be met in DJ mixed music programming?

3014 MR. CANALES: In terms of let's say the on air mixes that go on, for the sake of practicality we may prerecord some of those. In fact, we are not only going to include Canadian content but there will be some pre-produced -- I actually will produce our own music, our own blends of music, our own samples of music to be a companion to the mix.

3015 Let's say we are going to have an 8 o'clock in the morning mix. It's kind of hard to get a DJ at 8 o'clock in the morning in terms of motivation. So what we may have is a prepared play list type of thing, already checked by the music director; that it will go on air at 8:00 or 9:00. It will go to our production department and it will have production elements that would be home grown produced right there in the studio.

3016 COMMISSIONER WILLIAMS: I imagine if you are up late at the clubs, it's hard to get up in the morning.

3017 If one of your spinners asked how he could ensure his montage style music mix would qualify as Canadian content, what would you tell him?

3018 MR. CANALES: First of all, there are the guidelines for Canadian content. There is the minimum time in terms of each song has to be exposed or mixed into it. Then there is the selection of songs. We will have a play list that deals with the actual Canadian content that is currently being played on the radio station. It will be a guideline for them to use.

3019 What we will do is we will provide a selection of play of 200 or 300 songs that they can choose from. And as long as they do the minimum requirement of the Canadian content in terms of the exposure of the song to be eligible to be Canadian content, that is all we will require from them.

3020 We would not tell them which songs to play, but we will tell them to play them in accordance to the regulation. We will train them to do that.

3021 COMMISSIONER WILLIAMS: You plan to have a higher than normal level of Canadian content as well. Is that correct?

3022 MR. CANALES: Yes, 40 per cent. We did extensive music research all over the place, and we were happy to say that on one of the CBC Websites we found 1600 artists that are alternative rock or Electronica dance that are available and the music is on site to go on.

3023 We have written to some of those artists, and they are all very excited about it. We plan to profile a lot of them from the Halifax, Nova Scotia region, but right across the country certainly.

3024 COMMISSIONER WILLIAMS: You describe your format as one that would serve Halifax's youth, young adult audience in the 12-to-34 age group. Five other applicants are before the Panel seeking to serve the same basic audience.

3025 I assume you have looked at and reviewed all the competing applications?

3026 MR. CANALES: Yes.

3027 COMMISSIONER WILLIAMS: In a few words, can you tell us the main difference between your dance format as compared to the other formats that have been offered, specifically the urban top 40, urban rhythmic, CHR rhythmic and youth contemporary, which were the other formats which either have been presented or will be presented.

3028 From your research, are any Halifax stations currently programming any type of dance music similar to what you would offer?

3029 Why do you think your dance music format provides the greatest degree of programming diversity and represents the best choice of format to serve Halifax's youth and young adults?

3030 In a quick summary, how are you different? Is anybody else doing now to any degree at all what you plan on doing? Why is your format the best choice for the younger demographic in Halifax?

3031 MR. CANALES: To summarize how different we are, like I explained earlier, we looked at the music genres that currently serve the under 35 demographic over North America and the main difference that we have is that we will not play urban as in Hip Hop and Rap, and so on. Our base would be strictly coming from the alternative rock and the Electronica dance without going into the urban.

3032 MR. JIVE: There are some that cross over from the urban area, and they are still considered in our format.

3033 MR. CANALES: In terms of music nowadays, record companies are becoming so slick in marketing their music that nowadays -- for example, a couple of years ago Dolly Parton, who is a well-known Country artist, almost won a Grammy with an Electronica dance mix of the same song that she was playing on Country. Nowadays the marketing of music that comes is sort of blended in different styles so the radio stations will fit them in their format.

3034 So we have a very good artist that may not fit quite or format, and normally the record company will make a special blend, a special mix -- a re-mix it is called -- that it will fit into the format and the music director will look into it.

3035 MR. JIVE: Elvis Presley is one of the biggest artists right now in this format.

3036 MR. CANALES: So that is how different we will be.

3037 Who else is doing something in this market?

3038 I think there are only two radio stations that are doing something. One of them is CKDU. They have a couple of mixed shows. Certainly their style of programming is not the same style of programming that we do. They do more of the block programming, depending on their producers. But there are a couple of producers that do a couple of mixed shows, like mixing vinyl, and so on.

3039 I think Q104 will come a little close on the alternative Nova Scotian sound with a program they have. I believe it is on the weekends. It is called "Route 104" or something like that. It has won two or three East Coast Music Awards.

3040 COMMISSIONER WILLIAMS: Is anyone operating live from clubs like you propose?

3041 MR. CANALES: Not that I know of. I think occasionally you see here what they call remotes. We call them live-to-airs. But I don't think it is a wide practice like you see in Toronto and Montreal and other places. It is yet to come.

3042 The last part of your question is why we think our programming will be best suited to the under 34 demographic in the Halifax-Dartmouth area.

3043 The answer to that is because we have provided you with a window of genres of music that we plan to pick from to develop a custom made style to fit the Halifax population in that demographic. We feel we have enough of a selection to continue evolving and re-inventing ourselves and maintaining ourselves in the cutting edge to represent that to the genre of population as it was than to come in with an overly researched format that is invented elsewhere that you may want to just try to apply and provide a patchwork by adding a few local artists to the local scene.

3044 We are going to come in. We are just chefs. We are coming here to cook a mix that is going to fit right to the taste of the person here in the market with the local artists.

3045 Our plans are not to hire from anywhere else. All our employees are going to come in from the Halifax-Dartmouth area. If they don't know how to go out and do a live broadcast or do this or so on, they are going to be trained on it and go into that kind of thing.

3046 So we have designed it especially for Halifax versus trying to copy something coming in from somewhere else.

3047 COMMISSIONER WILLIAMS: It will be a whole new recipe, to follow on your cooking analogy, generally a recipe using local ingredients for sure.

3048 MR. CANALES: Yes. It is a new format really in essence. I foresee this being successful enough that somebody else perhaps in Toronto may want to copy us. That is what we plan to do. We want to customize it.

3049 COMMISSIONER WILLIAMS: The next area of questioning I am going to move into will try and put our finger on the pulse, and maybe we will explore some of those unspoken topics and taboos that you have referred to in your remarks and your presentations.

3050 The area is specifically spoken word programming.

3051 In your December 5th deficiency you stated that spoken word programming will account for around 7 per cent or 9 hours of the overall programming.

3052 Of this nine hours, 281 minutes, or four hours and 41 minutes per week, would be devoted to regular scheduled newscasts that I assume would include related surveillance material such as weather and sports. Non-news spoken word programming would include such features as "Club Forum", "Friday Night High", "Campus News" and entertainment-related features, as well as some form of interactive spoken word programming, and I assume some amount of non-scripted DJ or jock talk.

3053 Again of the nine hours of overall spoken word, the non-news spoken word levels would appear to total around four hours 18 minutes per week.

3054 You have identified Halifax youth and young adults as being underserved, and approval of your application would address this situation. Although the overall amount of time that you devote to news and non-news spoken word programming is clear, could you elaborate on the kind of local content you would provide in both the news and non-news spoken word programming and outline your plans to present this information within a context that would appeal to younger listeners.

3055 So I guess maybe an overview of your spoken word in its design and its appeal.

3056 MR. CANALES: Over the last few days you have heard from the applicants that the younger demo is sort of an elusive demo. It's the kind of demo that you can't pin down by putting an ad in the Chronicle Herald or trying to put a billboard on. It is sort of a little bit of a kind of underground economy.

3057 Having raised two children of my own and going through the whole tribulations of the music and how to create a dialogue with younger people, we found that the best way to do that is, first of all, to sound the market out.

3058 Most radio stations now, not necessarily just in this demographic but intensively in this demographic, create Web sites and what they call interactive forums which are chat rooms where young people can come in. They are disguised using different names, or whatever, and they can express themselves.

3059 We found that is one of the greatest things that can happen. I remember having trouble, for example, in trying to express myself with my parents and trying to reach topics that perhaps I wanted to discuss but the level of comfort wasn't there for me to speak on, and I tried to pass it on to my children. It is no different than any younger person who may have a problem of some kind that they need to explain, but nowadays they seem to relieve themselves by going into those forums.

3060 We use the forums -- and they will be well-publicized through the radio stations -- as a sounding board to develop topics that will be exposed as kind of the main kick-off topic on a talk program where people will participate, and it will interact, if we are talking about drugs or we are talking about sex or we are talking about whatever, school.

3061 You will see there is a tremendous need -- and I have seen this and experienced it personally -- once you open the forum and you put it in a way that is an attractive way to the younger demographic.

3062 For example, all talk programming will have music in the background: subtle, not enough to disturb what you are hearing, but to maintain the rhythm of the conversation and the interaction so as to allow those who don't care about the talk to still maintain an ear, kind of half listening and kind of half participating.

3063 Then you will see the young people really lining up in terms of the calls and paying attention to it. All you really need to do is present a topic of the day, if you will, in terms of where you open it up. And we get the reaction.

3064 That is a very valuable input for somebody who is actually programming, because it allows a forum to vent or air out their concerns, if you will. We are not trying to be a mentor but we are trying to direct them to wherever they may seek to find some help. At the same time it gives us a sounding board for us to taste some lifestyles of where we can direct our overall programming and music styles.

3065 COMMISSIONER WILLIAMS: On this interactive talk programming, with the music, the same beat in the background I guess is what you are saying. But what format would it take? How often would it air and who would have ultimate responsibility for the on-air content?

3066 What do you mean in describing the programming content as dealing with otherwise unspoken topics and taboos? What issues specifically do you think you would be dealing with? Could you give us an example of a specific program?

3067 I understand you need people to be interacting to create the specific program, but what would you might expect as a typical program?

3068 MR. CANALES: The issues that trouble the younger generation are issues that they wouldn't perhaps be able to speak about at home. Normally it would be the illicit stuff like drugs, like sex. Nowadays, for example, if you are current on the news, last week I opened up the Globe and Mail and I see this huge article on oral sex, that is not considered being sex by young people. It is a question of education or direction.

3069 If we were going to develop something that deals with that topic, for example, we would try to bring an expert --

3070 COMMISSIONER WILLIAMS: That particular example may have started with the President of our neighbour a few years ago. I don't think he believed that either.

3071 Sorry to interrupt.

3072 MR. CANALES: We will bring in an expert or somebody in community relations with the young people. There are such agencies that deal with people that are street -- I mean nowadays children or young adults up to the age of 16, you kind of don't have much of a direction of it in terms of trying to hold them to a pattern. If they decide to leave home or live a life of their own or be on the streets, or be whatever, it is very hard for a parent to control that.

3073 We don't aim to control it. We just aim to act as a relief or a sounding board for them to help them out to the next level. So we will bring in some expert that is used to dealing with these issues. We will bring up the topic, and you will see the phones light up in terms of people not being exposed visually and being able to talk in common on that regard.

3074 It is no longer a taboo issue. We mentioned it as a taboo issue. Perhaps it is in terms of in the overall context of programming, but really it is now coming into the mainstream with things that we see on a day-to-day basis.

3075 COMMISSIONER WILLIAMS: We have an open line policy, as you are probably aware. I think it is CRTC 1988-213. The Commission sets out a series of guidelines for broadcasters that program open line programming. Interactive talk programming as you have described falls under this provision of the policy.

3076 What types of mechanisms or internal guidelines will you have in place to ensure this programming does not contain abusive comment and is balanced and of a high standard?

3077 MR. CANALES: First of all, the number one thing that we would do would be the advisory to people that participate that that is really what are aiming to deliver in our programming.

3078 Second, we normally use a seven-second delay. Now it is kind of popular since the Super Bowl, but we normally we would use it in that context. In normal language of the youngster, you may end up having some swearing or some stuff that may be offensive to other people. So we try to avoid it. We try to tone it down and try to keep it clean, if you will, on the airwaves.

3079 To my surprise in having dealt with this in this area, they are very respectful of that. They are very respectful of the media that provides them with the entertainment that they want. If they are requested to refrain from doing something that would be offensive to other people, they do so. We have very few pranksters, if you will, in terms of trying to break that.

3080 Second, when you are dealing with an open line program, normally you have a multitude of calls and normally what we try to do is if we think there is over sensitivity or we perceive something, we would usually take phone numbers and we call them back. So at least we would know who we are dealing with or who we are trying to identify.

3081 In most instances, if you want to go over in terms of what the feel is for this, I would say the young people, believe it or not, although they may be the wildest person out there, because they respect the music, they respect what we are doing for them, they will have an ultimate respect for the rules, if you will, because they would understand that if we were hurt and we were off the air we wouldn't be providing them with the music that once upon a time they didn't have.

3082 COMMISSIONER WILLIAMS: So that is your listeners.

3083 How much of your non-news spoken word would consist of DJ patter, and what would your guidelines be for the DJ?

3084 MR. CANALES: You mean in terms of the music?

3085 COMMISSIONER WILLIAMS: No. In terms of his or her spoken word.

3086 MR. CANALES: Sorry, could you rephrase that. How much percentage?

3087 COMMISSIONER WILLIAMS: On average, how much, if any, of your four hours and 18 minutes of weekly non-news spoken word would consist of DJ patter?

3088 MR. JIVE: I don't think DJ patter was put into that equation. The spoken word was totally programs that are their foreground.

3089 If you went on for ten minutes in the morning about some specific topic that is hot at the time, that wasn't considered in that equation.

3090 COMMISSIONER WILLIAMS: Thank you.

3091 Mr. Canales, of the many hats you wear, I note you are listed as being the Manager Director of Global Groove Networks, a company described as being a worldwide producer, aggregator and syndicator of youth radio and TV content.

3092 Are there plans to feature any Global Groove Networks' programming on the proposed station; and if so, could you provide us with a few more details of the type of programming this might be, how many hours?

3093 MR. CANALES: Yes, Global Groove is a collective of DJs and talent and acts as the producer, aggregator, syndicator. There will be some DJs from Global Groove that will come and do some guest sets or set up some guest sets, but that will be the extent of it. It wouldn't be the only supplier of guest sets or so on to the station.

3094 COMMISSIONER WILLIAMS: Can you give us an idea of how many hours of programming that might represent?

3095 MR. CANALES: Probably a couple of hours a week.

3096 COMMISSIONER WILLIAMS: We will now move to the area of Canadian Talent Development proposals.

3097 You have proposed an annual $15,000 contribution to East Coast Music Awards to underwrite the creation of a special Halifax Superstar Award to be given to three local Halifax bands that achieve the largest growth in their careers over a one-year period.

3098 Would Jamz work with the East Coast Music Awards people in determining which bands would win the Halifax Superstar Award? Could you give us an idea of the judging criteria for determining who wins?

3099 How would your annual funding be used? For example, does your funding represent a cash award that would be distributed to the winning bands?

3100 Basically just give us a bit more information on that, please.

3101 MR. CANALES: In the matter of Canadian Talent Development, the radio station will promote and cooperate as much as we can to the initiative. Most of the mechanisms in choosing the winners or deciding the methodology of that will be entrusted to the East Coast Music Award. We would not try to influence or meddle in some kind of way with the winners.

3102 We will provide the funding. It will be cash funding. We will want to make sure that as much as possible of that funding goes to the artist as to an administrative thing.

3103 Our aim is to enhance the artist. So if it comes to the point where we have to write a cheque directly to the artist or whatever to avoid an administrative thing, we wouldn't charge any administrative charges ourselves. Our aim is to enhance the artists.

3104 When we deal with these organizations in general, the money is directed to enhancing of the local artist, and we will make sure that as much as possible goes right to the artist.

3105 COMMISSIONER WILLIAMS: In reviewing the budget breakdowns for both the St. Mary's University and Mount St. Vincent University annual music concerts, I notice that certain funding is allocated to cover marketing and advertising expenses.

3106 Do these expenditures represent payments to a third party, or do they represent payments that the station would receive for on-air promotion and advertising events?

3107 If it is to a third party, who as an example would we be talking about?

3108 MR. CANALES: Again, the way we will propose to do this is we will have an agreement with the universities. There will be two concerts, one in the spring and one in the fall, kind of a spring break and back to school, which are the two areas of interest.

3109 We will have them underwrite the administration and the production of this event. We would limit ourselves to the funding. Any promotional activity is over and above this funding.

3110 For example, if we are going to do a concert in the fall, we would provide $20,000 in direct funding and maybe $100,000 in air time funding to sort of promote the event as one of the station's events. But we are only representing the cash portion of that funding.

3111 In terms of the distribution of the funding, it is done in a way that equates to the actual success ratio. In other words, we don't want to leave somebody else to fund something that doesn't take proper sound or lighting or so on. We have been experienced and involved in doing all this type of thing. However, we don't pretend to be the concert promoter or the concert producer. We are the radio station.

3112 We want to ensure that it is done properly so that it comes out okay for everybody: the artist, the organization, the participants and ourselves. We are putting our name into it as being our event, as our cooperative event.

3113 COMMISSIONER WILLIAMS: In keeping with the third party marketing and advertising theme, I see that funding has been allocated as well under the heading "Marketing and Advertising" for the Annual Lobster Palooza Talent Showcase Initiative and that you would underwrite over a seven-year period at the Canadian Music Week.

3114 Again, would this funding go to a third party; and if so, could you provide us with an example of who we are talking about?

3115 MR. CANALES: Yes. There was a letter involved in our original presentation from Canadian Music Week.

3116 COMMISSIONER WILLIAMS: Out of curiosity, wouldn't Canadian Music Week people promote and advertise this type of event as a normal part of their business?

3117 MR. CANALES: Well, they do. But, you see, one of the problems and why we are doing this is the fact that the biggest complaint from the artists or the concerns of the artists in the local area is that they do not have access to bigger markets. The area doesn't have as many record companies or as many opportunities perhaps as Toronto or a bigger city. So you end up with a lot of artists making great efforts from Halifax, perhaps taking a bus to go out and play in some kind of a venue in Toronto and then coming back by train, great sacrifices to that.

3118 We don't want to bring this into a high profile event like Canadian Music Week is and kind of leave it short-changed in the fact that this is going to be run of the mill.

3119 If you are familiar with Canadian Music Week, they do somewhere over 200 showcases. We don't want this to be a showcase that is going to be another showcase that is listed on the paper. We just want to make a Maritime, a Halifax event. We want to make some noise.

3120 To make some noise, you have to stand out of the ordinary and you are going to have to come up with something that is going to -- we may have to bring some lobster, some special things, or something that is going to be of interest to people, to say when they come in town they will want to participate in particular.

3121 It will require that type of funding to be noted from the rest. Canadian Music Week is a great event. It happens once a year, but there's 200 showcases. I just don't want to be Showcase No. 201. I want to be the showcase that everybody looks at and in particular because we will be cognizant of the fact that the east coast, Halifax talent, will be present.

3122 For that, we will have to ensure that that level of promotion is done as a separate event within a larger event promoting Canadian music.

3123 COMMISSIONER WILLIAMS: I understand; thank you.

3124 In another initiative you have allocated a total of $80,000 over a seven-year licence term to underwrite the creation of demo tapes for aspiring Halifax musicians and recording artists. Annual funding ranges from $5,000 in year one to $20,000 in year seven.

3125 Can you tell us a bit more about this initiative. For example, what level of professionalism are we looking at with these demos? Are we talking of a budget of $500 to $1,000 per demo tape?

3126 How many demos do you hope to create annually? How will musicians be made aware of this initiative? What criteria will be used to determine who gets funding and at what level?

3127 Will the station be involved in overseeing these demo projects in other ways?

3128 So I guess a presentation on this demo opportunity that you are developing.

3129 MR. CANALES: The demos are meant to be a supplementary budget to complement other activities that may be going on in regard to development or enhancing the local artist.

3130 In terms of the methodology of how we will go about doing this, again I am a firm believer in hiring the right source. We will source at least two studios that do this for a living, and we will seek the most competitive pricing from our radio station point of view.

3131 It will be a situation where the artists will apply to get the demos. We will want to make sure that perhaps they are eligible by factor levels and they may be short money and we will help them by sending them into our professional company which then will invoice us for whatever it will be on a per-hour basis and we will pay them.

3132 COMMISSIONER WILLIAMS: So there isn't a specific amount for each artist. It is dependent on the individual situations then?

3133 MR. CANALES: Yes. It is discretionary. It is there because we know that we are out there ready to go to the showcase. But guess what, this guy doesn't have a demo. So we say let's put some demo there, because sure enough somebody is going to be ready to do something but they don't have a way to do it. We go through those situations on a day to day basis. We just say: Look, we do demos at whatever studio. Go there and they will take care of you if you have a tape or if you don't have a tape.

3134 We know what standard rates are and we will negotiate an ongoing seven-year agreement, if you will, to do this type of demo. So it's not like a lot of money for doing demos. But we will have it done on a professional basis and we will just pay them. There won't be any advertising involved into it. It will just be strictly an expenditure.

3135 COMMISSIONER WILLIAMS: In your opening remarks you suggested that most business here is conducted on a relationship basis, kind of like who you know, as it is in many markets. It is not unique to here, I would imagine.

3136 How would these artists find out about this?

3137 I guess what I can see is the first few in the door, obviously no problem. But at some point you will run out of money.

3138 MR. CANALES: How will artists find out? Well, we will go to the Music Industry Association of Nova Scotia and we will go to the Atlantic Federation of Musicians, which is the union here, and we will make sure that people are aware through their traditional methods of communicating themselves. Plus the radio station will run some promotional activity to attract new artists.

3139 We are willing to help those who need it. I think we have a generous package that we would accommodate a fair amount of people in one way or another.

3140 There is always the fact that the ultimate dream or ultimate goal of an artist is that their song is actually played on the radio as promotion for potentially people buying their records. That would be the greatest gift of them all since we are going to play a lot of new music.

3141 We try to widen it as much as possible, and we try to encourage other organizations to work with us and form some sponsors to create some extra funding or so on. There are organizations with representatives and they have this and do this, and they have already certain support systems. We don't aim to replace them. We aim to enhance them and we want to encourage other people to come forward and try to do that kind of a thing.

3142 For example, if we are going to develop this Annual Lobster Palooza going on, we will seek sponsors relative to exposing Nova Scotia products and so on that will accompany the artists, and they will be also helping to defray extra costs of keeping this strictly to the promotion of the music. We may get somebody who may want to provide some seafood or some beverages or something that belongs to the region and they want to showcase them in Toronto for mutual convenience purposes, and it will help in enhancing the whole thing.

3143 It won't be taking away from the budget. It will be strictly to promote the music.

3144 COMMISSIONER WILLIAMS: Thank you for that.

3145 You have proposed two non-music initiatives as part of your CTD package. One is a capital grant of $60,000 to the Canadian Broadcasting Museum, and a $25,000 grant to Mr. Wayne Plunkett to help complete and finish and publish his book, "The History of Canadian Broadcasting".

3146 You acknowledged during earlier questioning that these projects may not qualify for CTD per se even though they did represent an important benefit to the broadcasting system.

3147 The Commission agrees that neither initiative meets the current CTD eligibility guidelines but also acknowledges support of these initiatives would represent a benefit to the broadcasting system. However, we still need to clarify your plans with respect to the ineligible $85,000 in funding.

3148 There are a few options, and I am going to present three of them and explore them a bit with you and see if we can reach a decision on your part as to which route you would be interested in pursuing.

3149 Option 1: Do you wish to keep your $85,000 museum and book initiative on the table but as a separate condition of licence commitment outside of the CTD? This will of course reduce your overall seven-year CTD commitment from the original $1.25 million to $1.165 million. That is Option 1.

3150 Option 2: Do you wish to maintain the original level of CTD funding at $1.25 million and redirect the $85,000 to other initiatives that would be eligible?

3151 Option 3: Do you wish to keep the $85,000 museum and book initiative on the table as a separate condition of licence outside of CTD and redirect an additional $85,000 to other eligible CTD initiatives to maintain your CTD funding at the original commitment of $1.25 million over seven years?

3152 Those are the three options.

3153 MR. CANALES: We have done some thought after we presented that, and we have in our correspondence to the Commission lowered I think our representation of our CTD to $1,165,000.

3154 Nevertheless, we still want to maintain the commitment to the development of the book, which we think is a tremendous effort in representing the Canadian broadcasting. Wayne Plunkett has more or less developed almost like an encyclopedia style which has not been done in Canada, and we think it is a great thing, and we maintain our commitment.

3155 Also on the Canadian broadcasting museum, we want to see Halifax and the east coast representation well positioned in a national scope.

3156 So we would like to maintain those outside our CTD.

3157 In terms of incrementing our CTD another $85,000, it would be a question of budget that we really haven't accounted for right at this present time.

3158 So I would take Option 1 and maintain the support to the book and the museum outside the CTD.

3159 COMMISSIONER WILLIAMS: Thank you.

3160 I am going into the finance area for a few brief questions.

3161 I want to look at the sources and magnitude of your projected advertising revenue. Specifically, what percentage of revenue do you anticipate would come from existing stations, increasing in advertising budgets, attraction of new radio advertisers and say attraction away from other media?

3162 Where is your business coming from and how much do you think from each source?

3163 MR. CANALES: We have done some research on that and done some number crunching, and we feel that 50 per cent of our revenue will come from other radio stations; 25 per cent will come in from new advertisers; and 25 per cent will come in from other media advertisers, newspapers predominantly and some from direct mail and Internet.

3164 COMMISSIONER WILLIAMS: You know that your application for use of frequency 95.7 is competitive.

3165 MR. CANALES: Yes.

3166 COMMISSIONER WILLIAMS: And mutually exclusive with one other applicant in this hearing.

3167 In your view, what are the compelling reasons to give you the requested frequency?

3168 MR. CANALES: Well --

3169 COMMISSIONER WILLIAMS: Maybe I will just stop you for a second.

3170 The next question which I am going to give to our Chair to do at the end of course, is: In which way does your proposal constitute the best use of the frequency spectrum?

3171 It is a similar kind of question, so you can save some of your ammo for later, if you wish.

3172 THE CHAIRMAN: Or do it now.

3173 COMMISSIONER WILLIAMS: Or do it now, as he said.

3174 MR. CANALES: First of all, we apply like everybody else and I guess you can say it's a fair level field, like they say. We were careful enough to look for the frequency that wouldn't be so -- we knew of all these problems and I don't know why anybody else, Rogers included, wouldn't know about, this large corporation like Rogers. We knew about these problems before we applied and we went over all the frequencies. We knew there was a variety of different frequencies available and we chose that particular frequency.

3175 As you know, our station is not meant to be fully powered. It is only 22,100 watts, which doesn't quite seek the hundred thousand and so on that the other applicants are looking for.

3176 From that point of view, we were there first and we did our job right, or our engineers did, and presented it. I think that would have been available to anybody in terms of the knowledge that we had.

3177 Second, we asked the engineers when Rogers decided to switch to our 95.7 proposed frequency, and they went over and did some calculations and found out that if Rogers was going to reduce their power, just like Maritime Broadcasting did with the NAVCOM objection, they will actually have more ERP wattage staying on 105.1 than coming over to us. So we don't understand why. It is beyond our reason. They would have a better coverage staying where they are on 105.1 than moving over to the 95.7.

