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Prière de noter que la Loi sur les langues officielles exige que toutes publications gouvernementales soient disponibles dans les deux langues officielles.

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Toutefois, la publication susmentionnée est un compte rendu textuel des délibérations et, en tant que tel, est transcrite dans l'une ou l'autre des deux langues officielles, compte tenu de la langue utilisée par le participant à l'audience.

 

 

 

 

 

 

 

              TRANSCRIPT OF PROCEEDINGS BEFORE

             THE CANADIAN RADIO‑TELEVISION AND

               TELECOMMUNICATIONS COMMISSION

 

 

 

 

             TRANSCRIPTION DES AUDIENCES AVANT

                CONSEIL DE LA RADIODIFFUSION

           ET DES TÉLÉCOMMUNICATIONS CANADIENNES

 

 

                          SUBJECT:

 

 

 

VARIOUS BROADCAST APPLICATIONS /

PLUSIEURS DEMANDES EN RADIODIFFUSION

 

 

 

 

 

HELD AT:                              TENUE À:

 

Delta Regina                          Delta Regina

1919 Saskatchewan Drive               1919, promenade Saskatchewan

Regina, Saskatchewan                  Regina, Saskatchewan

 

October 31, 2006                      le 31 octobre 2006

 


 

 

 

 

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.


               Canadian Radio‑television and

               Telecommunications Commission

 

            Conseil de la radiodiffusion et des

               télécommunications canadiennes

 

 

                 Transcript / Transcription

 

 

                             

              VARIOUS BROADCAST APPLICATIONS /

            PLUSIEURS DEMANDES EN RADIODIFFUSION

                             

 

 

 

 

BEFORE / DEVANT:

 

Barbara Cram                      Chairperson / Présidente

Michel Arpin                      Vice-Chair, Broadcasting / Vice‑président, radiodiffusion

Rita Cugini                       Commissioner / Conseillère

Ronald Williams                   Commissioner / Conseiller

Joan Pennefather                  Commissioner / Conseillère

 

 

ALSO PRESENT / AUSSI PRÉSENTS:

 

Chantal Boulet                    Secretary / Secrétaire

Leanne Bennett                    Legal Counsel /

Conseillère juridique

Lyne Cape                         Hearing Manager /

Gérante de l'audience

 

 

HELD AT:                          TENUE À:

 

Delta Regina                      Delta Regina

1919 Saskatchewan Drive           1919, promenade Saskatchewan

Regina, Saskatchewan              Regina, Saskatchewan

 

October 31, 2006                  le 31 octobre 2006

 


                           - iv -

 

           TABLE DES MATIÈRES / TABLE OF CONTENTS

 

                                                 PAGE / PARA

 

MEDICINE HAT - PHASE I (cont'd)

PRESENTATION BY / PRÉSENTATION PAR:

 

Rogers Broadcasting Limited                       345 / 1766

 

Pat Lough (OBCI)                                  414 / 2031

 

 

 

MEDICINE HAT - PHASE II (458)

PRESENTATION BY / PRÉSENTATION PAR:

 

Lighthouse Broadcasting Limited                   458 / 2182

 

Golden West Broadcasting Ltd.                     459 / 2193

 

Radio CJVR Ltd.                                   460 / 2200

 

Harvard Broadcasting Inc.                         464 / 2212

 

Rogers Broadcasting Limited                       464 / 2218

 

 

 

MEDICINE HAT - PHASE III (465)

PRESENTATION BY / PRÉSENTATION PAR:

 

Alex Mair                                         465 / 2226

 

Aboriginal Media Education Fund                   478 / 2274

 

Carpet One Medicine Hat                           486 / 2303

 

 

 

MEDICINE HAT - PHASE IV (501)

PRESENTATION BY / PRÉSENTATION PAR:

 

Rogers Broadcasting Limited                       502 / 2380

 

Vista Radio Ltd.                                  504 / 2395

 

1182743 Alberta Limited                           504 / 2399

 

Radio CJVR Ltd.                                   505 / 2406

 

Golden West Broadcasting Ltd.                     508 / 2418


                           - v -

 

           TABLE DES MATIÈRES / TABLE OF CONTENTS

 

                                                 PAGE / PARA

 

REGINA - PHASE I (510)

PRESENTATION BY / PRÉSENTATION PAR:

 

Newcap Inc.                                       510 / 2438

 

Standard Radio Inc.                               564 / 2645

 

Touch Canada Broadcasting Inc.                    621 / 2911

 

Radio CJVR Ltd.                                   683 / 3276

 

 


         Regina, Saskatchewan / Regina (Saskatchewan)

‑‑‑ Upon commencing on Tuesday, October 31, 2006

    at 0833 / L'audience débute le mardi 31 octobre

    2006 à 0833

1761             THE CHAIRPERSON:  Good morning on this Halloween.

1762             Madam Secretary...?

1763             THE SECRETARY:  Thank you, Madam Chair.  Good morning, everyone.

1764             We will now proceed with item 8 on the agenda, which is an application by Rogers Broadcasting Limited for a licence to operate an English‑language FM radio programming undertaking in Medicine Hat.  The new station would operate on frequency 105.3 megahertz (channel 287C1) with an effective radiated power of 77,900 watts (non‑directional antenna/antenna height of 97.0 metres).

1765             Appearing for the applicant is Mr. Gary Miles, who will introduce his colleagues, after which you will have 20 minutes for your presentation.  Please go ahead.

PRESENTATION / PRÉSENTATION

1766             MR. MILES:  Madam Chair, Members of the Commission, I am Gary Miles, CEO Radio, Rogers Broadcasting Limited.  With me today, starting from my far left and your right, Leda MacLeod, business manager, radio, Ontario north; Alain Strati, vice‑president, regulatory affairs; Sarah Morton, operations manager, SONiCfm, and on my right, Kevin McKanna, executive vice‑president, radio, Alberta and Manitoba; Terry Voth, general manager, Lethbridge; and Angela Reimer, general sales manager, 660 News and the Fan 960 in Calgary.

1767             We are pleased to appear before you today to present our application for Rock 105, a rock music station for Medicine Hat.

1768             By now, you've already heard from a number of applicants proposing to launch new radio stations in a number of different formats.  For a market like Medicine Hat, we have proposed a broad‑based rock format to ensure we can effectively serve a wider range of musical interests and preferences.

1769             Content really is king, and our application for Rock 105 focuses on the need for strong, local programming.  While that certainly includes traditional news, it is, by no means, limited to it.  We've also proposed an innovative approach to local content focusing our efforts and resources on the establishment of a local production team, anticipating that they will develop and create segments that will inform and entertain listeners, whether on the air or on our website.

1770             Rock music fans are a bit of a different breed, and that's why it's critical that every aspect of our station reflects their attitude and their point of view.  Whether it's the morning show, our news segments, or even the ads we sell, we want our listeners to know at all times that they are tuned to a rock station.  If we don't, they will continue to go elsewhere accessing the growing array of audio options provided by satellite radio, iPods, and the Internet.  In this kind of environment, we know that each segment and element on Rock 105 must appeal to the interests and programming style of rock music fans in Medicine Hat.

1771             We believe the radio industry is at a crossroads.  New media technologies are breathing down our necks and striving to provide consumers with a new and improved commercial free or customizable version of what radio has been doing for years.  How will we respond?  Well, either we can limit ourselves to being just another option in a widening landscape of music technologies, or we can reinvigorate our programming strategies and more precisely distinguish and differentiate radio as a local content option.

1772             At Rogers, we believe radio has to focus more on what audiences are searching for, entertainment and a stronger connection to their local radio station.  With Rock 105, we think we've done that.

1773             Along with the best rock music, our station will establish itself as an important source of local news, information, and entertainment, and as a vehicle for community support and involvement.  Our unique approach to local programming starts with our newscasts.  Local news, weather, traffic, and sports will form the basis of our news programming, and the 105‑second Reality Check will connect listeners to local news from the Medicine Hat perspective, but we'll try and do it a bit differently.  Although we still call them newscasts, they're really not as conventional as you might think.  The 105‑second reality check is more like a synopsis of news headlines and interesting stories.  Targeting rock listeners, it will incorporate a rapid‑fire sound‑bite style using an engaging and humorous entertaining format, one we believe is more consistent with other programming elements and segments of our rock station.

1774             Perhaps a quick listen will give you a better idea of exactly what we mean.

‑‑‑ Audio Clip / Clip audio

1775             MR. MILES:  Rock 105 will also use other scheduled news segments:  Our Rock News features will incorporate an open‑concept format, covering anything from local events to the latest industry trends and the hottest new artists.  The Community Events Calendar and the Restaurant and Pub Crawl will provide details about events and activities in the Medicine Hat community, helping local organizations and businesses publicize their efforts to our listeners.

1776             Sarah...?

1777             MS MORTON:  Thanks, Gary.  Given our format and our audience, we also believe it's important not to place too great of an emphasis on traditional newscasts.  Rock 105's approach to news and information has to mirror our music format and station attitude, and traditional news segments are not the only means of engaging listeners.  The differentiating factor here is content, the ability to provide local, entertaining, and relevant content is the one thing that no other technology can do better than radio.  Content starts with on‑air talent, but does not end there.  It also extends to entertaining and interactive promotional activity and to on‑air feature development and production.  That's why Rock 105 will focus on the development of news and information in a way that's accessible and entertaining.  Rock audiences do want information, but they're less interested in traditional three or five‑minute newscasts.  They want to be entertained while they're being informed.

1778             The success of TV programs such as the Rick Mercer Report or this Hour has 22 Minutes represents the impact this kind of approach can have.  Although current topical and informative, these programs are really about entertaining their audiences.  We want to develop a similar approach at Rock 105 with the Rock 105 Content Factory.  Replacing the traditional exclusive focus on the news room, the Content Factory will translate local, national, and international news into interesting and entertaining programming segments for our listeners.

1779             Here's a short parody song to provide you with but one example of the kind of programming approach and style we're envisioning.  It's perhaps a bit light‑hearted, but you'll get the idea.

‑‑‑ Technical difficulties / Problèmes techniques

1780             VICE‑CHAIR ARPIN:  Don't hire him for sound production, eh?

1781             MR. STRATI:  Sorry, my media player.

1782             MR. MILES:  That's why he's not in the engineering department.

1783             COMMISSIONER WILLIAMS:  How did you get your newscast to start at 7:30 and end at 7:03?

1784             MS MORTON:  All right.

1785             MR. MILES:  7:31, 7:32.

1786             MS MORTON:  Maybe we'll hear the parody song later.

1787             The great thing about programming from the Content Factory is that it will be available only on radio, and it will serve to further differentiate radio from other options available to local listeners.  We need more programming that tries to accomplish that, and we think the Rock 105 Content Factory is a step in the right direction.

1788             An entertaining radio show requires resources and more depth than one person at the mike can provide.  Most stations address this by adding voices into their morning shows, a co‑host, someone doing sports, someone else on traffic and weather, a news person.  Too often this translates into nothing but more talk and not necessarily into more compelling and entertaining content.  We're starting to see that listeners don't necessarily want more people talking to them in the morning, they want people focusing more specifically on how to inform them in an entertaining way.

1789             Rather than adding new voices to a morning show, we would include additional producers.  Where more support is needed, we would establish a team of people behind the host, contributing creative ideas, production segments, and voice‑over bits, people who have hosted their own shows or who can bring creative talent to their roles.

1790             Content Factory staff will be comprised of people with creative or comedy‑writing experience, producers, and former on‑air personalities.

1791             Another under used source of content is the inclusion of listener input.  At Rock 105, all of our announcers will incorporate listeners' calls into at least two breaks per hour.  This listener interaction will provide local perspective and encourage a dialogue between listeners on the air.

1792             Our Impact 105 phone line will also provide our audience with the opportunity to leave messages and commentary on a variety of subjects.  These messages will then be produced and scheduled as on‑air programming content, covering topics like the possibility of a strike at the Goodyear plant, the effect of Canadian foreign policy on soldiers and their families, or local reaction to the provincial candidates' debate.  This interactivity will also be carried through to our Rock 105 website, generating an enhanced level of input and participation from our listeners.

1793             If anything, the phenomenal success of websites such as YouTube and MySpace have shown us that media consumers also want to express themselves and be content creators.  At Rock 105, we have to try and do the same, whether through listener calls, website chatter, or features such as DJ For A Night, we have to provide opportunities for the active participation of our listeners.  More involvement and more access can only mean that Rock 105 will be more local in its orientation and more community‑based in its reflection.

1794             Kevin...?

1795             MR. McKANNA:  Thank you, Sarah.

1796             In reflecting the needs and interests of our listeners, Rock 105 will also have access to other valuable resources within Rogers Radio.

1797             In April of this year, we launched 660 News in Calgary, our newest all‑news radio station.  We have invested over $2.8 million, and we have hired more than 36 full‑time and part‑time staff, including local news reporters, a meteorologist, and dedicated reporters for our business and sports.

1798             Together with our stations in Lethbridge, Rock 105 will also have access to a strong regional news team in southern Alberta.

1799             A connection to our news content software system will provide local news producers with immediate access to stories and segments from other news departments.  The Content Factory will then use and adapt these stories to reflect the interests and concerns of local listeners in Medicine Hat.

1800             The key here is availability.  All of these resources and all of this content will be made available to the Rock 105 Content Factory.  The objective is not to replace local news and information, but, rather, to supplement it and provide the opportunity for the insertion of local context and perspective.

1801             It's really about enhancing the listener experience and differentiating our local content from what is available elsewhere.  That's precisely why we also believe that new media will provide opportunities for us to broaden our relationship with listeners and establish more communities of interest.  We are focusing on harnessing the brand power of our stations and extending it to deliver more local content and more services.

1802             A few months ago, we launched a VIP program for many of our station websites.  Through new media, our listeners can now more actively participate and interact with our stations initiating a strong bond with our stations and our on‑air personalities.  The VIP program has proven to be extremely successful in driving traffic to our stations and our websites.  At CHEZ‑FM, our classic rock station in Ottawa, 20 percent of its listeners base has already registered as VIP members.

1803             Internet technology has become a part of daily life for most of us, but for the rock audience this is especially true.  Rock listeners go to the Internet to source a wide variety of information, and they expect to be able to interact with their favourite radio station online.  Rock 105's website will establish an online community, one where listeners can not only access music content and local information, but they'll also interact with our on‑air personalities.  Blogs, commentaries, and community postings will allow listeners to connect with station personalities and with each other.  We want to encourage more peer‑to‑peer contact between listeners and develop a community of interest that transcends music.

1804             More than ever, local is the key to our success.  Today, local also means a strong new media presence on the Internet.  At Rock 105, we'll establish an informative and entertaining new media platform to bring our local listeners even closer together.

1805             Terry...?

1806             MR. VOTH:  Thanks, Kevin.

1807             The Medicine Hat radio market is, itself, quite isolated, and local listeners have little access to out‑of‑market stations.  With few competitors and formats, existing stations are programmed to respond to as broad a variety of musical tastes as possible; however, no station is dedicated to the rock format, and rock music fans have no choice but to listen to other stations, even though they don't consistently play the music they want to hear.  Many would‑be listeners are, instead, turning to other options like satellite radio, iPods, and the Internet.  In an increasingly open system, it becomes imperative that we provide a localized option to compete for the time and attention of local listeners.

1808             Strong brands and local and long‑term programming investments will ensure that our stations can continue to deliver local programming that meet the expectations of our listeners and keeps them as consumers in our Canadian Broadcasting System.

1809             At Rogers Radio, we consistently seek out new and popular radio formats.  JACKfm is a good example of our ability to develop a unique and distinctive format for Canadian radio.  We also have extensive programming experience with the rock music format, having used it with great success in Lethbridge.

1810             For Rock 105, we've proposed a wide variety of music programs and features.  Programming like the Six O'Clock Six Pack, the Top 30 Countdown, and thematic rock weekends will engage and entertain listeners providing a differentiated and localized music approach for Medicine Hat.

1811             Rock stations are exciting places to work, exciting because each station still has the ability individually to make a tangible contribution in promoting and developing Canadian talent at the local level.  We know, we operate rock stations in other markets, and each of them has made a significant contribution to the development and promotion of new artists and local talent.

1812             With no dedicated rock station in Medicine Hat, many would‑be rock listeners will continue to turn to the Internet in their search for new music or emerging artists.  They currently have no option but to access other available sources for rock music.  If they continue to do so, we lose an irreplaceable opportunity to promote Canadian music, an opportunity to showcase new artists and local talent to rock listeners.

1813             Rock 105 will provide extensive promotional support and on‑air exposure for new artists and local talent.  We, specifically, proposed a number of new music features, programs like the New Rock Nation, Dig Deep 105, and the Rock 105 Steel Cage Match.

1814             We have also committed to spending a total of $1 million to support Canadian talent with at least half of that supporting local and regional initiatives in Alberta.

1815             $500,000 to Radio Starmaker to support emerging Canadian music stars.

1816             $300,000 to the Alberta Recording Industry Association to develop southern Alberta talent with networking nights, local symposiums, and career consults in areas outside of Edmonton and Calgary.

1817             And $200,000 to the Medicine Hat College Conservatory of Music and Dance to provide additional resources and support for music development initiatives, scholarships and special projects.

1818             We believe the benefits package we have proposed will provide much needed resources for the continuing efforts of these organizations.  Our proposal reflects our commitment to the community of Medicine Hat and our investment in the success of the rock format in southern Alberta.

1819             Gary?

1820             MR. MILES:  Before I conclude, with your indulgence, we have the parody song ready to go.

‑‑‑ Audio Clip / Clip audio

1821             MR. MILES:  In conclusion, with Rock 105, we are proposing to offer Medicine Hat listeners with their very own local destination for radio rock music.  They deserve it.  No other format provides as many dedicated listeners as rock.  For decades, rock music fans have developed the unique connection with their music as a means of cultural expression and identity.

1822             The introduction of Rock 105 will provide a fresh and unique perspective on local news and information, not only increasing the diversity of news and editorial opinion, but also establishing a unique approach to local programming, one that we believe is more consistent with the tastes and habits of rock music listeners.

1823             Our application demonstrates our commitment to serve the community of Medicine Hat.  Rock 105 will fill a void in this market and provide local listeners with a true dedicated voice for rock music.

1824             Our proposed initiatives totalling one million will assist local, regional, and national organizations in their efforts to promote and develop Canadian talent.

1825             For all of these reasons, we believe the approval of our application would be in the public interest, and we look forward to any questions you may have.

1826             Thank you.

1827             THE CHAIRPERSON:  Commissioner Pennefather?

1828             COMMISSIONER PENNEFATHER:  Thank you, Madam Chair.

1829             Good morning, and thank you for your presentation.  I will have some questions on programming and the music and spoken word, which the Content Factory will create, the talent development, and, obviously, your business plan.

1830             So although I won't sing the questions, we will start with music.  You have said throughout your Brief, and I assume that that's maintained in the presentation this morning, that you will offer a broad‑based rock format including music from the 1960s through the early‑1990s with some more recent rock.  And I believe in your deficiency May 19th, you focus on a rather large 25 to 54‑year‑old male skewed demographic.  Is that still the case?

1831             MR. MILES:  That is correct.  The station will probably skew about 60 percent male, 40 percent female.

1832             COMMISSIONER PENNEFATHER:  60/40?  And what would the median age be?

1833             MR. MILES:  33.

1834             COMMISSIONER PENNEFATHER:  33.  So given that, if we could just probe a little bit more the rock music so we get a better sense of what it will sound like.  Is your format more accurately described as mainstream AOR or classic rock, given your emphasis on the '70s, '80s, '90s?

1835             MR. MILES:  I'm going to turn this question over to Terry.  He operates this format in Lethbridge, sort of down the street and around the corner.  We also, however, operate this in similar size markets in Ontario north, very successful.  We have chosen a broad‑based rock format for a couple of reasons, one is it's ability to be a little more male than female, which fits in well in the competitive nature in Medicine Hat of the existing clients.  Secondly, because of the nature of the in‑migration into the Province of Alberta, the median age is a lot younger than it is in the rest of the provinces.  And, thirdly, because the broad‑based rock format allows the greatest opportunity to showcase new emerging Canadian talent and Canadian artists.

1836             So, Terry, perhaps you could start with a bit of the air balance that would be able to describe better the format composition.

1837             MR. VOTH:  For sure, Gary.

1838             The other applications, I would say, are not as broad as we are.  Truly, when we say a broad‑based rock format, I would say we definitely have that.  When it comes to current music, we're talking about actually 35‑percent modern and adult rock, Canadian bands like Sloan, Three Days Grace, for example.  25 percent of our music would be what we call album rock or AOR, bands like the Tragically Hip, Van Halen; 25 percent true classic rock, which is the '60s and '70s referred to, Led Zeppelin, The Guess Who, Bachman‑Turner Overdrive, and 15 percent of our music would be the adult rock component, which is, for example, new songs by Tom Cochrane and Colin James.

1839             COMMISSIONER PENNEFATHER:  Looking at it differently, could you break it down by decade, how much '60s, '70s, '80s, '90s?

1840             MR. VOTH:  I could.  I would say about 33 percent of the music will come from 2004 right up to current music.  In terms of the '80s, we'd be looking at about 15 percent, '60s/'70s would be about 25 percent, and '90s, I believe, would be about 10 percent.

1841             COMMISSIONER PENNEFATHER:  And given the rather large age distribution, even though we're looking at a median age of 33, it's 25 to 54 skewing male.  Do you intend to target?  Do you intend to use different music in different day parts?

1842             MR. VOTH:  We would be slightly day‑parted at nighttime because frankly during the night is more of an 18 to 34 population that is available for radio, so you skew a little bit harder, a little bit more modern, like you still play a lot of classic rock, a little bit of adult rock, but during the day time is when it's definitely ‑‑ you know, until ‑‑ from 6 a.m. to 7 p.m., say, is going to be the broadest 25 to 44 appeal.

1843             COMMISSIONER PENNEFATHER:  25 to 34, so ‑‑

1844             MR. VOTH:  25 to 54, pardon me.

1845             COMMISSIONER PENNEFATHER:  Throughout the day, would you say you have a core demographic within that range?

1846             MR. VOTH:  If we wanted to narrow it down further, it would be 25 to 44 with first emphasis on 35 to 44, second emphasis on 25 to 34.

1847             COMMISSIONER PENNEFATHER:  So the emphasis is the 35 to 44 side of that, if I heard you correctly?  Okay.  Now, you've indicated that, I believe, in the August 16 deficiency that you ‑‑ that nearly a hundred percent of your programming will be locally produced, but that voice‑tracked or automated programming will account for up to 20 percent of the broadcast week.  You've also indicated your intention to offer some syndicated programming.  So how many hours on average per week do you plan to devote to syndicated programs?  When would these air, and what would the impact be on your weekly local programming?

1848             MR. McKANNA:  I'll answer that question.  Voice tracking, 20 percent would be 26 hours.  At this point, we haven't got any syndicated programming that we're looking at, but I'd like to give you the breakdown of the actual voice‑tracked hours as well.  That would be evenings from 8 p.m. to midnight and weekends would be on Saturday from 9 p.m. to midnight and Sunday from 6 p.m. to 9 p.m., So there is the total of 26 hours of voice tracking.

1849             COMMISSIONER PENNEFATHER:  That's the voice tracking.  What about syndicated?  Do you plan to use any syndicated programming?

1850             MR. McKANNA:  Not at this point, no.

1851             MR. MILES:  If I may just interject for a second, we tend to view voice tracking a tad differently.  We think it's a very important part of programming.  And it's not as if ‑‑ that when voice tracking is on there's no one at the radio station, so the radio station really is ‑‑ has operators on during the period of time when voice tracking is on, but if you think about it, we've got, at the resources of Rogers, some very, very talented people who actually can provide stronger content and stronger association with the music at certain times of the day than we're able to recruit locally.  That doesn't make the local people a bad thing.  We take that opportunity to reinvest into things such as the Content Factory and more people behind the scenes doing different parts of radio.  So we're trying more than ever before to swing away from the old traditional ways of doing radio, into utilizing resources so that we're able to compete with this influx of new media and provide new opportunities.  So it's not a cost‑cutting issue, it's a matter of reallocating resources at the correct time.

1852             COMMISSIONER PENNEFATHER:  Thank you, Mr. Miles.

1853             We'll get back to obviously discussing this approach throughout the questioning, and I appreciate you adding it to each of the components of my questions because it will give us a better understanding.  Just looking at my question from the other side so that I'm clear ‑‑ my colleagues like to start me off first thing in the morning, but I don't think I had my second cup of coffee yet.  So in terms of the amount of voice track, in terms of the broadcast day, if we turned around the other way, the percentage of live programming would be?

1854             MR. McKANNA:  80 percent.

1855             COMMISSIONER PENNEFATHER:  80 percent?  And would you be willing to accept a COL in that regard should we so decide?

1856             MR. McKANNA:  Yes.

1857             COMMISSIONER PENNEFATHER:  Thank you.

1858             Now, let's look at the spoken word programming, and if you would allow, I would like, first, to clarify the spoken word programming content as closely as we can in terms of hours.  We'll get to the approach after that where we can expand a little bit on the components of the Content Factory, but just so we review what's on record to date, in the May 19th deficiency response you indicated you would devote 17 percent of the broadcast week to spoken word, which translates into 21 hours and 25 minutes.  And, again, in the same deficiency letter at answer 3, you said there will be news, weather, sports within the 105‑second Reality Check, of which we heard a sample.  So we have ‑‑ we're up now to a total of 56 minutes a week of spoken word.  We add to that ten minutes a week for rock news, so we're up to an hour and six minutes spoken word.  We add to this an hour for what was called Restaurant and Pub Crawl and Community Events Calendar, and we're up to two hours and six minutes.  Am I doing okay here?  So this would be what one might conclude would be more traditional, if I may be allowed to use that word, spoken word, if ‑‑ would you agree?

1859             MR. MILES:  So far, yes.

1860             COMMISSIONER PENNEFATHER:  Yes.  So we're back to our 17 percent, which leaves us ‑‑ we were up to two hours and six minutes or 17 percent of 126 hours.  That leaves us with 19 hours of what we might call unstructured spoken word.  Are we then on the same wave length?

1861             MR. MILES:  Yes.

1862             COMMISSIONER PENNEFATHER:  So is this the spoken word that will be woven through the programming throughout the broadcast days, this part of your programming approach?

1863             MR. MILES:  Kevin is going to give you the exact breakdown, and we have it so that we can file it at the end of the hearing, but one of the things that ‑‑ I'm sure we made the mistake on that one is that when we were talking about the amount of spoken word, we also had our commercial content in there, so now it starts to get more into line with the normal pattern of jock talk as well as the ability to take what we're doing in the Content Factory ‑‑ we've wrestled with this for some time because we've had a couple of appearances before you in which we've tried to explain the different kind of programming, so we put it more into very specific time periods and assigned time to it, although that's not necessarily the way it would be.  It's just that in order to make sure that we were able to be clear on the amount of programming that we had and the content in it is that we've actually identified specific time periods for it, and that will form the basis of the explanation that Kevin is going to give you.

1864             MR. McKANNA:  So, correct, it is 19 hours, and that breaks out as newscasts at two hours and 15 minutes.  The Content Factory is two hours and 30 minutes, music features, one hour and 20 minutes, so that's a total of six.  Jock talk in the morning show, four hours, at 12 minutes an hour, four hours, five days.  That's your four hours.  Midday and afternoon are both four hours with the same breakout.  Evening is 1.5 hours, and weekends is 2.5 hours for a total of 12, and we also include public service announcements for a total of one hour for the week, so there's 19 hours.

1865             COMMISSIONER PENNEFATHER:  So you will be tabling that breakdown with us?

1866             MR. McKANNA:  Yes.

1867             COMMISSIONER PENNEFATHER:  That's very helpful because it's a little different from what I was left with reading the deficiency to date.  So we're looking at the percentage ‑‑ 17 is not quite accurate.  It's actually ‑‑ let's talk about 19 hours of spoken word, which you've broken down as you've just described, so I'll work with that.  Now, within that, we have news for how many hours?

1868             MR. McKANNA:  Two hours and 15 minutes.

1869             COMMISSIONER PENNEFATHER:  So, again, it's pretty ‑‑ in that sense, that's close with ‑‑ to the application as we've seen it to this point.  Let's talk a little bit now about the approach and the news, the two hours.  Will it be a newscast, weather, sports?  How often will it happen?  Will it be closer to the traditional approach?  You said here in your presentation today ‑‑ the reason I'm asking is replacing, you say, the traditional exclusive focus on the newsroom.  Now, does that mean you will not have newscasts at specific hours during the day?  What do those words mean, in fact?

1870             MR. MILES:  Perhaps I could frame this in terms of the thrust of our presentation, with your permission, and then we will answer your specific questions.  Sarah will tell you a little bit about how the Content Factory will work and how those things ‑‑ and then we do have specific times that the newscasts will call including what comprises of the Content Factory.  But our approach is that if we were to apply for this licence five years ago, I'd rather suspect that we would have had lengthy newscasts, and they would have been at the top of the hour and the bottom of the hour because, frankly, that's the way radio run ‑‑ was run at those days, and we still operate some radio stations in some markets, not in this format that way.  So we look upon that today as those were the good old days, and I suspect when we're before you in the next two years we'll look upon our idea and our concept that we're trying to put forward here as those were the good old days.  So what we're trying to do is to capture our audience's attention in ways that are not tradition because they don't listen to radio and to music in the old traditional ways any more.  We really are trying to figure out if this is the right approach.  It may well not be.  It may well be that the right approach to serving communities like this is with extensive newscasts.  As I say, we operate some radio stations in similar sized markets, not in a rock format, in which we do a lot of this extensive news programming.  So we're trying to make sure that when they can hear the same music from a lot of different sources, what's going to keep them tuned to a local radio station in Medicine Hat and understand it, and we think it's content and entertaining that reflects the nature of what's happening in the community and in the province that they will not be able to get anywhere else.

1871             We actually have some stats from satellite radio listening in some of our research that, perhaps, later on we can bring up, but it's ‑‑ it's a bit frightening from a local radio broadcaster.  Anyway, let's start with what the Content Factory is made up of, if you don't mind.

1872             And, Sarah?

1873             MS MORTON:  Sure.

1874             We'll have six programming people at Rock 105, three of those will be on‑air, and three of them will be off‑air.  They'll be dedicated people to the Content Factory led by the program director.  These people will provide the news, they'll create the traditional newscasts that you'll hear in the morning show and in the afternoon show, but in addition to that what they'll do is take the news and information and create it into entertaining content for our listeners.

1875             You are hearing us talk a lot about content today, and, you know, there's a buzz phrase in the industry right now, content is king, and it really is the differentiating factor for radio right now.  You know, we ‑‑ we are fighting ‑‑ fighting it out with new technologies in a market like Medicine Hat where there is no rock station providing music to the rock audience, those people are sourcing their music in other ways:  They're going to the Internet, they're using their iPods, and those are sources for music that are not currently providing them with news and information.

1876             So as a rock station coming into a market like that, you have to find ways to ‑‑ to entertain and keep your audience with you.  They're used to sourcing their information outside of their music sources.

1877             And so what it does is create an opportunity for us to take news and information, repackage it, make ‑‑ create entertaining content, and then find ways to inform our listeners further with those new technologies.  So that bears the opportunity to take our listeners to the website, offer them further information on the website, and through the new technology.

1878             COMMISSIONER PENNEFATHER:  Could I just ask you to ‑‑ let's try to be a little precise on ‑‑

1879             MR. MILES:  Yes.

1880             MS MORTON:  Mmhmm.

1881             COMMISSIONER PENNEFATHER: ‑‑ some of the components of Content Factory.

1882             MS MORTON:  Sure.

1883             COMMISSIONER PENNEFATHER:  And I'll use your presentation.  You mentioned six staff.  Are these journalists?

1884             MS MORTON:  The ‑‑ those are six programming staff, so three will be on‑air, you know ‑‑ they'll be on‑air talent, and the three content ‑‑ dedicated Content Factory staff will have a news background that, you know, is certainly an important part of what they would bring to the table, but we're also looking for people who ‑‑ who can come at that news from a creative way, so people with writing and production backgrounds as well.

1885             COMMISSIONER PENNEFATHER:  So this is in your presentation today when you talked about additional producers ‑‑

1886             MS MORTON:  Mmhmm.

1887             COMMISSIONER PENNEFATHER: ‑‑ a team of people behind the host?  These are, essentially, writers, comedy writers, people who can do the interpretation ‑‑

1888             MS MORTON:  That's right.

1889             COMMISSIONER PENNEFATHER: ‑‑ and do the kind of parody work that you presented to us; is that correct?

1890             MS MORTON:  That's right, mmhmm.

1891             COMMISSIONER PENNEFATHER:  You also have another element called Listener Input.  You will incorporate listener calls into at least two breaks per hour.  Is this also part of the Content Factory created by the same writers?

1892             MS MORTON:  It is a source of content definitely, and those listener calls will be produced and expanded upon and be a source of ‑‑ a source for the Content Factory.  I think, additionally, though, it's a way of using listeners to provide news and information and ‑‑ and local context and perspective on new stories of the day.

1893             COMMISSIONER PENNEFATHER:  Is this the same thing as our impact ‑‑ your Impact 105 phone line messages produced and scheduled as on air‑programming?

1894             MS MORTON:  Mmhmm.

1895             COMMISSIONER PENNEFATHER:  Is it the same thing?

1896             MS MORTON:  Well, no, those are two different things.  The listener line is a place where listeners can call and leave messages and perspectives, that information would be taken by the Content Factory and ‑‑ and used as material there.  The calls that our on‑air announcers would be encouraged to take throughout their programs would be where the local context in perspective ‑‑

1897             COMMISSIONER PENNEFATHER:  How would you go about choosing which calls to use?

1898             MS MORTON:  That is up to the on‑air host at the time.  You know, when ‑‑ I'll maybe use an example from Edmonton because this is something that we do at SONiC in Edmonton.  We encourage all of our on‑air staff to take listener calls and to ask listeners for their input.  And what we've found is that when you give listeners the opportunity to give an opinion and ask them to call with traffic reports and comments on ‑‑ on public works and a whole variety of things, they respond to you, and they start to call on a regular basis and give you all kinds of information.  You know, I think listeners are used to being programmed to, rather than being asked to contribute to programming.  And when you ask them to contribute, they do.

1899             MR. MILES:  What we found as we moved more and more into this new media is that we have a brand and we have a personality, and, traditionally, they were on a radio, and you listened to them through various media, various outlets, and it was sort of a no connection.  Now, with the ability of use the web and loyalty program and bring them back in, we have them go out, and then they start to come back in.  And they start to form parts of the programming, and so the answer to your question about who would sort of decide what call to take, well, actually the announcer that's live on the air that starts to understand what the pattern is of what's going on, taking stuff out of the parody song that we had, taking stuff from the news.  It's incorporated into their topical talk patterns as they go throughout the day, and then they start to bring this back on.  In one of the instances in some of our stations, we actually have the listeners program a half hour of the music, and so how ‑‑ you get talking to them, and they come back in, and they select it.  We tell them it's going to be on at such and such a time on Thursday, they tell all their friends, they get involved on the thing.  It's getting them back involved into the process so that it's just not a matter of tuning into channel 2653, if you can ever find it on a satellite radio, and bringing down that particular format and just listening to it.  It's an involvement process.

1900             COMMISSIONER PENNEFATHER:  I think what will be helpful is when we see, also, the ‑‑ if you table with us the spoken word and the way it will be presented throughout the broadcast day.  While I don't want to sound like too much of a traditionalist, it is difficult to get a picture here of what the listeners will have in terms of spoken word.  If the spoken word you're describing could occur during a morning program, I've listened to them in Toronto on Rogers where there's the banter going on, and there's a fair degree of comedy interspersed with some music, it would then look like more of a typical station, if you will.  So if we could get a sense of that from what you're going to table, that would be very helpful.  And with this kind of phone‑in and also the use of opinions and listener input, I assume, obviously, that Rogers will maintain the codes that are ‑‑ the regulatory codes related to on‑air content?

1901             MR. MILES:  We will and quite prepared to commit to that.  In fact, you know, part of the Content Factory will be somebody who, in a more traditional sense would have been the news editor, just so that there is this sense of understanding, and so if something drastic and serious is happening, we're not going to be making light‑hearted comments on it, it will be more traditional.  And our scheduling does call for that on the radio station.

1902             COMMISSIONER PENNEFATHER:  Now, there's a couple of questions that come to mind when I listen to the approach you're taking.  One is that perhaps the approach ‑‑ and some of the two examples you gave us might tend to lead us to think that the approach you're talking about is more associated with other formats with youth, with younger listeners.  You're skewing to not only 25 to 54, but the 35 to 44 component of that, if we recall our previous discussion.  So why do you think that this approach will work with an audience of adult listeners?

1903             MR. MILES:  Well, I think that everybody actually wants to be a little younger than they currently are, and that's number one.  Number two, the phenomena that we're seeing in our research that we're ‑‑ I, for one, would do that.  The research that we're seeing as we roll throughout Alberta is that with the tremendous migration inward into the province, there's now a new influx of 25‑34s that hasn't been before, so you are correct in a more traditional form this would skew a little bit older, but we are actually finding out now that the market composition in large and non‑metro markets as well is more evenly split, 25‑34, 35‑44, 45‑54.  And the rock idiom transcends all of those things, and you've heard from Terry our composition, and so a great ‑‑ a broad‑based rock format has the ability to bring all these people together into one area, and the market can sustain this one because there currently is no rock radio station, and we'll have the ability to capture them in this area.  And we will be serious when it's time for serious news, but people want to be entertained.

1904             COMMISSIONER PENNEFATHER:  No, I do understand the approach.  It was a question of trying to get clarification as you know throughout today and yesterday on your core audience.  Just on that point as well, some of the programming approach you've described, if I could put it this way, could be listened to anywhere.  Now, how local will this Content Factory be for the listeners in Medicine Hat, and how do you accomplish that localism?

1905             MS MORTON:  Local will be a priority, definitely, for the Content Factory.  You know, listeners are interested first and foremost in what's going on in their world and how it affects them, and that means local news.  So local ‑‑ local news and information will comprise 75 percent of what the Content Factory does.  And, you know, also looking for ways to tie in national stories on a local level and being able to relate to the audience in that way.

1906             COMMISSIONER PENNEFATHER:  I believe you have mentioned the 75 percent local in previous correspondence.  Would you accept that as a condition of licence if we so decide, 75 percent local content?

1907             MS MORTON:  We would, yes.

1908             MR. MILES:  Yes.

1909             COMMISSIONER PENNEFATHER:  There's one other question I had just reading, again, your presentation this morning and the website, and clearly ‑‑ you've laid out quite clearly how you see the website incorporated into the Content Factory.  Would the local content ‑‑ we're discussing the on‑air content, correct?  And it will be 75 percent local?

1910             MR. MILES:  Correct.

1911             COMMISSIONER PENNEFATHER:  It's ‑‑ in reading this, one might be concerned that the online community would be the local component as opposed to the on‑air component, so we just wanted to be clear on that point.

1912             MR. MILES:  Perhaps the best way to explain that would be to give you some examples of things we're currently doing and how it ties in.  I'm going to start with Sarah, then I'll go to Kevin, and then to Terry.  Each one will have a specific example.  But, again, without sounding too repetitive on this one, what we're attempting to establish is the brand and the format going out to the listener and having them come back in so that they get totally committed to the radio station so that there is a framework around the 17 rock songs or the five modern songs or this kind of thing that they can get anywhere else.  And we're doing that in different ways, and Sarah, perhaps, one example, and then followed by Kevin and Terry.

1913             MS MORTON:  Sure.  I think it's important to understand that ‑‑ in particular, like, our rock audience, you really can't separate the radio station from the website any more.  The two reflect one another on an ongoing basis.  At SONiC in Edmonton, each of our announcers have a blog page that they update regularly with personal experiences and observations, and listeners can leave comments on those pages, and it becomes an ongoing commentary and discussion between the announcers and listeners, between listeners, as well, on those pages.  You know, we also include things that we're doing on the air on the website, so any ‑‑ any artist performances in our performance studios are placed on the web site, interviews with artists.  So you hear them on the air, but, additionally, you can go to the website to download them, here the pod cast of them.  We also conduct regular surveys with our listeners on the website, allowing listeners programming input with the radio station and feeling like they are a part of it.

1914             COMMISSIONER PENNEFATHER:  Okay, thank you.

1915             We'll move on to Canadian talent development, and I'm looking at your deficiency response dated May 19th where we asked for a cost breakdown associated with the funds earmarked for the Conservatory of Music and Dance.  And aside from asserting that the funds would go directly to musicians and artists attending the institution, you indicated that the conservatory will have control over the funds earmarked to them, but that Rogers will provide input into the overall development of these initiatives.  So I'd like to explore this a little more with you.  How will the funds be allocated to the conservatory?  That is, will this be in the form of multiple scholarships, for instance?  How will it work?

1916             MR. STRATI:  Well, in ‑‑ we've talked to ‑‑ for example, talked to Lyle Revic(ph) from the conservatory, and we've talked about different initiatives that are involved in different projects they're working on.  For example, they do have an academy program that is sort of the higher end to bring in people in the ‑‑ students who are in both music and dance categories, but who have sort of already developed expertise and very strong interest in this area.  So there are some scholarships that are currently available that are made locally, but some of them are part ‑‑ sort of part scholarships.  They're not full scholarships.  So certainly, scholarships or the increase of scholarships for students is one area.  There are also some that we had discussed about some symposiums and some special projects where you could look at either someone who is coming in locally as an artist, who would then have an opportunity, not only if they're at, for example, the Esplanade in Medicine Hat, there would be a performance.  There could also be an opportunity to tie in with the college and the conservatory where they could come and meet the students and talk about their experiences.  That's another area we talked about.  And another one is instruments.  I mean, they have an instrument rental program at the conservatory, and you could look to augment that and also to provide even for the purchasing of instruments.  So it's a bit of those three areas in terms scholarships, some special projects, and the instruments.  So those are the three elements we've talked about.

1917             COMMISSIONER PENNEFATHER:  So you have had discussions with the conservatory on the distribution and allocation of the funds?

1918             MR. STRATI:  Yes, absolutely.

1919             COMMISSIONER PENNEFATHER:  And have you any written agreement as to the allocation of the funds?

1920             MR. STRATI:  No written agreement, but certainly we could ‑‑ I'd be ‑‑ we could discuss it further and have sort of some further specificity in terms of the breakout, but it was ‑‑ you know, we had talked roughly in terms of one‑third for each of the different elements, you know, that would be a guide ‑‑ a guide in terms of how the allocations had be ‑‑ preferable if one year there was a special project that they could allocate those resources towards a special project, rather than others, but certainly we could provide that.

1921             COMMISSIONER PENNEFATHER:  So one‑third ‑‑ could you just give me that again?

1922             MR. STRATI:  Sure.  The one‑third disseminated to scholarships, one‑third to special projects, and one‑third to the instruments.

1923             COMMISSIONER PENNEFATHER:  To the instruments?

1924             MR. STRATI:  That's correct.

1925             COMMISSIONER PENNEFATHER:  And just in terms of your ‑‑ us being able to be sure that the funds actually do go where you had described them as going as therefore being appropriate contributions under CTD, could you advise us on what you have in place to ensure that the funds do go to this project?