3178 In closing, we aim to have a frequency. We studied that frequency as being a great frequency for us. It is non threatening to other people seeking more clear channels, larger channels or more power, and I think it will serve us quite well. But we would be prepared to undertake a change of frequency should the Commission ask us to do. We just aim to serve the community.

3179 We think we have done our job right, and we don't understand why they are moving to 95.7 when they could have more power on 105.1. That is why we objected to that.

3180 I don't know if that answers directly what you are asking.

3181 COMMISSIONER WILLIAMS: It gives us a good base of information to understand where you are coming from.

3182 I guess you feel your service is more needed in Halifax than your opponent?

3183 MR. CANALES: Well, in terms of the service, yes. I disagree with most of the people that have said that the CBC is not doing such a great job. Everywhere I get in a cab and I talk to people that have the CBC on. I happened to be profiled on the CBC this morning, and I wasn't sure. I was interviewed two days ago. Before I walked from the street to come in here to participate, I was told ten times that I was on CBC radio. So to me --

3184 COMMISSIONER WILLIAMS: We actually heard it this morning as well. News travels fast.

3185 MR. CANALES: So I think they are doing a wonderful job, and I think they could be encouraged to do an even better job locally after the criticism they got in this hearing.

3186 Furthermore, every radio station has the right to provide the overall community at large with news and information, perhaps not in such a sophisticated way as Rogers is proposing to do it, but it is available.

3187 In fact, if I am not mistaken, there is a licence undertaking that specializes in providing prerecorded information that deals with most of the issues of pressure, which is Information Radio, low powered. I think it is 97.9 in the FM frequency here.

3188 I think that the market already has a good blend in it of news and so on. I would say that on that basis and looking at the tremendous under-serving in the under 35 market that the broadcasters currently have, we have a better story.

3189 COMMISSIONER WILLIAMS: One more question before I turn it back, Mr. Chair.

3190 Jamz confirmed in its December 5th deficiency response again that should its application be approved, Jamz would as a condition of licence devote an additional $250,000 in funding over a seven-year licence term for support to the appearing application from the Centre of Diverse and Visible Cultures; and that this funding of course would be contingent upon the Community Type B application being approved and your application being approved.

3191 Can you describe your reasons behind this initiative and the opportunity it presents, please.

3192 MR. CANALES: Sure. When we looked at the market and what we wanted to do, radio is a local market and aims to serve the community. We found two areas where this was lacking.

3193 Area number one was the area under 35, which we chose to go out and provide a commercial proposal. We also found the area in community services and community access to the airwaves was lacking.

3194 I have been active for many years in this area in community and multicultural things and community associations that I know, and there has always been a constant struggle of trying to get some sort of a promotion, some sort of access, if you would, in the airwaves.

3195 I have noticed that one of the main broadcasters here in this town, Newcap, Newfoundland Capital, has started an initiative that helped launch an aboriginal radio network. I felt the aboriginal was such a narrow niche, if you will, for this community and I wanted to be the first one perhaps -- I don't know if it has been done anywhere else in the country -- that will endorse funding, not only with the money but also with the mentoring and the direction, and we are not sure how much more that can be quantified, for a community station in the whole sense that does not just serve a niche part of the market but the whole community. It will involve partly some other religions and partly some of the third language programming and the community at large.

3196 We were frankly overwhelmed with the response, when the interventions came in, from the quality of the people, of the associations and the people, and the outcry there for community. It is tremendous.

3197 We are very proud to be able to provide this help, and we hope and feel that it should be licensed, Kaleidoscope, and we want to go on with them.

3198 COMMISSIONER WILLIAMS: Thank you very much, Mr. Donovan, Mr. Canales and the panel members for Jamz. It has been a good start to a good day.

3199 Thank you, Mr. Chairman.

3200 THE CHAIRMAN: Thank you, Commissioner Williams.

3201 Commissioner Langford.

3202 COMMISSIONER LANGFORD: Thank you, Mr. Chairman.

3203 You have been worked hard today and I don't want to make it any worse. But there seemed to be one area that I didn't hear you get into with Commissioner Williams as much as perhaps I might have liked to have.

3204 You talked a lot about spending money. You guys are going to spend a lot of money here, and that's a good thing -- as somebody who is not yet in jail used to say.

3205 How about making money? It sounded from your opening remarks, Mr. Canales, that you could probably sell sand in the desert or snow in Halifax. I would like to examine that a little bit with you, because this is a tough market.

3206 I am not necessarily asking you to comment on other applications here. You will get a chance to do that in another phase. But we have heard from some pretty experienced, pretty skilled broadcasters, that they are struggling here because of five stations selling together: how tough it is for even someone who has two stations to try to make a buck here, to make a living.

3207 You are coming in with not only one station but a station that is being targeted at, if I can call it this, an untried demographic for Halifax; maybe not untried in Los Angeles or untried in Toronto but for Halifax this is a whole new world.

3208 Other applicants have told us that the place to make money here is in the older demographic; that even though it is crowded, that is still the place to go. You are coming in and saying no, we are going to go for a brand new unmarketed demographic, brand new sound. Bringing Elvis back from the dead is maybe not totally new, but it is somewhat new.

3209 How are you going to make enough money to do this? How are you going to crack this tough market of Halifax?

3210 MR. CANALES: As you know from my opening remarks, I have worked in this market before and it is a very tough market, regardless of what you are doing.

3211 My opinion, not to go to commenting on other applications, is that the state of the market is really controlled by two or three large corporations; that they have become a bit of a dinosaur in terms of their methodologies. I encountered in regular conversations about my application with other people's situations where some other people will be in a position of doing business with us, corporations, but they are not inclined to do so. They have gone into a position of a seller's market, if you would. This is our deal: take it or leave it or go somewhere else.

3212 I remember when that happened here when this town only has one newspaper. You did everything through the Halifax Herald, and if you did something wrong with the Halifax Herald well you were blackballed from there. You would be in deep trouble because you couldn't advertise. There was no other option.

3213 Then there was the Daily News and then there was something else and something else, and that kind of levels off.

3214 The position is not different than that. It has come to a point where there are really two phone calls to make here to get on the radio. If you double-cross any of those phone calls or whatever -- well, I am not going to say what the practices are, but they tend to abuse power, if you would, in terms of that.

3215 I think that that frankly works to our advantage because what it does is it creates a culture on the small business that grows and learns to live here into a situation of choice and diversity of where to go.

3216 I got in a cab not too long ago coming into here. It was the middle of summer, and I got the last room in the last hotel that I could get because it was packed. The buskers were here. It was the height of the tourist season. I said, "You must be happy with all these tourists going around" and he said, "No, I'm not because the tourists that come here don't take taxis. They come in buses or they rent cars." So I said, "When is it that you are happy?" and he said, "Well, when the kids get back to town, when it's back to school, because the kids are the guys that use all the cabs." They get all five in a cab and go for pizza down at the club, and so on.

3217 That is the market that has not been explored by the existing broadcasters -- not the cab buying advertising but where is that cab going with that economic expenditure, that desire to go out there and burn a few dollars and participate in life.

3218 We are not totally depending on the students coming into town for the economic thing, but in terms of perhaps going into the area of competing with the establishment, our best ally is that they are the establishment and we represent the independents. We represent the older deal that you could not get because you didn't get to a point with those people.

3219 I worked in this market for CFDR. If you go back a few years, CFDR was a station servicing the 55-and-older market. We had a 5,000 watt station in Dartmouth and we were competing with CJCH and CHNS, and whatever, which were well positioned.

3220 Our biggest advantage on the small businessmen, who is 90 per cent of the time the person that is going to make that decision of buying that order, was most times based our success ratio on the independence that we represent from a large affiliation with a media group or so on.

3221 People here long know the fact that there are all these radio stations working together. They have television and so on. I think being able to prove the fact that we do have an audience, that they have an economic value -- in fact is a very large economic value, as it turns out to be -- it will represent an opportunity for an independent small businessman to support us.

3222 Our prices are realistic. We are looking at very, very inexpensive advertising in terms of what they could be charged now. We are only planning to sell a third of our inventory, and our inventory is not even by the standards of the radio. We are only planning ten minutes of commercial content per hour, which most radio stations are around 13 or more.

3223 COMMISSIONER LANGFORD: Mr. Donovan, did you want to say something more?

3224 MR. DONOVAN: I could add just a few words.

3225 I spent my whole life, 25 years in business, competing internationally successfully, mostly successfully, and I look forward to competing in this market.

3226 The Halifax I know is a progressive city. Radio is stuck in 1950, and we need to update it.

3227 COMMISSIONER LANGFORD: Will you sell from in-house? Will you have your own sales force, or will you get some sort of third party professional group to do your selling for you?

3228 MR. CANALES: No. We will have our sales force, and we will train it and grow it and maintain it.

3229 COMMISSIONER LANGFORD: Without giving away any of your trade secrets, what approach do you take when you are opening up what I might call a brand new market to advertisers? How do you convince advertisers who have been looking at the over-35 demographic for years and years and years, have been looking, as you say, at solid groups, established groups?

3230 How do you open up? Where do you go to convince people that they want to advertise all of a sudden to a 12-to-35 group? What is your approach to that?

3231 MR. CANALES: First of all, there are advertisers already servicing that area. They are just not on the radio.

3232 If you look, for example, besides the daily paid circulation newspapers, there are free-standing newspapers. There is the independent The Coast, which we figure in terms of their yearly take is close to a million seven, a million five. There is the Napster, an insert with The Daily News that circulates. It is strictly an entertainment. Between the both of them there is already $2.8 million of entertainment strictly aimed to that demographic.

3233 A lot of those advertisers in those newspapers are just not advertising on the radio because the radio is not servicing that market.

3234 COMMISSIONER LANGFORD: You are only projecting to take 25 per cent of your total revenues from that particular area, and 50 per cent, by your own application, is coming from established stations. In other words, they have been advertising to a demographic that is well beyond yours. They have been advertising to us, and all of a sudden you want to get them to advertise to these young people that we see here today.

3235 How do you turn them around?

3236 MR. CANALES: The 50 per cent, just to clarify that, is really over a seven-year period. Our levels will change in the initial first two years.

3237 The number one objective that we try to do in advertising is create an impact and value for the advertiser. The number two objective right after that, since we don't have numbers to start with, is to develop the numbers to dominate, superserve that particular demographic.

3238 In the minds of a sophisticated media buyer, if you would, when you get into the larger kind of money, they are going to want to look at what am I getting in return, type of thing, more so than Joe Smith may want to buy it because they know you or they want to give you a chance.

3239 At that point, let's say for example we will start the radio station in September and immediately join BBM and develop the audience research necessary for us to go out. We have the budgeting for having all those resources that are slick and sophisticated, and they work in larger towns with numbers; that once brought over here they will aid our sales force into going in and develop sales.

3240 The first year it is projected, for example, in terms of the breakdown, as you say, in the 50 per cent, from the newspaper I think we are looking at somewhere around 35 per cent in the first year. So it is not really 25 per cent. It balances out to 25 over a seven-year period.

3241 We don't think everybody is immediately going to switch and buy advertising from us. We have to earn their respect.

3242 If I can just sum this, the highest aid in my life in marketing in radio has been creativity. I think of myself as a producer and each one of my clients as the production. If it is a fashion show or women's wear, we are going to come up with ideas that are not just going to be let me take your money and here's what you've got and God knows what you are going to get for a commercial.

3243 You have to be able to work with the customers. You find that nine times out of ten that is really what gains the customer, more so than if I come over here and try to slick you with a Powerpoint presentation to say that I've got more of this audience or the other audience.

3244 The development of that culture, that local customized culture into a client service, is what is important. We will do that with a sales force, a dedicated sales force that is not selling anything else but what we are doing. They live and enjoy the lifestyle of what we do. They are in the clubs alongside with the people doing it. They breathe what we do, and it is transparent to the client.

3245 The only question that will come in the mind of somebody trying to sign an order will be a question of value. We certainly want to provide a lot more value than what they are paying for.

3246 COMMISSIONER LANGFORD: Thank you very much.

3247 Linda Stronach was in town yesterday. She should have spent some time with you.

3248 Those are my questions, Mr. Chairman.

3249 THE CHAIRPERSON: Thank you, Commissioner Langford.

3250 Commissioner Cram.

3251 COMMISSIONER CRAM: Thank you.

3252 Being from the west, I hear and respond very well, Mr. Ritchie, to your point that decisions or changes can take place in companies which are owned and controlled by those at a distance. I understand your point is that you are independent and local.

3253 I hear you and there have been other occasions when we have licensed based on other criteria but in addition to that. Mr. Plunkett knows well that in Hamilton we licensed the Smooth Jazz station and one of the reasons was local ownership. But ownership changed within a couple of years.

3254 I ask you: If we are to consider local ownership as a criteria, how do we weigh the downside?

3255 What you put to us, Mr. Ritchie, is that we have large companies outside of Halifax versus a local company. I hear you and on other occasions we have seen that as a valid consideration.

3256 Do we give a 10 to local but discount it by 5 because you may sell out versus a 4 or 5 because it is a strong national company?

3257 We don't number things and say you get 10 points for this and 20 points for that. But I need some way to be able to judge what you are saying: local versus the large national company.

3258 Anybody can answer that. I didn't necessarily mean to put you on the spot, Mr. Ritchie.

3259 MR. RITCHIE: Thank you. Of course it is a very key part of a decision, I would think, and it is one that you really cannot pin down unless it was actually by contract where we sign with you a contract saying that under no circumstances will we ever consider selling to anybody; that we are going to keep this generation after generation. That is not practical.

3260 The only way we could sort of answer it, I think, is that there is a huge distinction, in my mind anyway, between public companies and private companies in that once you have a public company and an approach is made to buy or merge, the directors are in a very, very awkward spot, because they are not representing themselves. They are representing the public shareholders and almost a process or a dance starts, which a lot of times you don't have much control over frankly by the time you get investment committees in and bankers and auditors, and people objecting and people for it. It is entirely different.

3261 With a private company, I think all you can do is look at it initially, look at the people that are involved. We would say that we intend to remain a private company. We intend to retain this franchise. If an investment dealer can get excited, I guess we are all excited about it.

3262 Manuel paints a glorious picture of this under-34 market, and I almost feel like joining it. I think it is so exciting that I had better get into this.

3263 I know, in discussions with Michael and Manuel, we are not asking for this licence in order to resell it. We state that clearly, emphatically.

3264 You say to me: What happens if five years from now or ten years from now somebody comes along and gives you a $100 million for this, are you interested in selling? What do you do? No, we are not going to sell it. How about $125 million? No, we are not going to sell.

3265 You know my point. In other words, we can say now, with this set of circumstances at this time, it is not our intention, if we are favoured with this licence, to resell it.

3266 I would hope Michael might add to that, but that is my view.

3267 Michael and Manuel and I have been involved in a lot of companies that have started from scratch. This is starting from scratch. Some have been successful and some have been unsuccessful. Some have been bought out, some haven't been bought out. And some we have had not much choice in selling, for many reasons. Sometimes something doesn't go well and you are very happy to sell it. Sometimes it doesn't go well and it goes out of business.

3268 There is a whole variety of things that can happen with a corporation and a company, and a company is really nothing except the group of people that are trying to run it.

3269 MR. DONOVAN: I am over 50. My birthday is shortly, in about a week -- not that that means anything or is really relevant.

3270 I haven't listened to radio in Halifax in 25 years other than the CBC. I would really like to have a radio station that I could listen to. I think I am still young enough that I will find this, particularly the international aspect of this, which is very appealing to me personally; it is the type of music that I listen personally, something that I will listen to and that it serve this community.

3271 That has always been what has counted for me my whole life: serving this community. I believe it is a very progressive community. It is not a backwater. It is the most progressive community in this country and yet it has radio that reflects --

3272 THE CHAIRPERSON: Don't get her irritated.

3273 MR. DONOVAN: Okay. It's one of the most progressive communities. I betray my bias.

3274 MR. PLUNKETT: Commissioner Cram, if I could just add, as I am sure you know, referring to the Hamilton situation, there was some shuffling around of very minority shareholders, but certainly the control of the licence is still with Mr. Kirk.

3275 For the most part, I deal with medium sized broadcasters or entry ones who need some guidance to even make an application. I think I can say that all of the people I have worked with are still owning their stations. They are pretty fiercely independent. That is not to say that they couldn't be enticed with so many dollars being offered, but that is another story. Their general tendency is to want to increase their small and medium sized relative holdings to the whole pie.

3276 I think there has been obviously a great degree of consolidation in the industry, maybe too much. These broadcasters I am talking about are wanting to hold firm to where they are. Thank you.

3277 COMMISSIONER CRAM: Thank you. I have another question.

3278 The conundrum that I see in this market -- and by the way, I am permanently 39.

3279 The problem I see in this market though is if you are successful, what appears to be the pattern is that incumbents, primarily the group that have been described as acting as five, have three stations, one of which they could direct to program directly in competition with you.

3280 Am I wrong in that kind of analysis? What would you do in a situation like that? They apparently have sort of the combined sales force.

3281 Is my analysis wrong? How are you going to handle it?

3282 MR. CANALES: My experience in this type of enterprise programming and competitive situation is that I have been in very tight competitive situations like this before. The prevailing distinction that is associated with success is the ability of the management to have the street value or the ear to the ground in terms of what the street soundings are and what the pulse is.

3283 I will give you one example.

3284 When I ran Energy 108, which is CING, we took it to the highest level that it had ever been in that radio station in terms of dollars. We won the award of being the best station of the year, et cetera.

3285 Shortly afterwards it was sold to a large national well-known undertaking, CORUS, originally Shaw. CORUS is a separate company. They undertook to try to run it and in fact imitate it by buying other radio stations similar and created sort of a network, if you will. Let's go out and cookie-cut this. They had Oshawa and they had Barrie and they had Woodstock, and there was going to be the whole network.

3286 Their whole aim was a different means of what we were trying to do. They were trying to -- they actually syndicated most of the things, except for the morning and evening they were going to do the nightclubs.

3287 We were particularly in that market we grew the revenue to about 42 per cent of the revenue coming in from the nightclubs. Nightclubs normally don't buy any advertising based on ratings. They basically buy it on the music and also based on the feel that they have and the relationship with it.

3288 It is funny that the first thing that CORUS -- this shows you where it goes, and I think this is comparative with the group that you are referring to.

3289 The first thing they wanted to do when they bought the radio station was to knock out the live broadcasts. But then when they went to the accounting department and they said that is 42 per cent of our revenue --

3290 The moral of the story is that shortly after they bought it, a couple of years, they ended up failing in the market against other competitors and changing the format because of the fact that they were not independent, if you would, in their thinking. They were all centralized and thinking how it would feel on five, and this and that. They did not have the ear to the ground.

3291 My perception of the group that you referred to is that's so. They are local. They have been here. In fact, I know the majority of them they used to be sales reps in different radio stations and they grew into management. They are subject to corporate policy, if you would, in all areas of their undertaking.

3292 I think that kind of creates a handicap against us. We are free. We are young. We don't have to go and look at anybody in Toronto or anywhere else or a higher thing to make decisions. We will go with the flow and we will go with the street and adjust to meet those deadlines.

3293 I think the greatest advantage that we have is that we will be independent in terms of selling, in terms of marketing. We can make fast decisions. We can turn around and do fast undertakings as opposed to overly consolidated plans and worrying about how is that going to affect that other guy.

3294 Furthermore, it is difficult for me to say, but I don't think they will be able to source out the programming. Programming is not an easy thing to source out in this particular genre. You really need to have more of an international scope of where this goes. The moment you are not perceived as being cutting edge or cool is the moment that they will not listen to you any more and your business will disappear. So it constantly keeps us in the foreground.

3295 This has taken years. We have been doing this, at least on radio, since 1995 on this particular demographic. For that to be duplicated in terms of connections and so on, it would be very difficult for a corporation as to an independent.

3296 COMMISSIONER CRAM: Mr. Canales, do I understand you are getting back in the harness again? You are going to be GM of this station?

3297 MR. CANALES: Yes.

3298 COMMISSIONER CRAM: My last question. If you were licensed, would you agree to a COL requiring prior Commission approval should you enter into any agreement regarding sales or sales management?

3299 MR. CANALES: By all means.

3300 COMMISSIONER CRAM: Thank you.

3301 Thank you, Mr. Chairman.

3302 THE CHAIRPERSON: Thank you, Commissioner Cram.

3303 I have a couple of questions of clarification.

3304 Mr. Canales, when I was reading through the interventions, I noted that you had sent out an e-mail soliciting interventions, which is fine. We know everybody does that anyway, and it is part of the process.

3305 When a lot of the people sent the intervention, your original e-mail to them was attached.

3306 MR. CANALES: Came as part of it.

3307 THE CHAIRPERSON: I was struck by a couple of things in your original letter of soliciting the intervention.

3308 One was -- and I guess it is perhaps just a minor point -- you started off by saying: We seek two individual licences.

3309 I wonder if you could clarify that point with respect to yourselves and Kaleidoscope.

3310 MR. CANALES: I don't have the e-mail that I sent out in front of me. I think that it wasn't meant to be -- we had conversations with the Commission prior to us entering into an agreement with Kaleidoscope, and we had subsequent conversations with the Commission. This was before we decided to even support them.

3311 We had conversations with the Commission specifically to the support letter. So the comment was meant to seeking dual support. Those interventions were entered as dual support for both radio stations and they were sought on that basis. So we seek support.

3312 They weren't meant to say that we are applying, because we are not applying. We are not a body to the application. If it was taken in that context, I apologize. It was just to seek support for two applications which we have had the approval from the Commission to seek dual support. And Kaleidoscope did on their part, as we did on our part.

3313 THE CHAIRPERSON: So the e-mail was really on behalf of both of you, two separate voices.

3314 MR. CANALES: Yes. The subject of the e-mail clearly defines the two applications.

3315 THE CHAIRPERSON: The other thing was -- and I guess this goes a bit back, and I don't want to belabour this point perhaps unnecessarily.

3316 When you characterized your application in the e-mail, you characterized the music as ambient, down tempo, house, individual, intelligent, jungle drum and base, mainstream, commercial, techno backbeat.

3317 I must say I said to myself: What the hell is that?

3318 But in your application you characterized it and you went through a considerable discussion with Commissioner Williams on what you had characterized as alternative electronica progressive high energy dance.

3319 For somebody whose distinction in music goes classical, jazz, rock and roll or country, I am having some difficulty understanding what this is.

3320 Then when I went through the play list that you had proposed, which included Sting, Eurhythmics, we talked about Elvis Presley, Duran Duran, The Rolling Stones, Strange Advance, and then this morning you mentioned there is no urban, I kind of came to the conclusion that when I first read the application I thought this was going to be more different than it appears to be.

3321 I wonder if you might address that.

3322 MR. CANALES: Sure. First of all, the genres that you mention and the e-mail, I think I have provided a long explanation in terms of the music in my letter response to the negative interventions that we received. They are all sub-genres of one or two main elements, which is the alterative music and the electronica dance music, and they are listed in it.

3323 The reason for including them in the e-mail was they were appealing to producers, the people that run the music, that they will have an interest in participating in the process of having their records sold or played or promoted on the radio to see their interest level. If I was going to say we are going to play alternative, somebody would say well, we do drum and base. That doesn't fit me so I am not going to even bother.

3324 I kind of felt that I had to expand it to the point that it included a description without misleading what we are actually representing. That is what we did and that is what it represents.

3325 If you look at those sub-genres, you see them described in our letter, response to interventions.

3326 In terms of what is it that we will play versus the play list, we have provided the widest variety of genres to choose from. We aim to customize that to what will fit into the Halifax market. We don't aim to be a CHR or a top 40 radio station. We don't aim to follow the charts in terms of who else is playing somewhere else or coming in from American outfits or anything. I don't think the charts of the music that were provided -- I don't think there are charts for the music mix that we are looking for.

3327 We aim to play 75 per cent of the music that is currently not being played in town. We don't perceive ourselves as competing with any existing except the two ones that may be CKDU mixed show and then perhaps the two hours that Q104 does with "Route 104".

3328 Again, keep in mind that we aim to mix the music in a different context as opposed to trying to isolate it into the "rock 'n roll hour" or the whatever hour. Alternative is a rock format. It comes from rock. I can't take that away. That is where it came from. There will be many artists that cross over.

3329 You have some great artists, for example, like Alanis Morissette that once upon a time were a dance electronica artist and couldn't get anywhere and were reinvented as a great alternative artist, and have gone to the stardom that you have.

3330 Artists normally try to find the niche that fits them better or makes them more tradable or saleable commercially speaking.

3331 We really don't mean to, number one, overwhelm you, which obviously we have by providing that many things. We are not trying to copy anybody or trying to get at some kind of a hidden hit ratio or so on. We aim to play different music, diverse music that is not being currently played in the marketplace.

3332 I don't know if that answers your question.

3333 THE CHAIRPERSON: That's fine.

3334 My last question -- I am kind of curious. I understand, Mr. Donovan and Mr. Ritchie, that you are the financial backers for this operation. I would be interested to know the level of involvement you might have in the management and day to day operation of the undertaking. Or is your role simply as financial backers?

3335 MR. DONOVAN: My role will be essentially a financial backer. Bill expects to be a disc jockey, if I can speak for him.

3336 MR. RITCHIE: I am going to get back at him when it is my turn.

3337 MR. DONOVAN: Our roles are entirely financial backing, that's it, in trying to make a local, new, different business work here in what we perceive as a very staid market.

3338 MR. RITCHIE: In my case I know nothing about radio. I listen to CBC basically. I have been involved in a lot of different companies, and my role really is to put some money in. But I do like to keep in touch.

3339 I have known Manuel for a long, long time and I would think in this case there will be pretty regular and steady discussion between us, but not on operations. I would never get involved in the operation of any of the companies that I have invested in, except on maybe a board level or just on an advisory basis, or on just general discussion.

3340 As far as the day to day operation of the station, there will be no involvement.

3341 Over the years I have tried to act and I have been on stage, and I like to tell stories. In fact, I had a lovely presentation for you which included a couple of good old Nova Scotian stories, but no, you are not doing that. This is a serious matter, they said. This is not for jokes. Maybe I could tell them to you later. I don't know.

3342 It was Michael who put the kibosh. He is the big producer in the talent business. He listened for about two seconds and he said cut, no, out. I got mad at him but it didn't do any good. I wasn't allowed to tell the stories.

3343 So my role will simply be consult and very interested obviously and keeping in touch as much as I can with Manuel, and I am sure Mike and Manuel and I will be spending some time together as we go forward.

3344 THE CHAIRPERSON: Thank you.

3345 MR. CANALES: Pardon me, Mr. Chairman.

3346 I just want to add that the gentlemen are extremely humble in their presentation. I go calling on them through all their relationships in their Rolodex -- and remember what I say about how business is transacted in Halifax, and you would see some of the letters of support that we are receiving from some prominent people. I think that is the direction, their expertise in business, as well as their connections in town. It is a great help to the development of the success of this enterprise.

3347 THE CHAIRPERSON: Thank you.

3348 I think Commission counsel may have a few questions before we all head to the washroom.

3349 MR. McCALLUM: I will try to be short, Mr. Chair. I just want to follow up on a few little details, if you don't mind.