1926             MR. STRATI:  Sure.  And that's part of the ‑‑ absolutely.  That's part of the mention of consultation.  It's not that we will be consulted on the actual decisions that are made by the conservatory.  I think they would be more sort of the decider, if you will, in terms of where they see the money or working with the scholarships.  Our role would be to ensure, like you've mentioned, that just to get a good sense that the money is allocated and spent in a way that is appropriate for regulatory purposes and for meeting our conditions.

1927             COMMISSIONER PENNEFATHER:  With respect to that, would you care to comment on the possibility of a condition of licence to the effect that you would have in place an agreement that there was some feedback to you on the allocation of the funds?

1928             MR. STRATI:  Absolutely.

1929             COMMISSIONER PENNEFATHER:  Okay.  We'll go on to the business plan and economic analysis component, and I have a question on your revenue projections.  We note that your revenue projections are lower than most of the other applicants for the Medicine Hat market.  Do you think you may have underestimated the potential radio advertising revenue available to a new station?

1930             MR. MILES:  Well, we are ‑‑ I'm going to actually have Leda discuss the formula that we used to come up with it, but just as a general observation, it's enticing to be from outside of Alberta and think that the streets are paved with oil as it were, and in some of the markets it actually is true.  The ‑‑ we operate radio station a similar format, more competition in a market just up the street, and we haven't particularly seen this massive influx of wealth descending into the streets of Lethbridge.  I think that we find that it gets a little less as it goes down.  There's no arguing about the retail sales ability.  Radio station sales are based on competitive natures of people, and, you know, this market is still 55, 60,000.  In order for radio sales to be really good, it needs four car dealers, not two.  That's sort of the general way that it goes.  So we're ‑‑ we think that it's going to be a little longer and a little tougher slug.  The competitor that's in there, Pattison, is a great radio broadcaster.  He bought great radio stations.  These stations, the old CHAT, Medicine Hat, boy, there's lots of heritage and lots of relationship with the advertisers and the operator television station.  So this is not going to be an immediate form of let's get the revenue on the radio station.  We think we've been conservative, and we based, frankly, on our experience 90 clicks away.

1931             Leda, perhaps you can just outline the formula that we used.

1932             MS MacLEOD:  Basically we looked at ‑‑ we estimated what the market would be based on our experience in Lethbridge and in other markets of similar size across the country, and we applied our formulas based on what we felt our revenue share ‑‑ achievable revenue share would be.  We always believe in trying to do our best, but we will not overpromise and underdeliver.  So we believe this is a true ‑‑ a true estimate of what we can do.

1933             COMMISSIONER PENNEFATHER:  Now, I have your ‑‑ this is the appendix that you've included with Appendix B in terms of the comparison with Lethbridge.  Looking at this market, what are your comments on the possibility of Medicine Hat markets supporting more than one new station at this time?

1934             MR. MILES:  I think that it could support a mainstream station and a what we'll call a niche format or a smaller market format ability.  I think that ‑‑ and, again, I come back to it.  The good one radio stations in this market place.  The marketplace while it's growing, it still listened to one of the northern Alberta marketplace.  The entire oil and gas industry is not quite the immense bubble that it was a little while ago.  And we planned this radio station and looked forward to two to five to seven years.  We've been down this road before.  We've seen the ups, and we've seen the downs.  We love to operate radio stations when things are going up, but I'll tell you, it's a little tougher when it goes down.

1935             So, Angela, you've been in the marketplace, and you've had a discussion with some of the merchants.  What's your general opinion of the retail sales?

1936             MS REIMER:  Well, having gone down to the market and spoke to some of the business community and the Chamber, there is, obviously, a lot of the business community spends some money in the local radio landscape there.  There is others, however, that obviously doesn't fulfill their needs, so they're going to other media avenues such as print or billboard or even television there.

1937             There is an opportunity ‑‑ obviously, there is a big hole as the other applicants and ourselves are going for a rock station with a male skew.  So there is money there to be had from existing clients, from new clients to radio for a rock‑based station, male‑skewed station.

1938             It's a strong economy, but it goes up and down with the oil and gas and particularly gas in this market.

1939             At this point, speaking to some of them ‑‑ well, I was there when the gas was down a bit, they were seeing immediate changes because of that, immediate impact in terms of expenditure in their market.

1940             COMMISSIONER PENNEFATHER:  Thank you.

1941             My last question ‑‑ we've asked this question to other applicants as well.  If we go back to the beginning and we agreed that you have a very broad‑based rock format, what would be the impact on your proposal if the Commission were to licence another player with one of the ones which has a similar format or the adult standard modern nostalgia format where the listeners are 45 plus?  But what would be the impact on your business plan if we were to licence one of the applicants with a similar formula, particularly since you're the broad base of rock that you are?

1942             MR. MILES:  Well, first of all, we wouldn't ‑‑ we would not change our format.  The other formats that had been suggested the closest that came was a more modern alternative rock‑based ‑‑ broad‑based format.  So we would keep it the same.  We've operated these formats against competition in the markets, and over the longer period of time, they stand the test of time.  So that's number one.  Number two, we have made our projections with one station being in the market and another specialty station.  The impact of somebody else with a variation of the rock theme would probably extend our financial records one more year out ‑‑ one, two, one‑and‑a‑half years out, so that breaking even would probably be in around year five or six as compared with, I think we suggested it we'd be slightly out of it by year three as we're going into year four, that's been our experience in the past.  We've seen this thing.  It takes about two years for a marketplace to finally get readjusted back into introduction of new formats, sometimes a little longer if many more formats are introduced into it because it's not just the impact on the retailers and the clients, it's also the impact on the other radio stations themselves and the competitor ‑‑ and the people who are in the market, and a couple of mainstream formats in the market this size will have a fairly dramatic impact, in our opinion, on the current incumbents.

1943             COMMISSIONER PENNEFATHER:  Thank you very much, Mr. Miles, and all your team for your kind responses to my questions.

1944             Those are my questions, Madam Chair.

1945             THE CHAIRPERSON:  Thank you.

1946             Vice‑Chair Arpin?

1947             VICE‑CHAIR ARPIN:  Thank you very much, Madam Chair.

1948             Let's keep talking about the business plan.  And I note that in your projections that your national revenues are fairly low, and I know that you've got a lot of experience with national sales in the Rogers group.  What are the assumptions for ‑‑ that you have taken into consideration to come up with fairly low national sales revenues, particularly in the earlier years of operation?

1949             MR. MILES:  There are three things that we took into consideration:  First, this is a unDPMed market, so, therefore, you can't really say that if I have a 22 share, I'm going to get a 22 share of the business.  So that's number one.  Secondly, this station, I don't care how good it is, and we have a great team, it's not going to garner that right at the very beginning.  Station shares grow slowly, and national sales are accumed exactly to the amount of share of audience that you have.  So it's going to slowly progress over the period of time.

1950             The other phenomena that, perhaps, is more disheartening, I believe, for non‑metro market radio stations is the ‑‑ there's a swing out of conventional television looking for new homes for advertising.  Radio is picking up parts of that.  But as the markets continue to grow in the metro markets, there is a reduction in national business that goes into non‑metro markets.  It is a fact of life.  It's compensated a little bit by regional businesses.  So will we have a chance to bring some of our regional business in Alberta with all of our radio stations to this market, yes, we will, and that will make up for it.  But in terms of the big national accounts, taking a look at markets of this size, unfortunately, they're tending to spend their money on the larger markets and buying spread and buying bigger markets where there's more bang for the dollar, and so that's why we forecasted the national not to be as robust as it would look until we're able to get some traction and get some ability into these kind of markets from our formats.

1951             VICE‑CHAIR ARPIN:  And by a larger market, are you talking Vancouver, Toronto, Montreal, Calgary, or is it broader than that?

1952             MR. MILES:  The reality is that the old 80/20 rule really does exist and that 80 percent of the national business is done into the top ten markets across Canada, and it's as a factor of a number of licences in the markets, it's a factor of cost per point in those particular markets.  So it is ‑‑ it is what's happening.

1953             VICE‑CHAIR ARPIN:  I want to come back to Mrs. Morton, a discussion ‑‑ the discussions she had with Commissioner Pennefather, particularly regarding the number of on‑air staff.  You mentioned that you will have a director of programming.  Will he be ‑‑ will he also be part of the six people that you were talking that were ‑‑ will be handling programming, or is it a seventh person?

1954             MS MORTON:  No, he would ‑‑ he is part of the six that we talked about.

1955             VICE‑CHAIR ARPIN:  The six?

1956             MS MORTON:  Yeah, the program director will also host one of the ‑‑

1957             VICE‑CHAIR ARPIN:  One of the programs?

1958             MS MORTON:  One of the programs, yes.

1959             VICE‑CHAIR ARPIN:  Now, you said ‑‑ well, obviously someone at some point in time said that they will be more formal news because you cannot always have lightened news, you need to have more formal news.  Will you have a news team on top of the six people we've talked about?

1960             MR. MILES:  Not on top of, but one of the team will be the news director responsible for the news content on the radio station.

1961             VICE‑CHAIR ARPIN:  So what we're talking here, it's six people doing all the on‑air, the news, and the Content Factory?

1962             MR. MILES:  That is correct.  The answer to that is yes, and that leads to the next question is how can that happen, and how it can happen is that while technology is driving us crazy from time to time, it also is assisting in enabling us to do a lot of jobs faster and smarter and better than we've ever done before.  You know, all of our newsrooms across Canada have hooked up with the burley system, and this is the ability to gather in information and have it down in front of you, and with a couple of quick edits and things like that, you've got bits of a piece that you can put together.  And the same thing is happening with the rest of the technology that we supply all of our radio stations with.  So we're ‑‑ I think that, by and large, they're a little shorter on the bodies than they used to be 20 years ago, but there's more equipment and more facilities for them, and there's more programming IQ.  I know we've stayed away from the synergy question, and we don't have any problems with the synergy question.  That radio station in Medicine Hat will be a radio station in Medicine Hat, for Medicine Hat, run by Medicine Hat people.  But the synergies these days come from the ability to take ideas and translate those ideas and put them in and have the local people adapt to them.  The synergies these days are the ability for interconnectivity and instant interconnectivity.  So before the morning show goes on the air, they already know what the stories are that are happening across Canada because it's on their own screen sitting in front of them.  These content people can, at any time of the day, see what's developing and immediately switch and get an impact.  So it sounds like it's cumbersome, but it really is very exciting, and it's a very exciting part of it.  What we're trying to find out our way of doing it is then taking that and making sure it's also out on the web so that if you missed it there, you can pick up there, and you'll come back, and, oh, my God, I like that bit, so I've got to remember.  I'm back in the market tomorrow, I'll tune in the people and see what the morning show has got, what the Content Factory has done.  We think it's very exciting.

1963             VICE‑CHAIR ARPIN:  You have a rock station in Lethbridge.  Do you have a Content Factory also in Lethbridge?

1964             MR. MILES:  Terry, I'll let you answer that.

1965             We actually do have a bit of a Content Factory.  We haven't formalized it to this nature, but give us a couple of examples, Terry.

1966             MR. VOTH:  Sure, no problem.  The one that comes to mind ‑‑ and, actually, to respond to one of the Commissioner's comments about the age of appeal and so on and so forth, a recent example that we have ‑‑ the Content Factory, by the way, in Lethbridge, while not formal, is, in effect, myself as a program director, not just the general manager of Rock 106, working with the morning team, with our morning host, our morning co‑host, who is also a news person.

1967             VICE‑CHAIR ARPIN:  So they're missing you this morning?

1968             MR. VOTH:  I haven't talked to them yet.  And, actually, our evening fellow who also does production, and he has great ideas, and he brings a different take to it.  So I like to kind of bring these minds together informally, and we'll look at things.  Can we react as fast as the Content Factory would?  Not at this point because we don't have that focus that I would say ‑‑ I agree with Gary, it's very exciting.  For example, you know, you take ‑‑ not that long ago, there was this issue of automated garbage containers, which seems pretty mundane stuff, but the fact is, your garbage service is changing, and you don't know when it's changing, when they're going to pick it up.  Before it's a staggered route, how much is this going to cost you and stuff, well, so our morning team sees this, and I see this, and we go, okay, it's ‑‑ your garbage container has got a lid and typical stuff, it's got handles on it, what's the big deal about that?  Well, when you start thinking about it and getting behind the story, and this is what your Content Factory people would be focused on doing, is you find a few interesting things.  One is the city has spent a whole bunch of money sending out these glossy, expensive pamphlets to say your new garbage containers are coming.  It's kind of like the new phone books are coming, the new phone books are coming.  Secondly, the most interesting thing I thought was they're conducting seminars on how to use your garbage can, so we're kind of looking at this and going, you can't not get into that, and the difference between, you know, the typical news approach ‑‑ I think the typical news approach would say your garbage containers are coming out Monday, and here's where they're coming, and here's the zone, and here's how much they're going to cost you.  That's great.  But your Content Factory people are going to look, as I like to say it, to the left side of the road where everybody else is looking at the right, and they're looking at the left side and going, hmm, there's some interesting possibilities here.  So they're talking about something that your constituents, your listeners, adults included, are all interested in, but they're taking that side to get just a little more of their attention.  And, certainly, what happened when we took this story on and started talking about it is, of course, people were calling.  And they started talking about how the city is spending money, and why do we need these new cans, and why am I not getting them, and why is my neighbour getting one?  And it was ‑‑ it was great.  It turned into an entertaining news story.

1969             VICE‑CHAIR ARPIN:  Thank you.

1970             Will you have synergies between Lethbridge and Medicine Hat if you were to be granted, and what kind of synergies in terms of both programming and business?

1971             MR. MILES:  The synergies we bring are really best practices.  The synergies we bring are different ways and innovative ways that have worked in other markets, and we give them to the people in that local market.  So it's more a behind the scenes synergy as compared with we do this program, we're going to put it over there and do that.  We don't do that.  It is more the programming and sales and marketing IQ synergies that we have throughout the company that we continue to exploit.

1972             VICE‑CHAIR ARPIN:  The two clips we heard this morning, obviously, were not produced in Medicine Hat, and they were of high quality.  Were they produced in Lethbridge?

1973             MR. MILES:  No, they were produced in Edmonton.

1974             VICE‑CHAIR ARPIN:  They were produced in Edmonton?  And could we expect the same level of quality in Medicine Hat?

1975             MR. MILES:  Yes.

1976             VICE‑CHAIR ARPIN:  It's a much smaller market, much smaller base of talent, and ‑‑ but you're ‑‑ you're feeling that you have the ability to find the people and obviously the technology so that you can ‑‑ you're going to ‑‑ I understand SONiC hasn't been on air for about a year, a year and a half, but technology goes so fast that you may contemplate sending the equipment from Edmonton to Medicine Hat and buy new equipment for Edmonton?

1977             MR. MILES:  I'm going to mark that down, and I think the people in Edmonton will be marking it down.  What we do ‑‑ no, and that's what we're very proud of is that we have operations in different sized markets, and we're always on the lookout for talent, and we create talent, and we bring them in.  And it's this process of moving talent through the operations that is the thing that I'm most proud of, the ability to bring in new people.  We started a morning show out in Canmore, they're now up in North Bay.  When the current morning show in North Bay left, the world had come to an end, no one was ever going to replace these people.  The sales people were running around pulling out their hair, everyone was aghast.

1978             VICE‑CHAIR ARPIN:  But not working for you people, eh?

1979             MR. MILES:  That's right.  You know, this new morning show has taken over.  So to answer your question about the talent, what we do is we take people who are apprenticing in our bigger stations and put them into this.  So the idea of the context and the enthusiasm is the same, and we're able to produce the same kind of on‑air experience.

1980             VICE‑CHAIR ARPIN:  Well, Madam Chair, those were my questions.

1981             THE CHAIRPERSON:  Commissioner Cugini?

1982             COMMISSIONER CUGINI:  Thank you, Madam Chair.

1983             Mr. Miles, I was struck this morning by something you said in your oral presentation, and it's, "Whether it's the morning show or news segments or even the ads we sell, we want our listeners to know, at all times, that they are tuned to a rock station."  And your audio clips obviously gave us a very good sense of what your radio station will sound like, and I also assume it means Madonna will not be on your play list any time soon, but that's not my question.  So I was struck about, "even the ads we sell."  I wonder if you could explain to us a little bit what you mean by that.  Is it ‑‑ you know, will you be redoing the creative for some of the advertisers, or will you be selecting the advertisers themselves that you will sell time to on this radio station, just what do you mean by, "even the ads we sell."

1984             MR. MILES:  One of the programs that we've engaged in in the last four years has been to cement a relationship with the advertisers.  My view of the future is there will be fewer advertisers, they will have bigger budgets, and the relationship issue will be the same, but it won't be a relationship as we had in the old days, which was the hale fellow, well meant, a cigar, let's go to the game.  Well, maybe part of that's ‑‑ it's a relationship that's a marketing relationship.  And we take clients away on four‑day seminars in which we bring in people who are versed in marketing, versed in succession duties.  They're typically owner/managers, versed in HR, versed in technical things.  They're the people who get up at six in the morning to figure out where the dry route's going to be, going and opening up the store, go deliver the stuff, sell it.  They do this kind of stuff, and we've been modestly successful, and I say that hesitantly because I think we've been very successful in growing these people's businesses.  So we tend to grow them from that.  Part of the things that we talk about at that is that if you're running the Ford dealership, you should be on an adult contemporary station because there are cars that are suitable for that particular audience, and you should be there, and it should be a different kind of approach.  If you're going to be selling trucks and SV units on a rock station, it's a different kind of approach.  We have our creative people sit in on these sessions, and they start to develop with these owner/managers, which is typically what the business community in Medicine Hat is going to be made up with, of how to actually make sure that that message that's attracted to that radio station does the most effective views.  So that's what it's going to be like.

1985             COMMISSIONER CUGINI:  Thank you.  Thank you very much for that.

1986             Madam Chair, that's all.

1987             THE CHAIRPERSON:  Round two, Commissioner Pennefather.

1988             COMMISSIONER PENNEFATHER:  My apologies, Madam Chair, I am back.

1989             I just wanted to follow‑up very briefly on your conversation with Vice‑Chair Arpin.  We did discuss that 75 percent of the spoken word would be local, and we agreed that you would agree to a condition of licence.  I just wanted to be assured that that 75 percent would also apply to the news component, be it straight on news or be it Content Factory‑created news, that it would be 75 percent local?

1990             MR. MILES:  Yes.

1991             COMMISSIONER PENNEFATHER:  Thank you.

1992             THE CHAIRPERSON:  I'm sorry, we can't let you go yet.  I needed ‑‑ I need some sort of help with a few things.  You referred to out of the 19 hours that two hours was going to be Content Factory.  And I know that is square peg/round hole or vice versa, but the Content Factory also does the parody songs.  Does that sort of include the parody songs?

1993             MR. McKANNA:  Yes it does, two hours and 30 minutes, yes.

1994             THE CHAIRPERSON:  And, Mr. Strati, you were talking about one‑third of the money going to Medicine Hat College for the instrument rental program?

1995             MR. STRATI:  Well, currently there's a rental program.  It could also be a rental/purchase program is what we talked about with Mr. Revic.

1996             THE CHAIRPERSON:  Okay.  So you would, what, subsidize the rent?

1997             MR. STRATI:  Yes, that's correct.  Subsidize the rental or the purchase of instruments for students at the conservatory involved in the various programs.

1998             THE CHAIRPERSON:  Okay.  And, Mr. Miles, you talked about providing us with a chart similar to the ones we have been receiving on spoken word.  When would you be providing that?

1999             MR. MILES:  As soon as we're finished this part.  We have it all prepared.  Right after we're finish our session.  We'll provide it for you today.

2000             THE CHAIRPERSON:  Oh, okay, good enough, mmhmm.  And voice tracking, I'm ‑‑ my colleague, Commissioner Pennefather, had a COL from you that you'd be live‑to‑air 80 percent, and that is 80 percent of the broadcast week?

2001             MR. MILES:  Correct.  I think that's 101 hours or something along that line.

2002             THE CHAIRPERSON:  Yes.  And do you still intend ‑‑ as you said in your supplementary ‑‑ or in your answer to deficiencies of August 16th, do you still intend to ‑‑ at question 2 on page 2 there's a reference here to voice tracking perhaps weekday midday periods.

2003             MR. MILES:  We had put that in when we had a schedule that we had looked at, and then when we got around into actually doing it, we just shifted that midday down into the evening part.  There is no more, but to answer the question specifically, it's live to air from six in the morning to eight at night, and then operators on from eight until midnight.

2004             THE CHAIRPERSON:  Yes.  And guess I'm ‑‑ there's two issues that come to mind.  On page 10 of your submission today, I had little bells going off in my head, and I know I'm a regulator, and I'm not a creative person as you are, but you talk about the audience providing the opportunity to leave messages and commentary, and then they can be produced and scheduled as on‑air programming content.  And you have the example of a strike at Goodyear, the effect of the Canadian foreign policy on soldiers, et cetera.  What about same‑sex marriage and those tough ones, and how are we going to ensure ‑‑ like you say, you have one ‑‑ I guess as the news director person or somebody because there's a balance issue surely and code adherence issue clearly.

2005             MR. MILES:  It is the biggest concern of us in all of our operations.  Part of the Content Factory will be the news director, and this person will be ‑‑ again, we'll probably take them from Kevin, 660 News, out of that newsroom so that there is a true news sense.  You can't not understand about the news.  The other one, remember, would be the program director of the radio station, charged with the responsibility and the fiduciary responsibility of the programming content, and we'll well‑versed in that.  We spend a great deal of time in our training programs to ensure that everybody understands about this.  So while I can only give you my assurance, I will tell you that there won't be any difference between this operation and the way our other operations are ran for responsibility and adherence to the broadcasting guidelines.