3350 Dealing with the turntablism matter which you discussed with Commissioner Williams earlier, at one point you mentioned that there might be 20 songs in an hour or an 18-selection DJ mix but that you would log them as excerpts, for example.

3351 Would you feel that an 18-selection mix should be thought of as one selection, like a montage, or would it be like 18 individual selections?

3352 MR. CANALES: If you may, I will let Mr. Jive answer that question.

3353 MR. JIVE: And I defer back to Manuel.

3354 I don't have an answer for that. If I were going to make a list of songs to identify what is going on in an hour, I would list the individual selections. I perhaps don't understand the significance of listing it as a montage.

3355 MR. McCALLUM: It goes to the -- in accounting for Canadian content, it is better.

3356 Maybe I can ask my next question and if you are not sure of the answers, there is a second phase and a fourth phase in this process. If necessary, you could clarify at one of those phases if you are not comfortable in clarifying it immediately.

3357 MR. JIVE: Okay.

3358 MR. McCALLUM: I think we need to know for the purpose of our record.

3359 My follow-up question is: How would the Canadian content be counted in a sweep of 18 excerpts when they are not played in their entirety?

3360 MR. JIVE: At CFNY I set up a form which the announcer filled out, and there were specific numbers which had to be met in order to account for the Canadian content. The announcers were not allowed to dig deeper into the non-Canadian content to put us behind at any point.

3361 So that type of system would be set up here, as well, so that you can visually see I have accounted for my Canadian content. You check the box and you know which songs are Canadian content.

3362 MR. McCALLUM: In other words, you are saying you would follow the montage policy, where it is a montage. Is that part of your answer?

3363 MR. JIVE: I'm sorry, I didn't hear.

3364 MR. McCALLUM: You would follow the Commission's montage policy.

3365 MR. JIVE: We would have to review the montage policy in order to understand it.

3366 MR. DONOVAN: But yes.

3367 MR. JIVE: There you go. If that's all you were looking for, absolutely.

3368 MR. McCALLUM: That's the answer.

3369 MR. JIVE: I have no problem with that.

3370 MR. McCALLUM: Would there be any interruptions? If you had 18 selections or 20 selections, would there be any interruptions?

3371 If you had it going for let's say a full hour, would there be interruptions in that time, even for commercial breaks?

3372 MR. CANALES: Yes, there would be commercial breaks, interruptions.

3373 Perhaps I could enhance a bit. We discussed that a little earlier and I can go back to it.

3374 There is a definition of Canadian content and there is a definition of the amount of time that a song needs to be played for it to be eligible as Canadian content. In other words, you just can't play 30 seconds of Canadian content. That is not going to count.

3375 Those are the regulations. So we were going to build this in accordance to those regulations.

3376 As far as making breaks, to this particular question, there are two breaks an hour. The rhythm of the music is aimed like an adventure; that it goes on in zero minutes and perhaps it finishes in the 25th minute and then it changes and it goes into a new mix.

3377 The mix itself, if you are going to hear turntablism going in for an hour -- normally, it has a period of time of rise and low in terms of the tempo, in terms of guiding the audience over the experience of the music. That will happen normally on basically two hours.

3378 If you go to a nightclub you will see the high being built up and after a while it will come down and then they either will change the DJ or go into a new high. The same thing will fall on the radio station. When it is coming down to the low part is when we are timing it into a 25 minute when we go on to a commercial break.

3379 Does that answer your question?

3380 MR. McCALLUM: Yes, that is helpful.

3381 Should the Commission give any consideration to putting a maximum time limit on the montage so that it is not too long? For example, maybe an hour would be too long. Should there be a maximum number of montage within an hour?

3382 MR. JIVE: The segments usually don't go longer than 15 minutes without some kind of break, talking over it or something like that.

3383 I don't know if that helps.

3384 I have never heard one that went for an hour with no kind of interruption.

3385 MR. CANALES: The answer to your question is yes, we aim to follow the rules. So whatever rules are in place, which they are already -- and this is an issue that deals with on a day to day basis there are stations that play Canadian content on mixed things. We will follow the current rules.

3386 Should the Commission decide to put a new rule in, we will follow the new rule.

3387 We have been through this since a long time in doing this back and forth in Toronto in different markets with Canadian content. We can control the output, if you would, to satisfy the rules.

3388 MR. McCALLUM: Okay. I will take your answer as essentially being a firm undertaking to follow the rules.

3389 MR. CANALES: Yes.

3390 MR. McCALLUM: I would like to go quickly to the Lobster Palooza Talent Showcase.

3391 In responding to Commissioner Williams, you said that you would make it a Halifax event and not just another showcase. The one element that I didn't quite capture from your answer was whether the funding that you would provide for that would go to a third party.

3392 MR. CANALES: Yes. This is sort of a partnership; that we have done this in partnership with the Canadian Music Week, which is a well-known recognized showcase happening in Toronto as we speak right now.

3393 They will administer the funding in partnership with us. They are already putting the Canadian Music Week Showcase together. We just want to make sure that the funding goes to accommodate what we are saying it is and it does denote or promote the particular event.

3394 That will be our input, other than the input back at home here where we will have the selection of the bands or some kind of thing in order to get to the point of choosing who is going to get to go to the showcase or the promotion of the event.

3395 MR. McCALLUM: Just to make it easy, would you write a cheque then to the Canadian Music Week?

3396 MR. CANALES: We will but with discretion in terms of they should spend it in the right way. We don't just mean to write a cheque and comply with the regulation and walk away on it. We really mean that this should be to the aim of the promotion of the artist.

3397 So we are going to be following carefully how Canadian Music Week administers this in terms of the expenditures. But we will let them, because they are in a better position to offer a much better -- they are doing 180 showcases, so when we go out and do 181, or whatever, it is going to have a better footing with the sound companies and the lighting companies and all the suppliers in terms of pricing and so on, and more competitive.

3398 So we will let them act on that, but we will have a vigilant eye. We will be going over to supervise that on our behalf and broadcast, I may add, live from the events back home here in Halifax.

3399 MR. McCALLUM: There is a qualifier, then, in terms of where the money would go. But there is no qualifier, if I understand your answer correctly, in terms of (a) that the money would be spent; and (b) it would go to a third party.

3400 MR. DONOVAN: That is essentially correct, yes.

3401 MR. McCALLUM: Good. Thank you very much.

3402 Further in responding to Commissioner Williams in respect of redirecting the Canadian Talent Development money, you chose Option 1, which in fact reflects your presentation this morning where you referred to Canadian Talent Development support of $1.165 million.

3403 Just one aspect of it. The $85,000 funding which you were going to give to the Canadian Broadcast Museum and Mr. Wayne Plunkett as a separate commitment, separate undertaking, you would accept that separate undertaking as a condition of licence, would you not?

3404 MR. DONOVAN: Yes, we will.

3405 MR. McCALLUM: Thank you.

3406 Finally, you had not given any second choice for a frequency. You said that you would accept any other frequency, other than 95.7, if the Commission thought was appropriate.

3407 If by any chance this frequency was not available, have you given any thought to a second choice of frequency; and if so, what would that be?

3408 MR. PLUNKETT: Manuel, maybe I can answer that.

3409 MR. CANALES: Yes. I was just going to say that Mr. Plunkett could answer that.

3410 MR. PLUNKETT: I am not an engineer, but I do pride myself on knowing what is available in the markets and so on. As opposed to southern Ontario, for instance, there is quite a choice of frequency still in Halifax. Depending on how many licences come out of these proceedings will determine what is left beyond that.

3411 Because the Commission did not ask us for a second choice of frequency, to my knowledge, so we have not done a detailed analysis. I can tell you that if you wanted us to provide a specific second frequency, we could come up with one without much difficulty.

3412 MR. McCALLUM: All right. We will leave it at that for now.

3413 Thank you, Mr. Chairman.

3414 THE CHAIRPERSON: Thank you, counsel.

3415 Thank you very much, gentlemen. We appreciate your presence here today.

3416 We will take our late morning break now.

3417 Mr. Ritchie, did you have something you wanted to add?

3418 MR. RITCHIE: Mr. Chair, only a very brief thank you to yourselves. Also, quite a number of people of a younger element appeared this morning in the audience to give us moral support. I know some of the Commissioners noted that, but I would like to thank them on our behalf for coming.

3419 Thank you.

3420 THE CHAIRPERSON: Thank you.

3421 We will take our break now and reconvene at 11:30, at which time we will hear the Kaleidoscope application.

--- Upon recessing at 1115 / Suspension à 1115

--- Upon resuming at 1133 / Reprise à 1133

3422 THE CHAIRPERSON: Order, please, ladies and gentlemen. We will return to our proceeding now.

3423 Mr. Secretary, please.

3424 MR. LeBEL: Thank you, Mr. Chairman.

3425 We will now hear Item 10 on the agenda, which is an application by the Centre for Diverse Visible Cultures, on behalf of a corporation to be incorporated, to be known as Kaleidoscope Community Radio Society, for a licence to operate an English-language low power FM Type B community radio programming undertaking in Halifax.

3426 You have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

3427 MS BURKE: Thank you.

3428 Good morning, Mr. Chairman and Members of the Commission.

3429 My name is Margo Burke, a director of Kaleidoscope Community Radio Society.

3430 We are pleased to be here and welcome the opportunity to present our application for a new community radio station for the Halifax regional area.

3431 Before we do begin our oral presentation, we would like you to take a moment to view a short clip.

--- Video presentation / Présentation vidéo

3432 MS BURKE: I would like to take this opportunity right now to introduce the rest of the presenting panel.

3433 On my left is Ifty Illyas, who is a director of Kaleidoscope Community Radio Society. He is also a staff member at the Centre for Diverse Visible Cultures.

3434 Next to him is Mike Marentette, international social policy consultant from the Halifax community.

3435 On my right is Armando Regala, chairperson at the Centre for Diverse Visible Cultures and also a director of Kaleidoscope.

3436 Seated behind me presently is Wayne Plunkett, who some of you already know.

3437 Also supposed to come is Sam Fisher, Professor of Film Studies at the Nova Scotia College of Art and Design. At present he is still teaching class, and we hope he will join us. If he doesn't come in time for his presentation, Wayne will do that on his behalf.

3438 Kaleidoscope is a non-profit organization with a mandate to provide music and information programming not offered by mainstream commercial media in the Halifax regional area. The society was formed by concerned individuals from vastly varying personal backgrounds, coming together out of a common belief and vision in the value of locally responsive community radio.

3439 MR. MARENTETTE: Community radio is a significant communication tool and information sharing source for grassroots communities. The strength of community radio is in opening doors for communities to participate more fully in society. It develops talent, promotes and reflects local culture in identity and assists in creating a diversity of voices and opinions.

3440 It is a means of empowerment, especially for disenfranchised communities, and is an essential tool of education, community development and social change.

3441 Halifax, the largest city east of Montreal, continues to see its population becoming more cosmopolitan and diverse. Like all cities whose population is increasingly diverse, it has a major challenge ahead: that is, to accept, accommodate and learn about new voices and new traditions.

3442 We believe that mainstream radio stations do not realize and reflect this new diversity.

3443 Kaleidoscope Radio believes that one of the keys for change in acceptance of the many global cultures in Canada is the broadcast medium where, together with the spoken word and universal language of music, peoples from all cultures can be connected.

3444 Two market studies undertaken by the Centre for Diverse Visible Cultures reflected the very same responses about commercial and public radio. Respondents were disillusioned with commercial radio as they hardly carried any local content in their programming. They were also disappointed with public radio as it broadcast only a few hours of local content while the rest of its programs originated from the national network.

3445 Kaleidoscope hopes to provide a forum to express the views of those segments of the community who are under-represented, misrepresented and/or marginalized by mainstream media, groups such as women, people of colour, those of First Nations ancestry, gays and lesbians, persons with disabilities, the elderly, the homeless and the economically disadvantaged.

3446 We hope to convey views and philosophies not commonly or accurately presented in mainstream media.

3447 Dealing with diversity is a challenge that will multiply and intensify now and in the years ahead. Kaleidoscope Radio will be a new opportunity to reach out and to break down barriers of language, class, race, gender and ethnicity through music and through spoken word programming.

3448 MR. REGALA: The Centre for Diverse Visible Cultures, CDVC, is a community-based non-profit, non-partisan, non-sectarian organization promoting the wellbeing of all Canadians, immigrants and refugees, especially from diverse visible cultures residing in Nova Scotia, to enrich and enhance our Canadian community.

3449 It is governed by a volunteer board of directors who are Canadian citizens and permanent immigrants or residents. The Centre places a high priority on bringing awareness of world cultures to the community at large and to bringing harmony and integration among the various segments of society in Nova Scotia.

3450 Our Centre believes in the opportunities offered by radio for diverse communities. The Centre unites together individuals, non-profit and for-profit organizations as members and is open to all who will support the Centre's goals, aims and code of ethics.

3451 The programs and services provided by the Centre to, and accessible by, all persons from all ethnic origins and cultures.

3452 With funding received from all three levels of government, the corporate sector and from faith-based organizations, it continues to offer English as a second language and Canadian citizenship preparation classes, voicemail for the low income and homeless, a CAP site -- i.e., access to computers and the Internet for the public -- operates a food bank and fields a youth soccer team.

3453 In 2002 the Centre hosted the first-ever Multicultural Awards held in the province of Nova Scotia. With corporate sponsorship, the CVDC Cultural Diversity Recognition Awards Gala is held to celebrate and recognize those who have contributed selflessly to promoting racial harmony and bringing cultural communities together.

3454 The CDVC is the proud sponsor of the MIR Supershow, a musical extravaganza promoting Canadian musicians and held annually since 1999, funded entirely by the corporate sector.

3455 In February 1999 CDVC participated in a public hearing on third language and ethnic programming held by the CRTC in Halifax, wherein it stressed the importance of cultural and ethnic diversity in the media.

3456 The Centre realizes that a medium such as a community radio station would be an ideal instrument to generate awareness about our different cultures and bring all communities closer together.

3457 CDVC will provide every support to the Kaleidoscope Radio Community Society to make the venture a success so that this medium can help bring Canadians together.

3458 MR. ILLYAS: As Mike expressed in his remarks, the residents of Halifax metro have long expressed a desire for radio that serves and reflects their needs and interests. We want to ensure that they have a voice on our radio.

3459 Kaleidoscope will provide a mix of news, community announcements, discussions and call-in programs, religious programs, music and cultural programs with special features aimed at women, children, youth, immigrants, the disabled and the elderly.

3460 We propose to present programming of a truly local nature. Programming content will focus on the integration of different cultures. There will be in-depth interviews on topics such as educational issues, women's issues, drugs and substance abuse issues, immigration issues, housing, child and adolescence issues, citizenship involvement and acceptance and appreciation of multiculturalism.

3461 We believe that Kaleidoscope will bring lost listeners back to radio.

3462 Our programming will reflect attitudes, opinions, ideas, values and artistic creativity of the many communities that represent the Halifax metro region. It will bring awareness and generate discussion of local and global issues. It will promote acceptance and understanding between people and cultures, introduce new and experimental use of radio for creative expression and also a medium for dialogue, introspection and expression.

3463 Our music programming will significantly increase broadcasting opportunities for local musicians and composers, as well as increase the diversity of talent who at present get little opportunity to express themselves on radio.

3464 It will reflect categories of music that gets little airplay in mainstream broadcast media.

3465 News programming will reflect a much wider diversity of news sources, opinions and perspectives, and every effort will be made to present it with sensitivity, mindful of our diverse cultures. News assignments will focus on events that have been overlooked and under-reported by other news sources.

3466 Spoken word programming will be inclusive, balanced and reflective of the diversity of residents of the Halifax region and municipality. It will examine specific issues affecting other communities, such as health, community relations, self reliance, financial planning, legal matters, women's issues, local community forums, immigration, integration, media stereotyping and the mentoring of youth.

3467 Religious programming will reflect the cross-cultural linguistic and different faiths within our community. We hope to attract major faith groups and ensure a balance of religious programs by adhering to the Commission's religious broadcasting policy. We believe that our programming will contribute to harmonious integration of ethnocultural communities into the larger society which will be enriched as a result.

3468 At Kaleidoscope we expect a varied source of revenue through sponsorships, local time sales and fundraising campaigns. We will provide great opportunity for small businesses to gain exposure amongst the audience we are targeting, enabling small businesses to count on a reliable and concrete means of communication.

3469 We will have very little impact on existing commercial and community radio stations as we hope to attract, among others, a large majority of potential listeners from diverse cultures who have not been active listeners in the past due to the format of these stations.

3470 We believe we will attract a whole new community of listeners to radio by providing programming diversity better reflecting their reality and needs than has hitherto been available in the Halifax regional and area.

3471 We are thankful for the support received from the Halifax community. We have also received valuable support from many commercial and community organizations and we value them.

3472 We have great confidence that we will succeed because our greatest asset is the diverse communities in Halifax, whose members will contribute with their wealth of knowledge, experience and talents.

3473 Our station will reflect the cosmopolitan diversity in a balanced and inclusive manner. It will promote understanding and respect and help celebrate the contributions of diverse cultures that make up Halifax's population.

3474 MR. PLUNKETT: I will now read Sam Fisher's comments on local talent development into the record.

I am a Professor of Film Studies at the Nova Scotia College of Art and Design and a member of the Halifax film community. As a film professor and also a director of music videos, I am in constant contact with talented young people struggling to establish themselves in a competitive and corporately structured world.

The need for musicians and other artists to gain access to an audience cannot be overstated. The difficulty of those musicians and artists accessing audiences also cannot be overstated. Kaleidoscope Radio will be committed to the recognition and development of local talent and will fulfil existing Canadian content regulations. The station will promote new talent, music contests and events, festivals and cultural celebrations and help local musicians with their artistic and creative process by featuring them on live interviews. I believe that the effect this service will have on Canadian and emerging talent will have significant long-term benefits for the community.

Specialist music programs will feature local talent where their music will be played. We want to make sure that they have a voice on radio and that they have an outlet in which their music can be finally heard. We have been hearing their cries over the years for airplay, and unfortunately these musicians have been largely ignored by commercial radio.

Kaleidoscope Radio will strongly support the many musicians by way of airplay, interviews and publicizing performances. We will contact record labels and local nightclubs, various promotion companies and musicians to ensure that our station will be a comprehensive source of information regarding local, regional and national music in Halifax.

3475 Under the caption of "Volunteer Participation":

Kaleidoscope Community Radio station is committed to community involvement in all aspects of its development and operation. It will actively seek volunteers to participate in all facets of the station. It is Kaleidoscope's intention to engage volunteers from a cross-section of cultural diversities to the station, particularly from those under-represented groups previously mentioned. Ninety-five per cent of the radio station's staff will be volunteers who will be encouraged to improve their skills through workshops and training courses. The volunteers will be managed by the station executive, who will be responsible for coordinating and managing their on-air, technical, office and other duties.

The station will develop a volunteer radio station manual to help with volunteer management. It will also set up a volunteer advisory committee to help with programming and technical matters at the station.

Our station, as well as our programming, will be truly people powered so that our radio station will be enthusiastically and positively supported, encouraged and received by the wider community.

3476 MS BURKE: Kaleidoscope is committed to employment equity through affirmative action. We are committed to revoking the historic under-representation of women, Aboriginal Peoples, racially visible persons and persons with disabilities.

3477 In order to achieve employment equity for designated groups, we will develop, implement and maintain an employment equity action plan. Our plan will provide equity in employment, including pay equity, and maintain a supportive and welcoming environment for all individuals.

3478 Also, the plan will achieve and maintain a diverse workforce, initiating measures to ensure full participation of designated groups.

3479 Our employment equity policy and other staffing initiatives will ensure that on-air, off-air and management staff will be culturally and racially diverse and be a realistic representation of the demography of Nova Scotia.

3480 Our code of ethics will guide us as an instrument for fairness in dealing with matters relating to the station and the Society. We will incorporate policies and procedures to ensure access, equity and participation by those not adequately served by the broadcast media.

3481 We will promote accuracy and fairness in news and current affairs programs and develop and recognize Canadian content and talent by providing opportunities to have material broadcast on a regular basis.

3482 We will ensure the rights and responsibilities of volunteers and programmers. We acknowledge the rights of the listening audience to comment and make complaints regarding program content and service. We will facilitate internal conflict resolution and reflect the diversity of Canadian culture in the interests of local communities.

3483 Also, we will establish programming practices protecting children from harmful program material.

3484 MR. ILLYAS: We are thankful for the support received from the Halifax community. We have also received valuable support from commercial and company groups and we value them.

3485 Licensing Kaleidoscope Radio will send an important message that diverse communities and their voices matter.

3486 We appreciate your hearing our presentation and welcome your questions. Thank you.

3487 THE CHAIRPERSON: Thank you, Ms Burke and gentlemen for your presentation this morning. I will be doing the questioning on your application.

3488 One of the areas I want to focus on initially is something that you referred to on page 7 of your opening presentation this morning, and that is the issue of volunteers.

3489 Before I get into that, it is probably fair to say that while the Commission has encouraged community-student campus radio stations over the years, it is probably fair to say that there has been some difficulties with stations over the years. I don't mean in a compliance sense; I mean in the station's ability to keep going when these stations are largely dependent on volunteers.

3490 While we will often get a very enthusiastic committed group appearing in front of us for the application, sometimes that enthusiasm can wane as perhaps the principals behind the station go off and do other things, there is a transition in that original team or perhaps some enthusiasm in the community wanes and it becomes more difficult to get volunteers.

3491 That is why I am going to focus a little bit of my questioning in that area, just to get a better sense of how you see this operating.

3492 Before I start, Ms Burke, you introduced the different members of the team in terms of their directorship or their affiliation with the Centre or others. Who would actually be operating and managing the station itself?

3493 MR. ILLYAS: We would be. I myself would be involved initially at Kaleidoscope as a director myself. We would have a management team that would look after the radio station once it is incorporated.

3494 THE CHAIRPERSON: I will leave it to you among your team to decide who wants to answer the questions.

3495 I will focus on the programming. You have indicated that about 126 hours of the programming will be locally produced. You have also indicated this morning in your presentation -- and I guess I was going to get to that to try and get a sense of relative numbers here -- that "95 per cent of the radio station staff will be volunteers who will be encouraged to improve their improve their skills through workshops and training courses".

3496 Who will actually be contributing to the production of these programs?

3497 What I am trying to get a sense of in asking that is: What sort of broadcasting experience do the people who are going to be producing this 126 hours of local programming indeed have?

3498 MR. ILLYAS: Various members of the community who have broadcasting experience have come to us and because of that backing that we have from people with this experience, we set about initiating this.

3499 We have members from the Cole Harbour radio station that is now defunct. A lot of them were interested. Particularly the programmers who were there have shown an interest in wanting to do this. They were upset that they lost their licence. So there is backing from the community from the original Cole Harbour programmers, as well as others who have expressed a desire. They have a fair bit of broadcasting experience, both from a community perspective and from commercial radio.

3500 THE CHAIRPERSON: I guess your answer in a way somewhat underscores our concern in that indeed Cole Harbour was not able to be successful.

3501 You suggest that some of the "experienced" broadcasters are people who were involved in that. My question is not meant in any way as a reflection on those people or whatever difficulties Cole Harbour in being successful. But the fact is they were not.

3502 What we need is some sense of the experience of the people who are actually going to be doing this programming.

3503 You say you have been contacted by some people who have some broadcast experience. Can you be more specific than that?

3504 MR. ILLYAS: There are members of the public who have spoken to us and who have broadcast experience.

3505 The reason why the Cole Harbour station went off the air was not because of the programmers. They were programmers who were dedicated in their work. It was due to other factors.

3506 So there is a pool of programmers, at least program presenters, from that station who have shown interest, as well as others from the wider community. We hope to tap on their resources to make the station a success.

3507 THE CHAIRPERSON: What sort of experience are we talking about?

3508 MR. ILLYAS: They have experience with CKDU as a community station. They have presented programs before on community radio, as well as some of them were retired from commercial radio who are willing to come and help us.

3509 THE CHAIRPERSON: I would like to get a sense of the degree of commitment on the part of these people that you have had discussions with.

3510 Since we don't have employees in front of us and you mentioned that you have talked to a number of people, as I say, what degree of commitment do you have from these people that you have talked to that they would actually be the volunteers who would work at your station and engage in this program production?

3511 MR. ILLYAS: They are giving their full support. In fact, if you want, it is 100 per cent of their support. They want to make this a success, and they are prepared to provide their experience and talent to make the station a success.

3512 If I am to answer that, they will give us 100 per cent.

3513 THE CHAIRPERSON: So we have some volunteers who were involved in the Cole Harbour operation and some that have been involved with CKDU.

3514 MR. ILLYAS: Have experience there, yes. And there are others who would like to start new programs, and we would hope to bring them.

3515 THE CHAIRPERSON: So others who have no experience.

3516 MR. ILLYAS: Yes. But they are very keen. As you know, that doesn't help run a station but at least some of them have big dreams; that we want to see that they are given some programs to present.

3517 It always happens that when you start on something there are people, like you said earlier, Mr. Chairman, some may fall off and we expect a certain percentage of that will happen. But we have so much support and response from the Halifax community, because they desire having another community radio station that would help with their interests and needs, that I am sure we will have a large pool of people that we can draw upon.

3518 With the experienced presenters, we will be able to handle our programming of 126 hours.

3519 MR. PLUNKETT: Mr. Chairman, if I may just add, the coverage area of the station is much more centralized into the population base of the Halifax Regional Municipality as opposed to Cole Harbour was off on the side and certainly did not have a listenable signal in downtown Halifax.

3520 THE CHAIRPERSON: I take your point, Mr. Plunkett. My point wasn't to get in to the reasons why Cole Harbour wasn't successful. It was the relative degree of experience that the people would have had who were involved in it.

3521 MR. PLUNKETT: Yes, I understand. I just was thinking from the standpoint of even after the station was on the air and the amount of people who would become aware of it, the broader range to draw volunteers from to keep up the troops.

3522 THE CHAIRPERSON: Right.

3523 MR. ILLYAS: If I might add to that, Mr. Chairman, in the case of Cole Harbour, I didn't want to refer to that before because it was a difference of opinion between two communities that really did it in rather than a lack of programmers.

3524 THE CHAIRPERSON: It wouldn't be the first time we have seen that problem.

3525 Have any of the volunteers had commercial radio experience, other than CKDU?

3526 MR. ILLYAS: One or two who are retired have had commercial experience.

3527 THE CHAIRPERSON: When you talk about 95 per cent of the radio station staff will be volunteers, what are we talking about in terms of numbers? How many permanent staff? You are one.

3528 MR. ILLYAS: We will have someone as part-time reception, as well as a sales person who will be on commission.

3529 THE CHAIRPERSON: So you are really the only permanent --

3530 MR. ILLYAS: No. We would have another program manager who would overlook the programming. I would be more with the administration part of it.