2006             THE CHAIRPERSON:  And my final thoughts are ‑‑ and you said, you know, it would impact your ‑‑ it would delay your cash ‑‑ your cash‑even date by a year or two if somebody else in a mainstream format were put in.  I guess I concern myself about ‑‑ this Content Factory concept is a bit of a flyer for you.  You know, a bit of a new thing for you, and I can see how exciting and interesting it is, but what happens if it doesn't work after two years and we have somebody in the market who may have a COL for a hundred‑percent, you know, voice to ‑‑ live to air, and because of your format and your concept, you're at 80 percent, and so you would change to a format that's ‑‑ that is more mainstream in terms of, I'm going to say less ‑‑ you're less ‑‑ I mean, you have a creative idea here, but you go back to the more traditional, and you'd have an advantage, wouldn't you?

2007             MR. MILES:  Yes, we would.  That is true.  That's not where we see the future of radio broadcasting.  Again, maybe five years ago we ‑‑ this would have been a whole different ‑‑ well, it would have been a different kind of application.  What we tend to do at Rogers in programming and in sales is we tend to take markets, and we sort of condense our ideas of bits and pieces.  So the Content Factory is formalized into Medicine Hat.  We think this is a concept that's got legs.  We have lots of other sized markets of which this is an incubation period for this thing.  We'll take it, and we'll run with it.  I very much doubt that we'll ever go backwards.  We'll try and move forward, and we'll try to expand it, and we'll roll it out if it works.  If it does not work, there will be something else that will go in that won't be back into the traditional things.  We believe we can't go back there, it's gone.  That kind of broadcasting is gone.  We've got to figure out what this new one is.  We've got to be part of where this ‑‑ where it's going to.  And so I don't know whether that answers your question or not, but that's just the vision that we have at Rogers of looking forward.  The new platforms, how can we get that brand and content out there, and how can we get that listener back engaged in the radio station because if we don't, they're gone.  They're gone.

2008             We ‑‑ you know, we've got some research, and pardon me for taking time, but I think it's important for the Commission to hear this.  We've gone into markets now in the last four months with research, as we do continually.  For the first time, we're adding the question on, do you listen to satellite radio, and if so, how often?  So here are the results.  Three months ago we were in Ottawa.  Four percent of the people in Ottawa listen to satellite radio once a week or more often.  So that's cume.  Of that 50 percent, two percent are fans.  In Calgary, a month and a half ago, six percent of the Calgary market listens to satellite radio, three percent or half of them are fans.  In Grande Prairie, eight percent listen to satellite radio, four percent are fans, and more particularly, up to 15 percent of certain narrow demographics were listening to satellite radio.  It's here, and we've got to figure out how it is that we can operate our radio stations against just one competitor, but it's the kind of research that we're now doing, and as a result of that research, the iPod listening and all this other stuff, that's why we're trying to do new programming concepts.

2009             THE CHAIRPERSON:  Thank you.

2010             For the record, my nephew listens to satellite, but he listens to BBC News.  I don't know what 21 year olds are about anyway.

2011             Thank you.

2012             Legal counsel?

2013             MR. MILES:  You have brought him up well.

2014             MS BENNETT:  Thanks.  I just have one small point of clarification.  With respect to the condition of licence that 75 percent of the news content would be local, would that be on a daily or a weekly basis?

2015             MR. MILES:  Weekly.

2016             MS BENNETT:  Thanks.

2017             THE CHAIRPERSON:  Last night I had this tape going through my head, two hours ‑‑ two minutes, two minutes.

2018             Mr. Miles, you have two minutes.  Thank you.

2019             MR. MILES:  Is this where I get a chance to say that it's a pleasure to be back in Regina where it all started for me?  I have to bring that in somewhere.

2020             We have proposed the best rock format for this market given its size and its current competitive nature.  This is a broad‑based format equal across the demos, and it's more male skewed than female.

2021             We know how to do this format in this size market; our experience is in Ontario north and Lethbridge.  In Lethbridge ‑‑ and we have been in this market since 1989 in Alberta.  We understand the province.

2022             We have explored and proposed possible solutions to the new competitive landscape including brand and content extension to the web.  The Content Factory is designed to do this.

2023             The incumbent broadcaster, Pattison, is a good, strong broadcaster with two mainstream formats and a television station.  He's got heritage and market momentum.

2024             This is going to be a tougher grind than everybody expects, and we're here for the long haul.

2025             Thank you.

2026             THE CHAIRPERSON:  Thank you.

2027             Madam Secretary...?  Oh, I'm being asked to give everybody a five‑minute break.

‑‑‑ Upon recessing at 1002 / Suspension à 1002

‑‑‑ Upon resuming at 1011 / Reprise à 1011

2028             THE CHAIRPERSON:  Madam Secretary...?

2029             THE SECRETARY:  Thank you, Madam Chair.

2030             We will now proceed with the last application for the Medicine Hat market, which is item 9 on the agenda.  It's an application by Mr. Pat Lough, on behalf of a corporation to be incorporated, for a licence to operate an English‑language FM commercial radio programming undertaking in Medicine Hat.  The new station would operate on frequency 102.1 megahertz (channel 271C) with an effective radiated power of 100,000 watts (non‑directional antenna/antenna height of 214.5 metres).  Appearing for the applicant is Mr. Pat Lough who will introduce his colleagues, and you will then have 20 minutes for your presentation.  Mr. Lough?

PRESENTATION / PRÉSENTATION

2031             MR. LOUGH:  Good morning, Madam Chair, Commissioners, CRTC staff.  My name is Pat Lough, president of Rock 102, and today with me is my wife, my business partner, Dulaine Lough.

2032             It is with great enthusiasm and excitement, a lot of nervousness, that we are appearing before you today to present our application for Rock 102 to serve Medicine Hat.  We want to express our appreciation to the Commission for allowing us the opportunity to take part in this public process.

2033             Our application represents my lifelong dream to enter into the radio industry.  We believe that Rock 102 addresses all of the requirements set out by the Commission for the licensing of a new radio station, and we believe that Rock 102 has exceeded the CAB's Canadian talent development initiatives for a small market such as Medicine Hat.

2034             This being our first time before you, the Commission, we would like to take a moment to introduce ourselves as the applicant.  I was raised in Medicine Hat during the '70s and '80s.  During this time period, members of my family were actively involved in music groups throughout the city, such as the Crescent Heights High School Concert Band, Crescent Heights High School Jazz Band, Medicine Hat Police Youth Band, Medicine Hat Musical Arts Theater, Medicine Hat City Concert Band, various garage bands, and church‑related music groups.

2035             It was in Medicine Hat during the '80s that I became interested in sound and emerging technologies and, subsequently, radio broadcasting.  After 20 years in Medicine Hat, I moved to Calgary to pursue studies in electronics at the Southern Alberta Institute of Technology.  I graduated from SAIT with a diploma in computer engineering technology, and following that, I worked 14 years in various technical roles with Nortel Networks.

2036             For the last three‑and‑a‑half years, Dulaine and I have owned and operated a small specialty store in Calgary.  Our vision and hard work has turned a struggling retail shop in the inner city into a stable and profitable business employing 12 people.  Dulaine has operated the day‑to‑day operations of our store since we bought it, and I focus on the business operations.  Dulaine has successfully taken the store from barely making ends meet to making a consistent year‑over‑year profit of 30 percent.

2037             I opted to leave Nortel in 2005 to finally pursue my dreams in radio broadcasting, as radio has been a vision of mine for over 15 years.  And I believe that with the present circumstances right now in Medicine Hat, I am hoping to make my dream become a reality.

2038             The licensing of Rock 102 will allow me and my young family an opportunity to return back to Medicine Hat and invest into this community that once invested into me.

2039             MRS. LOUGH:  Madam Chair, Commissioners, CRTC Staff, Rock 102 is the only applicant that will be 100 percent locally owned and operated.  Our application represents a new entrant into the Canadian broadcast System, and it effectively represents the small business owner in Medicine Hat.  Letters received in support of our application and results from our marketing survey indicated that residents would much prefer their new radio station to be local and to have ownership in the community.

2040             Today, 100 percent of Medicine Hat's mainstream media is owned by the Vancouver‑based Pattison Broadcasting.  Being locally owned and being part of the community, we will have much greater visibility in the community that we are licensed to serve.  Greater visibility and involvement will allow us to be better equipped to respond to the needs of Medicine Hat.

2041             When we were doing our research, we were shocked to find out how much foreign ownership there is in the Alberta radio market.  In 2004, companies based outside of Alberta owned 80 percent of our province's radio stations.  We believe that this imbalance has been created largely by recent transactions where very profitable out‑of‑province broadcasters have consumed smaller independent stations for market dominance.

2042             Alberta's radio stations are highly consolidated with 64 commercial stations, as reported in 2004, controlled by 15 ownership groups.  Of the 15 ownership groups, only six hold a single broadcasting licence, which means that the other nine owners hold on average 6.4 radio licences each.

2043             The licensing of Rock 102 will give some ownership of Alberta's public airwaves back to Albertans.  There is no doubt that Rock 102 will offer diversity, not only in Medicine Hat, but also in a highly consolidated Alberta radio market and in the Canadian Broadcasting System.

2044             Medicine Hat, now a market of 62,000 people, experienced an incredible growth rate of 9.1 percent from 1996 to 2001 with a 25 to 64 age group growing 27 percent.  It is the males within this age range that we will be focusing on as our target demographic.

2045             With the cost of living in larger centres like Calgary and Edmonton skyrocketing beyond belief, smaller communities like Medicine Hat, have the most to gain.  Medicine Hat is experiencing economic growth at a healthy, sustainable rate.  Major retailers with significant budgets are also seeing the economic advantage of being located in Medicine Hat.  Major employers such as Encana, Petro Canada, Canadian Fertilizers, Home Depot, and Wal‑Mart have all realized the benefit of doing business in Medicine Hat.

2046             The average 2004 PBIT for Alberta's FM stations is 35.2 percent.  We believe that Medicine Hat is extremely healthy and that the Medicine Hat market raises the Alberta PBIT significantly upwards.  The interests of all the major broadcasters in this room is a good indication that everyone believes that Medicine Hat is a profitable market.

2047             Our application is about diversity.  The 60‑percent classic rock format will be of particular interest to 25 to 54‑year‑old males and the 30‑percent classic hits format will likely attract more female listeners than it would if we played classic rock alone.  Our proposed Alberta Rocks, Totally Canadian, and an alternative rock program will make up the balance of our genre of music programming.

2048             Because we believe in Canadian artists, we have committed to a full 40 percent of Canadian content.

2049             As a new entrant to radio broadcasting, during our first year we have proposed a live breakfast show running from 6 a.m. to 9 p.m., a live afternoon drive from 3 p.m. to 6 p.m. and live evening program from 7 to 10 p.m., totalling nine hours a day of live‑to‑air programming.

2050             Totally Canadian will be a daily one‑hour program focusing entirely on Canadian artists and will be placed in the prime listening hour of 6 p.m.

2051             Canada Rocks and Alberta Rocks will have us deviate slightly from our classic rock and classic hits formats, as we will be highlighting all Canadian and Alberta talent.

2052             Our potential audience clearly indicated that they wanted variety, so we feel that exposure to Canadian and Alberta talent in different genres of music will offer diversity and will be appreciated by our audiences.

2053             Diversity of ownership and a diversity of voices are very important in the Canadian Broadcast System and are vital in smaller communities.  The Rock 102 application was submitted with the intention of giving new radio personalities a start in the radio industry.  We have planned to make use of new technologies, such as voice tracking, to help new broadcast personalities become comfortable with broadcasting.  Such technologies will help new broadcasters perfect their image before going live on the air.  With time and experience, new personalities will move to a live role.  Voice tracking will also allow us the greatest diversity with our on‑air personnel, as we will be able to attract personalities who may want to be on air, but due to circumstances, may not be able to.

2054             We also want to emphasize that it is important to us, as the owners, that Rock 102 will not be a station that is purposely offensive.

2055             As stated in our deficiency letter dated June 30th, 2006, we will commit to 15 percent spoken‑word programming, totalling 19 hours per week.  Our spoken word component will include the normal DJ commentaries and reflection, along with Rock 102 presents a music calendar highlighting upcoming concerts in the area, a community calendar highlighting local community and non‑profit events.  In the winter, a ski report, crime stoppers reports, the stock market and business reports, agriculture reports, public service announcements, and various charity initiatives.

2056             We have committed to a total of five hours and 15 minutes of news per week as a minimum of news.  The breakdown is as follows:  For 55 minutes of news a day, Monday to Friday, 20 minutes of news Saturday, and 20 minutes of news Sunday.  Now, I do believe in what you've got, it says 40, and that was a mistake, and we ask you to change that and apologize for the inconvenience.  It will be 20 minutes of news on Saturdays and Sundays.

2057             The commitments we have made are minimums and will be increased as the need arises.

2058             MR. LOUGH:  Our CTD initiatives are substantial for a new entrant into the broadcasting system.  We have proposed direct expenditures of 37,800 ‑‑ sorry.  Yeah, we have proposed direct expenditures of 37,800 and indirect expenditures of 319,550 over the seven‑year licence.  Although our CTD initiatives do not have the same dollar value as other applicants, who hold multiple licences, we are confident that our initiatives not only exceed the requirements identified by the CAB, but they are also focused on the community that we'll be serving.

2059             We believe that there are many ways that a station can support Canadian artists, most notably through airplay, SOCAN fees, and CTD commitments.

2060             Based on the CAB suggestion for CTD in a small market like Medicine Hat, we pledged a commitment of $400 to FACTOR.  In addition to the CAB suggestion, we opted to invest an additional $5,000 minimum into the direct and indirect ‑‑ into the direct and an additional 45,650 per year in the indirect CTD initiatives.

2061             Our pledge to invest 1,500 for an Artists in Residency Program is a grassroots initiative.  The Artists in Residency Program would bring well‑known and accomplished musicians, conductors, or composers to Medicine Hat to perform workshops with local schools.  Under the direction of Mr. Bill Wahl, the Artists in Residency Program will bring artists, conductors or composers who have an interest in working with students.

2062             The local band teachers will identify students that may benefit from direct interaction with the artist, conductor, or composer.  Students will be given the sheet music in advance so that they can effectively prepare for the workshop.  When the artist, conductor, or composer puts on their workshop, they will have the opportunity to share what inspired them when they wrote their composition.  They can share some of the life challenges as a musician, and they can share how they overcame some of the life challenges and share industry contacts and trades.

2063             The Artists in Residency Program doesn't have to be the same every year.  One year it could have a senior high band ‑‑ senior high school band focus, the next year it could have an orchestra focus, and the next year, it could even have an elementary school focus.

2064             Terri Clark, a well known country musician, was a personality artist that Mr. Wahl was able to bring into his high school band to discuss some of her challenges before making it big in country music.  Another Albertan who has had a very long and successful music career and who is willing to share his life experiences is Tommy Banks.  In the case of a conductor or a composer coming to perform at a workshop, the Artists in Residency Program will give them an opportunity to also put on a public performance involving the students from their workshop.  If marketed, the Artists in Residency Program could attract corporate sponsors and funding from the Alberta Foundation for the Arts.

2065             Whatever the shape the Artists in Residency Program ultimately takes on, we will ensure that the contribution is in compliance with Appendix 1 of CRTC 1990‑111.  If we don't receive positive feedback in regards to the Artists in Residency Program, we're willing to redirect the funds to ARIA to be spent in other areas ‑‑ to being spent in other initiatives in the Medicine Hat area.

2066             Originally intended for the Classic Rock Music Event, we pledged $2,000 towards a public concert featuring a local group as a warm‑up band.

2067             When we were challenged by CIRPA to consider giving monies to the area, we found that area would keep the money in the Medicine Hat area and would gladly help us achieve this objective to promote local Alberta talent.  We were responsive to CIRPA's request and submitted a letter from ARIA on our response to ‑‑ on our response to their letter of intervention.

2068             Support for a newly founded Medicine Hat Folk Music Festival, we have committed $1,500 to help develop this initiative.  The Medicine Hat Folk Music Society was started in ‑‑ I better stick to my script.  Monies pledged to the Medicine Hat Folk Music Society will be in compliance also, with the Appendix 1 of CRTC 1990‑111, with a leaning towards the songwriting competition, but our early discussions were involving some administration costs.

2069             Approval of Rock 102 will offer diversity in the Medicine Hat market and will offer diversity to the highly consolidated profitable Alberta radio market, which has a lot of foreign ownership.

2070             In efforts to grow the broadcasting community, Rock 102 has proposed to donate equipment that we have acquired over the years to help the Medicine Hat College develop a student‑run station.  We talked about the student‑run initiative in our Brief, and this initiative will not only give the college students a voice in the community, but it will give college students valuable on‑air experience to potential DJs that could benefit the local stations.

2071             Should the Commission approve our licence, we will be a fresh, new broadcaster in Alberta's strong and vibrant radio market.  As a first‑time broadcaster, we've made very significant commitments and have exceeded the CRTC's requirement in developing Canadian talent in Medicine Hat.

2072             Additionally, we have shown strong support for artists, both provincially and federally, through station‑oriented music programs, which have been strategically placed in prime listening periods.

2073             Rock 102 will offer a new listening voice or a new listening choice, a new advertising choice, a new and accessible ownership group, a new and local approach to CTD initiatives, a strong community involvement.

2074             We have had a significant amount of support from potential listeners and advertisers in Medicine Hat.  Many of our 128 letters express support for a locally owned station.

2075             We want to thank you for your time hearing our application and are glad to answer any questions you may have.

2076             THE CHAIRPERSON:  Thank you.

2077             Commissioner Williams?

2078             COMMISSIONER WILLIAMS:  Good morning, Mr. And Mrs. Lough, and welcome to this hearing.

2079             Clearly a very entrepreneurial couple.  What type of store do you operate in Calgary?

2080             MRS. LOUGH:  It's a paint‑your‑own pottery store as well as doing some glass using.  So it's crafty and very ‑‑

2081             COMMISSIONER WILLIAMS:  Creative.

2082             MRS. LOUGH: ‑‑ artistic and creative, yes.

2083             COMMISSIONER WILLIAMS:  Yes.  If you were successful in your application for a licence, would you sell ‑‑ sell the store and relocate to Medicine Hat, or ‑‑

2084             MRS. LOUGH:  Yes, we would.  I have been asked that question by people that know me and know that I love my job, but what I love about it is the creativity and the people aspect of the job, and I can get that in Medicine Hat, so I'd be glad to relocate there.

2085             COMMISSIONER WILLIAMS:  Do either of you have any previous broadcasting experience or were associated with any broadcasting entity?

2086             MR. LOUGH:  Neither of us do have a broadcasting background.  I believe the success of our station will be in our people.  I believe there's a tremendous amount of talent in Medicine Hat.  People that can't find a place on the two stations owned by Pattison, I believe if there's competition, then there will be more avenues for people to ‑‑ you know, to be on the air, to have an involvement in broadcasting.

2087             COMMISSIONER WILLIAMS:  Could you help me with a bit of ‑‑ help me gain a better understanding of your business experience in, say, other businesses or other enterprises that you've worked on, either from a start‑up perspective or even a mature business?

2088             MR. LOUGH:  So during my high school years and during my college time in ‑‑ well, high school years and my year at the Medicine Hat College, I was very entrepreneurial.  I learned sound reinforcement at a young age, that made me attractive to some local bands, that made me attractive to church groups.  There was really nobody in Medicine Hat doing audio‑visual stuff.  We could have ‑‑ I could have stayed in Medicine Hat and pursued that component of it.  I was actually challenged ‑‑ or challenged, I was asked by a new audio company that came to Medicine Hat in about 1998 ‑‑ I was kind of asked by him why I never stayed, and, you know, I felt at the time that I've spent 20 years in Medicine Hat, that ‑‑ that it's time to experience the bigger city, and it's definitely time to return back.  So in Medicine Hat, we did audio‑visual ‑‑ or I did sound, and when I moved to Calgary, that expanded to audio‑visual.  I did a lot of tape ‑‑ tape sales, CD sales, all in the audio‑visual world.  We had the opportunity in 2003 to buy the studio, which we saw as another complimentary component of a communication‑type environment.

2089             COMMISSIONER WILLIAMS:  Okay.  I'm going to go through ‑‑ your presentation is ‑‑ that has been put together, your application is very thorough and very well done and carefully thought out, so I still have a few questions, and we'll work our way through them together.

2090             I note that your proposed Rock 102 is ‑‑ or that Rock 102 is proposing a classic hits, classic rock blended format that will feature a predominance of classic hits music in the morning and early afternoon, switching to a predominance of classic rock music in the late afternoon and evening.  I also note that you're proposing to offer a limited amount of new alternative rock as part of your evening programming to appeal to the 18 to 34‑year‑old male segment of the population.  In your Supplementary Brief, you state that you want to introduce this type of split format in order to offer greater musical diversity to Medicine Hat listeners until such time as a new station is licensed by the Commission to serve ‑‑ serve this market.  Now, we've looked at the sample music lists provided in your Supplementary Brief, but would like you to describe for us, again, the type of classic music mix that you would provide as part of your blended format proposal and who you are targeting with this morning and mid‑afternoon classic hits programming.  I ask because the classic hits format seems to be evolving, somewhat, into two types of sound, a softer AC top 40 music blend skewed towards female listeners and the more traditional male‑oriented and harder sounding rock‑oriented classic hits music mix.  So can you tell me a bit about what you plan to be offering in this proposed station?

2091             MR. LOUGH:  All right.  So we ‑‑ we propose to start the day with a classic hits format.  Again, we felt that was very attractive to bring in a female audience, recognizing though that CHAT and MY 96 are catered towards the female audience.  Because it was very clear that Medicine Hat wanted something different, we wanted to be relatively broad to be attractive to various audiences.  So we're proposing to start the day with a classic hits format, which would definitely be attractive to females, as well as males.  And we progress ‑‑ as we progress through the day, we're going to take on a harder format.  Basically, at 12:00/1:00, you'll know that if classic hits aren't really your thing, you might want to go back to MY 96.  We have no problem with sharing an audience.  We think that there's a lot of radio jumpers in the industry.  As we progress through the day, we're going to take on a harder and harder sound.  We're not looking for a heavy, heavy sound.  We do see that the evening presents an opportunity to focus on a little bit more alternative rock though, which may propose a little bit more of the harder sound, but that will be blended with the traditional classic rock.  Saturdays, we're looking at a ‑‑ we'll do a program that will definitely focus on the '60s/'70s classic rock, the pure classic rock, more in a similar association to Q107 out of Calgary.  So our classic hits, we'll probably ‑‑ to brand, it would be similar in nature to JACKfm, a very popular format across the Country, and our classic rock format will take on more of a sound like Q107.  There's a Q in Toronto as well, I can't remember the name, but take on more of the classic sound.

2092             COMMISSIONER WILLIAMS:  Day parting ‑‑ in the radio industry's experience, day parting different music formats to serve different audiences sometimes works in smaller markets with limited tuning choices; however, sometimes this programming approach also serves to alienate audiences because neither group is ultimately satisfied with the split format approach.  Why do you feel your female‑oriented classic music mix and your male‑oriented classic rock mix will work so well in the Medicine Hat market?

2093             MR. LOUGH:  We've heard a lot of people say that they're just tired of the repetition that they experience in Medicine Hat.  If you're not into country, your choice is MY 96, unless you have satellite and cable FM and such, but, typically, as you're driving through your car ‑‑ and, historically, looking at the traditional radio broadcasters, that's what's been in the market.  I had a blank on what your question was, sorry.

2094             COMMISSIONER WILLIAMS:  That's okay.  You can come back to it late if it comes to you.  In your Supplementary Brief, you said you would keep the slit format until such time as the Commission licences another commercial station to serve Medicine Hat.  What would happen if the Commission would decide to licence more than one commercial station at the end of this hearing?  Would you keep a split format, or would you go with one format full‑time, and, if so, what would be your preferred format?

2095             MR. LOUGH:  I guess as we made our application originally, we felt Medicine Hat was definitely a strong market.  We felt there was ‑‑ after I made the application, I felt that there was potential in Medicine Hat for two stations, given the number of applicants that had responded.  Also, comparing to Lethbridge, a market that has four mainstream stations, now Paul Larsen ‑‑ a fifth one coming online, plus a Christian station, plus university stations, CBC, CKUA, plus three television stations.  So there was a good inclination that Medicine Hat could very well receive more than one licence.  We proposed our application based on the split format recognizing that if there is another applicant, we have identified our formats right there.  We will gladly refocus ‑‑ draw our attention to probably the classic rock.  That's where we saw the most support was for classic rock.  I mean, classic ‑‑ classic hits, there was a strong support for that as well.  If another format is licensed similar to ours, like in the classic hits and us being the classic rock, we have no problem focusing on the classic rock.

2096             COMMISSIONER WILLIAMS:  In your executive summary, you indicated that the proposed station will be of great interest to the 25 to 54‑year‑old male audience, but you further state that the alternative rock you're proposing will attract younger males, 18 to 34.  Can you tell me what demographic will make up your core target audience under your current proposal?

2097             MR. LOUGH:  I think the core target audience consistently will be around 39.  We recognize the alternative rock is ‑‑ is focused on a Saturday night program and a little bit throughout the week in the evenings.  Alternative rock doesn't have to have that garage sound and just ‑‑ it doesn't have to be labelled as alternative rock, I guess.  We recognize ‑‑ we recognize, like, groups like Nickelback does fall under the alternative category, but it's also getting a lot of airplay on stations like MY 96 and such.  So we recognize that it does fall under category.  There's also sounds that that category has traditionally ‑‑ I guess, sounds that the alternative rock has been labelled as that we probably won't go to that extreme, except, perhaps, on the Saturday nights when we recognize that that's when we will have that audience.

2098             COMMISSIONER WILLIAMS:  And the group of people that are interested in that music are typically about 39 years old?

2099             MR. LOUGH:  On a Saturday night, no, that average will probably drop down to about 24.

2100             COMMISSIONER WILLIAMS:  Okay.

2101             MR. LOUGH:  Yeah.

2102             COMMISSIONER WILLIAMS:  Your proposed classic hits/classic rock music format will feature a broad range of musical genres and styles.  Other applicants are proposing to serve a similar target audience with somewhat similar music formats, including another classic hits/classic rocks blend, rock, full‑time classic rock, and full‑time classic hits.  Could you please comment and describe how your proposed format differs, if at all, from these other format proposals, and would you also explain to us why you feel your format is better than, say, an adult standard modern nostalgia or even broad‑based AC music format in that it would be the better choice to serve the current Medicine Hat market.  So I guess tell us how you differ, and why are you the best choice?

2103             MR. LOUGH:  I guess right from the very beginning of this application, we made it known that we were looking at a split format.  We've had a few surprises yesterday where there have been some applicants that ‑‑ that the formats are, you know, different than what the original, I guess, thought was.  So right from the beginning we felt that that was ‑‑ that would be appropriate, two formats to incorporate.  That attracted the bulk of Medicine Hat's audience.

2104             We had a survey that definitely revealed that classic rock was the first one ‑‑ actually, you guys have a copy of the survey.  That the classic rock was the preferred format, classic hits was a close second.  Why our format over like a nostalgic, such as one of the applicants, I believe that the nostalgic format is a good format.  It could compliment ours actually quite well in terms of offering diversity in the market, but also offering different audiences and different advertisers.  So I believe that the format such as that could compliment ours, which is complimenting the MY 96 and the CHAT format.  I guess another reason why I feel like I could endorse that particular application is because I don't see it as competition to us at all.  The other format is classic rock/classic hits.  The reality is very ‑‑ a number of applicants have proposed very similar formats, so can I say that ours is better than theirs per se?  Well, we're offering classic hits, they're offering classic hits.  We're offering classic rock, they're offering classic rock.  So if you're looking at that music format, I think all the applicants here are equivalent on that level.

2105             I guess the other very key factor is we're proposing a local station and by local people in the community.  Other applicants are proposing to have an ownership in a different market, perhaps Toronto.  I mean, Pattison right now, based out of Vancouver or Kamloops, I'm not sure, is ‑‑ owns the market.  They ‑‑ as an ownership group, they're not in the market that often.  Dwayne Dietrich, manager of CHAT and MY 96 does an excellent job.  I have no question about that, but I think there's a lot to be said when the ownership is in the market.  I think Bill ‑‑ Bill Yule, who owned the CHAT for years and owned MY 96 before he sold out to Pattison, was very active in the community.  I think the local ownership is what Medicine Hat wants, and I think that there is a big benefit.

2106             COMMISSIONER WILLIAMS:  Tell me a bit about the benefit of the local ownership in the community.  That's ‑‑ I'm interested in how you ‑‑ what you think about that.  What are the benefits?

2107             MR. LOUGH:  I think the simple fact that when you're part of the community and when you've lived in the community, you kind of know.  You kind of know who you can go to to find stories and who you can rely on in terms of support for, you know, say a concert or something like that.  I guess you know the connections.  You know where you can go that if you need something ‑‑ and no doubt that radio is an avenue ‑‑ is a venue where people go to when they need something.  Charitable groups will go to a radio station and say, hey, we're starving for this.  Can you help us get the support we need?  And I think if you have to call up Toronto or call up Vancouver to get that permission, then I think that community involvement is often gone, it's lost.

2108             Sometimes there's timing issues.  If I was to mention about the fires in Kelowna in 2003 ‑‑ as I've talked to people out there, I've heard complaints that, you know, the major broadcasters in that market that don't live there took a while, and I guess ‑‑ took a while to respond effectively.  I think that when there's a local ownership, the issues are more personal.  You're willing to get involved.  You might not have that business focus, that focus on the bottom line every time.  I think you just see issues, and you want your community to be better so ‑‑

2109             COMMISSIONER WILLIAMS:  Do you have anything you'd like to add, Mrs. Lough?

2110             MRS. LOUGH:  I would just like to say that I think being part of the community, with Pat having grown up there, they're not just ‑‑ Canada Day isn't just an event, it's part of his history, it's part of our history as a family.  There are events and parts of Medicine Hat that we know because we've got history there, and I think that's a benefit because we know the history, we know the people.  It's kind of a joke between us that we can't go anywhere in the world, practically ‑‑ I mean, Hawaii and Las Vegas and wherever.  I think everywhere we've gone, we run into people from Medicine Hat that Pat knows.  And I think that will benefit our ownership because, for example, if there was something going on in a school, it's not just a news item, it's something that's happening with our children, and that will matter to us.

2111             COMMISSIONER WILLIAMS:  Thank you.

2112             I note you are proposing to offer a minimum of 56 hours of local programming per week.  You state that this would give you the flexibility to pick up a national syndicated program such as a classic rock magazine.  You also state in your 30th of June 2006 deficiency response that most, if not all, of our programming will be produced locally.  Can you please reconcile these two statements?

2113             MR. LOUGH:  Right.  There are a variety of music magazines that are available to independent broadcasters, some of them are ‑‑ some of them are originated by, say, Standard Radio and such.  We like the idea of being able to offer people in Medicine Hat something that they can hear in other markets, but we've also recognized that our application is local.  We do intend to do the classic music program identified on Saturday as a local program.  We just wanted to have the option to explore, I guess, other radio ‑‑ nationally available radio programs, and I guess we'd look at more of like a Sunday night ‑‑ a late Sunday night type program, possibly when the listenership is low, and that could be ‑‑ a nationally available program could attract listenership ‑‑ could raise our listenership in a typical low period.

2114             COMMISSIONER WILLIAMS:  In your 30th of June deficiency response, you specify that your programming will be unique and reflective of Medicine Hat, which will result in the community being better served.  Outside of your commitment to provide five hours and 25 minutes of news and related surveillance material each week, can you elaborate on the other types of local reflection programming that you will offer within your overall commitment to devote a minimum of 19 hours or 15 percent of the broadcast week to spoken word material?

2115             MR. LOUGH:  In what I read today, we have committed to the five hours ‑‑ and in here I notice that we put five hours and 25 minutes.  I guess that was a miscalculation.  It was five and a ‑‑ five hours ‑‑ five and a quarter hours, which is ‑‑ right?  Which ‑‑ no.  Yeah, five hours and 15 minutes.  So I apologize for that.  That was in the response.  I'll gladly take five hours and 25 minutes.  I ‑‑ there's not a lot of difference there, I don't think.

2116             In what we read today, we proposed, like a ski report, snow conditions for out at Cypress Hills, for out near the Lethbridge ski hills.  People tend to travel to the Pincher Creek area for skiing, so we've proposed a ‑‑ you know, a ski report, a community calendar where we'd be highlighting community events.  That would be an avenue, a venue, where people can send in a fax, send in an e‑mail to our department and be able to get that on the air in a relatively expedient process.  We've also proposed the music calendar where we will highlight visiting bands to Medicine Hat, highlighting them to Calgary, highlighting them to a reasonable distance within Medicine Hat.  We highlighted crime stoppers.  Crime stoppers is a fabulous initiative that ‑‑ people feel that ‑‑ I think people ‑‑ people have a genuine willingness and ability to get involved if they can.  We're proposing to do an association with crime stoppers.  That's not new.  That's something that has existed in Medicine Hat.  We have no problem having that as a duplicate of all the other stations.  Like, we just feel that there's value ‑‑ there's value in something like crime stoppers.  The stock market report, business report.  Something like CIBC Wood Gundy would be who we would like to involve with that or TD Waterhouse.  The agricultural report, public service announcements from various groups and various charity initiatives.

2117             COMMISSIONER WILLIAMS:  Would these programs, for the most part, be locally produced or acquired or syndicated or a combination?

2118             MR. LOUGH:  You know, pretty much everything would be locally produced.  I'm not sure if CIBC Wood Gundy has a radio personality in Medicine Hat.  I know that there's a guy in Calgary that does it on the Calgary radio stations.  We would hope ‑‑ it would be our desire to have someone local in Medicine Hat so that people can ‑‑

2119             COMMISSIONER WILLIAMS:  Try to find a local broker, for example, and ‑‑

2120             MR. LOUGH:  Exactly.  One of our support letters was from a financial company, I'm drawing a blank on the name of them.  Do you know what, they've supported us.  They would be one that we'd probably look at going to first, and say, you know, this is what we want to do.  Is this something that your company would be interested in doing?  Something like the public service announcements, you know, Canadian Blood Bank, well, that's produced elsewhere.  That would be something that we would just acquire and make available.  Crime stoppers, that would be a local initiative.

2121             COMMISSIONER WILLIAMS:  You state that your station will provide a local service that would cater to what you described as the underserved male demographic group in Medicine Hat.  However, as indicated in your local programming schedule, your Supplementary Brief page 14, your programming will be voice tracked Monday to Friday between 9 ‑‑ 9 a.m. to 3 p.m. and from 6 p.m. to 7 p.m. during one of your feature programs called Totally Canadian, and from 10 p.m. to midnight accounting for 45 hours of weekday programming, as well, with the exception of four hours of live programming on Saturdays and on Sundays between 8 a.m. and noon.  You would also offer 28 hours of voice tracked programming over the weekends.  Would you elaborate on the rationale behind this program decision to rely so heavily on voice tracked programming and how you feel it may or may not impact on your ability to provide a quality service to your Medicine Hat audience?

2122             MR. LOUGH:  Right.  We see voice tracking as a component that will allow new broadcasters to get onto the radio.  I'm not a personality.  That's ‑‑ I'm not going to be a voice on the station, that's not my area of comfortness.  And we recognize that there are other people that are like that, but have that genuine desire to, you know, perfect something.  So we see voice tracking as an option where a new broadcaster or a college student can get on the radio, and, yeah, it might take them three tries, but then they can have something that represents them well.  We also see voice tracking as an option to allow us a larger pool of talent that ‑‑ radio has a lot of part‑time positions, so we see voice tracking as an opportunity to have an individual who may work for another company but have a genuine interest in getting into radio, have them slotted at whatever, 10:00 or 9:00 until 12:00 or whatever, in a period where, yeah, they're actually at work, but ‑‑ but they want to pursue this career path, I guess, at some point.  And it might be immediate, it might be a job sharing type thing that they want to do kind of indefinitely.

2123             COMMISSIONER WILLIAMS:  Could you tell us how much of the five hours and 15 or 25 minutes of news would be station produced?

2124             MR. LOUGH:  My immediate reaction is it's all station‑produced because this is our only station, but we do recognize that there are the Broadcast News services where smaller markets tend to rely on the Broadcast News to get the national stories.  I guess other forms of news would be CTV News Net, CNN.  We can observe, we can scan, we can monitor these other news services and still do a local ‑‑ do everything totally local.

2125             COMMISSIONER WILLIAMS:  Localized, yes.

2126             MR. LOUGH:  So we are proposing 100 percent of our ‑‑ 100 percent of our news production will be local.  I guess, you know, if we want to follow the commentaries of, say, our Prime Minister making a comment in Ottawa, we want to play that snip‑it, well, I guess that's not local, is it, unless I have a reporter actually in Ottawa.  You know, so I guess that's an area that I have a fairly good understanding of.  All of our production will be local, but, obviously, there will be sound bytes that are from other markets.

2127             COMMISSIONER WILLIAMS:  Mmhmm.  Do you believe that your new staff would be sufficient to produce not only this amount of news but also newscasts of a high quality?

2128             MR. LOUGH:  I think everybody in our station in the first year is going to wear multiple hats.  If we are looking at a station manager doing some researching ‑‑ some research, I should say, for the news department, and then they say, hey, you know what, these are the top stories of the day.  You guys now refine, and you guys, you know, make it appropriate for today and, you know, cut and add and do whatever you need to do.  I think there ‑‑ in a ‑‑ in a very entrepreneurial‑type station, everybody wears multiple hats.

2129             MRS. LOUGH:  If I might add, I ‑‑

2130             COMMISSIONER WILLIAMS:  Of course.

2131             MRS. LOUGH: ‑‑ I don't think that we are that naive to think that there won't be a growth curve.  We know that we are new, and we know that we will learn somewhat, but it's our intention, obviously, in our own community to not embarrass ourselves and to really come out of the chute being incredibly professional and then grow from there.

2132             COMMISSIONER WILLIAMS:  You've indicated that Rock 102 will employ the equivalent of two full‑time news reporters and that you plan to utilize a college student on the weekend to help with the newscasts.  Could you tell us who will be responsible for managing the content of your news programming?

2133             MR. LOUGH:  So the management ‑‑ the overall management would be responsible by the news director and, ultimately, by the station manager.

2134             COMMISSIONER WILLIAMS:  I note you've provided no information on your staffing plans in the area of general programming.  Could you provide us with the type of resources you will allocate to production and on‑air broadcasting?

2135             MR. LOUGH:  I have it somewhere.  So we've proposed five DJs, two news reporters, which will result in a total of seven on‑air personalities, four technical people, and within technical, I'm including the scheduler, technical and then two creative people, so I kind of lump that as four technical people, and then two administration people, one ‑‑ one of those being the manager.

2136             COMMISSIONER WILLIAMS:  Okay.  In your application, you indicate that $1,500 will be allocated to the development of the Medicine Hat Folk Festival.  How will this funding be used by the Folk Festival to support Canadian talent?  Will it be used to underwrite Canadian performers appearing at the festival, or used to underwrite administrative and/or infrastructure costs?

2137             MR. LOUGH:  Our initial discussion with the folk music group was to take on ‑‑ to offer them some funding to underwrite or to help the administration side of it.  We would like to give them, I guess, enough latitude that, you know what, should they have success on one particular concert and should they feel that's not really necessary, if they wanted to offer that as a scholarship as part of their songwriting competition or whatever, we'd like to give them that latitude.  We will offer them the Appendix 1(a), which will very specifically say this is what's allowed and this isn't what's allowed.  If they're in compliance with that, we will sign the cheque and hand that off to them.

2138             COMMISSIONER WILLIAMS:  Should the Commission decide that some of these costs do not qualify as direct contributions to the development of Canadian talent, would you be prepared to redirect these costs to an eligible initiative as set out in the just mentioned Appendix 1?

2139             MR. LOUGH:  Yes.

2140             COMMISSIONER WILLIAMS:  Okay.  In your response to deficiency questions, dated 30th of June, you make reference to a survey that you conducted.  Did you conduct or commission a study that would support a demand in the Medicine Hat market for your proposed station, and, if so, could you provide us a copy of this study?

2141             MR. LOUGH:  So in what you received today, there was a copy of the survey.

2142             COMMISSIONER WILLIAMS:  Okay, all right.

2143             MR. LOUGH:  We did the survey kind of involving two particular avenues:  One being a web survey where we got the information out to people saying, you know what, if you want to have an impact on a new radio station that potentially could be licensed from Medicine Hat, please hit this website and take the survey, so that's the bulk of that survey.  We also wanted to offer people that ‑‑ you know, surprisingly, some people don't have access to the Internet.  We also wanted to offer people a toll free number where they could call in and kind of ‑‑ and take a similar survey.  So the surveys weren't exactly the same.  We've identified all the questions in the survey.  The telephone survey was a scaled‑down version.  I think there were eight questions in that.  Through that service, we got a printout of how many people selected option 1 relating to this particular question.

2144             COMMISSIONER WILLIAMS:  Okay.  After examining the methodology used to project audience, we note that you have not taken into account varying levels of interest in the proposed musical format from various demographic groups.  Instead, you've used projections of 15 plus population and multiplied these by a factor of 19.5 hours per week of radio listening to arrive at your projections.  Do you think that failing to take into account varying degrees of interest in your proposed format from various demographic segments may have resulted in a possible overestimate of your projected audience?

2145             MR. LOUGH:  I think Medicine Hat is tired of the repetition that they've experienced on MY 96.

2146             COMMISSIONER WILLIAMS:  I'm sorry, I missed that.

2147             MR. LOUGH:  Sorry, I think Medicine Hat is very tired.  From what we've seen in our letters of intervention, they're very tired of repetition of MY 96.  So I think we're going to have a good sized audience, broad ‑‑ you know, broad in nature, 25 to 54, so I guess we didn't break down on the specific categories and do the calculations that way.  I apologize for that.  I think that's something I didn't really consider as I've gone through this process.

2148             COMMISSIONER WILLIAMS:  We may have covered this to some extent earlier, but do you believe the Medicine Hat market could support more than one station at this time?

2149             MR. LOUGH:  I believe the Medicine Hat market is very strong.  I believe that the Medicine Hat market could support two stations, and I think that's in addition to the power upgrade for CJLT, should you guys approve that.  CJLT just has a very defined audience.  I just don't see that as an issue.  There are, I think, choices that would make ‑‑ choices in applications that would help the market absorb two new stations.

2150             COMMISSIONER WILLIAMS:  Okay.  How did you, as a family business group, decide that you wanted to enter this particular type of business?  What attracted you to this business, what got your attention, and what ultimately made you decide that it was something that you wanted to pursue?

2151             MR. LOUGH:  Getting involved in audio‑visual at a young age ‑‑ sorry, getting involved with sound at a young age got me involved with various bands in the Medicine Hat area.  Moving to Calgary, we were involved with choirs, choirs and orchestras and stuff.  So I've always had the desire to do sound.  Throughout all of this, I've done a little bit of recording stuff, and it's just been very simple and kind of on the side and nothing that I really want to put my name on.  But, you know, it's stuff that I have done kind of in a live environment.  Radio is the next logical step for my interests.  I've always wanted to get into radio.  I see there's ‑‑ I don't know where to go with that.  Radio has just always been a passion of mine ‑‑ always been a dream of mine to pursue.