3531 THE CHAIRPERSON: You are administration.

3532 MR. ILLYAS: Yes.

3533 THE CHAIRPERSON: So one other permanent person?

3534 MR. ILLYAS: One other permanent person who would be looking after the programmers and helping them out.

3535 THE CHAIRPERSON: Is that person here today?

3536 MR. ILLYAS: No.

3537 THE CHAIRPERSON: Have you chosen that person?

3538 MR. ILLYAS: We have looked at a few people who have shown some interest, but we really want to look at that a little bit more. They have given us their credentials and they all are equal. So we haven't chosen one yet because we haven't still got our licence. And we are hoping as soon as that happens we hope to choose one.

3539 THE CHAIRPERSON: Of the candidates you are considering, what is their background?

3540 MR. ILLYAS: They have radio background, particularly from CKDU.

3541 THE CHAIRPERSON: So this is again CKDU.

3542 MR. ILLYAS: Yes.

3543 THE CHAIRPERSON: Can you indicate for us what sort of ongoing training and who will provide the training, and the experience of the person, the individual, who will be providing the training for these volunteers.

3544 MR. ILLYAS: We will be getting the program manager to begin with. Also, there is the Nova Scotia Community College in Kentville that has a radio program, and there are lecturers there. I have spoken to one or two of them, and they are interested in helping us out, particularly training volunteers.

3545 We were looking at about five modules that would help presenters get on the air, particularly with knowing law and studio techniques, and things like that.

3546 So there are a couple of professors at the Nova Scotia Community College in Kentville who are prepared to help us with the training, because ultimately they would want their final year students to come and intern with us and there would be some help like that as well.

3547 THE CHAIRPERSON: Would this be part of the formal curriculum at the community college that these volunteers would be taking the training or would it be a separate training program that would be geared to your operation?

3548 MR. ILLYAS: It would be a separate one geared to our operation. But would have the experience from the staff at the community college over there.

3549 THE CHAIRPERSON: Let me get back to this numbers thing.

3550 We have two permanent staff?

3551 MR. ILLYAS: Yes.

3552 THE CHAIRPERSON: You and the programmer.

3553 MR. ILLYAS: I would be initially on a part-time basis because it is just the administration part of it. I am prepared to provide a lot of volunteer time as well.

3554 THE CHAIRPERSON: So you will be part-time.

3555 MR. ILLYAS: Yes, as an administrator.

3556 THE CHAIRPERSON: And you have just characterized yourself as a volunteer as well?

3557 MR. ILLYAS: Yes. I know part-time will be so many hours of work, as well as I will volunteer hours as well, because we have spent a lot of volunteer hours doing this and I intend to continue doing it.

3558 THE CHAIRPERSON: So you will be spending most of your time at your day job, so to speak.

3559 MR. ILLYAS: As well.

3560 THE CHAIRPERSON: Would I take it, then, there will be one permanent job?

3561 MR. ILLYAS: Yes, one programming manager and a sales manager who will be working on a commission basis, as well as a part-time receptionist.

3562 When I say part-time receptionist, there will be two of them. We hope to employ two so that their duties can be split, the hours can be split. We have employment for two people rather than just one person.

3563 THE CHAIRPERSON: This is for which job?

3564 MR. ILLYAS: For the reception.

3565 THE CHAIRPERSON: The reception; okay.

3566 When you calculated 95 per cent of the radio station staff will be volunteers, how many volunteers at any given point in time? What are we talking about?

3567 MR. ILLYAS: Most of the programs we intend to have will be run by volunteers.

3568 THE CHAIRPERSON: How many people?

3569 MR. ILLYAS: I haven't got the figures on that here.

3570 THE CHAIRPERSON: Can you estimate? If you have a licence, six months down the road into your operation what would be your best guess as to how many volunteers would be working at the station?

3571 MR. ILLYAS: We will have about 30 to 40 volunteers who already have shown an interest.

3572 THE CHAIRPERSON: Thirty to 40 volunteers?

3573 MR. ILLYAS: Yes.

3574 THE CHAIRPERSON: Would this be like on-air?

3575 MR. ILLYAS: The majority of them will be on-air and maybe about 10 per cent will have responsibilities with office duties and others. So it will be mostly presenters to begin with, presenters of the programs who will be volunteering.

3576 THE CHAIRPERSON: And it will be the one permanent programmer who would be sort of managing this group of 30 to 40 people on a regular daily basis?

3577 MR. ILLYAS: There will be about ten volunteers who will be doing other aspects of running the station, other than presenting programs. I will be with them as well.

3578 THE CHAIRPERSON: Do you have a sense of what sort of turnover you are likely to have with that many volunteers? Could you expect every six months to have to train 10 or 20 new ones to replace the ones who have left?

3579 MR. ILLYAS: I don't envisage a large turnover.

3580 THE CHAIRPERSON: Why do you say that?

3581 MR. ILLYAS: Because those who want to do programs have talked about having programs at different stages when this started on the application, and they have shown a lot of interest. From what I see and their dedication at this point in wanting to see that the station is a success, I feel that they might continue for at least two or three years before they decide to do other things.

3582 I think initially I don't see a large drop-off from the volunteer base.

3583 MR. PLUNKETT: However, if I may say, once the training programs are established in the modules, as Ifty indicated, the process is in place to continue training people. I certainly would say from my experience, as yours of community stations, I would think there would be a 25 per cent turnover probably every year, minimum.

3584 There will be a mechanism in place to keep the ball rolling.

3585 THE CHAIRPERSON: Is this Mr. Sam Fisher who has just joined the group?

3586 MR. FISHER: It is. Sorry for my tardiness.

3587 THE CHAIRPERSON: Welcome, Mr. Fisher. We have gone through your presentation and we are dealing with a number of questions related to volunteers to help manage and operate the proposed radio station.

3588 If we have a 25 per cent turnover, with one permanent programmer it is not clear to me who is going to be responsible for managing the turnover, managing the volunteers, arranging for the training and so on.

3589 I would like to get a better sense of how that is going to be handled.

3590 MR. ILLYAS: Once we get the station on the air, actually before we get on the air we would start off with some training of presenters and the volunteers who would be helping us with the radio station.

3591 Once we get on the air, based on the percentages that would be on the air as well as those helping around the station, we would initiate training programs that would help us see that there is a flow of new volunteers and new presenters coming in, if that answers your question.

3592 THE CHAIRPERSON: If we are having professors or teachers from the community college who are going to be doing this training and we have 30 to 40 to train at the outset, and then every year we are going to have to train 10, perhaps 15 more, these teachers/professors have day jobs too, just as you do.

3593 I am wondering how we are going to make sure that this continuity of getting people and training them and making sure that they have the skills to make your radio station a success so that you can be satisfied, and we can, that you are going to have the skilled resources to make this successful.

3594 MR. ILLYAS: Once we get the initial training done, we are hoping that the presenters themselves would be able to help with new volunteers who will be coming in.

3595 We are looking at something called peer teaching. So once they learn the ropes of running the station or presenting a program, we would encourage some of those presenters to help us with peer teaching as well.

3596 So that way we are hoping to not tax too much on the time of the professors at the community college. But we would get them involved on a regular basis, because they have volunteered to help us through with this.

3597 THE CHAIRPERSON: Specifically, what roles do you see the volunteers playing at the station?

3598 MR. ILLYAS: When I first mentioned 30 to 40 volunteers, Mr. Chairman, I meant there would be a lot of office duties and things like that, library and all that, cataloguing. So we would have volunteers there.

3599 We would have volunteers calling people and getting feedback to see what type of programs they would like and things like that; as well as programmers.

3600 So of 30 to 40 volunteers, I am looking at roughly 20 to 25 presenters of programs.

3601 THE CHAIRPERSON: The programs themselves, the content of the local programming, is this something that you expect that a volunteer is going to come to you with an idea for a program and that volunteer then becomes the volunteer and the programmer so to speak?

3602 MR. ILLYAS: The presenter, yes. Well, yes and no. There are some programs that we would want, particularly news and things like that, that we would have control of. As for the other shows, like programs that would be presented by volunteers, we would give them the opportunity to air that once they get their training.

3603 THE CHAIRPERSON: The person who is going to be the programmer, what is their mandate, if you will, in terms of planning and organizing what this station is going to sound like in terms of who they decide, what sorts of programs they decide, what ideas come from the community with these volunteers get on the air?

3604 MR. ILLYAS: We will have an advisory committee that would look into that and see what type of programs need to be addressed, not just on a willy nilly basis. When someone brings an idea, it will go to the committee and the committee will decide whether that program goes on.

3605 THE CHAIRPERSON: Is there a particular framework within which you would be expecting these programs would fall?

3606 If anybody comes to you with an interesting idea, you would present that to the committee. Is this largely going to be driven by the ideas that come from the volunteers?

3607 MR. ILLYAS: That's right.

3608 THE CHAIRPERSON: Will you be having brokered programs?

3609 MR. ILLYAS: No, I don't think we will have that. Brokered programming, as I understand, is someone from outside giving us, from a network type of thing.

3610 THE CHAIRPERSON: And paying you.

3611 What about religious programs? You mentioned religious programming.

3612 MR. ILLYAS: Yes.

3613 THE CHAIRPERSON: Would those be programs where they would pay you?

3614 MR. ILLYAS: Yes, they would do that; yes.

3615 THE CHAIRPERSON: I recall in your financial figures you indicated that.

3616 MR. ILLYAS: That's right.

3617 THE CHAIRPERSON: So in that respect you will be having some of those. Perhaps we can go into it in a little more detail when I cover some of the financial aspects of this.

3618 Beyond the volunteers, what plans do you have to facilitate community access to the programming? How do you propose to involve the broader community, if you will, beyond just the volunteers who would come into the programming content of the station?

3619 MR. ILLYAS: We would advertise on the station as an outreach, and we will also go into the community and we will do promotional work in the community to bring about the knowledge of the station, as well, and present ourselves at different promotions to advertise the radio.

3620 THE CHAIRPERSON: Can you be more specific?

3621 MR. ILLYAS: On a regular basis we will be going to the malls and have a stall set up so that the community that visits the mall will realize that there is a community station in Halifax.

3622 As well, we would advertise on our radio and promoting ourselves at various events as well, cultural events and various celebrations. We hope to set up stalls there and promote ourselves.

3623 THE CHAIRPERSON: Do you have plans to use other media to do that?

3624 MR. ILLYAS: We would initially look at mostly community stations. It all depends on our sales budget, how we would go about doing that with commercial radio.

3625 THE CHAIRPERSON: Within the budget that you do have, what specifically would you plan to do in terms of use of other media? It's a bit of a catch 22 when you get a new station. You are depending on people listening to your station but nobody knows you exist so nobody is listening.

3626 How are you going to make people aware that you exist even?

3627 MR. PLUNKETT: Perhaps, Ifty, you could also comment on the intertwined number of organizations that are in your location, the CDBC and the Bloomfield School.

3628 Since I have been working on the application in the last few days -- you would have a better idea than me, but there are a lot of organizations and people that would be fodder for what you are talking about: coming and going through there alone.

3629 MR. ILLYAS: Yes. Where we are located right now there are many community organizations in that building. There is so much traffic in there with people from different communities coming in to those organizations.

3630 As well, generally we have a very good rapport with most of the non-profit organizations, from the support letters you see.

3631 We would advertise ourselves through various publications, local papers.

3632 MR. FISHER: If I might add to that, on behalf of NSCAD, one of the things appealing to others in organizations is that we would have this opportunity. Certainly from our perspective it is a very appealing opportunity. I almost feel that the opposite is true; that there are going to be more people trying to get access to air time on the station and wanting to be involved in it than we can actually cater to. I know that there is already a log jam within the community.

3633 I think the important thing about community radio is that it defines itself based on the demands from the community. I am actually expecting the opposite to be true; that we will have too much and too many people approaching and not enough to cover air time.

3634 THE CHAIRPERSON: So largely you would be depending though initially on sort of word of mouth and perhaps newsletters from the organizations and so on, not the conventional sort of mass media, as we would understand it, largely due to constraints on your budget.

3635 MR. ILLYAS: At the beginning, yes.

3636 THE CHAIRPERSON: Let's switch to spoken word programming.

3637 You have agreed to at least 25 per cent of your weekly programming to be spoken word. The sense I got when I read your application was given the nature of this undertaking, that seemed somewhat low to me.

3638 Do you want to comment on that?

3639 MR. ILLYAS: We have said that we would have a minimum of 25 per cent spoken word programming. But if you look at the programs that we have now in our application, there is a fair number of them talk, spoken word, as well as music in it. So I am sure we would be more than 25 per cent.

3640 THE CHAIRPERSON: I am not trying to drive you one way or another in terms of more or less spoken word. I am just trying to get a sense of the programming that you would have.

3641 Would all of your third language program blocks, as well as the English language block, offer spoken word? How do you see having this mix?

3642 MR. ILLYAS: There will be a limit of spoken word in both language as well as the English language. But the majority of the spoken word would come from English language programming.

3643 THE CHAIRPERSON: The majority of spoken word would be English language.

3644 MR. ILLYAS: English language, yes.

3645 THE CHAIRPERSON: Which implies that the majority of the third language would be music.

3646 MR. ILLYAS: No, no. There will be a percentage of spoken third language as well, but it will have a music element in it as well.

3647 THE CHAIRPERSON: So will music be crossing the English language and the various third language blocks?

3648 MR. ILLYAS: Yes, it would in some spoken word programming. It will have music as well as spoken word, and others will be strictly spoken word.

3649 THE CHAIRPERSON: What sort of music do you intend to play?

3650 MR. ILLYAS: We intend to play the music that is not being given air play currently. There are a lot of our musicians here in Halifax, or for that matter in Nova Scotia, who have made CDs and haven't had the opportunity of getting them played anywhere on radio right now.

3651 CKDU does some but not all genres. So we want to open that out so that every genre of music that has been produced here in Halifax is played. We would not distinguish between a commercial type of label or level before you can get it played elsewhere. That is what is happening right now. A lot of local musicians don't get their music played right now.

3652 Sam will also add to the breakdown aspect of it, if you don't mind addressing that.

3653 THE CHAIRPERSON: Could you give us a sense of what that is? It is one thing to say that there is lots of music being created out there that is not getting played, and I guess we have heard earlier this week and earlier today about lots of different genres of music -- which I candidly admit a lot of them are foreign to my ear. But there is no doubt they are out there and there is a large interest in them.

3654 We would like to get a better sense of what sort of music you are talking about that you expect to actually play on your station.

3655 MR. ILLYAS: We would be playing music that cuts right across the musical spectrum. For instance, if it is rock music -- and there are bands from here that play rock music, and there are stations, commercial stations here right now that play rock music. But they are not playing their music. So we want to do that for them, the local musicians.

3656 If it so happens that a musician who puts out Hip Hop or urban, or whatever, and it is not being played elsewhere, we want to give them the opportunity for airplay.

3657 MR. PLUNKETT: If I may add, we did reply to Section 65 of the original application with quite a broad breakdown. There was a lot of discussion went into this before we answered that question. We did break down the various sub-categories into every area, except for Country, which always has two stations on the air in Halifax. So that is the reason for it not being provided there.

3658 But all the other major sub-categories are represented.

3659 MR. ILLYAS: If I may say, it will be pop rock and dance 25 per cent. It will be 15 per cent Easy Listening, 10 per cent Concert, 5 per cent Folk and Folk oriented music, 5 per cent World Beat and International 25 per cent; Jazz and Blues, 5 per cent; and non-classic religious music, 10 per cent.

3660 These are the areas that we are looking at.

3661 THE CHAIRPERSON: Would most of the music that you play be local musicians who, as you have indicated, are not able or are not being played by other stations in the market?

3662 MR. ILLYAS: We hope the majority of the music that we will play on the air is to help local musicians. I guess that is coming from the community here, as well as we will be playing others.

3663 If we do play other music, it will be music that even from a national basis they haven't been heard here. There are lots of musicians outside Halifax that put out music that is not being heard on commercial radio. So we would look at that as well in these categories.

3664 THE CHAIRPERSON: Would you expect, given the rationale or the intent that you have here, that most of the music that you play would be Canadian?

3665 MR. ILLYAS: Certainly.

3666 THE CHAIRPERSON: I want to switch again in programming to ethnic.

3667 Can you give us a sense of how much of the programming that you have will be ethnic programming; that is programming that is specifically directed to culturally or racially distinct groups, that is other than Aboriginal?

3668 MR. ILLYAS: Yes. Fourteen per cent of programs will be directed to ethnic programming.

3669 THE CHAIRPERSON: So 14 per cent would be ethnic?

3670 MR. ILLYAS: Yes.

3671 THE CHAIRPERSON: That is 14 per cent of 126?

3672 MR. ILLYAS: Yes.

3673 THE CHAIRPERSON: How much would be devoted to third language?

3674 MR. ILLYAS: None. But the third language will come in the ethnic programming. It won't be third language --

3675 THE CHAIRPERSON: So all of the third language is within the 14 per cent.

3676 MR. ILLYAS: Yes.

3677 THE CHAIRPERSON: How much of the 14 per cent, then, is third language?

3678 MR. ILLYAS: We haven't categorized that. What we want is to have a mix with English and the third language at the same time. There are people who would like to listen to ethnic programming, but if it is purely on a third language they won't want to listen.

3679 We want to encourage people from other backgrounds who are not particularly of that ethnic or that language to listen to that program. So if we provide part of it with English, it will help to get to a wider listener audience.

3680 THE CHAIRPERSON: Do you have some rough idea? Would we be looking at maybe half of the 14 per cent being English? Or would English be most of it?

3681 MR. ILLYAS: A little less than half will be third language.

3682 THE CHAIRPERSON: So somewhat less than half.

3683 MR. ILLYAS: Yes.

3684 THE CHAIRPERSON: So about 7 per cent or less.

3685 MR. ILLYAS: Yes.

3686 THE CHAIRPERSON: So probably less than eight hours a week would be third language.

3687 MR. ILLYAS: Right.

3688 THE CHAIRPERSON: You mentioned Native and Mik'maq programming in your application that you wanted to offer.

3689 I must say I was curious when I read the application. How do you expect to provide the Mik'maq programming?

3690 MR. ILLYAS: We have been in touch with the Mik'maq community, and they showed an interest in presenting a program. When we told them about the community radio station, they were very interested and wanted to know if they could be part of our group. I said certainly, and once we get the licence they would be interested in participating.

3691 That is when we decided to include Aboriginal Peoples as well.

3692 THE CHAIRPERSON: Is that somebody locally?

3693 MR. ILLYAS: Yes, locally.

3694 THE CHAIRPERSON: Locally here in Halifax?

3695 MR. ILLYAS: Yes, it is.

3696 THE CHAIRPERSON: Would that be done in English or in Mik'maq language?

3697 MR. ILLYAS: They have said that it would be primarily in English. They might have a certain percentage of the Mik'maq language as well. But we haven't discussed that further yet.

3698 THE CHAIRPERSON: All right.

3699 When we talk about 14 per cent ethnic and perhaps somewhat less than that as being third language, that is initially, I take it. What would you see that being over the licence term?

3700 Is it your expectation that given the nature of the community here, that would probably maintain at that level?

3701 MR. ILLYAS: Yes, we would be maintaining that. If we do increase it, it won't be by much.

3702 What is happening in Halifax is we need to bring people together, particularly the wider community, to understand the various cultures that are in Halifax. If we are going to provide entirely a program in third language, they will be turned off. And we don't want that happening.

3703 So even with those third language programs, ethnic programs, it will be with a percentage of English as well.

3704 There are people from the wider community who are very interested in somebody's ethnic music, but when it is described in third language they don't know what it is and they get put off. We don't want that to happen. We want them to listen to those programs as well.

3705 We would be having it with English and the third language, so I don't see that percentage increasing.

3706 THE CHAIRPERSON: I must say I find it a bit curious. I don't know much about the Centre for Diverse Visible Cultures, but I find it a bit curious that given the apparent rationale underpinning the station and the groups that you represent supporting it, that essentially we are talking about an English-language community radio station here, notwithstanding the fact that the backers are the Centre for Diverse Visible Cultures. I would have thought that catering to the various cultural ethnic groups in the community here, you would have been doing more.

3707 MR. ILLYAS: We felt, Mr. Chairman, that it would be better to have a community station with more English in it, with the English language, than strictly an ethnic station. We don't have the ethnic numbers here.

3708 What we are trying to do is to bring the wider community to understand the ethnic cultures here. The only way we can do that is to broadcast a fair percentage in English so they will tune in and understand the various cultures rather than presenting an entirely ethnic language program that nobody will understand and nobody will tune into.

3709 The numbers that we have of ethnic persons here, of cultures, are not very large. If it was in Toronto, certainly. We have looked at it from that point of view.

3710 I can see the curiosity in your mind about why, coming from the Centre for Diverse Visible Cultures, we are not looking at more ethnic programming. We would love to do that, but it is a matter of integration. We want the people from ethnic backgrounds to integrate, and one way of doing that is to bring both wider community and the ethnic community together.

3711 Radio is a medium that we can do that, but if we entirely stick to providing third language programming, that is not going to happen.

3712 THE CHAIRPERSON: I assure you I am not trying to sound critical in posing the question. It is just trying to get a better understanding of what you are proposing to do here.

3713 MR. REGALA: I may be able to add something. This touches on the role that the Centre for Diverse Visible Cultures can play.

3714 The Centre itself, as Ifty has pointed out, one of the main goals is to help the various ethnic and diverse communities here to be able to integrate and to be able to relate better to the general community. So one of the things that we are trying to do is to make them be able to communicate better in the language that the community operates, which is English.

3715 As you would have noted, one of our core programs is being able to provide English as a second language program to these people so that they can upgrade their ability. When they come in here and they are not able to communicate as much as possible in English, we can help them do this and help them be able to integrate and to relate with the members of the community in a more viable way.

3716 One of the things is to increase their ability to communicate in the language that is more generally used in the community, which is English.

3717 That is why the use of the third language right now in the start-up of the radio station is at a lower level. It doesn't mean that we will be operating at that lower level forever. It is just that that is the starting point for us.

3718 We would like to be able to use English as a better tool to reach out to the people, not only in the ethnic community but to the general community as a whole.

3719 THE CHAIRPERSON: That is fine. Thank you for that.

3720 Going back to the religious programming for a minute, do you have firm plans for religious programming; and if so, where would it come from?

3721 MR. ILLYAS: Mr. Chairman, before we embarked on this application we were approached by Halifax Jamz. We had this thought for a long time to have a radio station, and when Halifax Jamz made a proposal we felt this was feasible.

3722 But we realized that licensing depends on the Commission, and if they don't get one where do we stand?

3723 THE CHAIRPERSON: I was going to ask you that.

3724 MR. ILLYAS: Yes. We didn't want to be totally dependent. We wanted to get a head start on that.

3725 What we did was we approached the religious organizations and asked them whether they would be interested in a community radio station, whether they would be interested in broadcasting on our station. They were very interested because they could appeal to the people that they were wanting to appeal to through a community radio. We told them that we would have a maximum of eight hours basically for the eight major faith religions, so that all communities would be looked at.

3726 Some of them responded positively, some haven't. So we have firm commitment now for about four to five hours of religious programming.

3727 THE CHAIRPERSON: That is all local.

3728 MR. ILLYAS: That is local, yes. We haven't gone outside at all.

3729 THE CHAIRPERSON: No religious from outside.

3730 MR. ILLYAS: No.

3731 THE CHAIRPERSON: When you talked in your financial projections about sponsored programming and you indicated eight sponsors, would these religious programs be sponsored programs?

3732 MR. ILLYAS: That's right.

3733 THE CHAIRPERSON: When you say you have firm commitments for four or five --

3734 MR. ILLYAS: Five others.

3735 THE CHAIRPERSON:  -- you have eight sponsors at $3,000 each per year. You have firm commitments for five sponsors at $3,000 each per year.

3736 MR. ILLYAS: That's right.

3737 THE CHAIRPERSON: For how many years?

3738 MR. ILLYAS: We have asked for a commitment of a year to begin with.

3739 THE CHAIRPERSON: One year.

3740 MR. ILLYAS: But they were so enthusiastic about them being on community radio, even if I asked for another three years' commitment, they would have given it to us. It is just pushing into the future. We thought let's see whether we can stand alone or not. We feel that with that commitment we could.

3741 THE CHAIRPERSON: You indicated eight sponsors in your financial projections.

3742 MR. ILLYAS: Yes.

3743 THE CHAIRPERSON: You have firm commitment for five.

3744 MR. ILLYAS: Five, yes.

3745 THE CHAIRPERSON: You said a number of them have said no. Is five probably it for the first year or so?

3746 MR. ILLYAS: No. We have still to hear from others who want to participate, provided we get our licence.

3747 There are others who were very interested even before we got the licence. They were glad to make that commitment. And the others say they will make the commitment once we get the licence.

3748 THE CHAIRPERSON: Do you plan on purchasing any other programming from elsewhere outside the local area or indeed outside the country?

3749 MR. ILLYAS: No, Mr. Chairman, I don't think so. We will be with the local faith communities here.

3750 THE CHAIRPERSON: Let me then ask you the question more specifically.

3751 You just referred to the Jamz application. In their application they indicated -- and I was curious that you didn't mention this when we were talking about training -- that they would be prepared to provide you with training and the $250,000 over seven years.

3752 Let's suppose we don't provide Mr. Ritchie an opportunity to become a DJ. What then happens with respect to you?

3753 You didn't mention the fact, although they did, that they would provide the training. Is it your view that they would provide some of training?

3754 MR. ILLYAS: Mr. Chairman, we wanted to stand alone, because if they didn't get their licence and if we made ourselves favourable and you felt that we deserved the licence but because of that you wouldn't be able to give us the licence, that would be a shame.

3755 That is the reason why we thought we would stand alone, stand to see whether we can become a viable entity. That is why we decided to have our own training and all that.

3756 If Halifax Jamz does get their licence, we will be more than happy. As you say, $250,000 over a seven-year period will give us a good baseline to stand on, as well as on top of the commitment that we have had. We will become fairly quickly operational.

3757 Recently what we did was in anticipation of a licence -- I don't know whether this is looking too much into the future. We had an opportunity to go to an auction this past Saturday where they auctioned off Cole Harbour equipment, and we went and picked out a few items that would help us.

3758 THE CHAIRPERSON: Since you mention that -- well, let's put a period on that first point then.

3759 You are confident that your projections will allow you to succeed if Halifax Jamz was not licensed. We have already talked about the training. So if they get the training, that is a bonus.

3760 Your projections suggest to you, at least, that you can survive without the $250,000.

3761 MR. ILLYAS: That's right.

3762 THE CHAIRPERSON: That you could stand on your own.

3763 MR. ILLYAS: Yes.

3764 THE CHAIRPERSON: Picking up on that last point on Cole Harbour, one of the questions I wanted to pose to you is: What is the status?

3765 In your application you mention there were negotiations going on with Cole Harbour regarding the equipment, and now you say there was an auction last Saturday to auction off the equipment.

3766 MR. ILLYAS: Yes.

3767 THE CHAIRPERSON: You have some of it?

3768 MR. ILLYAS: Most of it, other than for office equipment. We got most of the technical stuff.

3769 What we did was, Mr. Chairman, I was in contact with the President of the Cole Harbour Radio Society, and he told me that if we were prepared to pay a certain amount, which they owed the government, that we would be able to get the rest of the equipment that they had.