2152             COMMISSIONER WILLIAMS:  And, Mrs. Lough, from your perspective?

2153             MRS. LOUGH:  I have had the fortunate pleasure of loving any job that I have had.  I have a been a director of a pregnant ‑‑ or assistant director of a pregnancy care centre for years, and I loved it.  I have worked in a church, and I loved it, and I love my job now.  Pat, unfortunately, has not had the opportunity to love his job, and as a ‑‑ as his wife and as a family, I am certainly wanting to allow him the pleasure of loving his job and being passionate about it, and it's been clear to me and clear more every day that radio is what he loves.  So I'm certainly willing, and we're willing, as a family, to make it a career choice.

2154             COMMISSIONER WILLIAMS:  Okay.  Thank you both very much for helping us gain a better understanding of your application.

2155             That concludes my questioning, Madam Chair.

2156             THE CHAIRPERSON:  Thank you.

2157             Vice‑Chair Arpin...?

2158             VICE‑CHAIR ARPIN:  Thank you very much, Madam Cram.

2159             Which part of the radio are you more interested in, management, sales, programming?  Which functions within the radio organization has ‑‑ seems to be more palatable to your taste?

2160             MR. LOUGH:  I have a great interest, I think, in the management and the sales component of it.  I like people, and I see the sales component of that being strengthened by that.  I also think I have a good business sense.  From the business sense, I ‑‑ from the business sense, I think I can do a good job managing that.  We've managed the staff of 12 people through the studio.  Staff like working for us, for my wife in particular, but I think we've got a very good business sense as a family, as a couple.  I also have a good technical component, so I think I can recognize ‑‑ I'm not saying I want to be the one in there doing all the technical stuff because I think there are opportunities for others to ‑‑ to learn that and to develop.  I've done that.  That's been a phase of my life that I've enjoyed.  I have that component behind me now, and I'd like to explore ‑‑ I have done some sales, and I see the sales and the management kind of going hand in hand for me.

2161             VICE‑CHAIR ARPIN:  Another more technical question that we've asked to all of the applicants that have appeared before us over the last day and a half is we've asked them if what was the median age of their ‑‑ of their listener, and with ‑‑ and if it skews more towards male or female.  I think in your ‑‑ in the project, it will be skewing more towards male, but what will be the median age?

2162             MR. LOUGH:  Yeah, I believe we indicated today that probably around 38, 39 is what we would see as the median age for our classic rock.

2163             VICE‑CHAIR ARPIN:  For classic rock.  For ‑‑ and for your ‑‑ taking into consideration the actual stations in the market then, obviously, the age ‑‑ the various demographic that you have in Medicine Hat, so you think 38, 39 will be your ‑‑ what you'd kind of be catering to?

2164             MR. LOUGH:  Yes.  We see MY 96 catering to a young audience.  CHAT ‑‑ CHAT is not just ‑‑ CHAT is for country people, so to say that, you know, you're old, you're going to listen to CHAT, but, no, that's not true.  So we see our median age of 38, 39 as probably ideal.  We will attract people that don't want to listen to CHAT.  We will attract people that ‑‑ we'll attract older people that don't want to listen to CHAT, I guess, is what I'm saying.  Just because you're older, doesn't mean that you like country.

2165             VICE‑CHAIR ARPIN:  No, yeah.  Thank you, Madam Chair.

2166             THE CHAIRPERSON:  Thank you, Mr. Lough.

2167             You now have two minutes to give us your why we should licence you in preference to the others.

2168             MR. LOUGH:  All right.

2169             Madam Chair, we sincerely want to thank you for giving us the opportunity to present our application today.  Radio, as I hope has been clear, has been a passion of mine for a number of years.  In fact, my wife reminded me just last night that on our very first date, she was asked the question by me what she thought of radio.

2170             The reality is, we will never be in a position to buy a station such as many of the other applicants ‑‑ actually, all of the other applicants in this room have done within the last couple of years.  We recognize that we must get our start by finding the very best talent and pursue a start‑up station.

2171             When I saw the CRTC had a call ‑‑ had opened a call for my hometown of Medicine Hat, I realized that there is no better opportunity for me to pursue a passion ‑‑ for me to pursue my passion than in my hometown.  Seeing many applications similar to ours and receiving 128 letters of support with good leadership, it is clear that our station will do well.  Our confidence is strengthened by the fact that ATB, Alberta Treasury Branch, has applauded our application and felt that it's one of the best business plans that they've seen.

2172             There is no doubt that Medicine Hat needs another radio station, and there's no doubt that the majority of the people want a format to be a rock‑based one.  We believe that there's a tremendous amount of talent in Medicine Hat.

2173             We ask you, the Commission, to grant us the opportunity to get into broadcasting by approving our application.  We've done the very best that we can with the limited resources in making our application attractive and competitive.  We pledge more than what the ‑‑ we pledge more than what is required for Canadian content, we pledge more than what is required for CTD, and we will get back to my hometown to ensure that the station is truly local and best served.

2174             We appear here today not requesting licence number 46, not requesting licence number 25, but we're requesting licence number 1.

2175             Thank you for your time and consideration.

2176             THE CHAIRPERSON:  Thank you, Mr. Lough, Mrs. Lough.

2177             We'll now take a 15‑minute break, meaning we get back here at 11:25, and we will then be proceeding with phase II.

‑‑‑ Upon recessing at 1111 / Suspension à 1111

‑‑‑ Upon resuming at 1125 / Reprise à 1125

2178             THE SECRETARY:  Thank you, Madam Chair.

2179             THE CHAIRPERSON:  Madam Secretary...?

2180             THE SECRETARY:  We've now reached Phase II of the process in which applicants appear in the same order to intervene on competing applications, if they wish.  For the record, Newcap Inc. has indicated that they will not appear, as well as numbered company 1182743 Alberta Limited and Vista Radio.

2181             I would now call on Lighthouse Broadcasting Limited to come forward.  Mr. Raible, you have ten minutes for your presentation.

PRESENTATION / PRÉSENTATION

2182             MR. RAIBLE:  Good morning.  I just wanted to intervene in response to Newcap's application.  I noticed yesterday ‑‑ oh, I'm sorry, should I continue?

2183             THE CHAIRPERSON:  Are you replying to something that Newcap asserted against you?

2184             MR. RAIBLE:  That they said yesterday about the market.

2185             THE CHAIRPERSON:  About the market?

2186             MR. RAIBLE:  They made a comment about the booming market in Medicine Hat, and we just wanted to respond to that being that we live and work in Medicine Hat and that the market isn't quite as booming as they would say.  It isn't quite as booming as it says.  It is ‑‑ can be very volatile in Medicine Hat.  That was the nature of our intervention.  Would that be okay?

2187             THE CHAIRPERSON:  Okay.

2188             MR. RAIBLE:  Thank you.

2189             So, again, just in reference to a continual booming economy in Medicine Hat, agriculture and oil and gas are very volatile, as we've experienced with the BSE that occurred a couple years ago in Medicine Hat.  And as far as the oil and gas, since August of this year, capital expenditures by gas companies in Medicine Hat for the remainder of 2006 have been cancelled.  B&J Services, a gas company in Medicine Hat didn't move one truck for an entire week in early October.  The economy is not booming currently, it is flat.  Based on this information and the fact that we currently live and work in Medicine Hat, we believe the market could only reasonably maintain one new station in addition to the power increase of Lighthouse Broadcasting.

2190             Thank you.

2191             THE CHAIRPERSON:  Thank you.

2192             THE SECRETARY:  I would now call on Golden West Broadcasting Limited to come over forward for their Phase II process.

PRESENTATION / PRÉSENTATION

2193             MR. HILDEBRAND:  Thank you.

2194             I only have one comment and that relates to the CJVR application on the 35 to 40‑percent music question, so that's really the only comment I have.

2195             Thank you.

2196             VICE‑CHAIR ARPIN:  Which comment?

2197             MR. HILDEBRAND:  Well, that, I mean, they should basically stay with what they had applied for.

2198             Thank you.

2199             THE SECRETARY:  The next applicant to appear would be Radio CJVR Limited.

PRESENTATION / PRÉSENTATION

2200             MR. SINGER:  Good morning, Madam Chair, Commissioners.  I don't know if this is the place to answer this question.  There was a question posed by Commissioner Arpin to me yesterday re the CBC.  I do have some information on that.  If it's appropriate at this time, I'd like to ‑‑

2201             THE CHAIRPERSON:  Yes, go ahead.

2202             VICE‑CHAIR ARPIN:  Yes, it is.

2203             MR. SINGER: ‑‑ comment on that.  Thank you.

2204             In response to the point raised yesterday, we had D.M. Allen(ph), our consulting engineering firm contact the CBC, and if I could just read a quick letter that was sent to us yesterday, perhaps it would shed some light to the response to that.  "Please accept this letter as indication that the Canadian Broadcasting Corporation is prepared to enter into negotiations with multiple licences for the shared use of CBC's broadcasting facilities serving Medicine Hat, Alberta.  Specifically, if multiple licences are successful in obtaining licensing from Industry Canada and the Canadian Radio Television and Telecommunications Commission for operation of FM broadcasting undertakings to serve Medicine Hat, CBC will be happy to discuss the feasibility of sharing our facilities at the above‑noted location on an equal footing.  Subject to the successful completion of technical and financial considerations, CBC will coordinate the necessary upgrades at the Medicine Hat facility to accommodate the broadcasts of new FM undertakings from this location.  Site sharing with CBC is conditional on approval of the frequency analysis, a structural analysis of the tower, an analysis of RF exposure levels in accordance with Safety Code 6, and agreement on all terms that shall be outlined in formal licence agreements to be negotiated between the licencees and CBC.  Licence fees payable shall be negotiated based on final details of the site‑sharing proposals.  All costs associated with the licencees presence, on‑site equipment, electrical transmission, mechanics, et cetera, will be the responsibility of the successful licencees.  If you require additional information, please feel free to call.  It will be our pleasure to help CJVR and/or other successful licence applicants fulfill their broadcast requirements.  Sincerely, Jason Coleman, Business Manager West, CBC Radio Canada Transmission."

2205             VICE‑CHAIR ARPIN:  That's partly in answer to the question that I asked because my question was, will the CBC allow ‑‑ because an argument has been made here throughout the hearing that if we were to licence two new applicants with ‑‑ in the same format, then the first one on air will have ‑‑ will pick its own format, the other one will have to find something else.  And my question was, since you are ‑‑ most of you are all going on the CBC tower, will the CBC allow one broadcaster to be on air first, or will they say to everybody, no, you'll do it in the ‑‑ all at once, or are we going to ‑‑ because they will have to turn off their transmitter for a couple of nights, so they probably won't be ready to turn ‑‑ to turn their transmitters and all the other tenants off air for more than once.  So that's why I asked the question, will the CBC allow any of the applicants, if we ‑‑ or the new licencees, if there are more than one, to first launch and much before ‑‑ ahead of the second one.  So that answer doesn't allude to that, but my expectation, I will ‑‑ and I'm talking of ‑‑ like, for myself is that since they will have to put down their transmitters a few days over a couple of weeks and that more than likely they will say to everybody, we're going ‑‑ make a single plan, and we'll get installed at the same time.  So the pick in the ‑‑ who is going to pick the format first will ‑‑ has to be something that you will have to deal with before going on air.

2206             MR. SINGER:  That is correct, and I guess, Mr. Commissioner, that is our point of view, that we will have to deal with whatever situation, and we will be prepared to do that.

2207             VICE‑CHAIR ARPIN:  Okay, fine, thank you.

2208             MR. SINGER:  That's all I have, thank you.

2209             THE CHAIRPERSON:  Thank you, Mr. Singer.

2210             Madam Secretary...?

2211             THE SECRETARY:  I would now call on Harvard Broadcasting Limited to come forward.

PRESENTATION / PRÉSENTATION

2212             MR. COWIE:  Thank you, Madam Chair, this is unchartered territory for us.

2213             Harvard, historically, does not participate in this phase of the hearings, but in this case, we feel we must, and it ‑‑ we wish to refer to CJVR's attempt to change the Canadian content promise in their application, and just to solidify the fact that that's fundamentally important and should not be changed during a hearing process.

2214             Thank you.

2215             THE CHAIRPERSON:  Thank you, Mr. Cowie.

2216             Madam Secretary...?

2217             THE SECRETARY:  And I would now call on Rogers Broadcasting Limited to come forward.

PRESENTATION / PRÉSENTATION

2218             MR. MILES:  Thank you, Madam Chair.

2219             We, too, do not normally appear during this process, but in the presentation yesterday, we did hear one of the applicants to appear to increase their commitments from 35 to 40 percent at the hearing stage of the review process.  This proposed Canadian content level is one of the key criteria of the application process.  It may well have been an honest mistake, but I think we have to insist that the commitment stays at 35 percent on the basis that it was submitted in the broad‑based business plans and programming formats.

2220             THE CHAIRPERSON:  Thank you, Mr. Miles.

2221             Madam Secretary...?

2222             THE SECRETARY:  Thank you, Madam Chair.

2223             I'd just like to indicate for the record that Pat Lough, on behalf of a corporation to be incorporated, will not be appearing in this phase, so this will complete Phase II of the process, and we are now ready to proceed to Phase III, which is the ‑‑ where parties appear in the order set out in the agenda to present their intervention.

2224             I would now call on the first appearing intervenor for CIRPA, Mr. Alexander Mair.  I'm sorry for the pronunciation.  When you're ready, you have ten minutes for your presentation.  If you could please introduce yourself for the record.

2225             Thank you.

PRESENTATION / PRÉSENTATION

2226             MR. MAIR:  Good morning, I'm Alexander Mair.  I'm appearing on behalf of CIRPA.  Excuse me if I cough during the presentation, but I'm just getting over a case of bronchitis, and the dry, hot air in the hotel has aggravated it quite a bit yesterday and this morning.

2227             Just background on myself, I'm representing more than 160 members of CIRPA from coast to coast.  As well as being a director of CIRPA, I've also been a director of FACTOR, Radio Starmaker Fund, the Audio‑Video Licensing Agency, SOCAN, the Canadian Music Publishers Association, and the National Aboriginal Recording Industry Association.  Earlier in my career, I was vice‑president of what is now called Universal Music Canada.  I managed Gordon Lightfoot, and founded ATIC Records, which I sold in 1999.  ATIC received 116 gold, platinum, and multi‑platinum albums from the U.S., the U.K., Holland, Japan, and Canada.  I'm currently the publisher of Applaud, a controlled circulation trade paper celebrating the success of Canadian artists in the international forum.

2228             This is CIRPA's only appearance at these hearings, so our comments cover all the applications.

2229             We were surprised initially that with the Review of Radio held that there would be licences issued before the results of that review, so we are assuming that whatever the results of the review are, any licences issued today or out of today's hearings would be bound by the same new rules and regulations that would arise out of the Review of Radio held earlier this year.

2230             At the 1998 Review of Radio, the Commission, in its wisdom, raised the Cancon levels from 30 to 35 percent, the first increase in 28 years.  The Commission also stated that they expected stations to voluntarily increase to 40 percent over the next five years.  Almost every licence issued after 1998 was at the 40 percent level.  We are not aware of any of these new stations having any problems with this level of Cancon.

2231             Broadcasters also promised increased diversity, which, sadly, has not happened.  As CRIA's submission to the review indicated the top ten most played Canadian artists receive almost 50 percent of the Cancon airplay with Brian Adams being the most‑played artist in Canada.  Brian Adams, Nickelback and the Tragically Hip collectively receive approximately a third of all Cancon airplay.  The average Cancon record played in this country is about ten years old.  What kind of signal does that send to younger Canadian artists who expect to be heard on the Canadian air waves, they have to wait ten years before they're going to be considered?

2232             At the recent Review of Radio, we proposed 45 percent Cancon level and 50 percent of that reserved airplay be allocated to independent labels.  A review of the sound scan analysis of the top 200 CDs ‑‑ top 200 selling CDs in Canada last week showed 57 were by Canadian artists.  Canadian artists held the number 1, number 2, number 3, number 9, and number 10 positions on the charts with two of them, Gregory Charles at number 1, and Sarah McLachlan being on independent labels.

2233             Of the 57 titles on the top 200 charts, 43 were on independent labels, more than two‑thirds of the best‑selling Canadian CDs of the week.  Considering the influence of American media, music is our most successful cultural industry.  In an analysis of sound scanned sales charts, when Canadian artists and indie labels are added to the independent distribution figures, Canadian artists and indie labels do almost 48 percent of the total CD business in Canada.

2234             We do acknowledge that some of the independently distributed product is not Cancon, but we're still major ‑‑ we're ‑‑ the independent sector with Canadian artists is bigger than any of the four multi‑nationals; however, many of the independent label artists suffer from lack of strong airplay, which hinders their success.  The more successful a CD is in Canada, the easier it is to break even or profit on touring and to access international markets.  Over 24,000 new Cancon tracks are issued each year, but airplay is too often reserved for the big internationally successful Canadian artists, often signed directly to major international labels.  With Cancon levels being considered by most broadcasters as a ceiling, not a floor, we believe it is time for the Commission to recognize these realities and support our proposals through conditions of licence, not promises of performance.

2235             I was pleased yesterday when Elmer Hildebrand acknowledged that their station was at 45 percent voluntarily.

2236             I'd like to talk about Radio Starmaker and FACTOR.  Throughout the last number of applications at this hearing and others, broadcasters have chosen to allocate most of their funding to Radio Starmaker.  I remind the Commission that Starmaker came out of the 1998 hearings and was created to deal with the six‑percent surcharge on the sale of successful broadcast stations.  It was not envisioned, at that time, to be any sort of larger animal than that.  It was not expected to compete with FACTOR for funding from broadcasters or from government.  Why most of the broadcasters are putting their money towards Starmaker is a question that has not been answered.  We can only assume that part of it is their desire to put as much of it into Starmaker, as they control Starmaker, and much of the funding from Starmaker flows back into radio and television time buys, and, therefore, it also allows the radio stations to hang their names on ‑‑ tied in with the bigger Canadian stars who get Starmaker support.  One of the broadcasters yesterday mentioned Nickelback is ‑‑ he was proud that they were supported by Starmaker; however, the recording that Starmaker supported was funded by FACTOR initially.  This is a major, major concern to the independent sector.

2237             FACTOR turns down approximately 75 percent of all applicants due to lack of sufficient funds.  Radio Starmaker has taken five years to get to the point that there is a sufficient demand for the funds available at Radio Starmaker.  It has only been the last two Starmaker meetings that demand this exceeded supply of money, and that included Starmaker setting up all sorts of new programs in order to utilize the funds.

2238             Starving FACTOR will lead to a decline in the quality and quantity of Cancon releases and impede the growth of the Canadian Music Industry.  Something that's important when ‑‑ during the hearings, we've talked about ARIA and SRIA, the provincial music industry association is getting support from broadcasters.  Their main support comes from FACTOR.  They need a healthy FACTOR in order for them to do their jobs regionally.

2239             CIRPA supports increased exposure of Canadian artists, particularly during prime time.  We do not support the ghettoization as caused by beaver bins(ph) or other such programming during periods of low listenership.  Cancon must be spread equally throughout the broadcast day and evening.

2240             CIRPA also believes running contests locally, in order to choose one act who may get airplay on a particular station is more of a station promotion that a CTD commitment.  Obviously, only artists who perform music in the genre of the station running the contest have a chance of winning, so the contest is not open to all local artists, only those performing music in the appropriate genre.  CTD funds are better spent to a provincial organization or a national organization such as FACTOR or CIRPA.

2241             The question of emerging artists is dear to our heart, and we believe the indie label carve out would lead to more emerging artists getting exposure.

2242             Although a gold record in Canada is a sign of marketplace acceptance, in reality, there is little profit at that level.  In order to avoid discrimination against artists who have reached this level of success, we would define emerging artists as those who have earned a platinum record in Canada and a gold record or better in at least one major foreign market, such as U.K., U.S., Germany, or Japan.  This definition would allow artists with a modicum of success to continue to access funding programs and airplay.

2243             Thank you.

2244             THE CHAIRPERSON:  Thank you, Mr. Mair.

2245             I'm not sure I understood your first point.  You're assuming that the people whom we licence here at this hearing would automatically be under ‑‑ licensed under and conditioned subject to an as yet unpublished decision?

2246             MR. MAIR:  Mmhmm.  Is that not correct?

2247             THE CHAIRPERSON:  How can that be possible when ‑‑ I mean, they're applying under the law.  The policy is as it is today.  And I'll give you an example.  Let me give you an example.  If we changed in the new decision our policy on CTD to say all of the money should go to radio stations in Nunavut, the Northwest Territories, and the Yukon, we would then unilaterally, without their knowledge, simply impose new CTDs on anybody we licensed under this?

2248             MR. MAIR:  It's not so much CTD, but the most important is the Cancon levels.  If, in your wisdom, when the decision of the Review of Radio comes out and you agreed with SOCAN at 50 percent or CIRPA at 45 percent and said effective January 1st, 2008, the Cancon level will be 45 percent, that would apply to all of the licensed broadcasters ‑‑

2249             THE CHAIRPERSON:  I see.

2250             MR. MAIR:  And I assume it would apply to the ones who are being licensed today, and I'd just like that confirmed or denied.

2251             THE CHAIRPERSON:  Well, I can't give you a position of law, so maybe you can talk to your lawyers.  You said since the radio policy almost all radio stations have been licensed at 40 percent.  Now, I've been around since then, and I've got to say, my memory of that is not ‑‑ not in accordance with yours.  Do you have any statistical basis for that?

2252             MR. MAIR:  The monitoring that has been done by CIRPA of the mainstream licensing has been at 40 percent.  Obviously, ethnic broadcasting, Christian broadcasting, some other niche programming is at a lower level.

2253             THE CHAIRPERSON:  So what percentage of the mainstreams have been licensed at 40 percent?

2254             MR. MAIR:  From our understanding, all of them.

2255             THE CHAIRPERSON:  A hundred percent?

2256             MR. MAIR:  Yes.  Commissioner Arpin is disagreeing.

2257             THE CHAIRPERSON:  I have to say, I mean, it would seem ‑‑yeah, the majority, but not all.  I mean, I have to say in some ‑‑ I would think in some formats it would be virtually impossible, anyway.