3770 THE CHAIRPERSON: So you made a cheque payable to Paul Martin, did you?

3771 MR. ILLYAS: No. That was the negotiations we mentioned in our application.

3772 Suddenly we realized that -- what it was is that if it was beyond a certain amount, it has to go to public auction. That is what we were told. That put us in a situation, because we were hoping to negotiate and get that equipment and that would give us a head start.

3773 THE CHAIRPERSON: So it did go to public auction.

3774 MR. ILLYAS: It did go to public auction. We went there and fortunately for us we paid, I believe, less than one-third of what we would have had to pay if we had to negotiate and get it from Cole Harbour.

3775 THE CHAIRPERSON: So you got some change in your pocket.

3776 MR. ILLYAS: We did.

3777 THE CHAIRPERSON: Good. So what are you missing?

3778 MR. ILLYAS: We are just missing a board and someone has volunteered to give one to us.

3779 THE CHAIRPERSON: So you are confident you can get --

3780 MR. ILLYAS: We have the transmitter.

3781 THE CHAIRPERSON: With what you saved, you can --

3782 MR. ILLYAS: Yes.

3783 MR. PLUNKETT: We have two-thirds of a radio station probably from the auction, and the other equipment we have lines of -- either they were bought by other people at the auction thinking they were going to end up with much more of the whole situation. So there are a number of negotiations going on.

3784 THE CHAIRPERSON: I guess you could have 100 per cent of the equipment and still need the licence though.

3785 MR. ILLYAS: That is what we are worried about.

3786 MR. PLUNKETT: It is pure coincidence, as you know.

3787 I arrived at the hotel on Thursday night from Toronto, and the first thing the desk clerk said to me was, "Oh, I remember you from when you were down here in August preparing the application. You like auctions, don't you." It was like antique auctions. He said, "Have you looked at the Halifax paper today?" I said, "I've got it under my arm. I'm going to look at the auctions when I go up to my room." And he said, "You are going to find the Cole Harbour equipment is coming up on Saturday."

3788 So it's just pure coincidence that it was the Saturday before this hearing started.

3789 THE CHAIRPERSON: We talked about the equipment. The one other area is local time sales. I would like to get a sense of how confident you are in the local times sales figures that you have indicated in your financial figures, which starts off at almost $63,000 and goes to $85,000 by year seven.

3790 What are those projections based on?

3791 MR. ILLYAS: Mr. Chairman, we called many small businesses, businesses that exist in Halifax that do not get any radio advertising because they cannot afford it. When we told them that should we get the licence for a community radio, would you be interested in advertising with us, they said yes, they would like to.

3792 There again it is localized, and they were very interested in that type of arrangement. We spoke to automotive garages, so many small shops. They can't afford commercial radio rates, but they can afford community radio rates.

3793 So based on that, that is how we came up with that.

3794 THE CHAIRPERSON: It sounds like the same market Mr. Canales might be after.

3795 MR. ILLYAS: No. We are going even further down.

3796 THE CHAIRPERSON: Your worst fear might be that he gets licensed.

3797 We are near the end here.

3798 Given the changed technical parameters -- and maybe Mr. Plunkett wants to answer this.

3799 I am familiar for years going through the theoretical coverage area and then discovering the actual coverage area in some instances, especially given the nature of the topography here and the ocean and the Bay of Fundy, and so on, I know how the real coverage areas, whether it radio or TV, can differ somewhat.

3800 What do you anticipate to be the actual coverage area for the station?

3801 MR. PLUNKETT: I anticipate it to cover, with a good signal, 95 per cent minimum of what I understand to be the Halifax Regional Municipality, certainly the old cities of Halifax and Dartmouth at least.

3802 I can equate it to a present station on the air, Tourist Information Radio at 97.9. We have exactly the same parameters, the low power equivalent of 50 watts, at the antenna height that they are and the antenna height that we are, the same equivalent combination on the CBC radio tower. I extensively monitored their signal range when I was here in August and was pleasantly surprised, and this has been patterned on that.

3803 We have no doubt that we can equate with what they are getting and that would suffice for what we are hoping for.

3804 THE CHAIRPERSON: Then my last question would be -- and I guess this goes back to the Cole Harbour thing and concerns over volunteers and so on. I take the point that Mr. Plunkett mentioned earlier about the coverage area for Cole Harbour versus your coverage area, and if you want to include that in your answer, that's fine.

3805 The question that certainly comes to my mind is: With the failure of Cole Harbour notwithstanding all the enthusiasm that was behind that application and the certainly noble objectives that it had to deal with a lot of difficulties that were being had in that community at the time -- which, I must say, we were certainly hopeful that the radio station would be helpful in addressing a lot of those concerns.

3806 Notwithstanding the noble cause, it was not able to be successful.

3807 So my question to you is: With that in mind, what makes you think that you can be successful here?

3808 MR. ILLYAS: The signal that we will be sending out is a different coverage.

3809 There were two reasons why Cole Harbour had a lot of difficulty. One was the internal thing that went on between different communities.

3810 The second thing was their antenna was moved from where they originally planned to have it, which would have covered a fair bit of Dartmouth and a little bit of Halifax. When they had to move it away to Preston, they lost the Halifax coverage. They got a lot of dead space around Preston. So they got coverage of Dartmouth, but very little of Halifax.

3811 Whereas with our antenna on a CBC tower, we will be covering Dartmouth, Halifax, Bedford and Lower Sackville. On a good day it will take us out to Lower Sackville, which is almost 95 per cent of the Halifax Regional Municipality -- the original region, not the new one where it goes all the way out to Ecum Secum, which is about 30 kilometres away.

3812 That is why I feel we are confident that with the coverage we have, we will have a lot of small businesses interested in us, as well as other communities coming in.

3813 Also there is the fact that this is truly a community station in the sense that it didn't originate from a "school" incident. A lot of people felt that it could have been handled many other ways, not necessarily through a radio station.

3814 THE CHAIRPERSON: All right. Perhaps we will leave it at that.

3815 I understand Commissioner Cram may have a question or two.

3816 COMMISSIONER CRAM: Thank you.

3817 Mr. Regala, I need a little history of CDVC. I am not from here.

3818 How long has CDVC been around?

3819 MR. REGALA: CDVC is a pretty young organization. We have been about three years in operation right now. Is that right?

3820 MR. ILLYAS: We have three years in the new location.

3821 MR. REGALA: We have three years in our new location, but a total of about seven years total operation as a community-based organization.

3822 COMMISSIONER CRAM: How many members do you have?

3823 MR. REGALA: Our membership is based on individual membership. I don't have an actual total right now.

3824 MR. ILLYAS: We have over 80 to 100 volunteers and about 30 members. It is more an organization that helps immigrants, refugees and others integrate. So most of the programs that we run are for that kind of group.

3825 We have a large volunteer base. In fact, in our English as a second language program we go and help out those who cannot go to a learning centre. What we do is we have our volunteers going to their homes. That volunteer base alone is about 30 volunteers. We have workshops and train them as to how they should do the English language training.

3826 COMMISSIONER CRAM: There seems to be a fair number of programs.

3827 MR. ILLYAS: Yes.

3828 COMMISSIONER CRAM: How many staff do you have?

3829 MR. ILLYAS: We have three and a half permanent staff, paid staff. It varies because we have funding. We have arrangements with the various employment programs. So there are times when we have about seven, and it drops down to about three.

3830 COMMISSIONER CRAM: The connection with Kaleidoscope is where I want to go to. It is a question in your deficiencies.

3831 It is your letter of November 13th, and it is Question 12 at the top of the page.

3832 MR. ILLYAS: Yes.

3833 COMMISSIONER CRAM: There are going to be eventually nine directors.

3834 MR. ILLYAS: That's right.

3835 COMMISSIONER CRAM: Three will be appointed or elected from the CVDC.

3836 MR. ILLYAS: Appointed.

3837 COMMISSIONER CRAM: Appointed by CVDC to this board.

3838 MR. ILLYAS: Yes.

3839 COMMISSIONER CRAM: Six will be appointed from the community at large?

3840 MR. ILLYAS: No, elected.

3841 COMMISSIONER CRAM: Where is the community at large? Help me with this.

3842 MR. ILLYAS: The Kaleidoscope Community Radio station will be a society on its own.

3843 COMMISSIONER CRAM: It will be the members of that society.

3844 MR. ILLYAS: Yes.

3845 COMMISSIONER CRAM: Then you say two directors will be appointed and filled from within the programmers and volunteer cadre.

3846 So of the six you will then have two of them who will either be staff or volunteers?

3847 MR. ILLYAS: They will be all volunteers. From the presenters group or programmers group, there will be one, and from the volunteer group there will be one, so that we have direct access to the community as well as through the society.

3848 COMMISSIONER CRAM: So programmer volunteers and then non-programmer volunteers, one each.

3849 MR. ILLYAS: Yes.

3850 COMMISSIONER CRAM: All right. So there will be an ability at least to access CDVC by this mechanism and to maybe search out volunteers that way.

3851 MR. ILLYAS: Definitely.

3852 COMMISSIONER CRAM: Thank you.

3853 Thank you, Mr. Chair.

3854 THE CHAIRPERSON: Thank you.

3855 Commissioner Demers.

3856 COMMISSIONER DEMERS: Thank you, Mr. Chairman.

3857 I have just one question on your oral presentation, at page 5, the second-last paragraph on news, you say that:

"News programming will reflect a much wider diversity of news sources, opinions --"

3858 In reality, could you elaborate on how, in what way this will be a more diverse source of news than other stations.

3859 MR. ILLYAS: Right now local news in Halifax, there is hardly any. They just devote two or three minutes, and it is mostly provincial news. Halifax news is at a minimum.

3860 We want to bring in a little bit more around the Halifax area, news from around that area. Most times, even if you look at TV in the evening, there is hardly any news from Halifax. It is always mostly news from around the province.

3861 So we thought we would have more Halifax news as against what is presently served.

3862 COMMISSIONER DEMERS: How will you collect or have you thought of how you will be able to gather up that news and put it on the air?

3863 MR. ILLYAS: This is where we were hoping to involve students from various schools who are interested in journalism and broadcasting. We would involve them. We would approach the School of Journalism at King's College. There are first year students and second year students who would be more than happy to be our voice on the street to gather this information.

3864 COMMISSIONER DEMERS: You have indicated that you would have three and a half individuals who will be paid by the station. Will one of these paid persons be in charge of news, or will it be a volunteer?

3865 MR. ILLYAS: It will be a volunteer who will be in charge of news. But any news that goes in will be vetted before we put it on. Unlike other commercial mediums, it will not be right on the spot. We would want to see that the news that goes on has been properly screened. That way, there will be a certain delay.

3866 I guess it becomes the practice now, even with various major events, that there is a seven-second delay now because of things that have been happening. So we want to make sure that the news that goes over our radio would be looking into many aspects, particularly sensitivity at various cultures. We don't want to offend them. Many times there are instances where news is made over radio as well as other media that are very insensitive to certain cultures. And we want to be careful with that.

3867 Also, we would like to have news of celebration of cultures rather than always having negative information being supplied over the radio. We want to make that an important element as well.

3868 COMMISSIONER DEMERS: Thank you.

3869 Thank you, Mr. Chairman.

3870 THE CHAIRPERSON: Thank you.

3871 Commission counsel?

3872 MR. McCALLUM: Thank you, Mr. Chair. I have just one really, just to get a better understanding of the listenership of the station.

3873 I can understand in terms of who would be listening, that people who have recently immigrated to Canada from various countries who are clients of the CDVC will be listening, and other people who have immigrated in the past. I can see people who would be interested in the religious programming to be listening; perhaps gay/lesbian people listening to the programming that is directed to that audience.

3874 Who else in the wider community, other than the ones I have just mentioned, do you think you can attract as listeners and why?

3875 MR. ILLYAS: There is another group that has been totally ignored in many ways and that is the disabled, the blind. We want to provide programs for them. They can hear. There are so many blind musicians whose music can be played, and there are so many programs that we can have for them that will talk about assistive technology, different things that will help them live a better life.

3876 And there are other disabled persons who we can attract; as well as, as you said, the various ethnic groups.

3877 Also, it is important to attract people from the wider community, the so-called Anglo Saxon as well, because they need to know that we live here. In Halifax it is not happening. Some people don't know that. That is why you see right now amongst our panel a broad group; that we want to reach out to the wider community. That is our goal.

3878 So we are hoping that all communities, including the wider community, will listen to us.

3879 MR. McCALLUM: On that question, do you have any sense of who in the wider community might be listening?

3880 For example, in the age ranges, do you have any sense of the age ranges that might be listening or any other characteristic that they might share that would be listening?

3881 MR. ILLYAS: We hope to attract a wide range of ages to our station. We don't want to take away from the main radio stations. Those people are already listening to those stations. We are hoping to attract persons who have tuned off radio.

3882 There are so many people from the wider community who have turned off radio because of the content that is being provided right now. I am sure as soon as we start there will be enough programs there that will certainly attract a larger percentage of those who have been turned off. We can bring them all back. I am confident of that.

3883 I have talked to many people, and they have all said they don't listen to radio any more. They just watch TV for a little while just to get the news and that's it. Most of the time they are listening to their CDs and other entertainment.

3884 That is a sad thing that has happened.

3885 MR. McCALLUM: Thank you, Mr. Chair.

3886 THE CHAIRPERSON: Thank you, counsel.

3887 Ms Burke and gentlemen, thank you very much for your presentation here this morning and for answering our questions. That concludes this stage of the application process for your application.

3888 MR. ILLYAS: Thank you.

3889 THE CHAIRPERSON: We will take our lunch break now and reconvene at 2:15 when we will hear the application from CKMW.

--- Upon recessing at 1307 / Suspension à 1307

--- Upon resuming at 1415 / Reprise à 1415

3890 THE CHAIRPERSON: We will return to our proceeding now.

3891 For all of those out in not radio land but Internet land who may be listening to us on our audio feed on the Internet, in terms of our order of business we will hear the next application today and then deal with Phase II of the process and adjourn for the day and commence Phase III of the process, that being the appearing intervenors, tomorrow beginning at 9:00 a.m.

3892 I might also say it is refreshing to see all of the young people in the audience here today. I guess there were a number here yesterday as well.

3893 We have been comparing birthdays for us aging baby boomers who are on the Panel, most of whom don't have a clue what alternative rock or urban music is. We are learning a lot this week. It is nice to see you all here.

3894 Mr. Secretary.

3895 MR. LeBEL: Thank you, Mr. Chairman.

3896 We will now hear Item 11, which is the last of the applications for the Halifax market.

3897 It is an application by CKMW Radio Limited, on behalf of a corporation to be incorporated, for a licence to operate an English-language commercial FM radio programming undertaking in Halifax.

3898 The new station would operate on frequency 103.5 MHz (Channel 278C), with an effective radiated power of 78,000 watts.

3899 Mr. William Evanov will be introducing the panel.

3900 You have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

3901 MR. B. EVANOV: Mr. Chairman, Members of the Commission, Commission staff, my name is Bill Evanov, President of CKMW Radio Limited.

3902 Before we begin, I want to thank you for this opportunity to present our vision for a new radio station in the Halifax market and to introduce the radio station team that developed this application.

3903 Before we go on, I do want to wish all the Members on the Commission and the Commission staff happy birthday.

3904 Also, today is the birthday of my daughter. She is an honours student at McMaster University, so I am very proud of her. I will have to phone her after the hearing.

3905 And I found out by chance that our legal counsel, Stuart Robertson, it's his daughter's birthday today as well. We have obviously a number of "happy birthdays".

3906 To go on, at the front table, starting on your left, is Paul Evanov, Vice-President of CKMW Radio, who also programs CIDC-FM and has made it the number one youth station in the Toronto CMA.

3907 To his left is our Vice-President of the Radio Group, Carmela Laurignano.

3908 To her left is our Vice-President of Sales, Ky Joseph.

3909 And to her left is Lorne Simon, a Haligonian with 20 years' experience in broadcasting and our station manager for the Beat.

3910 At the rear table, in the back row, from left to right on your radio dial, is Bob Linney, our research consultant.

3911 To his left is Scott Fox, who heads up our programming team.

3912 To Scott's left is Del Archer, our consultant for news and information services -- a resident of Halifax with 45 years' experience in television and radio news.

3913 To Del's left is Jeremy Slattery, a local club DJ spinner who is a judge in this year's Juno Awards program.

3914 Joining me at this table, starting to my left, is Stuart Robertson, our legal counsel.

3915 To his left is Gary Muise of the Grafton Connor Group, the company which operates the Dome, one of the largest clubs in downtown Halifax.

3916 To Gary's left is Raoul Rozier from Halifax, our street promotions coordinator.

3917 Before my panel begins, I just want to say one thing here. Over the years we have assembled and developed a large and dynamic team at our three radio stations. It's an innovative, creative, street-wise, street-smart team that has built three radio stations in the most competitive market in Canada.

3918 Our three-station team has many, many capable broadcasters with the ability to launch a number of stations in other markets.

3919 Some members of our team are here today to discuss our vision for a new radio station in Halifax. Also, with this application we are extending a broadcast ownership opportunity to two of the key senior people in that management team: Carmela Laurignano and Ky Joseph.

3920 This team will deliver today's presentation. I would like to ask Carmela, our quarterback, to begin.

3921 MS LAURIGNANO: Thank you, Bill.

3922 Now we will begin our presentation.

3923 The Commission has seen CKMW Radio Limited apply for new licences in Toronto, Kitchener and Edmonton in the recent past and you will see us again in the future. We will tell you why we are expanding our interests.

3924 I am going to ask Paul Evanov in his capacity as shareholder of CKMW Radio Limited to explain this background.

3925 MR. P. EVANOV: Commissioners, our company has been involved in the launch of two radio stations devoted to serving the 18-to-34 demographic and in bringing dance music to Canadians. We have learned to program for young people, how to program from the street and how to build a distinct station sound and a successful business in the most competitive market in the country.

3926 We believe that with the talented crew that manages our stations, we can take this focus and experience in programming to young audiences to where it is most needed.

3927 We have such confidence in Carmela, our radio group manager, and in Ky, our head of sales, that we have invited them to join us in investing in this Halifax opportunity. It is truly time to see a new and diverse ownership in a market such as Halifax, and we sense that the best way to make that point is to diversify the ownership in our application as well.

3928 With such talented and experienced leadership, our application is the strongest we have ever put together and we are enormously proud of the proposal we offer you today.

3929 MS LAURIGNANO: Commissioners, Paul's experience as program director at CIDC-FM is now so evolved and proven that we know he can provide the necessary back-up and guidance to help our Halifax operation become a reality and an enormous success.

3930 When the Commission called for applications for Halifax, we immediately called upon our researchers to identify opportunities in the market to see if there was a need or niche we could fill.

3931 MR. SIMON: The overwhelming result of the research was that the youth market is underserved in Halifax. In fact, we learned that the number of persons in Halifax in the 15-to-34 age group has been consistently growing over the last three years, outpacing the national growth rate.

3932 The median age of Halifax is younger than the national average. Almost 30 per cent of Haligonians are in the 15-to-34 age group.

3933 There are six degree-granting educational institutions here in Halifax, which means that for most of the year the percentage of the population in the age group is even larger.

3934 Post-secondary registered students are estimated to be approximately 30,000. The Canadian per capita tuning to radio by 12-to-17 year olds has declined 15 per cent between the spring of 2001 and 2003. Among 18-to-24 year olds, there has been a decline of 14 per cent during the same period.

3935 Youth are turning away from radio in Halifax as they do not believe there is anything for them in the radio broadcasting system.

3936 No station in Halifax addresses the 12-to-24 demo. We will.

3937 We were excited by the prospect because we have experience in the youth market, and it is the mission of our company to take our skills and our focus on youth to as many markets in Canada as can accommodate a youth-oriented station.

3938 What did we find in Halifax? We found companies that wanted to attract young customers. We found DJs who said it was difficult to play new music in clubs because the young customers had not heard the new music on the radio.

3939 We found advertisers saying they had no bargaining position with the existing broadcasters because there is virtually no competition in the radio marketplace. Also, if the advertisers were trying to attract young listeners, they found radio a very inefficient buy because youth are not listening to radio.

3940 MS LAURIGNANO: This told us two things are crucial in this market -- two things, as it turns out, that are our greatest strength:

3941 (1) a new station must be focused on what the 12-to-24 year olds want to hear in terms of music, talk, community information and news; and

3942 (2) the market needs a new and independent player who can survive in a tight market where the largest block of existing players are among the most powerful media companies in the country -- who are likely and able to make entry by a new player almost impossible, and who are likely to pick up on our good programming idea and make it their own, even before we go to air should we be granted a licence.

3943 We are survivors, and we have a mission and we have the resources to stay in any battle.

3944 This opportunity was made for us.

3945 MR. FOX: We have presented to you what appears to be a new format -- Youth Contemporary Radio. It is, and it isn't, new at the same time.

3946 Adult Contemporary is a well recognized format: music and talk designed to attract adult persons in the community. That format has been so well established that the industry has developed AC Charts from which AC stations can confidently choose their music -- hits and non-hits.

3947 Youth Contemporary Radio is the younger sibling: music and talk designed to attract young persons in the community. The format is not at all established yet but its time has come. The research tells us that.

3948 The only thing that makes Youth Contemporary Radio fundamentally different from AC in terms of structure is that being new, there are no charts already created from which the YCR station can safely choose its music.

3949 We are programming from the street based on what our target audience wants. Our music will be drawn from several sources. You will note in what follows that YCR is not a hit-driven format or a high-rotation format. There will be hits played and there will be repeats, but what and how often will be entirely a function of what is most popular in our target audience. There will be a premium on what is new and what is proving to be most interesting.

3950 The traditional sources are:

3951 Record companies -- they serve all radio stations across Canada, but radio stations are very selective about what they play from what is available in their shipments.

3952 Record stores -- these stores receive requests daily for what consumers want to buy. These stores are therefore to us an invaluable source of consumer demand for new product.

3953 Existing charts -- we monitor existing charts including R&R, Billboard and the Canadian national charts. Even though we are not a hit-driven station, we look at them to gauge the popularity of the music we play.

3954 Listener feedback -- this takes two forms. First, we receive telephone calls and e-mails from listeners who want us to know what they want to hear. We take those requests very seriously.

3955 Second, we have our "Keep It or Beat It" feature every week night in peak listening time. We offer the freshest sounds and the newest music we can find and let our listeners decide for themselves if they wish to hear it again on our station. Whatever the listeners say goes.

3956 Beyond that, we go to non-traditional sources:

3957 DJ Pools -- help us develop the dance and urban components of our format. Here in Halifax there is an active and important pool called Pool East run by Bruce Anderson. The member DJs in this pool play to thousands of people each week in local dance clubs. They experience first-hand what music is hot and inspires a reaction from the crowds. The record companies give music to all of the DJs in this pool to generate a street-level buzz on new music.

3958 Conferences around the world -- again, for our dance and urban music, we attend conferences in Germany, France, Miami and, of course, Canadian Music Week celebrated each year in Toronto. The newest and the best are always pushing their product at these conferences. It is something we have to be at to keep up with what is going on.

3959 Monitor the Internet -- we look at music discussion forums to see exactly what people are talking about.

3960 Open door policy -- we have an open door policy. It is a policy we have always had in this company. We make ourselves available to the artists and the independent record labels that want to meet with us. We listen to their music, and we offer them feedback when we can.

3961 This policy has resulted in a major boost for such acts as Love Inc. (a Juno winner), Elissa (a Juno nominee), The Sound Blunts (a Juno winner), Original 3 (a Juno nominee), Shawn Desmond (now signed to BMG -- a major label), and Choclair (a Juno winner), who all got their first airplay on our Orangeville station.

3962 Few radio stations anywhere make themselves available in this way. But we do.

3963 MR. LINNEY: The research showed us a few things that will guide our programmers. We learned the young audience wants diversity in their music. Ninety-five per cent of our target audience wants to hear a large variety of music. They want things that are new and exciting. The 15-to-24 age group showed an interest in urban, Hip Hop, rock, R&B and alternative rock. A high percentage of the people who said they liked urban and Hip Hop also have a high interest in other music types such as pop, R&B, dance and top 40.

3964 When we put our proposed blend of these different music types to our research group, we found that 53 per cent of the 15-to-17 year olds said they would "definitely" listen to us. Another 37 per cent of that age group said they would "probably" listen. In the older group of our target audience, 46 per cent of the 18-to-24 year olds said they would "definitely" listen. Another 39 per cent of that group said they would "probably" listen to us.

3965 Combined, that is 90 per cent of the 15-to-17 year olds and 85 per cent of the 18-to-24 year olds who have expressed interest in listening to what we are proposing.

3966 The goal is not to be all things to all people but rather to satisfy the wide range of interests that exist in the youth market.

3967 MR. P. EVANOV: We are the only applicant here which is currently operating a youth-oriented station.

3968 We see the need to have real persons selecting the music on a daily basis with an ear to the ground. It is not a formula thing. Even in our Orangeville station where we have a CHR format, we do not use any outside music consultants or rely upon any formula for selecting our music. Even in CHR we have our own approach to programming. We are active programmers, programming from the street and finding new and different music to be fit between the hits and the better-known selections.

3969 This is what we do and it is the secret of our success. We break new music, new groups and we are proud of it.

3970 We will do the same in Halifax directed to the 12-to-24 demo as our dedicated market.

3971 And now Del will speak to our news.

3972 MR. ARCHER: Commissioners, in my many years in this industry, I have learned the overriding challenge of presenting news and information is to make sure you are addressing listeners in a way that suits their ear and their sensitivities.

3973 News is news is news and the stories must be told. There is, however, a lot in the telling.

3974 Our research identified for us the priorities for the news and information elements in Halifax and we have incorporated them into the programming mix.

3975 The number one information element is weather -- and after Hurricane Juan and then "White Juan", I can't imagine why.

3976 The second priority is concert updates. The third is news and information specific to school. Fourth is news and information about Halifax.

3977 The key to success in radio -- and you have heard this mantra repeated many times; you have done it yourself -- is local, local, local.

3978 The Halifax youth audience wants news and information, club and entertainment listings, some gossip from the world of entertainment, and then sports updates with a skew to local and university sports.

3979 That list clearly shows the challenges that we face. The most in-demand information programming relates to the local Halifax situation -- weather, schools, what's happening in the city.

3980 This means that we must have the personnel to gather the local information and prepare it for broadcast. Our plans are for a news director/reader, and I am pleased to tell you that Kristen Tynes, a respected Halifax broadcast journalist, has agreed to head up the news service. She has already submitted a letter of support for our application, and it is in our application in front of you.

3981 She intended to be here today, but she is a new mom. Her baby is ill and she had to excuse herself.

3982 She would be joined by two reporter/readers with all the news services and communications technology we need to gather our information from Halifax. We will be working with interns in gathering the all-important news from schools and throughout the community we serve. The intern program will be a vital part of how we get the information we need.

3983 We have some other options available to us in the area of news gathering and reflecting the interests of the youth market, while at the same time stimulating the interest and involvement of that community.

3984 To be a little more specific, we believe that no one is really listening to young people in this market. We plan to invite the youth of Halifax to be part of our editorial process. They will be encouraged to suggest topics and stories for our newscasts. It is certainly not a new idea since it is employed very successfully by my friends at CJOH-TV in Ottawa.

3985 We are satisfied that an Internet Website will also provide access to the thinking, the trends and the issues affecting the youth market in Halifax.

3986 And we propose to establish a phone line to record the thoughts of interested youth from which selected samples can be taken and used on air.

3987 Commissioners, we should all be concerned if the younger members of our community are not presented with the information and stories about the community in which they live. They are not getting in on what is happening, and they are not getting enfranchised. I see it as a fabulous opportunity for this community in which I live to have the benefit of a turned-on generation, if you like, which cares about what is going on and wants to take part and take its part in the governance of the public business.

3988 Let's not forget that half of that demo are of voting age and the other half are getting ready to take on that responsibility. We have not missed that important fact.

3989 MS JOSEPH: Our mission of attracting young listeners will be enormously successful here in Halifax, but sales are also an important part of our radio operation.

3990 What an awesome challenge! It is a lucrative market and there is room for another player in radio. But the one you choose to compete with existing groups must have several key characteristics.

3991 They must be able to compete with the much larger players who, through the power of combos and their sheer muscle, can offer advertisers incentives which will constantly challenge any independent station.

3992 There are three owners of radio in Halifax. Two of them jointly garner 70 per cent of all sales in this market. The third group has the other 30 per cent. That is a tight market.

3993 They must have the financial resources and expertise to survive the stiffest competition imaginable. The reality is the new entrant must expect that the incumbents will drop their rates whenever they feel they need to in order to get advertising dollars.

3994 They must have a format that offers something entirely different from what the existing groups have to offer.

3995 They must be able to convince advertisers that it is the most efficient buy for the particular demo being served.

3996 They must be able to bring onto radio in Halifax those businesses who have not traditionally bought time here.

3997 Many have asked whether the teens in our target audience have money to spend. Even the question belies a basic lack of awareness of what is happening all around us. Consider the following:

3998 Today's teens are called the "six pocket phenomenon". They draw income from the pockets of their parents and in many cases from their step-parents and also their grandparents.

3999 TrendsCan says that Canadian teens aged 12-to-19 have a combined annual income of $19.1 billion. That's $107 per week of disposable income per typical teen. That's probably more than most people in this room have right now, because we as parents and adults have many responsibilities and things to pay for.

4000 The teens are using their own money on discretionary spending: clothes, entertainment, fast food and, of course, cell phones. And the list goes on.

4001 We find that teens are also considered to be an important voice in the family and influence -- or kidfluence, as the term goes -- a number of major purchasing decisions the family makes: the family car, movies to see, restaurants to go to, electronics.

4002 We know we can survive and prosper with The Beat. We have the experience, the street-smarts and the financial resources to get it done.

4003 MS LAURIGNANO: This applicant will survive in a market where a small group of big broadcasters think they have a lock on it.

4004 By now, you know our company. You know our track record. We meet our commitments. We do not abandon formats. We have prevailed whenever challenged.

4005 In any application the Commission is looking for: programming; the ability to sustain the operation; commitment to Canadian Talent Development; and diversity.

4006 Our CTD commitment is a substantial investment both in direct and indirect contributions. It is designed to focus on local talent initiatives with a particular theme of promoting and developing the talent of interest to youth audiences. We have detailed these initiatives in our written application.

4007 This application brings diversity to Halifax with: a new editorial voice; a new music format; new listeners to radio; new advertisers to radio; and new investors.

4008 We ask for an opportunity to serve this exciting and vibrant market. We want to bring to it our enthusiasm and show you how youth respond when broadcasters pay some real and focused attention to them.

4009 We would be pleased to answer any questions you may have at this time.

4010 THE CHAIRPERSON: Thank you, Ms Laurignano and your team for your presentation this afternoon.

4011 I will turn the questioning over to Commissioner Cram.

4012 COMMISSIONER CRAM: Thank you, Mr. Chair.

4013 I hate to bring age up again, but we have two "Evanovs" here. So I propose, Mr. Bill Evanov, to call you "Mr. Evanov Senior"; and Mr. Paul Evanov, I will call "Mr. Evanov", if that is all right.

4014 I'm sorry, Mr. Evanov Senior.

4015 MR. B. EVANOV: Thank you.

4016 COMMISSIONER CRAM: I want to start off with -- I notice, Mr. Fox and Mr. Linney, that you talk about what your research has told you on the format.

4017 This is where things get interesting.

4018 At page 6 of your presentation today you talked about "when we put our proposed blend of these different music types to our research group, we found out", te-da-te-da-te-da. But when I read what you put to your proposed listeners at page 15, you referred to this new FM station will play a combination of urban, CHR and dance, and there was no reference to rock.

4019 I go on to the rest of your research, and at page 12 in the first paragraph, again the Nova Study, it talks in the first paragraph about:

"Although the rock genre evidently enjoys universal appeal, the demographic polarization for hip hop and urban music is abundantly evident in the market."

4020 When you talk about majority choices, again in this demographic, I don't see rock in that.

4021 At page 13, there doesn't appear to be any crossing of interest with alternative rock.

4022 So the core issue here is what research shows the blending of rock with the three that you actually asked about in your research?

4023 MS LAURIGNANO: I am going to ask Mr. Linney to begin addressing the question.

4024 MR. LINNEY: Commissioner, on page 12 of the Nova Study you will notice that the breakout by demographics shows exactly the polarization toward urban, hip hop, R&B and dance.

4025 You are absolutely right that rock does not come up as high as our three principal genres.

4026 For example, looking at age 15-to-17 on page 12 of the study, you see the three, what we classify as primary preference, are hip hop, urban and R&B. However, rock came in fourth.

4027 As you move into the 18-to-24 demographic, you will see that alternative rock moves up into third place and rock moved up into number one.

4028 So the challenge here is in trying to program music mixes. As we said in the presentation, we are not trying to appeal to absolutely everyone. But in the target age demo of this radio station, which is 12-to-24, there are clear preferences within the subsets of the key demographics.

4029 Rock is in there specifically because of the 18-to-24 factor, not because of the 12-to-17.

4030 COMMISSIONER CRAM: What about the issue that we have so often heard about of tune-out: that if you play rock, then those who love the others -- urban, dance -- will drop off the scale?

4031 MS LAURIGNANO: That's where the magic of programming comes in and the expertise comes in. As you know, several genres of music can coexist in one format.

4032 For example, in the AC format you can have an R&B artist side by side with a country artist, for that matter. It is in the blending. It is in the way it is put together. It has to be a fluid format.

4033 I think Scott and Paul can give you some idea of how we go about it and why they can coexist.

4034 MR. P. EVANOV: Rock and urban together may or may not work, just the two separate genres. There is really no model for that. What we are proposing is a mixture of four genres, which is urban, dance, pop and rock.

4035 When you mix all these together -- and, as Carmela mentioned, the way you mix them when you are mixing all these genres together, then that is what works. You can't just take two of them. You need the variety, and you need the four to go well together.

4036 A small example is MTV Canada and MuchMusic. What they play for the viewers is a mixture of rock and urban and pop. They mix everything in there. They do have very little dance, but they do mix the other genres together, and quite successfully, because that is what the viewers want to see and those are the videos that the youth want to see.

4037 So when it is mixed together like that, the preference is -- it's not here's a Jay-Zee song; that's an urban song. And then next is a Nickelback song; that's a rock song. I don't like it.

4038 It's the way you mix it and it's the way you program it. This is the way it attracts the youth audience. A good song is a good song, no matter what format it comes from.

4039 Carmela made the analogy with AC. You take many, many different types of music and put an AC format, many different types of artists. It's the way the station is blended together to make it appealing for the listener.

4040 MS LAURIGNANO: To understand the format youth contemporary, one must understand that it is a program that targets to the demographic. The point of departure is the demographic. We are not starting from one genre of music from a narrow perspective. We are looking at this demographic and saying we are targeting 12-to-24.

4041 There are some people in the audience who are here that are in the 12-to-24, and they will tell you that some of them like urban music more, but I would expect that the overwhelming majority of the young people who are in our audience today like more than one type of music because that age demo has different tastes, just as they have different backgrounds, different ethnicities, different tastes in music and clothing and food and all kinds of things.

4042 It would be naive of us to think that this is a homogenous group; that you just take a narrow genre of music and build a radio station around it.

4043 This is a community that has large and varied interests. They told us what those interests are. They are urban music, which includes hip hop and R&B. They like the dance music. They like some of the rock. They like the rock alternative. They like the other rock, depending on which end of the demo it is. They like some dance. I daresay that some of them will like opera.

4044 As we said, we don't want to be everything to all people, but how do you attract the most people? It's a block-based format. It's not a little narrow niche format.

4045 The reason for that is that this radio station really should attract as many people as possible. We have also looked at other models across the country, quite frankly, where the one-genre music formats are being abandoned faster than rats can jump ships. You have to be silly not to look at all those factors.

4046 So the music is designed -- today we are programming it a certain way, given the tastes and the need almost for these people to want change. It will evolve over time. Seven years from now we are not going to be programming the same thing. Music tastes are going to change. For all we know, there might be some other type of music that comes in. But the demo will always be there. So when we are targeting that demographic, that is what is important to us.

4047 That also ensures our viability and ability to survive, because we are programming and targeting the demo; hence the youth contemporary radio. So whatever is contemporary today, seven years from now, 20 years from now, that's where we will be.

4048 COMMISSIONER CRAM: Then I have to ask -- and, Mr. Evanov, I wrote down that you said "that's what works".

4049 When you were having Nova look at the interest in your proposed service, why didn't you add that to the question?

4050 The question is: This new FM station will play a combination of urban, CHR and dance.

4051 Why didn't you find out statistically on research -- if you say this works, why didn't you say: This new FM station will play a combination of urban, CHR, dance and alternative rock and would you be interested?

4052 Here what both of you are saying intuitively, and based on other media and for the older generation, but why wouldn't you actually ask the question so we could see it in print?

4053 MS LAURIGNANO: I am going to ask Bob in a moment again to explain how the research was done. I think we call it three dimensional because it just peeled several layers: what is your most favourite and then went deeper and deeper into it.

4054 What I am going to say is that the research for us is a tool. We are the programmers; it's not the researcher. When we put the programming schedule together, we looked at the research as one factor. We looked at our experience in other markets as another fact. We looked at the players here in the market.

4055 Quite frankly, it would be a lot easier to just give the project to a researcher and expect them to do the same thing. That's not the way we do it.

4056 We looked at record sales, what is important, what bands are going on. And that's how the format was developed: what advertiser base we can get, whose targeting what, what the youth culture is doing, Internet sales, that kind of thing.

4057 The research was a tool for us. Paul and our people are the programmers.

4058 I think Bob may have something to add.

4059 MR. LINNEY: Madam Commissioner, you are looking at the proposed description of a radio station at the front end of the survey. If you actually turn to page 27 of the Nova Survey, you will see that we actually tested as well 11 different genres of music. We wanted to make sure that the original mix that was conceived for the format actually matched what the interests were, and the answer is that they didn't when you talked again of the 18-to-24 demo. That's where rock came into it.

4060 The second thing that helps confuse the situation is the fact that the descriptions we use for music these days tends to be blurred. I will give you an example.

4061 We went through all of the applications to see if all of us were talking about the same artists and how they were described. In all the applications who are after this proposed demo, there were only five artists described in the applications. Of those five, none of us put them in the same music genre.

4062 Nickelback is a good example. To us they were a rock band. To others they were alternative rock. So those blurry lines help to confuse when you actually try to describe a format.

4063 The result of the research was the recommendation to the applicant was: You have here a target audience with a wide interest in music. They obviously like new breaking experiment; they obviously like to feel that they are on the leading edge, whatever the genre.

4064 The only thing I can tell you cleanly from the research is what not to play. The rest of it is up to the experience of the programmers.

4065 The description of the genres, in all honesty, in all the applications goes from left to right on the radio dial.

4066 COMMISSIONER CRAM: Then you talked, Ms Laurignano, about your experience. Have you tried the mix of urban and alternate rock on any of your other stations?

4067 MS LAURIGNANO: The simple answer is yes.

4068 Paul can begin the answer.

4069 MR. P. EVANOV: Yes, we do. In our current operation in Orangeville, on CIDC-FM, we run a CHR format and we do have a mixture of urban, rock, pop and dance as well. The difference with that is in our Orangeville operation we cater to the 18-to-34 demo. We are not specifically targeting youth. We are targeting an older demographic.

4070 Even in regard to that, we have had the experience, and even beforehand with CING-FM in Burlington earlier on, we also programmed 18-to-34 and we also included the different genres of music with rock, urban and also dance. The same thing is true, and we have been successful with both operations. A good song is a good song, and it is in the way that you mix it and done properly.

4071 True, you can't play six rock songs in a row and then six urban songs in a row. You might be trying to reach too many people at the same time. It is in the way you mix it. You can play two urban songs, two rock songs, two dance songs, two pop songs.

4072 It's the certain songs you are playing. Different artists have different sounds. As Mr. Linney stated with Nickelback, anybody can call them from a CHR to a rock to alternative rock. Certain songs by Nickelback, some people will like, others they won't. It's even selecting not just an artist but the different songs that they have.

4073 In regard to Justin Timberlake, he has a song that comes out that is a ballad, very slow, that will fit across formats in eight different radio stations. Then he will come out with a song, an urban song, that might fit only one or two.

4074 It's choosing the selection of songs to play. Instead of playing the ballad after an urban song, you might pick the other one that has more pop in it and has the same sounds.

4075 Without getting into too many more examples, we have had success at our current CHR station mixing the different kinds of music together. We are gearing to an older demographic there, but it has and does work.

4076 MS LAURIGNANO: We actually had an analogy a while back. This is a recipe rather than two ingredients. As an Italian-Canadian I don't think I would eat oregano and garlic together, but if they were in a good tomato sauce they would be quite appropriate.

4077 As we say, it's a blend; it's a mix; it's a formula. We don't expect that everybody is going to like that music the whole time, 24 hours a day or 18 hours a day.

4078 And it will vary. It depends who is out there, if there is new music. It's a pinch of this -- just to expand on the recipe. It's not an exact measurement. It's a pinch of this, a pinch of that, depending on the tastes. And the tastes will change and vary.

4079 COMMISSIONER CRAM: Does it depend on the mix of the particular song in the sense that one artist does one song and then there are different mixes that come out? Is it that you would choose a different mix of it in order to blend it?

4080 MR. P. EVANOV: No. What I mean by mix -- I know there has been a lot of talk about DJs and mixing and everything else. By mixing, I guess that's the wrong term. It's blending the songs together, deciding which songs to play after one another.

4081 True, there are some remixes of some songs, but that is not what we are talking about here. We are talking about blending the songs together with an ear to programming, deciding what is going to sound good after this song, what is going to sound proper after this song, what song will sound proper after this song, what song will sound proper after this song. Then it goes back to day parting: at 7:00 a.m. you are not going to blast somebody with a hard, hard rock song when they are just getting up. In the evening you day part and you play a little harder songs towards the evening rather than you would in the morning.

4082 I didn't mean to confuse it by saying mix. It's more of a blend of what you decide to play one song after another.

4083 COMMISSIONER CRAM: I was going to ask about day parting. How would you generally day part the genres? Where would you put them?

4084 You say you would put rock at night or the heavier stuff at night? Is that it?

4085 MR. P. EVANOV: Not just the rock at night. In every genre there is softer music, more for a morning show, more appealing for a morning show. There are harder edge urban songs, like a Justin Timberlake. There are harder urban songs that at 8:00 a.m. when people are waking up they don't want to hear right away.

4086 We would still be blending all four genres all throughout the entire day, but it is selections from each genre that would be day parting, with a different sound in the morning and mid-day than in the evening.

4087 It would be the four genres mixing throughout the entire week, throughout the entire day.

4088 COMMISSIONER CRAM: Based on your play list, our capable staff have figured out the percentages based on the list you sent in to us, and thought that about 34 per cent urban, 16 per cent CHR, 23 per cent dance and 27 per cent alternative rock.

4089 Is that pretty well what you are playing now on CIDC, and there was another one?

4090 MR. P. EVANOV: Yes. We are only currently operating one CHR station where we play any of these types. The other station that I mentioned is another owner.

4091 Our Z103 station in Orangeville is different than this. It does take from these genres, but it is more of a CHR. The big difference in Orangeville is we are a CHR radio station. So the percentage of CHR would be a lot higher than this, which would bring down the rock and also bring down the urban because we are a top 40.

4092 It does vary from time to time at different times of the year with different musical tastes, what's on, what's coming up. And that really does vary.

4093 The big difference is in Orangeville we are a CHR and here we are youth. So the CHR percentage would be much, much higher.

4094 MS LAURIGNANO: The other factor there is that there is one fulltime urban station in the Toronto CMA and several rock stations. If somebody is a real hard core listener to that music, they have that choice.

4095 COMMISSIONER CRAM: Ms Laurignano, when you were talking about this, I got the impression that we can't necessarily count on the relative numbers as representative of what you will do over the seven years.

4096 Do I take it that you will try to take the pulse and vary the numbers (a) as time goes on and you may in fact delete eventually alternative rock if indeed the other ones are -- do I have that correct?

4097 MS LAURIGNANO: Yes, you've got that right.

4098 COMMISSIONER CRAM: It's about the only thing I have.

4099 MS LAURIGNANO: Actually, we can guarantee that that is what we will be doing.

4100 As I said before, keep in mind that it is contemporary music. This is what we are talking about: contemporary music for this age demographic.

4101 We know there is contemporary music with Norah Jones, there is contemporary music with Celine Dion. But we are not necessarily going to be programming that.

4102 It is what this generation wants. We are going to look at the 12-to-24. We are not relying on charts because there is no youth contemporary charts. In any case, we are looking at all the other places where what this group of consumers and young listeners want to hear will be able to tell us.

4103 We are going to facilitate them telling us what they want to hear. We have a feature, for example, that is called "Keep It or Beat It", where they can actually vote every single day. It's a feature that is on at 7 o'clock at night.

4104 We have the Internet, which for us is a fantastic marketing tool, as well as a way to feed back and to connect.

4105 We have presence on the street. We have DJs in the clubs, on the air, that will give us that information. We have a community coordinator that is going to give us feedback.

4106 So we are not going to sit there and dictate anything. We are going to respond because it is in our interest.

4107 If one music falls out favour or something else comes along, or sometimes you have a phase or you have these spikes, we will be there to react. If that's what they want to hear, that is what we will do.

4108 COMMISSIONER CRAM: You use the analogy to the video flows, MTV, and that sort of thing in terms of the popularity.

4109 I am not too sure if the analogy would apply, because when I watch TV I watch it by appointment essentially. I may be watching on the top 20 lists or top 40 lists. I may be watching for one or two. And I also have the visual experience of seeing what Justin Timberlake or Swollen Member, for that matter, looks like.

4110 To me, the analogy I don't see is exactly all together. You think the analogy is a good one, though, do you?

4111 MS LAURIGNANO: The analogy was made in the context that it is music that doesn't result from a chart, an existing chart; that it is driven by the requests. So in that sense they have created their own chart.

4112 So it is really music by demand.

4113 There's an idea for MuchMoreMusic -- "music by demand". But that is really what it is. And it was in that context that we meant the analogy.

4114 COMMISSIONER CRAM: Then you use AC, adult contemporary, as an analogy. To me -- and I just use my own example.

4115 I had, I guess -- and my Panel Members will have a breakdown to hear this. I had far stronger feelings when I was 18 than I have now, in the sense that I was a Marxist Leninist and I was this, that and the other thing. And yet now I would probably be amenable to listening to other things because there is the nostalgia element.

4116 I am asking myself whether that demographic, in terms of having all of these, including alternate rock, is more vehement in their feelings and if you have seen any evidence of a turn-off if you play one genre or another.

4117 MS LAURIGNANO: I would agree with you. My feelings were stronger too when I was that age.

4118 In an ideal world there would be a radio station for every genre of music, because then you could really do everything that you wanted to. In a not so ideal world, we buy records and do some other things. That is one way of looking at it.

4119 The other way is, as I said, we are not all one-dimensional beings; that radio in this case and youth contemporary is not just about the music, that the spoken word here is a fantastic and tremendous part of this application.

4120 Otherwise, it is easy to buy your CD and get that. But we are looking to offer a meeting place, a place where it is blended and music is one component. And yes, you try to blend it in such a way that you have the broadest base possible.

4121 Sure, sometimes there may be a turn-off or maybe somebody won't put it with it or maybe somebody will have an appreciation for something, or develop an appreciation over time, because it is not just being thrown together. It is being hand picked. So there will be familiarity.

4122 Maybe Scott can add to the actual blending in the analogy to the AC, expand on that, and also how the spoken word is part of this recipe that we are talking about.

4123 MR. FOX: The nature of the youth contemporary format is that it responds to trends and it plays what people want. But woven into that mix of music is a series of spoken word that is so incredible just for this age demographic, the 12-to-24.

4124 We are talking about information delivered in a way that these people can really relate to it. It is not the mindless banter that I have heard on some of the stations here, that I don't think is relevant to the 12-to-24 demographic. That is in the time I have been in Halifax.

4125 It is relevant stuff that kids are talking about. It's technology stuff. It's Play Station. It's entertainment headlines. It's movie and DVD releases. It's relevant talk. It's talk about clubs. It's talk about community events that affect the youth.

4126 This is information and spoken word that is completely aimed at this demographic and woven in between the music. So it all flows seamlessly. It is just an amazing series of what these kids want and what they have really been expecting from radio for a long time but they haven't gotten here in Halifax.

4127 COMMISSIONER CRAM: How does your format differ from the other applicants in this hearing targeting that demographic, 12-to-24?

4128 MS LAURIGNANO: It differs to the greatest degree, as I mentioned before, that it is not premised on one genre of music. So it's not just a dance station, it's not just a rock station. The departure point for some of the applicants was that there was X number of people within this age demographic. Some of them will like this music exclusively and then some of them may like it secondarily or in some measure or other, and so we build a radio station around that.

4129 We looked at the whole demographic. It is almost like, to the degree that it's possible, how can you provide a full service station to this demographic? If this demographic was in one town and you had only one station, how would you program it?

4130 That is the sort of approach that we took.

4131 In order to be of as much service as possible, you are looking at everything that these people have in common from there to there.

4132 Of course you know that the interests of a 12-year old are not exactly those of a 24-year old. So then you treat your day parts. You put your big newscast in the drive because it is likely that some of them are going to work; that they are interested in more world events versus the local, and that kind of thing.

4133 That is where the programming comes in.

4134 So we are very different in that way.

4135 We are different because of our experience we are operators in a market that -- never mind?

4136 We successfully compete with some of the giant broadcasters in this country. We are a small Orangeville radio station that is competing with the likes of Rogers and CORUS and Standard and CHUM, head on with formats; that we were covering a little niche a while back and then somebody saw an opportunity, so they introduced the format and got huge shares and just went on and went on, and we never lost money once in that whole process.

4137 As a result of that, we are alive and we are well. They have moved on to some other things.

4138 So there is a difference in that we calculate how we are going to survive in the long run.

4139 I am going to ask Ky to tell you, for example, how we approach the sales. We have no doubt, absolutely, that we are going to get listeners, but we also are going to ensure that we are going to be viable. So there is a sales strategy and the whole thing that went with it.

4140 COMMISSIONER CRAM: I will get to that later.

4141 MS LAURIGNANO: All right.

4142 MR. P. EVANOV: If I could add to Carmela's comments, as Carmela said, we picked a demographic that is not being served in Halifax at all, the 12-to-24, and then we went out and found out what they wanted to hear. That is where we came up with the YCR format, including all the four genres.

4143 When we look at the other applicants -- and there are many here -- proposing a somewhat similar format, first off, Rogers is proposing an urban only format. We are proposing a format that encompasses urban but also pop, rock and dance.

4144 We feel, and as has been stated earlier in the hearings, that urban by itself is not viable and will not work in this market. That is why we have offered a larger variety in a more broad-based format in the youth contemporary radio with the urban, pop, dance and rock.

4145 Astral has also applied for an urban only format, which they stated as well that will not work on its own. In this format urban by itself cannot work. Again, it is a narrow-based format, and that is why again we offer our format which offers a variety in the four different genres of music.

4146 Astral with its rock application is also gearing toward the younger demographic area, but it is a one-genre format proposed, rock only.

4147 If we look at the other applicants, Jamz is also only offering a one single genre format, which is dance. Once again, we are offering the four genres, the variety, the broad-based youth contemporary radio.

4148 Also with Jamz, Scott kind of alluded to spoken word and information to this youth age group is very, very important. We are offering 34 per cent spoken word while Jamz is only offering 7 per cent.

4149 We feel, as Scott mentioned, not only is the music very important but the spoken word and the information.

4150 Also in regard to East Coast, they are offering a CHR format, which is basically described as urban and dance. Again, it is only the two genres of music. After we talked to the youth and we did our research and everything, the youth want variety. The 12-to-24 want variety, and they want a broad-based format, which we are offering.

4151 So that is really what separates us from the other applicants who are also targeting youth. We are offering a bigger variety with the four-genre format while they are more narrow based. I think that answers your question.

4152 COMMISSIONER CRAM: Vis-à-vis the incumbents, the stations in Halifax, do you have any idea of your percentage of duplication of play lists?

4153 MR. P. EVANOV: Yes. At the time when we submitted our play list with our application and with deficiencies, the only other format that -- it didn't really even come close, but the only other format that could be comparable is the current station C100. They are a hot AC format targeting adults, number one.

4154 Obviously we took a look at the full market to see what is being currently offered, and we found out that they are offering to adults and they are a hot AC.

4155 When we submitted our list at that time, our duplication was only 14 per cent of what their play list was at the time. Things always change, but at the time our proposed play list was only 14 per cent. We really are not targeting the same audience. We are not targeting the same people at as that station.

4156 We looked at other stations in the market, and every single station is targeting adults over the age of 25, with country formats or classic hits formats. What we are proposing is completely different.

4157 COMMISSIONER CRAM: Is there any other basis upon which you would provide diversity to the Halifax market, in addition to the cross-over, the duplication?

4158 MS LAURIGNANO: Yes. We are, I would say, the only applicant who has experience in programming to the younger demographic. And that we believe has to be a strong consideration, given what has been called the playing field here with the players.

4159 We have experience. We have successfully programmed two stations in the past, CIDC in Orangeville and CING in Burlington, where at one time -- I think you heard about the energy even in these hearings, but it was really Bill Evanov who launched that station, and it was abandoned after he left.

4160 I am going to ask Bill to give us a sense of our approach to launching and competing.

4161 MR. B. EVANOV: Two major broadcasters in the Toronto area, which were at that time Rogers and CORUS, basically under-estimated our ability to survive. Both programmed identical CHR formats at the time and came at us, so that there were three stations doing identical formats in the market. Both of them had superior signals, where ours only covered 70 per cent of the Toronto CMA.