2258             I hear what you are saying about Starmaker versus FACTOR, but with both of them, we, the Commission, have no control over where the money goes and of the governance, and really that's, I guess, not our issue.

2259             I did want to refer to the written position that CIRPA had filed, and do you have that at paragraph 5?

2260             MR. MAIR:  Unfortunately, Air Canada lost my other bag, and I'm still waiting for it to arrive before I leave today.

2261             THE CHAIRPERSON:  Join the club.  Join the club.  It says, "We are disturbed by the lack of commitment to funding for FACTOR as a total of the applicants overall Canadian talent development commitments.  FACTOR is a proven success story whose funding greatly assists in the development of new artists and the marketing of existing ones, both for CIRPA's members and the industry as a whole."  Would you be surprised that perhaps in Alberta and Saskatchewan there might be others who might be likewise disturbed as to the distribution of FACTOR money?

2262             MR. MAIR:  It is quite possible.

2263             THE CHAIRPERSON:  Yeah, and I'll tell you what the 2006 report showed.  Out of the $12,560,000 allocated in the FACTOR report allocated by province ‑‑ they didn't allocate another 1.5 million because it was for other reasons, so they didn't allocate it by province.  So out of the 12,560,000, Alberta, with 10 percent of the population, received 1.34 percent of the monies or $168,500.  Saskatchewan, with 3.1 percent of the population, received .24 percent.  In other words, $30,700.  Ontario, with 38.9 percent of the population, received 58.9 percent of the FACTOR money or $7,403,000.  Would you be surprised if in 2001 and 2 Alberta, with 9.9 percent of the population, received 2.8 percent of the funding.  Saskatchewan, with 3.3 percent of the population, received 1.3 percent.  There seems to be a very consistent pattern with FACTOR.  Would you not agree that people applying in Alberta and Saskatchewan might be aware of that fact and might, in fact, want to be ensuring that they can benefit people in the areas from which they would be receiving revenue?

2264             MR. MAIR:  In our submission, we supported funds being allocated to the provincial associations as being acceptable CTD commitments.

2265             THE CHAIRPERSON:  And would that then reduce your support ‑‑ or FACTOR's support for ARIA and SRIA?

2266             MR. MAIR:  No, not at all, but I ‑‑ on that, I ‑‑ I'm not ‑‑ obviously, I don't prepare FACTOR's reporting system, and FACTOR is not allowed to come to this.  Because of the makeup of their Board, they cannot speak out publicly.  A lot of artists signed to Toronto‑based record companies are from other parts of the country.

2267             THE CHAIRPERSON:  Well, I don't know if ‑‑

2268             MR. MAIR:  And that may ‑‑

2269             THE CHAIRPERSON: ‑‑ if you read the record ‑‑ if you read the record, the report, the allocation is based on applications from each province.  That's how it goes, and I understand that completely.  The real issue is whether or not there is sufficient effort being put to training people ‑‑ or monies to training people outside of Toronto as to how to make applications and what ‑‑ what is available.

2270             If you'll notice, the FACTOR report, the only place they had seminars was in Toronto.

2271             Thank you.  Thank you, Mr. Mair.

2272             THE SECRETARY:  Madam Chair, we are now ready to proceed to the next appearing intervenor, and I would like to indicate, for the record, that Factory Optical Holdings will not be appearing as they were listed on the agenda.

2273             I would now call the next two appearing intervenors that are in support of Harvard Broadcasting, the American ‑‑ I'm sorry, Aboriginal Media Education Fund and Carpet One, Medicine Hat.  If you would come forward to the presentation table.

PRESENTATION / PRÉSENTATION

2274             MS WATSON:  Good morning, everyone, good morning Vice‑Chair, Commissioners, and Commission Staff.  I'm Murielle Watson, and I'm the Executive Director of the Aboriginal Media Educational Fund known as AMEF.  I was looking for an easy way to pronounce all this.  I'm very pleased to appear before you to discuss this important initiative and how the support of broadcasters, like Harvard Broadcasting Inc., are critical to the success of this endeavour.

2275             First, let me begin by discussing the issues that underline the need for this program.  The Aboriginal Broadcast Industry is relatively new and could possibly be described as being in its infancy.  While the presence of Aboriginal peoples in front and behind the cameras and microphones has been a sporadic part of the Canadian Broadcast Industry since its creation, it is only within the past decade that we have begun to design and operate our own broadcasting services.  In this regard, we are fairly new players in this industry and finally starting to establish an accepted and recognized presence in the field.

2276             Collectively, whether it is in the area of radio or television broadcasting, we are still very much in the process of learning the many aspects of the broadcast business.  As such, we are developing new skill‑set, new practices, and new ways of doing business.

2277             Despite being in its second licence term, one of the biggest challenges that still remains for APTN is the sourcing of qualified and skilled staff for all positions.  In discussion with other broadcasters, both within and outside the Aboriginal community, we have confirmed that this is a systemic issue, rather than one specific to Winnipeg where we are located or even one that is isolated to the medium of television.  It is this reality, the fact that young Aboriginal persons are not even considering careers in broadcasting, that brought us to the conclusion that we must do something about it.

2278             Closer examination revealed that Aboriginal persons, for the most part, are not aware of the career opportunities.  For many of our youth, this industry is not accessible to them, or, if it is, they think it's beyond their reach, both institutionally and financially.  The AMEF seeks to remedy all three of these impediments.

2279             The Aboriginal Media Educational Fund is a not‑for‑profit charitable organization, an initiative of the Aboriginal People's Television Network, but AMEF is an independent organization with a mandate to encourage, promote, and make possible the development of an Aboriginal pool of film, television, broadcast, and media professionals, and create opportunities for original programming and professional development, which will be recognized nationally and internationally.

2280             AMEF will develop a talent pool that can produce, distribute, market, and broadcast programming that will be relevant to today's Aboriginal culture, both nationally and internationally, and highlight the rich First Nations, Inuit, and Metis history.  It will assist the target groups in finding training and professional development opportunities in all areas of the media industry from technical to directing, from on air, to management.  This will be done through professional development, scholarships, tailored programs, and mentorships and will target the following groups:  The first one will be encouraging the careers in all aspects of production and broadcasting for Aboriginal youth through various outreach opportunities, job fairs, presentations, and a very visible presence in schools and such venues where our youth can be reached and see the opportunities offered to them.

2281             The second will be promoting and facilitating hands‑on experience for careers in production and broadcasting for recent Aboriginal graduates of media programs.

2282             And the third being developing new skills for Aboriginal production professionals wanting to take the next step by entering into the international market.  AMEF will also facilitate partnerships with international Indigenous production and broadcasting entities with the goal of forming alliances and partnerships, which will provide exporting opportunities and exchanges.

2283             I must, again, reiterate that AMEF will operate separately from APTN.  While APTN has been instrumental in breathing life into the initiative, its role will be, largely, to provide support through a position on the Board and to help promote the fund to the communities they serve.  It is the goal of the AMEF to develop talented Aboriginal media people who can work anywhere in Canada or abroad and in positions that span the entire breadth of the broadcasting industry.

2284             AMEF will be run by a Board that at the moment has six members, five of which have been confirmed.  In addition to this, we have assembled an advisory committee that spans the broadcast and film production industries.  This group of talented and accomplished individuals will provide guidance on a range of issues including advice on raising funds, attracting partnerships with established professionals, and direction on career opportunities within media.  The Board members will be instrumental in establishing a mentoring position within the companies they represent and expending the opportunities to companies beyond their own.

2285             Some of the advisory committee members will be well‑known to the Commission, and in combination, represent a broad section of the media in Canada.  For example, Sandra MacDonald who was the former head of the CTF and the National Film Board, the Honourable Douglas Frith, who was a former Minister of Indian and Northern Affairs and now runs CMPDA, Mark Starowicz of the CBC and Tom Perlmutter of the National Film Board.  And, in total, we anticipate having ten members within this advisory committee.

2286             AMEF represents the truest form of talent development amongst a group of people that are underrepresented in the broadcast system.  We will neither attempt to prescribe areas of development, nor will we limit the training we will offer.

2287             If in a single year, all applicants for funding are interested in getting into radio, then we will seek to find opportunities for them.  In this way, the fund cannot be seen to be supporting one medium or one avenue of development over another.

2288             Our goal is to raise 10 million to provide a secure funding base that will ensure the program's longevity if guaranteed.

2289             Awareness will not be achieved overnight, and so the fund must be well‑financed and supported to enable it to operate over the critical period of the first five years.

2290             As well, AMEF is committed to provide an annual report card about the Commission and the various broadcasting entities that will support it.  This report card will clearly demonstrate the level of participation, types of training or professional development opportunities, as well as any other endeavour that will have been provided through the fund.

2291             AMEF intends to be very transparent in this regard with a view of ensuring that the entities that will fund this initiative will be able to see concrete results and not worry that they have sunk funds into a bottomless pit from which they see no results.

2292             It is through the support of broadcasters like Harvard Broadcasting that our goal to expend the opportunities and contributions of Aboriginal people within the broadcast system will be realized.  Support for our community is not new to Harvard.  Harvard was the first radio broadcaster to create a long ‑‑ yearlong mentoring program for Aboriginal news people, the first to incorporate an Aboriginal feature into a mainstream radio service, and the first to expend this program throughout its existing and proposed stations.  Not only did Harvard commit to this mentoring program in Calgary, but also in Fort McMurray and Saskatoon.  The funding they now offer AMEF is a natural extension of their ongoing community support and their commitment to help elevate the role for Aboriginal persons in the Canadian Broadcast System.  Harvard Broadcasting's commitment in Medicine Hat marks the first contribution from a radio broadcaster, and we hope that we ‑‑ with the support of the CRTC, it will be one of the first of many.

2293             For people whose history is communicated orally and for communities that are enriched by the sharing of stories, the broadcasting industry would seem a natural vocation.  It is this intuitive sense of appropriateness that makes the AMEF such a natural talented development opportunity.  It is the need within the broadcasting system for trained personnel and the shortage of training and/or funding that make AMEF particularly relevant.

2294             The Commission has recognized the role of Aboriginal persons within the broadcasting system and given us the means to ‑‑ by which we can share our cultures and enrich our people, as well as allow Canadians to share into a unique world view and perspective.

2295             Now, we ask that the Commission recognize that hand in hand with having the way to communicate comes the need to develop the personnel that will bring our stories to life and make the most of the opportunities you have provided.

2296             Furthermore, AMEF will serve to develop a variety of skilled individuals and a multitude of disciplines related to the broadcast sector.  As such, it's not meant to take anything away from other issue‑specific initiatives, but to become a broad‑based effort to boast their opportunities in many areas.

2297             AMEF is a very constructive beginning to developing this talent, and we ask that the Commission confirm its suitability as a recipient of Canadian Talent Development Funds, and further, that they recognize Harvard Broadcasting's exemplary initiatives in serving the communities in which they operate by awarding them a licence in Medicine Hat.

2298             Thank you for your time and attention, and any questions, I'm here.

2299             THE CHAIRPERSON:  Thank you, Ms Watson.

2300             You're Mr. Harvey?

2301             MR. HARVEY:  Yes, I am.

2302             THE CHAIRPERSON:  If you could proceed, and then we'll deal with questions at the end.

PRESENTATION / PRÉSENTATION

2303             MR. HARVEY:  Thank you, Madam Chairman.

2304             Ladies and gentlemen, I would first of all like to apologize for not having a copy of my presentation.  This isn't something that I do every day, but it is something that I feel strongly about today.  So as I proceed, I would like to say thank you for accepting my request to appear before your hearing relative to Harvard's application for a licence to operate a new mainstream rock FM station in Medicine Hat.

2305             I own a diverse small company with my brother in Assiniboia, Saskatchewan.  The company is a third‑generation family business, rich in history.  For the past 86 years, our family has been in the hardware, furniture, and floor covering business.  We presently own and operate a Home Hardware store, a Carpet One store, and a furniture store, and we are 50‑percent shareholders in Ashdown's Furniture and Interiors in Moose Jaw, Saskatchewan, the previous businesses in Assiniboia, and since ‑‑ in 2001, we opened a large Carpet One flooring store in Medicine Hat, Alberta.  This provides you with a little background on whom and why I am making a presentation today.

2306             In Medicine Hat, we feel there is a need for a new radio station.  This is a fast‑paced, young, and progressive city, and there are only two commercial radio stations presently both owned by the Pattison Group.

2307             The format Harvard is proposing is lacking on the airwaves presently and would appeal to a younger male audience, an audience that is certainly present in Medicine Hat today.

2308             Licensing Harvard in Medicine Hat will bring a greater spirit of competition and free enterprise to the city.  The local business environment would benefit from another advertising option and format.  Listeners will have more choices.  But the main reason I am here today supporting Harvard is because of their commitment to the communities in which they do business, in particular, their devotion to and support of charitable causes in the markets they serve.  If licensed, Harvard will bring its commitment, community spirit, and charitable giving to Medicine Hat.

2309             As a business owner, it is important to get results from our advertising, but it is extremely gratifying to be part of the charitable programs Harvard is involved in.  Their commitment to every community they serve is overwhelming, and I have been involved in many projects in small town Assiniboia, Saskatchewan, that would not have come to fruition without the help of Harvard.

2310             In closing, I would like to summarize my position with regards to Harvard's application.  I feel they would be a great business partner in Medicine Hat through their integrity and spirit of enterprise.  I believe the radio public would benefit from this new format culturally and economically.  More importantly, though, it will be to the benefit of the many charities within and around Medicine Hat that will reap the rewards of Harvard's corporate philanthropy as time goes on, a legacy that Harvard continues to promote.

2311             Thank you for your consideration.

2312             THE CHAIRPERSON:  Thank you, Mr. Harvey.  Please don't leave the table.  There may be questions.

2313             Commissioner Pennefather...?

2314             COMMISSIONER PENNEFATHER:  Thank you, Madam Chair.

2315             Good afternoon.  Thank you.

2316             I'm going to just ‑‑ I have a couple questions for you, Madam Watson.  Thank you for your presentation because it filled in a few of the blanks on the ‑‑ what AMEF, the Aboriginal Media Educational Fund is all about.  I went to the website, and I gather from the website and from your presentation, though, we're in early days, programs are not as yet functioning; is that correct?

2317             MS WATSON:  Absolutely.  What we're trying to do is we're trying to do as much research as possible, which we're near completing.  I will be presenting to a Board meeting, which is taking place in the next couple of weeks.  But what we wanted to do is make quite sure that everything was in place before we started running, so we have a list of all our potential contacts and mentors.  We have a list of all the funding opportunities.  We have been meeting with everyone in the private and public sector across Canada.  We're putting together good ‑‑ what I believe will be a good governance mechanism, which will allow us to have complete transparency of ‑‑ you know, for everything we do including the members of the Board that are chosen.  So this has taken a lot more time than I wanted because I'm the most impatient person when it comes to programming programs, and, of course, which brings me also to the fact that a lot of the ideas about the type of programming are also coming to fruition and will be presented shortly.  But this took rather a long time because I wanted to make sure that we were actually looking at programs that will fulfill the needs of the community that we're trying to serve.  There's no point in ‑‑ you know, I can come up with any number of programs.  This is what I've been doing for the past many years across Canada, creating and developing training programs, but there are certain real needs, which are different from what I've been doing up to now, so it required a lot of meetings, a lot of talking to the ‑‑ to the people in the community that would be interested in these programs.

2318             COMMISSIONER PENNEFATHER:  Okay.  Well, I'm sure you're aware of one of the reasons I'm asking the question, and amongst others, it's very important to have a good sense of where the fund is going and why.  But at the very end, you do say, "AMEF is a constructive beginning to develop this talent.  We ask the Commission to confirm its suitability as a recipient of CTD funds."  So you also mention in your letter that you submitted ‑‑ provide direct funding allows to allocated funds to program and initiatives most urgently needed.  So at this stage, can you help us by understanding, your understanding of how the programs, as you see them developing, would be under the current rules of CTD initiatives, appropriate allocation.

2319             MS WATSON:  Well, essentially, what we're looking at is making ‑‑ interviewing the people where a need has been expressed by both the person and the market.  And to give you an example, from the Writers Guild and from many of the producers, I have heard that writing skills are much required.  So the first thing ‑‑ one of the things that I have done is I've approached the Writers Guild of Canada, and together, we will be putting together a program, which we will fund.  They will develop with us to make sure that, you know, the proper requirements are met.

2320             COMMISSIONER PENNEFATHER:  And these are writing skills in broadcasting?

2321             MS WATSON:  These would be writing skills in broadcasting, yes.

2322             COMMISSIONER PENNEFATHER:  So there would be skill training and mentorship?

2323             MS WATSON:  Absolutely.  Mentorship I have always found is an extremely important element in any program.  It is not enough to give a two‑day seminar or have a weeks ‑‑ you know, and then just let them go into the great wide world.  You need to be able to make sure that you follow‑up.  One of the great ways of following up and making sure that whatever they learn is put into practice is to go through the mentorship.  There could be two mentorship processes.  Depending on the level of the candidate, there could be placement with the broadcasters or on a set, and there could also be a mentor of which has been selected, which is near to what that particular participant wishes to attain, and where they could call on a regular basis and get advice.

2324             COMMISSIONER PENNEFATHER:  Okay.  One last question, and I don't know if you're able to answer this at this point.  But from a governance point of view, can you foresee the possibility that broadcaster participating by means of a CTD contribution would be able the have a say in how the funds would be used?

2325             MS WATSON:  Not with what I'm presently putting together, and I've had some great help with some people who have been spending a lot of time writing the rules.

2326             COMMISSIONER PENNEFATHER:  Okay.  So it would be, generally, seen as more of an overall contribution to the fund, and ‑‑

2327             MS WATSON:  Absolutely.

2328             COMMISSIONER PENNEFATHER: ‑‑ the fund would make the decisions.

2329             MS WATSON:  We make the decisions, absolutely.  It is necessary, and I can assure you that nobody that will be contributing will be sitting on either the Board or the selection committee.

2330             COMMISSIONER PENNEFATHER:  Okay, thank you.  Nice to see you again.

2331             MS WATSON:  Thank you.

2332             COMMISSIONER PENNEFATHER:  Thank you, Madam Chair.

2333             THE CHAIRPERSON:  Vice‑Chair Arpin?

2334             VICE‑CHAIR ARPIN:  My first question is for you, Mrs. Watson.  At ‑‑ in your oral presentation, from time to time, you're using the present tense, and other times you're using the future tense.  Where are you?  Are you now operating, are you structured?

2335             MS WATSON:  Well, I am because I'm really in the present and in the future.  I'm glad you noticed that.  You know, presently we have had ‑‑ we've formed partnerships, and one of our recent placement was ‑‑ we paid for ten Aboriginal youth to be trained through the National Screen Institute.  It was a 16‑week program in which they learned various skills, and where they will continue to be mentored.  So that's in the present.  The present is also a partnership with Ryerson, which are taking on a couple of our, you know, worthy candidates.  But as with any new organization ‑‑

2336             VICE‑CHAIR ARPIN:  There's a lot to be done.

2337             MS WATSON: ‑‑ you have to be present and future, so I'm continuing the future speaking to people, developing programs, and looking forward, in the next few months, to really being able to get going.  I mean, we have a terrific idea and a great need.

2338             VICE‑CHAIR ARPIN:  So thank you.

2339             Mr. Harvey, I don't know if you were here yesterday or ‑‑ or surely you were here earlier this morning.  A discussion we had throughout the two days is that ‑‑ has to do with the market of Medicine Hat and the ‑‑ is it a booming market?  Is it a stable market?  Is it ‑‑ I don't think anybody argued that it was in negative conditions, but some ‑‑ or we heard Mr. Raible earlier saying that, be cautious, Medicine Hat is not Lethbridge, is not ‑‑ surely not Fort McMurray or Grande Prairie.  To the contrary yesterday, we heard some of the applicants saying that with all the economic development that is taking place, particularly in the southeast of Alberta, Medicine Hat is growing at a faster pace than, say, Lethbridge on one hand, and then so that the economy ‑‑ well, retail sales are ahead of pace.  They ‑‑ surely, they are ahead of ‑‑ quite ‑‑ from an index point of view, quite above national average.  You are a retail person in the Medicine Hat market.  What is the actual conditions of that market?

2340             MR. HARVEY:  Thank you for your question.  To give you ‑‑ I do business in two provinces, Saskatchewan is relatively, we would say, conservative and staid.  In Medicine Hat, the business market is very vibrant.  It's driven by oil and gas revenues to some degree.  Unfortunately, to the demise of Saskatchewan, it's driven by retirement.  It's driven by the Medicine Hat College.  There's a lot of ‑‑ again, unfortunately, to the demise of Saskatchewan, a lot of young people moving in to Medicine Hat.

2341             Medicine Hat is developing its own economy within its own city.  It's certainly dependent on agriculture, it's dependent on gas, it's dependent on oil, but there is lots of manufacturing coming into the city.  One cannot underestimate the economic activity of oil and gas, but I think Medicine Hat is maturing into a city, much the same as Lethbridge.  The growth factor is phenomenal.  The one thing that we see is just the maturing of the market becoming a full‑fledged city instead of a larger business centre.

2342             VICE‑CHAIR ARPIN:  The ‑‑ some of the applicants yesterday were saying that the big boxes are getting ‑‑ are moving now to Medicine Hat.  People used to go to Lethbridge to have a Wal‑Mart, and they ‑‑ and a Future ‑‑ but on ‑‑ the Wal‑Mart being ‑‑ and Best Buy, I will say, are what we call the big boxes.  The ‑‑ now, you are in the carpet business.  How do you see those big boxes coming in your market?  Are you concerned that they're going to eat your lunch, or there's room for you and for them?