4162 At the time both basically held news conferences and told the advertising agencies, the newspapers and the industry that there was only room for two good CHRs, Rogers and CORUS, and that we would be out of business in six months.

4163 That was five years ago, and both those stations have flipped format. They have both abandoned their audiences. Rogers flipped to JACK and CORUS flipped to country in Hamilton. But we stuck to the format and we stayed with it. We competed with them very successfully.

4164 This small independent company survived in that most competitive market. We think we have the right formula and that we can survive in the Halifax market.

4165 We like to compete with other broadcasters. We love to compete with the big broadcasters because we are a small independent company. We try harder. We move like lightning. Our people are very creative.

4166 We have been a stand-alone for many, many years. In other words, we were a stand-alone for ten years in that marketplace, and yet we did very well. So we know how to operate a stand-alone station, and we know how to program to young people.

4167 COMMISSIONER CRAM: Thank you.

4168 I want to move on to your CTD now.

4169 You have allocated, I think, $10,000 annually to the Urban Star Quest, and you produced a letter saying that this would be produced by a third party.

4170 How specifically will your money be used in this?

4171 MS LAURIGNANO: Urban Star Quest is an initiative that we are working on together with Canadian Music Week. There is a letter on file from Neil Dixon, who is the President of Canadian Music Week.

4172 It specifically will be applied to the local initiatives here. It will be dedicated to the Maritime area.

4173 The idea is that it is a search for an urban idol across the country being recruited regionally from various parts. Our particular portion of that money would be applied to the Maritime region. The idea is there is a competition and you get to the quarter-finals and then the semi-finals, and then the finalists are invited at the music conference, which is usually held in Toronto.

4174 COMMISSIONER CRAM: So Chart Toppers is producing this. Will the money go to Chart Toppers for producing it, to the artist, to the artist's travel to the finals? Or do you know what the money will be used for?

4175 MS LAURIGNANO: I don't have it in writing because it is not fully developed yet, but we will submit it in writing as soon as that is finalized.

4176 Our discussions and conditions with them are that they would be to the benefit of the artist direct, whether that is to help them travel to a regional competition, whether it is a prize, an amount that is going to go to the artist. But definitely it would be strictly for the benefit of the advancement of the artist, whatever that is going to be determined.

4177 Once that is spelled out, we would of course submit it.

4178 COMMISSIONER CRAM: So it would be to the benefit of the artist, such artist to be from the Halifax, Nova Scotia, area.

4179 MS LAURIGNANO: Exactly.

4180 COMMISSIONER CRAM: Then there is $112,000 to the DJ Spinner Search. You are in partnership, and I believe you have your partner there.

4181 MS LAURIGNANO: Yes.

4182 COMMISSIONER CRAM: We were looking over some of your expenses, and they appear to be duplicated.

4183 What will be your specific expenses and how much are they?

4184 MS LAURIGNANO: I will tell you exactly what they are.

4185 Our specific expenses are all of them in any case. However, what is the amount allocated in the expenditures for the DJ spinner is, in year one, $12,500; year two --

4186 COMMISSIONER CRAM: For what, though? That is the issue.

4187 MS LAURIGNANO: This is for prize money directly to the artist.

4188 COMMISSIONER CRAM: Only for the artist.

4189 MS LAURIGNANO: Only for the artist, right.

4190 Then everything else will be accommodated through strategic partners, such as the one that we have with the Dome, sponsors, or any other way. We don't anticipate any shortfalls, but should there be any, that would be part of our operating budget.

4191 This is strictly for the artist.

4192 COMMISSIONER CRAM: Why did you decide to do the money incrementally? Why in a smaller amount and then larger and larger and larger?

4193 MS LAURIGNANO: It is for what we think is a good reason; that this is going to be a new event here and the station will need time to grow.

4194 DJ spinners as artists, and as a genre, are growing. We have reason to believe that there is a movement right across the country that is more and more recognizing DJ spinners as artists. As the station matures, we will be in a position to enlarge the competition and to make more prize money available as the talent develops.

4195 It made sense to us that we should grow with it.

4196 Perhaps Jeremy could give us a sense of how he is looking forward, as a DJ spinner, to this kind of initiative.

4197 MR. SLATTERY: Thanks, Carmela.

4198 Personally, it is very frustrating as a club DJ when it comes to trying to play and break in new music in Halifax. Sometimes you just have a case where the knowledge of the music isn't there and cases where the crowd is not in sync with that.

4199 It is not because the music is bad. DJs around the country are getting the same music at the same time. They play in high rotation. They are getting a very positive feedback for it. But they also have the help of radio as well, which creates more frequency for the music, for the new artist, and people recognize it easier.

4200 So it has become very frustrating to try and break the new music scene in Halifax. It is almost like a hand-in-hand thing with radio and the entertainment scene. They seem to work together in promoting the new music.

4201 People approach me on a nightly basis and ask me, when they hear new things: "Why can't we hear this in Halifax? Why is not on radio? This is great stuff." Or they have seen the video and it's not on radio in Halifax. Can they even buy it here?

4202 So there is definitely a need for it here. I think it would make my job so much easier.

4203 Again, it is increasing the awareness of new artists, new talent, not just DJs but singers, promoters, songwriters on all levels.

4204 COMMISSIONER CRAM: You talk about your strategic partnership. What if you have a divorce? You said you would cover the costs, but how high will you go?

4205 MS LAURIGNANO: If we get divorced, we would look for a new partner right away. We don't intend to be single for too long.

4206 We will definitely go all the way in getting it done. We will get it done. We know what has to be done.

4207 In any case, you can rest assured that the money that has been designated to go directly to the artist, we will do that. We have experience as well.

4208 Actually, if you don't mind, I will ask Gary to give you an idea why he wants to support this initiative.

4209 MR. MUISE: On behalf of the Dome, we operate one of the largest nightclubs in Halifax. We don't have a stage for live entertainment, so we consider DJs our live entertainment. We are actually in the process of moving our DJ booth so that it is right in the middle of our dance floor so it's more of a focus. That is why this is so important to us and is key.

4210 I hope that helps.

4211 COMMISSIONER CRAM: Thank you.

4212 Now we go to the Beat Annual Summer Rush. The money again -- it's the same concept -- is for performers' fees, travel and for accommodation for the performers. The rest again, you are talking partnership in Contra.

4213 What if that fails? How high are you prepared to go to guarantee that this event will happen?

4214 MS LAURIGNANO: We will get it done. I can tell you we will seek sponsors. We will look for other strategic partners if anything falls away from us.

4215 Again, we do it right now as well. There is a great attraction for a lot of companies, who are looking to attract this young demographic, to be associated with an event like this. Ky can speak to it, but we found that advertisers and sponsors are automatically -- every year they like to have their name associated with the event.

4216 Should any shortfalls happen, we can make it up. That is not a problem, not only from operating budgets from the radio station but we are in a good position in any case to meet any shortfalls of any kind.

4217 Our view is to have 12 to 15 different acts featured at this event. Depending on which year to which year, there are increments in that plan as well. We plan to pay anywhere between $3,300 and $4,200 per group as a participation fee for the event.

4218 So we will get it done.

4219 COMMISSIONER CRAM: As in your other applications, you have $115,000 unallocated.

4220 Can you give us a reason why you do that?

4221 MS LAURIGNANO: Yes, I can. We designed our CTD strategy really with three things in mind.

4222 One was that we wanted it to be local. Two, we wanted it to be of interest to the demographic that we are talking about. And three, we wanted to be in a position to be able to act and/or react in the future with demands that may come our way, with new initiatives that we could instigate, new ways that we could, for example, come up with an idea as we have for the DJ spinner competition, and take that money as seed money to find a strategic partner to get a bigger idea, a return on it.

4223 I am not suggesting that it is going to go to a DJ competition, but similarly, as we have done with other initiatives, we will say: Okay, just off the top of my head, let's put it to a CD, for example. We have $30,000 of seed money. You could be a strategic partner and we will do this and come up with an idea.

4224 So it is for new initiatives in the future. It is not meant to augment any of the initiatives that we have identified, because we have already built that in. You have noted before the increments, and we anticipate that there is going to be growth in some areas and that we will have to react accordingly.

4225 That money is really there for future plans. Some of them we don't know. We have some ideas. There might be other organizations. But in any case, it will be for local initiatives. It will be for Halifax, and our view is to serve this demographic through talent initiatives of some sort.

4226 Of course, we would make you aware, as we get closer to the year of expenditure, as to what our plans are.

4227 COMMISSIONER CRAM: Thank you.

4228 There was some issue as to the total amount of your CTD. You can confirm for the record that your CTD is $1 million over the seven years and that you will accept that as a condition of licence?

4229 MS LAURIGNANO: Yes, I confirm that there was a typo mistake.

4230 COMMISSIONER CRAM: And you can confirm that the allocation of that $1 million CTD is in accordance with your letter of December 27, 2003?

4231 MS LAURIGNANO: Agreed.

4232 COMMISSIONER CRAM: Thank you.

4233 Now, DJ spinning. It seems we have been here before too.

4234 You are talking about having daily mixed shows and live-to-air events three nights a week. Does this involve DJ spinning?

4235 MS LAURIGNANO: The mixed show twice a day, yes, approximately 20 minutes, a live DJ mixing the music live on air.

4236 COMMISSIONER CRAM: And the live-to-air ones?

4237 MS LAURIGNANO: No. The live-to-air, we will take the music feed from the club to the radio.

4238 COMMISSIONER CRAM: And it will be DJ spinning?

4239 MS LAURIGNANO: Paul can answer that, but I don't believe it is all DJ spinning. The records come from there, but we play whole selections, as well as some mixed sets, what is called a mixed set.

4240 MR. P. EVANOV: Yes. Just to avoid confusion, the two mixed shows we have at 5:00 and 10:00 p.m., it's a DJ spinner live in the studio mixing the music, going back and forth on the turntables.

4241 We gave you a display in Kitchener, an idea. It's the same idea there.

4242 It would also be a DJ spinner providing the music in the club. It would be a direct feed from the club through an ISDN line, a broadcast line.

4243 In the club the difference is the cuts would be whole. In the studio during the 20-minute mix that we do, it's a quick back and forth very quickly, not playing the songs in their entirety, more of a montage. In the club it would be songs in their entirety. It would be mixed but it would be a song and go on to another song. It wouldn't be radio edits of the song. It would be a DJ spinner providing the music the entire time.

4244 With the live-to-air, it would be a DJ spinner actually playing the music but there would also be one of our announcers doing live announcements, doing the actual broadcast from the club, doing actual talking from the club, as well as a technician-producer to oversee.

4245 COMMISSIONER CRAM: You agreed to the 40 per cent Canadian content, and you know that DJ spinning is not recognized under --

4246 MR. P. EVANOV: Right.

4247 COMMISSIONER CRAM: You can still meet your Canadian content with the programming we have talked about, the big shows?

4248 MR. P. EVANOV: Yes, we definitely can. There is an abundance of great Canadian talent that can be played in the clubs that is actually still being played in the clubs right now even though they are not actually live-to-air. So we have no problems at all meeting our 40 per cent Canadian content level.

4249 COMMISSIONER CRAM: Now we are going to vocal and spoken word. Thank you for your piece of paper here. I note the 5.5 hours of news and surveillance and that sort of thing.

4250 When I look at this, excluding ads and PSAs, how much time is spoken word and what percentage of the week is that?

4251 Does anybody have a calculator?

4252 MR. FOX: Spoken word, minus commercials, public service announcements and promos, is 22 per cent.

4253 COMMISSIONER CRAM: You are talking about the interactive part, and I look at talk features, which is 9.9 hours a week, and then the "Keep It or Beat It". Presumably what you are going to be doing is having people phone in.

4254 How are you going to do that and what safeguards are you going to put in place for the odd problem?

4255 MR. P. EVANOV: First and foremost, with "Keep It or Beat It", yes, it is a call-in feature. We play a new song and the listeners get to call in, anywhere from 25 minutes to half an hour, to vote to "keep it", they want to play it, or "beat it", they don't.

4256 We do not put anybody on live at all. It is all prerecorded, using computers and hard drive systems to edit them quickly to be able to play them back on air. But no caller would ever be allowed on the air live. It would always be prerecorded.

4257 If we ever got into a situation where we did more calling in or more interactivity, we would definitely install a delay system so that we had full control over what goes on the air.

4258 COMMISSIONER CRAM: What about the other, the talk features, what are those? Or are those just prerecorded?

4259 MS LAURIGNANO: The talk feature there is the announcer talk.

4260 COMMISSIONER CRAM: Just DJs.

4261 MS LAURIGNANO: They would be subject to training sensitivity. They would have to pass our programming guidelines, of course, and that kind of thing.

4262 COMMISSIONER CRAM: So the interactivity that you are talking about here would be through the Website and through the phone-ins on "Keep It or Beat It" kind of thing.

4263 MR. P. EVANOV: Not just "Keep It or Beat It" but throughout the other parts of the day as well.

4264 MS LAURIGNANO: And countdowns.

4265 MR. P. EVANOV: And countdowns as well. We will have an interactive countdown: Hi, it's Sue from wherever. The Number 7 song is yada-yada. That would be interaction as well.

4266 COMMISSIONER CRAM: But all prerecorded.

4267 MR. P. EVANOV: Yes.

4268 COMMISSIONER CRAM: And edited, if necessary, before it goes to air.

4269 MR. P. EVANOV: Definitely.

4270 MS LAURIGNANO: The technology is such that it could be done almost instantaneously so that it doesn't have to be pre-done the day before or hours before. It's virtually seconds before.

4271 COMMISSIONER CRAM: Any plans to share programming with CIDC?

4272 MS LAURIGNANO: No plans, no. It doesn't fit at all.

4273 COMMISSIONER CRAM: Tell us about how you see you will be dealing with the 12-to-24 demographic; what the challenges are and how you would meet them in the station.

4274 MS LAURIGNANO: I think I am going to ask Del Archer to start off with the news, because news is a big part of our spoken word, and it has been factored into the plan.

4275 I am going to ask Del to tackle that one.

4276 MR. ARCHER: Commissioner, let me give you an example. If this station we are talking about is on air in Halifax and there is a DJ discussion about Nickelback, as it did yesterday, providing $10,000 worth of instruments to the Sydney Academy in Sydney, Nova Scotia, that then becomes grist for the news mill.

4277 There is nothing that is not going to be on the table in terms of news. We are going to, however, look at news in terms of: Does this story have an impact on the 12-to-24 year olds? And if so, how are we going to report it?

4278 I start from the foundation that far too many broadcasters in Canada tell their listeners what they are going to hear. We want to listen to them.

4279 I have a great deal of respect for the intelligence of young people, 12-year olds included, and your 15-year old niece or daughter, or whatever it was you were saying that says "whatever".

4280 COMMISSIONER CRAM: It's her whole vocabulary.

4281 MR. ARCHER: Well, whatever.

4282 The point is that they have something to say. It's all in how you go about bringing it out of them.

4283 Put a challenge to a group of teenagers on any subject that you care to name, and they will respond, dramatically and now and successfully.

4284 I am always impressed by the high level of articulation that they can bring to a subject. I am saying to you that I am going to encourage our station and our news people, a team led by Kristen Tynes, to explore that.

4285 Why wouldn't we want to hear what these kids have to say? Why wouldn't we want to tailor our newscasts to those things that they identify for us as being important to them? It can be done.

4286 CJOH has proven it. The Child and Youth Friendly Ottawa Organization has proven it. They have fought like crazy to get the profile and respect that they want and need, and part of that was through Max Keeping and Scott Hannan. The success of that is based on the partnership that they have with CJOH.

4287 We think we can do the same thing here. It has been proven, so we are not reinventing the wheel.

4288 We see this as an untapped, unserviced, underrated audience, and we have every belief that we can bring them on stream.

4289 Is Haiti going to make the newscast today? Well, let me suggest to you that if there is a Haitian community in Halifax to whom this is important, maybe we are going to call the young people of Haiti, or our street people are going to go out and talk to them.

4290 That will become the way that we tailor it to that audience.

4291 I am just so confident that it can be done that I am surprised it hasn't been done. But most broadcasters have a certain demographic that they are going to cater to, and they have demonstrated to their satisfaction that these young people are not really interested in news. So they have made no attempt to try and bring them into the fold.

4292 I think we can.

4293 COMMISSIONER CRAM: Thank you.

4294 You say in your economic projections that 25 per cent of your revenue is going to come from incumbents, the lowest of all the other applicants.

4295 Can you tell us why?

4296 MS LAURIGNANO: Sure. I am going to ask Ky to address that question.

4297 MS JOSEPH: Thank you.

4298 I will answer the question by saying that the reason that only 25 per cent will be coming from incumbents is that there is nobody right now serving the youth market. Seventy-five per cent of our revenue will be coming from entirely new advertisers to radio or other media.

4299 Our formulas for projecting revenue are extensive, and we look at the advertiser demand. But that is just an indicator. Much like programming from the streets up, it's the same thing with sales. Myself and a team of people went out and did an extensive survey of advertisers and the demand.

4300 In a nutshell, what we found was that the business community in Halifax has not ignored the youth; radio has. So they don't have an outlet for that. We heard it from several of them, and we reviewed national sales. We reviewed the Halifax retailers that target the youth market. We then had a cross-section discussion with all the advertisers and a detailed calculation, account by account, was derived. That is how we came up with our projections.

4301 For example, our live-to-airs, we know that perhaps we may not have live-to-airs sold initially when we start the station, but we know that we have projected 22 weeks out of the 52 weeks in year one as a guideline of how many live-to-airs we are going to sell. We talked to several of the clubs in the area, several of the entertainment institutions, and they kind of gave us an idea of what they thought would be cost effective and how they could get a return on their investment.

4302 That is why none of them are advertising on radio in Halifax. It is just not cost effective for them to do that.

4303 We looked at other entertainment venues, and we came up with $290,000, or 28 per cent of our revenue, which would be derived from the entertainment industry so to speak.

4304 We looked at our features, and we talked to a cross-section of national advertisers who have a hard time advertising in this area. We are responding here to an economic trend.

4305 I will give you an example.

4306 Canadian Tire, Wal-Mart, The Bay, traditionally they advertise to the 25-to-54 year old demographic. They have all come up with a secondary slush fund, so to speak, to target the younger demographic.

4307 Two weeks ago I sat in the head office of The Bay and they said to me -- we were talking about Halifax, and they said there is just no outlet in Halifax for us to talk to the young demographic. We have an initiative right now -- although it is a national initiative, they are going about it at a regional level, and they are saying: We want to target females 20-to-25 years old who are engaged. We want to promote our gift registry. There is nowhere for us to do that. If you got the station, absolutely we would definitely be interested in advertising on your station.

4308 We researched The Yellow Pages. We researched The Coast. We researched the Dalhousie and St. Mary's papers. Again, we talked to several advertisers.

4309 We did find, however, that there was a little bit of hesitancy. They said yes, we would absolutely support you, but there is a monopoly here and we don't want to step on anybody's toes and we don't want to scare anybody. But you can absolutely be certain that if you came to Halifax with what you are projecting, it would be in our best interest to advertise.

4310 MR. B. EVANOV: Commissioner, we have a very large advertiser from the Halifax area sitting at our table. I think he would like to make a comment on what Ky mentioned.

4311 MR. MUISE: As for the Dome, most of our advertising right now is strictly print and Web-based. There is really not a radio medium for us to get it out there that is going to reach the market that we are trying to hit.

4312 It is very important for us to hit that market, because it is all time-sensitive events. There is no way to do it, so it's all print. There is no radio. If there was a station like this, we would be willing to advertise on it. It is key, because we are going to hit that spot, that market, that we want to hit.

4313 COMMISSIONER CRAM: Thank you.

4314 You heard me ask somebody else this question.

4315 In their intervention MBS was talking about an 11 per cent increase in listening per capita by your demographic 12-to-24 in the BBM fall '03 data here in Halifax, making the 12-to-24 year olds in Halifax actually listen more per capita than anywhere else in Canada to radio.

4316 Does that change any of your demand and therefore revenue projection?

4317 MS LAURIGNANO: It does to the positive. We are actually delighted by these results, which hopefully are not just a spike. You know when you do this kind of research, you have to track it for a period of time.

4318 It could be, for example, that maybe some of the broadcasters have tweaked a little bit their programming, which to us indicates that if there is a need and this pent-up demand we are talking about, as soon as anybody offers anything it may very well be that this demographic is looking for that kind of thing.

4319 Imagine if there was a full-time service. We look at it hopefully as a very encouraging trend. We would love to make that grow to a critical mass in the future.

4320 That, to us, is very encouraging.

4321 COMMISSIONER CRAM: Thank you.

4322 Should you be given a licence, would you agree to a condition of licence that you would seek prior Commission approval for any sales or sales management agreements?

4323 MS LAURIGNANO: Yes, we would.

4324 COMMISSIONER CRAM: Thank you.

4325 Now here is your time to shine. You can give us, if you can, your compelling reasons why you out of all of the many excellent applications we have had should be given the licence; and second, technically why you are the best use of the frequency.

4326 MS LAURIGNANO: I will answer both questions in the same breath almost.

4327 The difference between us and others is that we are so -- well, I shouldn't say that.

4328 It is not really the difference. We have in common that everybody wants to serve this market. We are really enthusiastic about this opportunity because we think that we are offering diversity in music. We are introducing a new format, which is a pioneer format across Canada, that we know of; one that is more broad-based.

4329 We are happy to address an unserved and underserved demographic, the 12-to-24.

4330 We bring a new editorial voice to this city. We have a full stand-alone newsroom to meet the needs of our youth.

4331 We believe that we can contribute to youth culture, and we believe that youth culture does need a voice on the dial. We as an industry will need those listeners in the future.

4332 We are, we believe, the applicant who is poised to challenge the monopoly. We have the tenacity. We have the financial resources and the experience to get it done.

4333 We offer new ownership. There are two women and two people who have been in this broadcasting business for a while.

4334 We bring a new stream of revenue to broadcasting. You were just mentioning why ours are lower. We know that the existing players are not going to give it up very easily, number one.

4335 Number two is that our demographic is toward the lower end, by which I mean there are no buys coming into the market right now anyway so there is nothing for us to feel. The buys that are going to the other stations are more the 18-plus. In fact, even some of the other applications are targeting the 18-plus, which means that the impact would be greater than ours.

4336 We have, we believe, CTD initiatives that are innovative, substantial and local. And we will have the least impact on broadcasters, as I said, whether you decide to give one licence or two in your wisdom.

4337 We are the only applicant before you who is successfully serving the youth demographic right now.

4338 We really want this licence.

4339 COMMISSIONER CRAM: Thank you, Messrs. Evanov, Ms Laurignano and --

4340 MR. SLATTERY: Commissioner, if I may, I think there is another point that Carmela may have missed where there is a difference from the other applications.

4341 Our applications have been referencing a lot of local talent, whether it is DJs, artists, songwriters, whatever, saying if they get the application they are going to support them and play them.

4342 Perhaps I could read down this list of local talent: Classified, successful MC; Amelia Curran, successful songwriter/playwright; representatives from Universal Soul, who are a staple in the hip hop community in Halifax; Shelley MacPhail, manager of Urban Music; Provost, promoter and North Preston community organizer; Spesh K, an MC; Scott Doucette, of CTG Records, retail store owner and video producer/promoter; Ghettosox, MC; Mic B, an MC; Scott DeRos of Endemik Records; Sammy Davis, Sound Check magazine and Push magazine and DJ; Beau Cleaton, booking agent; DJ Plae Boi, radio and club DJ; Jerry Wheatley, who runs the largest and most successful mobile DJ outfit in the metro area, Atmosphere Entertainment; Mike Stevens, publicist; David Stiles, DJ; and TK Thorpe.

4343 We are not just dropping these names. These people are sitting here in the audience today in support of this application.

--- Applause / Applaudissements

4344 COMMISSIONER CRAM: Thank you, panel.

4345 MS LAURIGNANO: Thank you. We told you young people had a voice in this station.

4346 THE CHAIRPERSON: Thank you, Commissioner Cram and to the panel.

4347 Commission counsel?

4348 MR. McCALLUM: Just a couple of small follow-ups from a couple of places.

4349 Earlier, Commissioner Cram read you some percentages of music supplied by the music list; like 34 per cent urban, 23 per cent dance, 16 per cent CHR/top 40, and 27 per cent alternative/modern rock.

4350 In responding you contrasted those percentages with the percentages I think that are played at CIDC Orangeville.

4351 The way I understood your answer is I thought you implicitly agreed with those percentages for here. Am I right?

4352 MS LAURIGNANO: Yes, you are right. The percentages that we supplied in the deficiency letter which Commissioner Cram was referring to were for Halifax. They were a sample of some hours. That was the aggregate of a sample of a typical few hours a week.

4353 We said that if you summed those hours, that is the result that it would show.

4354 So the 27 per cent for rock, for example, would be applicable to there. It was not reflective of what CIDC does.

4355 MR. McCALLUM: Could you say of those four genres which two will predominate on a weekly percentage basis?

4356 MS LAURIGNANO: I can't tell you that over the term of the licence. I think if we were programming, when we wrote the letter that would have been that. I think it is safe to assume that in the immediate future the music will derive primarily from the four genres which we have identified, which is urban, pop, rock and dance.

4357 MR. McCALLUM: Based on those percentages, urban and alternative modern rock would seem to be the top two, and then dance and CHR top 40 would be the bottom two.

4358 Those would be the top two for say the first two years of your licence term if you received a licence?

4359 MR. P. EVANOV: You can't forecast. Music goes in cycles. You can't forecast that far ahead, to be honest.

4360 This is when we looked at the Halifax market at the time we submitted this sample play list of a few hours. At that time, if we were on the air, that is what we would have programmed. That is what we would have done.

4361 Even now, months later, it does change. It is not carved in stone. We would follow the trends of the music and what is happening.

4362 We would still follow within the four genres, within there.

4363 MS LAURIGNANO: By the same token, we have no reason to believe that these music genres are going to disappear. I think we can predict with some confidence that these will be the predominant genres of the format.

4364 MR. McCALLUM: Thank you. Basically what you are saying is that we can use it as guidance for an idea as to what you would do.

4365 MS LAURIGNANO: Yes, I think that is fair to say.

4366 MR. McCALLUM: On the technical side of things, I think there were revised technical parameters filed for this station. We wondered if you would refile the estimated coverage and population data under the new proposed technical parameters for the 3 microvolt per metre and the .5 microvolt per metre contours.

4367 MS LAURIGNANO: Yes, we can do that although in our letter indicating the switch of frequency it was indicated that the contour for the population was not affected by the switch.

4368 That was in our letter --

4369 MR. McCALLUM: So the population is essentially the same.

4370 MS LAURIGNANO: Exactly, as would the contour area be.

4371 MR. McCALLUM: I can infer, then, that there is no change to the business plan.

4372 MS LAURIGNANO: There is no change to it; absolutely.

4373 MR. McCALLUM: Finally, in responding in terms of the overall summary, you mentioned that you can survive and you can do well depending on how many licences the Commission sees fit to grant in a case like this. And you sort of suggested that it might grant one or two licences out of this process.

4374 Could you elaborate on what licensing scenarios you could be comfortable with out of this process. How many and which ones -- which types, not specifically which ones. Which types would cause you a problem?

4375 MS LAURIGNANO: Our preference would be one -- us.

4376 Our second choice would be a different format, some applicant who is applying for an older demographic and a different format musically speaking. That would be the second scenario.

4377 Third, we will live with whatever the wisdom of the Commission is. It would be easier for us, but we would not be afraid of two youth licences. For all we know, one of the incumbents could be flipping before we get there. So it really is neither here nor there.

4378 MR. McCALLUM: If the Commission chose three licences, for example, that would not be a problem for yourself.

4379 MS LAURIGNANO: Three? As I said, the third option would be -- perhaps another one would be a community-type station or the less commercial station. We could coexist with that.

4380 MR. McCALLUM: Thank you, Mr. Chairman.

4381 THE CHAIRPERSON: Thank you, counsel.

4382 Thank you very much, Ms Laurignano and the rest of your team. We appreciate your clear responses to our questioning this afternoon.

4383 That then completes this phase of our hearing. We will take our afternoon break now for 15 minutes -- let's say a little more -- and we will reconvene at 4:15, at which point we will start Phase II of the proceeding.

4384 We will take our break now and reconvene at 4:15.

--- Upon recessing at 1555 / Suspension à 1555

--- Upon resuming at 1615 / Reprise à 1615

4385 THE CHAIRPERSON: Order, please, ladies and gentlemen.

4386 We will return to our proceeding now and Phase II of the proceeding, Mr. Secretary.

4387 MR. LeBEL: Thank you, Mr. Chairman.

4388 As you indicated, we have now reached Phase II in which the applicants will appear in the same order as they did appear to present the application. They are provided with a period of ten minutes to intervene to the competing applications.

4389 Global Communications has already indicated they would not appear in Phase II, as well as Halifax Jamz, as well as the Centre for Diverse Visible Cultures.

4390 We will now hear from Rogers, Items 1 and 2, to intervene to the competing applications at this time.

INTERVENTION

4391 MR. MILES: Mr. Chair, Members of the Commission, we have no interventions for the applications.

4392 THE CHAIRPERSON: Thank you, Mr. Miles.

4393 MR. McCALLUM: Mr. Chairman --

4394 THE CHAIRPERSON: Mr. Miles, I don't follow instructions very well. Counsel had suggested to me they had a brief question they wished to put to you and I forgot.

4395 MS JONES: It is just confirmation.

4396 You have resubmitted your new parameters for the new frequency. Could you tell us whether or not this will affect your business plan.

4397 MR. MILES: No, they will not affect our business plan.

4398 MS JONES: Thank you very much, Mr. Chairman.

4399 THE CHAIRPERSON: I think that's it. You're out of here.

4400 At the rate I'm going, I will be too.

--- Laughter / Rires

4401 THE CHAIRPERSON: Mr. Secretary.

4402 MR. LeBEL: Thank you, Mr. Chairman.

4403 I will now ask Astral Radio Atlantic to intervene at this point.

4404 THE CHAIRPERSON: Please proceed when you are ready, Mr. Eddy.

INTERVENTION

4405 MR. EDDY: Good afternoon, Mr. Chairman, Members of the Commission.

4406 My name is John Eddy. With me today are Tom Blizzard, Jennifer Cox and, just arriving, Claude Laflamme.

4407 Before we begin our intervention, we would like to take a moment to place on the record a brief update and a minor clarification arising out of our appearance before you on Monday.

4408 First, we would like to confirm that information regarding estimates of the population within the service contours has been filed with the Commission staff.

4409 Second, we would also like to record the following clarification.

4410 In answer to a question from counsel, I said that the profits from Atlantic Beat CD sales would go to charity. I misspoke. I should have said profits, if any, will go to a local non-profit organization that qualifies for CTD. However, our intent is not profit. To the contrary, our intent is to maximize distribution to the benefit of artists. our position on this is consistent with other clarifications we provided in the deficiency process and at the hearing.

4411 I will now turn to our oral intervention.

4412 First, Rogers Broadcasting.

4413 Rogers deserves credit for an innovative proposal. Unfortunately, it is compromised by the absence of supporting local market analysis. As a result, it proceeds on the mistaken assumption that Moncton, Saint John and Halifax are homogenous markets. As Atlantic broadcasters, we know that is not the case.

4414 Next is Global.

4415 Global's research clearly supports our finding that there is a void in the market for services catering to young adults. Nevertheless, they propose a format that targets the 35-plus demographic -- a demographic already well served by five of seven existing stations.

4416 Licensing Global will not contribute to media ownership diversity or diversity of editorial views, nor will it result in a new community reflection.

4417 Licensing Global will add significantly to its current 23 per cent share of broadcast advertising revenues in Halifax. This raises the spectre of excessive concentration in advertising share.

4418 I would like now to turn to MBS.

4419 Like Global, MBS is proposing a format targeting the well-served upper demographic. However, they acknowledge a void in the youth market. Importantly, MBS's research confirms our findings that modern alternative rock is the single most popular of eight formats with adults 18-to-34.

4420 We agree with Global's statement that MBS' proposed AC format will duplicate or "bleed" into existing services even more than Global's Easy Listening format.

4421 Granting MBS another licence will not contribute to editorial diversity.

4422 Finally, we submit that MBS' concern about declining success in small markets is not a valid reason to entrust it with a new licence in Halifax. We consider it a privilege, not a burden, to operate in small markets in Atlantic Canada and we operate here successfully, as do others.

4423 Turning to CKMW.

4424 CKMW does not have a viable business plan. Their hybrid youth contemporary format that blends urban rhythmic genres with 27 per cent alternative rock will not attract the audience CKMW projects. They have submitted no research to support this blend.

4425 For the most part, people who like modern alternative rock do not want to listen to urban music, and vice versa. Even East Coast's local music experts confirmed, based on their experience with record sales and the local club scene, that urban rhythmic and modern alternative rock are distinct and incompatible formats.

4426 As a result, CKMW's audience forecasts and revenue projections are overstated and unreliable. To make matters worse, CKMW's revenue projections are based on the assumption that they will generate over $825,000 from sources other than radio in their first year of operation, despite being a new entrant and the seventh ranked station in the market. This is unrealistic.

4427 Further, their revenue projections are based on a power ratio of 113, which again is inconsistent with it being a new entrant and the seventh ranked station in the market.

4428 At the same time, CKMW understates capital investment. Their business plan estimates capital expenditures of $263,000. By comparison, capital expenditures for most applicants who are new to the market and propose high-powered stations average more than $1 million each.

4429 As a result, CKMW will not survive as a stand-alone station.

4430 Finally, with respect to Jamz.

4431 Jamz has presented a new format we don't understand. They have submitted two play lists that represent two completely different stations. Whatever this new, untested format is, they have no local market research to substantiate its appeal. This is risky. Once again, we would like to underscore concerns about their business plan and the viability of a stand-alone operator with an unproven hybrid format in this market.

4432 In conclusion, we respectfully submit that none of these proposals furthers the objective of the Broadcasting Act as well as our applications, which offer the underserved young adults two distinct and complementary formats based on a viable business plan that promises new ownership and editorial diversity.

4433 Thank you for your attention. We would be pleased to respond to your questions.

4434 THE CHAIRPERSON: Thank you, Mr. Eddy.

4435 Commissioner Langford.

4436 COMMISSIONER LANGFORD: I just want to be clear on one thing, if I may.

4437 You are very clear on the stations that you have spoken to or reacted to, the applications for stations that you have reacted to, but what should we infer about your position on other applicants that have appeared before us this week, the ones that you have been silent on?

4438 MR. EDDY: We just didn't have anything we thought we could usefully add further to the comments that we had already made.

4439 COMMISSIONER LANGFORD: Should we infer that you can live with them as fellow licensees or simply that, as you said, you have nothing to say about them?

4440 MR. EDDY: During the course of the initial presentation, we made it clear that there were several of these applicants that would not cause us difficulty co-existing with, and we didn't mean in the course of our remarks today to reverse our position with respect to that.

4441 Our intent today was to put before you our comments and observations with respect to the quality of these various applications insofar as it relates to your licensing criteria, nothing more.

4442 COMMISSIONER LANGFORD: Thank you.

4443 Those are my questions, Mr. Chairman.

4444 THE CHAIRPERSON: Commissioner Cram.

4445 COMMISSIONER CRAM: I wanted to talk to you about the issue of the smaller markets, and that is on page 3, paragraph 8.

4446 It sort of involves what the Commission should do when we are faced with the reality of say a radio station in a small market -- and I note that they had a radio station in a market as small as 2,000, which is incidentally equivalent to the population of Indian Head, Saskatchewan, where I came from.

4447 What should we do when a company has a radio station in a very small community as an existing radio station and yet it is facing problems with profitability?

4448 It seems to me that what has happened in the past is we would take that as a consideration in granting a licence somewhere else in order to allow the cross-subsidization in order to maintain a service that is already there.

4449 I guess what you are saying is that we shouldn't even take that into consideration.

4450 My reaction to that is: Doesn't that inevitably lead to the abandonment of these licences by licensees? And are we doing our duty to the Act and the system if we don't at least consider existing licences in smaller communities?

4451 MR. EDDY: My first comment I think would be that we operate, for example, in the community of Grand Falls, New Brunswick, which is almost exactly 50/50 French/English bilingual community of about 4,500 people, maybe 5,000 max, which has a French language service in it and several American services. We operate there successfully.

4452 Our first point was that there are operators in small markets in Atlantic Canada who are thrilled to be there, and that includes us, and who are successful there. Our first comment was to the effect that declining success in small markets is not necessarily an indication of adverse market conditions or economic circumstances, because it is not true for us.

4453 We go from that to the proposition that if we understand Maritime Broadcasting's position, it is that they should be given favourable consideration by the Commission for a new licence for Halifax on the basis that, by doing so, it will assist them in continuing to provide service in small markets.

4454 Interestingly from our perspective, the situation has almost been the reverse. The situation from our perspective has been that small market operations have been the cash generators that enable you to launch successfully an application to be in a larger market.

4455 If you look at pretty much all the data that has been put before you with respect to the conditions in this market today, it's tough. This is a lot more difficult than a lot of other places I can think of in small town Atlantic Canada.

4456 We think that the argument that MBS is advancing is worthy of challenge.

4457 COMMISSIONER CRAM: You are saying that we should assume that the lack of profitability is due to management issues, not adversity in the market? Or we should make an assessment to decide whether we should keep or assist that licensing in keeping that station?

4458 MR. EDDY: Sure, I think those are all valid inquiries that you should be able to make, absolutely.

4459 COMMISSIONER CRAM: It seems to me that -- I guess I don't know whether Astral tried to buy all of the telemedia stations in Alberta from very, very small areas that apparently were worthless. I guess the issue is: How far do we go to preserving service for people who have it already?

4460 MR. EDDY: I can't speak to the point of view of the ultimate purchaser of those stations, but my understanding is -- which is Newcap with Standard in a minority position. My understanding is that they are delighted with the acquisition, not the reverse.

4461 COMMISSIONER CRAM: Thank you.

4462 THE CHAIRPERSON: Thank you, Commissioner Cram.

4463 Thank you, Mr. Eddy.

4464 Mr. Secretary.

4465 MR. LeBEL: Thank you, Mr. Chairman.

4466 I will now ask Maritime Broadcasting System Limited to intervene at this time.

4467 THE CHAIRPERSON: Mr. Pace, the floor is yours. The microphone is yours whenever you are ready.

INTERVENTION

4468 MR. PACE: Mr. Chairman, Commissioners, for the record, let me re-introduce the members of our panel.

4469 I am Robert Pace, the Chairman of MBS. To my right is Nancy Hilchie, General Manager of Oldies 960 and Country 101. Next to Nancy is Merv Russell, our President and CEO.

4470 Seated behind me, on my left, is Dan Barton, our Chief Programmer; Debra McLaughlin of Strategic Inc., who authored our consumer research report; and next to Debra is our legal counsel, Rob Malcolmson of Goodmans.

4471 First, we would like to thank our 75 supporting interveners.

4472 We filed a detailed written intervention that reviews all aspects of the competing applications in Halifax. We do not propose to revisit that intervention in full today, but we would like to take you through a number of key points and provide our views on some of the comments made on the record by competing applicants.

4473 First, we would like to comment on the evidence of market demand put forward by certain applicants. Each of Rogers, East Coast and Jamz chose not to undertake any local market research. In fact, while Rogers acknowledged in response to a question from the Chair that research was valuable, the applicant said its approach is to do it "after the fact".

4474 This is simply not good enough. In a competitive process where the Commission has stipulated that evidence of market demand is one of the key licensing criteria, applicants should be required to provide some reliable empirical data to prove demand in the markets to be served. This is particularly important where untested or narrow formats, such as news/talk/sports on FM or youth, are being proposed. Yet none of Rogers, East Coast or Jamz have submitted evidence of demand.

4475 The dangers in going with a format that has not been adequately tested by research were made clear by Rogers in its presentation in-chief, when the applicant stated that its "after the fact" research in Vancouver showed that Rogers should never have launched its alternative Hits station in that market in the first place.

4476 Merv.

4477 MR. RUSSELL: Turning now to Astral and Global.

4478 Astral's market research, which was based on a very small sample of 300, evidenced little demand for the format it is proposing. As described in detail in our written intervention (paragraphs 45 and 48), 64 per cent of the sample responded they were "not very" or "not at all likely" to listen to a new urban FM and 53 per cent responded in the same manner with respect to alternative modern rock.

4479 Despite these results, Astral is proposing urban and modern rock formats for Halifax.

4480 Global's research also fails to establish demand for the Easy Listening format it proposes. Rather, Global's research would seem to indicate that the greatest demand is for soft pop or AC music. The Oakes research report found that 77 per cent of the 26 per cent "Easy Listening Cume" identified soft pop as the primary preferred music style; 60 per cent identified today's "softer hits" as their primary music style.

4481 These results suggest that Global will have to migrate to more of an AC format in order to achieve its projected share of tuning.

4482 Global's research is impossible to reconcile with its business plan. At minimum, the Global business plan -- which contemplated a 15 per cent share of tuning -- will have to be revisited in light of the lack of demand for its easy listening format.

4483 The exchange between Commissioner Langford and Global also demonstrated just how lean the core easy listening audience really is. The demise of CIEZ-FM's easy listening format confirms that Global will face a formidable challenge in Halifax.

4484 All of this leads us to conclude that, rather than responding to any meaningful demand, Global is attempting to make the market fit its desired format.

4485 Nancy.

4486 MS HILCHIE: I will now comment on the applicants' business plans.

4487 Rogers is seeking six FM licences, two in each of Halifax, Moncton and Saint John. Rogers has acknowledged that two of its six stations will also provide a signal into Fredericton. Rogers' Canadian Talent Development commitment of just over $1 million for six stations is, in our view, inadequate and not at all in line with the regulatory benefits it is seeking.

4488 Further, our review of Rogers' business plan revealed that it is simply not viable over the long term. Rogers' application states that its news/talk station, without subsidy from its sister urban top 40 station, will not earn enough revenue to recover its operating costs. Even with this subsidy, Rogers' news/talk station will suffer a total loss of more than $3.5 million over its first term.

4489 Rogers' proposal for its youth-oriented urban top 40 station is also flawed. In large part Rogers bases its application on its experience with the similarly programmed and now defunct KISS 92.5 in Toronto. Yet Rogers has abandoned the youth format in Toronto in favour of JACK-FM. And this format flip occurred despite being the dominant station in the youth market.

4490 In spring 2003, BBM data estimated KISS 92.5 had a first place share of 28.7 per cent among 12-to-17 year olds and 11.2 per cent among 18-to-24 year olds. Rogers has also left the youth format in Vancouver and Ottawa. Both of these markets have much larger youth populations than Halifax. This track record makes Rogers' commitment to youth radio in Halifax questionable at best.

4491 Like Rogers, Astral's urban application is not financially workable without the licensing of its proposed sister rock station. In fact, if Astral's urban FM was licensed, it would still stand to lose $3 million in the course of the first seven years. With over $4 million in Canadian Talent Development commitments and a willingness to absorb losses of that magnitude, it seems Astral's strategy is to buy market share. Or to put it in Mr. Eddy's words: "... that's how bad we want the market".

4492 MR. RUSSELL: The Astral proposal is also troubling from the perspective of the impact it will have on existing stations. Astral indicates that 90 per cent of hours tuned to both its proposed stations will come from existing stations, while only 5 per cent will come from new listeners. Further, 55 per cent of Astral's advertising is projected to come from existing radio advertisers.

4493 These projections indicate that the market Astral seeks to target is already well served, and not only will Astral add little by way of diversity, but they will adversely affect existing broadcasters.

4494 Now briefly to Jamz and East Coast.

4495 Given the age span (12-to-34) of the demographic both Jamz and East Coast seek to serve, and the nature of the unproven niche formats they intend to program, more meaningful local research is required to determine if Halifax can sustain such stations. Even if compelling evidence of demand existed, it will be difficult, to say the least, for a single station operator with a narrowly targeted youth format to compete in the Halifax market.

4496 MR. PACE: In conclusion, we submit that licensing a format that is untested, unsupported by research or is not reasonably sustainable will cause further disruption in an already competitively imbalanced marketplace.

4497 Global's easy listening station will, if it stays true to its format, hurt our AM oldies station. We are unable to comply with Global's request that we consider only current FMs when examining the impact their proposed station will have on the market. The impact on the Halifax AM stations simply cannot be ignored because they do not advance their argument.

4498 Global's proposal will have also a negative impact on Seaside Community Radio -- a station largely playing the very music Global proposes to offer. And if Global decides it cannot sustain easy listening and migrates toward the 25-to-54 demographic, it will hurt our country FM and our new AC station, if it was licensed.

4499 Two Astral or two Rogers FMs in Halifax will do nothing to correct the current competitive imbalance, an imbalance that began in 1998, as the attached BBM summary demonstrates. If two Astral or two Rogers stations are licensed, MBS will find itself competing not only with CHUM and Newcap but also Rogers or Astral.

4500 Mr. Chairman, Commissioners, we thank you for this opportunity and we will take any questions.

4501 THE CHAIRPERSON: I don't think we have any questions.

4502 Thank you very much, Mr. Pace.

4503 That is not to say that we won't have any follow-up questions at Phase IV when all the parties come back again. But not at this time.

4504 MR. PACE: Thank you.

4505 THE CHAIRPERSON: Mr. Secretary.

4506 MR. LeBEL: Thank you, Mr. Chairman.

4507 I will now ask East Coast Broadcasting Incorporated to intervene at this point.

4508 Mr. Cormier, you have ten minutes to intervene.

INTERVENTION

4509 MR. CORMIER: Mr. Chair, Commissioners, my name is Serge Cormier, President of East Coast Broadcasting. I would like to take this opportunity to intervene on some of the applications considering utilizing the same format that we are proposing for the Halifax market.

4510 First, I would like to take this opportunity to clarify a question that Commissioner Cram asked yesterday during Phase I concerning estimated quarter-hour ratings and total weekly reach. As Commissioner Cram stated, she identified a discrepancy between the two figures.

4511 Upon further review, there was an error with the initial application concerning the estimated total weekly reach figures. The actual numbers -- and those numbers were submitted subsequently. But since the application was already gazetted, it was not accepted by the Commission.

4512 The numbers for the central area should be 60,000 people, and for the full coverage area it should be 75,000. That would support our first year market share rating of 7 per cent.

4513 On to why East Coast Broadcasting makes the best available use of the frequency, I will state a few points to, as I said, the groups that are proposing to have a format similar to East Coast Broadcasting: namely, Rogers, Astral and CKMW.

4514 First of all, some comments on the Rogers application.

4515 As stated by Astral just a few minutes ago, when they appeared they had no market research to support their claim while we have limited market research as far as the Solutions Research Group's study and also, as well, the research that Mr. Marshall Williams brought as far as the data that he collected at HMV. That research is actually more than what Rogers actually brought to the table.

4516 As you also heard, Rogers stated that they usually do research after the fact that they put the station on the air, to see if it is going well; and if not, then they change it.

4517 My concern with that is that basically they would put that station on the air, and if it doesn't work then they would flip it to JACK. That is my comment on Rogers.

4518 Also, I wanted to add that Rogers considers that Moncton and Saint John are similar markets. If you take a look at their application, as far as the figures projected for revenue for Moncton and Saint John, they are absolutely the same. So basically the bulk of their research is on the Halifax market, and as far as Moncton and Saint John are concerned they are actually less important markets.

4519 Because of the lack of research in the Moncton and Saint John markets, I can't see why they would actually pursue those markets.

4520 Another point I would like to make with Rogers is the fact that they will not support the urban without the news/talk licence. They stated, after the Commission asked the question of what would be the lowest amount of licences that you would be willing to accept, they actually stated that at the bare minimum they would accept the three news/talk stations.

4521 In other words, the urban really is just a kicker for them. It is just a sidekick, I should say. It's not really what they are going after. It's just something that if they get it, it's good; but if not, it's no big deal because the Rogers Corporation has so much money that they can afford operating more licences in order to get better odds of getting something.

4522 Now on to Astral. I would like to make a few comments.

4523 The most surprising comment that I heard about Astral is the fact that they stated that it its urban station proposal would not survive as a stand-alone station. In other words, they would either accept having the rock station and the urban station or they would just accept the rock station and not the urban station.

4524 That, to me, is saying that they don't consider urban as a viable format. That clearly shows, when you take a look at their financial projections for their urban station over the seven years, they post a loss over the full seven-year term. And the Commission made a note of that.

4525 Also, I would like to talk about the proposed frequency that they considered for their rock service. Of course, with NAVCOM concerns they were forced to change frequency to 89.9 FM.

4526 That change -- I'm not sure why, first of all, a change in those technical parameters was actually accepted this late in the game. As I pointed out in the intervention that we filed against Astral concerning those changes regarding their technical parameters, changing this late in the game, first of all, is not fair for the other applicants, Rogers included, since they changed to 95.7 FM.

4527 Also, as well, the change actually -- and this was not really mentioned that often, and I want to make note of it.

4528 By having 100 kilowatts on 89.9, this effectively blocks out the 89.9 FM frequency in Truro which the CBC is proposing to use as their future Radio Two service, part of their long-term radio plan.

4529 To support this, the CBC, the corporation itself, actually also filed an intervention against Astral, stating that they were not informed about these recent technical changes. What Astral tried to use as a way of getting out of this tight spot or this problem that they have with interfering with the CBC frequency in Truro, they proposed that the frequency in the long-term radio plan for CBC in Truro would be changed from 89.7 to 105.1 FM so that they could use 89.9 FM in Halifax.

4530 First of all, as CBC stated, you can't really do that without getting approval from the CBC first. That is my first point.

4531 The second point is that while this might be a solution, what happens if the Commission decides to grant a licence to Maritime Broadcasting who decided to keep their proposal on the 105.1 frequency? They would be out of luck, as I could say, because if the 105.1 frequency is used at originally proposed 30,000 watts -- it was originally proposed to be used at 100,000 watts by Maritime and then they reduced it to 30,000 watts, which does not cause interference with NAVCOM. Subsequently, they saw that they could probably go as high as 45,000.

4532 If they get the licence, then Astral would not be able to use the 89.9 frequency because then the CBC would not have a home for their Radio Two service.

4533 Moving on, I also want to note that at 100 kilowatts on 89.9 FM, it effectively blocks out that frequency from pretty much all of Atlantic Canada.

4534 MR. LeBEL: Excuse me, Mr. Cormier. Could you conclude in 30 seconds. You are out of time.

4535 MR. CORMIER: Moving on here, I want to make a comment about the urban format proposed by all of the applicants.

4536 To my view, urban is a new format and thus revenues are limited. The three groups that propose to have an urban type radio station clearly are big operations. To my view, those big operations, with the fact that urban is so new, it really is not viable.

4537 Our strategy really is to be a small operation and have minimal overhead costs. At 3 kilowatts our overhead costs would be much lower because we would not have to have all those costs related to technical.

4538 So with low overhead, we believe that the format would be viable as compared to Astral and, to a lesser extent, Rogers who stated that urban is a loser without the assistance of another station.

4539 Before I conclude, I want to make one quick comment about CKMW.

4540 First of all, they are proposing to serve the 12-to-24 demographic. To my knowledge, it is a very limited audience segment representing only 14 per cent of the population. To my view, that is not viable.

4541 As we are proposing close to 35 per cent of the population, we believe that our proposal is much more viable than CKMW's proposal. Also, they did not test this format with the 12-to-24 demo as CIDC, their operation in Orangeville, is 25-to-34.

4542 In concluding, we believe that East Coast Broadcasting would make the best use of the 89.7 frequency. I would like to conclude by saying if we are granted a licence, we will not let you down.

4543 Thank you.

4544 THE CHAIRPERSON: Thank you, Mr. Cormier.

4545 I just want to clarify one thing for the record with respect to the rather lengthy concerns you had about the technical spectrum issues.

4546 We rely on Industry Canada to grant technical authority, and Industry Canada did not, as you are aware, for a number of the applications because of interference with NAV CANADA, which, as I understand it, the applicants would not necessarily have been aware of.

4547 So the applicants went back to the drawing board and found other frequencies, in one case a frequency that is near yours.

4548 But we regazetted those applications providing an opportunity for parties to comment in that respect.

4549 I just wanted to make that clear again for the record, because there seemed to be an implication from your comments that somehow there was an unfairness from a procedural point of view in terms of dealing with that issue. Certainly from our point of view parties were all given an opportunity to comment prior to this hearing.

4550 I think those are all the comments we have. Thank you very much.

4551 You will have an opportunity again to appear in Phase IV of the proceedings.

4552 MR. CORMIER: Thank you.

4553 THE CHAIRPERSON: Mr. Secretary.

4554 MR. LeBEL: Thank you, Mr. Chairman.

4555 I will now ask International Harvesters to intervene at this point.

--- Pause

4556 MR. LeBEL: Mr. Chairman, I am advised that International Harvesters will not be appearing in Phase II.

4557 I will ask CKMW to intervene at this time.

--- Pause

4558 THE CHAIRPERSON: Hello, again, Ms Laurignano.

4559 MS LAURIGNANO: Hello again.

4560 Mr. Chairman, we have provided our written intervention against the other applicants during the gazetted period and have nothing more to add at this time.

4561 THE CHAIRPERSON: Thank you very much. Nor do we have any more questions.

4562 Mr. Secretary, I believe that concludes this phase of our proceedings?

4563 MR. LeBEL: Indeed, Mr. Chairman, it does conclude Phase II.

4564 THE CHAIRPERSON: With that, we will conclude our business for the day. We will reconvene tomorrow morning at 9:00 o'clock, which will commence Phase III, the other appearing intervenors.

4565 We will see you tomorrow at 9:00 a.m.

--- Whereupon the hearing adjourned at 1706, to resume

on Thursday, March 4, 2004 at 0900 / L'audience

est ajournée à 1706, pour reprendre le jeudi

4 mars 2004 à 0900

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