2343             MR. HARVEY:  Well, there's room for both.  We're a service‑driven industry.

2344             I like to think that I come from pretty humble beginnings, and as my grandfather and my father were tenacious, we'll survive.  There's no problem there.  That, in itself, is an indication that, again, people that have ‑‑ well, definitely more resources available to them than I do are seeing that market as viable, and so trade and commerce ‑‑ I mean, we're riding a peak on our graph, but ‑‑ and it's certainly going to level out, and it's certainly going to probably go down, and that's where all my business planning is done on a flat line, relative to how we do it in Saskatchewan, and I ‑‑ I don't see any problem in that market.  It can't consistently maintain the pace of growth right now.  The city can't even keep up to it.  They'll tell you that.

2345             For me, the indication of larger companies coming in, the big boxes, the Costco is supposedly coming in the fall or early spring.  All of those things are good indicators of a strong economic market, and I think that it can only be good.

2346             VICE‑CHAIR ARPIN:  Thank you very much, Mr. Harvey.  Those are my questions.

2347             THE CHAIRPERSON:  Thank you, Vice‑Chair.

2348             I have just a few more questions of Ms Watson.  You are looking for another Board member.  Is that ‑‑ are you looking for a First Nations person?

2349             MS WATSON:  (Off mic...)  I always forget to do that.  Yes, we're very careful in looking ‑‑ we have Metis, we have Inuit, we're looking at First Nations.

2350             THE CHAIRPERSON:  No, I'm talking about your Board Members.

2351             MS WATSON:  Yes, and the sixth person will be ‑‑ that will become a fact in two weeks' time.  The person has been approached and will be ‑‑ most probably be accepting.

2352             THE CHAIRPERSON:  So you have Board members of Sandra McDonald ‑‑

2353             MS WATSON:  Oh, no, no, that's the advisory committee.  This is not the Board.  The Board is made up exclusively of Aboriginal peoples.

2354             THE CHAIRPERSON:  Oh, okay.  So this is ‑‑

2355             MS WATSON:  Yes, I'm sorry.  The advisory committee is the greater ‑‑ they're the people that are going to give us all sorts of information, help us find funding ‑‑

2356             THE CHAIRPERSON:  My mistake.

2357             MS WATSON:  ‑‑ put us in the right direction ‑‑

2358             THE CHAIRPERSON:  Okay.

2359             MS WATSON: ‑‑ and be a great source of mentorship.

2360             THE CHAIRPERSON:  Now, and do I understand in terms of the present, AMEF has already disbursed monies and has already sent ‑‑

2361             MS WATSON:  Yes, yes.

2362             THE CHAIRPERSON: ‑‑ some worthy individuals to Ryerson and to NSI?

2363             MS WATSON:  That's right.

2364             THE CHAIRPERSON:  And so you've already been raising money, under a different name or ‑‑

2365             MS WATSON:  No.  The first funding has come from APTN.  They've put a certain amount of money aside, and that ‑‑ that was our first because we wanted to ‑‑ at the same time as being recognized by CRA, as a non‑profit charitable organization, we wanted to be able to straightaway start our work.

2366             THE CHAIRPERSON:  Oh, seed money?  Okay.

2367             MS WATSON:  Yes.  So that's our seed money.

2368             THE CHAIRPERSON:  And you want to raise $10 million?

2369             MS WATSON:  Yes.

2370             THE CHAIRPERSON:  And then you think you'll be self‑sustaining after that?  Is that the concept?

2371             MS WATSON:  Well, $10 million, you know, I look to the budget, is a good amount, but we will be continuing to look for funding from that and on.  It doesn't mean that we will not start before we get our $10 million or that we will stop at $10 million.

2372             THE CHAIRPERSON:  Yes, okay.  And then you are also, is it setting up partners that will do the mentorship?

2373             MS WATSON:  We're setting up partnerships where ‑‑ one of the things I've done in my former life as ‑‑ starting with the ‑‑ creating the national training program when I was with the Canadian Television Production Association, was look at the number of training programs that were in Canada, and you'd be horrified to find out that it's 200 a knot(ph) with a lot of people competing for the same amount of money and not knowing that, you know, some of the training is repeated a dozen odd times across the country, and, you know, one would serve but, anyways, that's ‑‑ that's an ongoing problem which many people are trying to resolve.  So, therefore, one of the things I've done ‑‑ and I went back to my notes to see who was still in existence and have been getting in touch with the people I feel will best serve to deliver the programs that I'm looking at.

2374             THE CHAIRPERSON:  Thank you.  Thank you, Mr. Harvey.  Thank you, Ms Watson.

2375             Madam Secretary...?

2376             THE SECRETARY:  Thank you, Madam Chair.

2377             This completes Phase III of the process, and we will now proceed to Phase IV in which applicants can reply to all interventions submitted on their application.  Applicants are invited to appear in reverse order as listed on the agenda, and for the record, Newcap Inc. will not be appearing in this phase.  Therefore, I would ask Mr. Pat Lough, on behalf of a corporation to be incorporated, to come forward if he wishes to appear in this phase.

‑‑‑ Off microphone / Sans microphone

2378             THE SECRETARY:  All right.  Mr. Lough has declined.

2379             Then I will call on Rogers Broadcasting Limited to come forward.

PRESENTATION / PRÉSENTATION

2380             MR. MILES:  Thank you.

2381             I will be uncharacteristically brief.

2382             Thank you so much on behalf of my team for an expedient hearing, but very fair, and through you, Madam Chair, to the rest of the panel and to the staff for all of the assistance during this hearing process.

2383             Thank you.

2384             THE CHAIRPERSON:  The Vice‑Chair has a question for you.

2385             VICE‑CHAIR ARPIN:  And for all of those who will come.  We heard CIRPA making some comments regarding the radio review and expecting that ‑‑ or those who will be licensed will agree to follow the rules that the Commission may come up with out of the radio review.  Do you have any comments to make to ‑‑ to what Mr. Mair said earlier today?

2386             MR. MILES:  Yes, I do.  I thought that he was unfair and uncharacteristically negative toward the applicants in the general process of funding for the Canadian talent thing.  Look it, we have always looked forward to a relationship in the industry that we have established through the CAB and the hearing process and the radio regulation process, and that is a process that I think will continue, and we shouldn't try and destroy any of that kind of relationship that we've got going, and we do look forward to the material coming out of the radio review.  We've all been part and parcel of the process.

2387             VICE‑CHAIR ARPIN:  So you will be ‑‑ if say that the Commission, in its wisdom, choose the SOCAN approach and make it 51 percent Canadian content, you will adhere to that 51 percent Canadian content, even if today, at this hearing, your application wasn't predicated on that level?

2388             MR. MILES:  Reluctantly, yes.

2389             VICE‑CHAIR ARPIN:  Thank you.

2390             THE SECRETARY:  I would now call on the next applicant, Harvard Broadcasting Limited.

2391             MR. COWIE:  Thank you very much, Madam Chair and Members of the Commission, Commission Staff.  We just wish to thank you very much for a very efficient and helpful hearing for us.

2392             I hope I don't have to answer that question, Mr. Vice‑Chair, I thought Mr. Miles did a good job of that.  But there are two sayings, one is that Lord Beaverbrook said, "The world is full of unrealized fears," and on the other hand, the others, "Que sera sera."

2393             So thank you very much.

‑‑‑ Laughter / Rires

2394             THE SECRETARY:  The next applicant to appear would be Vista Radio Limited.

PRESENTATION / PRÉSENTATION

2395             MS MICALLEF:  We don't have anything to add either, other than to thank the Commission for, again, allowing us to be ‑‑ to appear in front of you, and we have really nothing to add to either what Mr. Miles said or Mr. Cowie.  They were both very articulate.

2396             Thank you.

2397             THE SECRETARY:  Thank you.

2398             We'd now call on numbered company 1182743 Alberta Limited to come forward, please.

PRESENTATION / PRÉSENTATION

2399             MR. LARSEN:  Again, just thank you, Madam Chair, Commissioners, and staff for the expedited hearing.  We'd reiterate again no reply to the CIRPA intervention, but we'd like to just point out that we did a written response to the CIRPA written intervention, so thank you very much.

2400             VICE‑CHAIR ARPIN:  Mr. Larsen, your reply ‑‑

‑‑‑ Laughter / Rires

2401             VICE‑CHAIR ARPIN:  Yes, obviously the argument that Mr. Mair made this morning regarding the radio review was not in the CIRPA submission on one hand or was not ‑‑ surely not articulated the way he articulated it, and so your reply didn't cover that, so what are your views?

2402             MR. LARSEN:  Right.  As a new broadcaster, obviously, we would abide by the rules that are set by the CRTC.  I would agree with what Mr. Miles said that we believe there's a fair structure in place, and whatever the rules will be, will be, and we will follow them.

2403             VICE‑CHAIR ARPIN:  Thank you.

2404             MR. LARSEN:  Thank you.

2405             HEARING SECRETARY:  The next applicant would be Radio CJVR Ltd., if they would come forward.

PRESENTATION / PRÉSENTATION

2406             MR. SINGER:  Thank you, Madam Chair, Commissioners, and CRTC staff.

2407             I would just like to comment on the interventions stated here this afternoon regarding our admission of 40 percent Cancon in our oral presentation.  We apologize that our inclusion of that 40‑percent Cancon commitment in yesterday's presentation has caused concern to our fellow applicants and to the CRTC.

2408             As noted yesterday, we regret that the 40‑percent figure was not included in our Supplementary Brief filed earlier.  In preparing that application, we felt it was a given that CJVR would commit to 40‑percent Cancon just as we do at our two FM stations in Melfort and Whitecourt.  This level, I can assure you, and assure our applicants, our fellow applicants, was not based on what our competing applicants have placed in their applications.  The level was based on what we, as a strong promoter of Canadian talent, commit to at our radio stations.  The only reason we added that into our oral presentation yesterday, regrettably, was to parallel that level with our other significant Canadian talent development benefits that we are very, very proud of.  We've been recognized for this commitment of promoting local Canadian talent, and when we put this application, we said, why would we stop here?

2409             Finally, I wish to say that CJVR is very respectful of the CRTC public process and the fair manner in which all applications are treated and assessed.  It was never our intention to work around that process.  Having said that, to be fair to our competing applicants, with the commission's indulgence, CJVR will go on record to state that a 35‑percent commitment to Cancon level should go on the record in our Medicine Hat application if this Commission so chooses; however, should with be monitored at any given time, given this licence, I can assure you, you will find that we are playing at least 40 percent Cancon.

2410             And in closing, I just wanted to say thank you for a very fair hearing.  Thank you for pointing out our omission, and we will strive to keep that in mind as we move forward.

2411             THE CHAIRPERSON:  Thank you, Mr. Singer.  Any ‑‑

2412             VICE‑CHAIR ARPIN:  Any comments on Mr. Mair's presentation this morning ‑‑ this afternoon, I should say, regarding the radio review?

2413             MR. SINGER:  I think my fellow applicants that have appeared before me pretty well summed up my feeling on that.  Thank you for the opportunity.

2414             VICE‑CHAIR ARPIN:  Thank you.

2415             MR. SINGER:  Great.

2416             THE CHAIRPERSON:  Madam Secretary...?

2417             THE SECRETARY:  Thank you, Madam Chair.  Golden West Broadcasting Limited is the next applicant.

PRESENTATION / PRÉSENTATION

2418             MR. HILDEBRAND:  Thank you one last time.  Thank you for running an expeditious process.  I think you have gone through a lot of applications with great dispatch, and I think everyone in the room appreciates that.

2419             I have a small comment to make on the CIRPA presentation.  Notwithstanding the compliment that he gave our organization for, you know, exceeding Cancon regulations, I find it presumptuous for an organization like that to come and try and run our business.  I think until such a time as we are invited to participate in making their business plans, they should, you know, keep their distance.

2420             Thank you.

2421             VICE‑CHAIR ARPIN:  Any further comments regarding the radio review?

2422             MR. HILDEBRAND:  Yeah, again, I think the Commission will be fair in their radio review, and, from our perspective, we'll be able to live with whatever the review comes down with.

2423             VICE‑CHAIR ARPIN:  Thank you.

2424             MR. HILDEBRAND:  Thanks.

2425             THE SECRETARY:  I will now call on the last applicant, Lighthouse Broadcasting Limited.  Do you wish to appear?  I see they're not present.

2426             Madam Chair, this completes the list of applicants and therefore phase IV of this process.

2427             I do have two announcements to make on the record.  We have been provided a document by Rogers Broadcasting, which is a breakdown of their music and spoken word as they had committed to do so.  This document will be placed on the applicant's file on the public examination file, and it can be viewed in the exam room.

2428             We also have been provided with ‑‑ Radio CJVR Limited, there's a table showing their spoken word content, as they had committed to do so, and that also will be placed on their application filed.

2429             Madam Chair, this completes the consideration of item 1 to 9 on the agenda.

2430             Thank you.

2431             THE CHAIRPERSON:  Thank you, Madam Secretary.

2432             We will adjourn ‑‑ by my clock on my wall, it's 20 to 1.  I think we will actually even go for until ‑‑ what do we say, an hour and a half?  2:00.  So you can even take an afternoon nap.  We will be proceeding to volume 3 and Regina, the pearl of the prairies, of course, at 2:00.

‑‑‑ Upon recessing at 1239 / Suspension à 1239

‑‑‑ Upon resuming at 1400 / Reprise à 1400

2433             THE CHAIRPERSON:  Madam Secretary...?

2434             THE SECRETARY:  Thank you, Madam Chair.

2435             We are now ready to proceed with the applications from the Regina market starting with item 10 on the agenda, which is an application by Newcap Inc. for a licence to operate an English‑language commercial FM radio programming undertaking in Regina.  The new station would operate on frequency 90.3 megahertz (channel 212C1) with an effective radiated power of 100,000 watts (non‑directional antenna/antenna height of 148.5 metres).

2436             Appearing for the applicant is Mr. Rob Steele, who will introduce his colleagues.  Mr. Steele, you'll have 20 minutes for your presentation.

2437             Go ahead.

PRESENTATION / PRÉSENTATION

2438             MR. STEELE:  Thank you.

2439             Well, good afternoon, Madam Chair, Members of the Commission, the Commission Staff.  I'm Rob Steele, the President and Chief Executive Officer of Newcap Radio, and before we begin our presentation, I'd like to reintroduce our team.  Seated in the front row to my immediate right is David Murray, Chief Operating Officer for Newcap Radio, beside Dave is Glenda Spenrath, assisted GM of Newcap's Alberta Radio Group East, based in Lloydminster.  Glenda was born and raised in Saskatchewan, and, as you may know, Lloydminster serves much of western Saskatchewan.  And as such, Glenda has good knowledge of the economic picture in the province.  To her right is Mark Maheu, Executive Vice‑President and Chief Strategist for Newcap Radio.  Next to Mark is Sue Stevenson, News Director of our southern Alberta group of stations, including KG Country and Z99, Red Deer.  And on the far right is Brad Boechler, our VP of sales.  Brad was born in Melfort, raised in Regina, and worked in radio in the city and throughout the province for many years.

2440             This is the second of our three appearances, and this application represents our first proposal to bring our brand of radio to Saskatchewan, and I'd like to ask Glenda to speak to the economic conditions here in Regina.

2441             Glenda...?

2442             MS SPENRATH:  As we did our research on Saskatchewan, we realized that Regina is one of Canada's best kept secrets.  Let me tell you about some of the reasons why we are excited about Regina.  While it seemed there was an exodus in the late‑1990s, the population is now growing in Saskatchewan.  FP Demographics projects that the population will increase to over a million people by 2011.  Regina actually counters the provincial trend with modest population growth over the past ten years.

2443             In terms of income, there's continued growth in household incomes, a primary indicator that consumers have the money to spend on goods and services.  And, of course, this means a growth in retail sales.  FP Markets projects that income in the city will increase by nine percent from 2006 to 2008 and by 22 percent by 2011.  In fact, Regina's 2006 personal income is two percent ahead of the Canadian average and 14 to 16 percent ahead of the provincial average.

2444             In terms of housing starts, Stats Canada reports that Regina and Saskatoon are leading all other metro markets in Canada in the new housing pricing index, other than Edmonton and Calgary.  CMHC indicates that single‑family housing starts are strong in both Saskatoon and Regina because that is where employment and wages are growing.

2445             A good indicator of the economic activity in the province is the government's announcement last Friday that they were able to cut the provincial sales tax by two percent.  The government indicated that revenues from the energy sector enabled them to maintain their economic position while cutting the sales tax.

2446             I would like, now, to ask Brad Boechler to speak about what this means for retail sales and radio revenues.

2447             Brad...?

2448             MR. BOECHLER:  Thanks, Glenda.  The economy in Saskatchewan is quietly turning around, and this is good news for radio.  More people making better wages and buying homes means more spending on consumer goods.

2449             FP Markets projects retail sales to grow in Regina at about the same rate as income.  The $2.1 billion in retail sales in 2006 are projected to increase by nine percent by 2008 and by a total of 23 percent by 2011.  This should have a substantial and positive impact on radio revenues.

2450             While we do not have access to the actual financial returns for this market as there are only two private radio broadcasters, we can look at the trends in the province and expect that Regina should outperform the province given its better economics and consistent employment rates in both the public and private sectors.

2451             According to the Commission's radio financial summary for 2005, radio revenues had an average annual growth rate of nine percent between 2001 and 2005.  Properly stimulated, radio revenues will continue to increase at the same rate as retail sales, and, as you know, new radio entrance into a market normally caused radio revenues to increase even more rapidly.

2452             We believe that Regina is an underserved market in terms of the number of radio stations available to its residents.  For a few examples, Moncton, New Brunswick, whose CMA is less than three‑fifths that of Regina, is home to six commercial FM stations and two community stations that aggressively compete for revenues in that market.  Added to that, two Christian stations and as well four CBC stations.

2453             If we consider only commercial radio stations, there is one radio station for every 20,000 people in Moncton compared to Regina's one radio station for every 34,000 people.

2454             Saint John, New Brunswick, a city whose population is 110,000, has six commercial radio stations of which five are on the FM band, or one for every 18,000 people.

2455             Brandon, Manitoba has a population one‑fifth that of Regina's but has four commercial radio stations, about one for every 10,000 people.

2456             Belleville, Ontario, has a census agglomeration, a population of approximately 90,000 people, less than half of Regina, but is home to five local commercial radio stations or one radio station per 18,000 residents.

2457             We believe that Regina residents have a right to the range of radio choice that the market can support, and it can definitely support more radio.

2458             In my meetings with Regina business leaders, I basically heard the same thing repeated over and over: another choice in radio service and advertising options would be beneficial for their business.

2459             Now, to speak to you about our choice of formats, here is Mark Maheu.

2460             MR. MAHEU:  Thanks, Brad.  Newcap Radio conducted a complete and comprehensive research study of the Regina market to determine what opportunities might exist for a new FM radio service.  Our research was conducted with Regina residents aged 18 to 64, and we examined nine different format options.

2461             Our findings showed that the preferred format option for Regina listeners was classic hits followed by classic rock and then '60s and '70s oldies.

2462             Next, we looked at the percentage of format void, which is simply the percentage of people who say they would listen often to a format but cannot associate any radio station in the city with it.  The percentage of format void indicates how big an opportunity there is for a new format.

2463             In Regina, the top format void is for '60s and '70s oldies at 16 percent, followed by classic hits at 11 percent.

2464             Now, since CRTC regulations do not allow for a true oldies format because it is predominantly hit songs from the '60s and '70s, Newcap proposes an oldies‑based classic hits format for Regina.

2465             45 percent of the music will be the great oldies hits from the mid‑'60s through the '70s from artists like The Supremes, The Four Tops, CCR, the Beach Boys, The Guess Who, and Bachman‑Turner Overdrive.

2466             55 percent of the station sound will draw from the traditional classic hits repertoire from the '80s and '90s and now from artists like Bryan Adams, Phil Collins, Madonna, and John Mellencamp.

2467             Now, according to the research, the demographic this format would appeal to is adults 35 to 64 with real strength with adults 45 to 64.  This strong, positive interest skews slightly to men at 55 percent, women at 45 percent.

2468             Newcap is also proposing to create and broadcast several fun, informative, and interesting music features to compliment the music on the radio station.

2469             Week nights at seven, we will feature That '70s Show featuring music from artists like Abba, Gordon Lightfoot, Joni Mitchell, The Bee Gees, Chicago, all the artists that defined a decade.

2470             Sundays at noon, we'll put the emphasis on The Roots of Rock'n'Roll.  The show will pay homage to the music that created the rock genre, with blues, rock'n'roll, and vintage rock classics from artists as diverse as BB King, Elvis Presley, Hank Williams, Elmore James, and John Mayall.

2471             And Sunday nights at six, we'll air The Classic Album Story.  Each week, we'll tell the story of one of the best classic albums from the past 40 years, playing tracks, and discussing the albums with listeners and guests.

2472             We know from our experience that the oldies‑based and classic hits listeners love the music of the past, but they live in the here and now.  Adults 35‑64 also have an expectation of credible, frequent news and information from radio.  As part of our proposal for Regina, we have addressed this need by putting forth an extensive schedule of spoken word programming and news.  And to tell you a bit more, here is Sue Stevenson.

2473             MS STEVENSON:  Thanks, Mark.  As we noted in our previous presentation and as you will hear in our current presentation, we believe there is a need for an even greater emphasis on local news and information in an era where niche formats, specializing in almost everything you can imagine, are available to all of us.

2474             At Newcap, we are proud of the way we make every one of our stations a local station.  We don't do it the same way in every place, rather we tailor our approach to what the particular circumstances of the community are.  So, for example, in Saint John's, Newfoundland, our heritage news and talk station VOCM is pretty well solid news and information all day, and our news director there, Gerry Phelan, recently won a national RTNDA award.  You also heard the other day about our success in Red Deer.

2475             As in Medicine Hat and Saskatoon, we propose to provide a minimum of five hours and 45 minutes per week of news of which 75 percent will be local.  Our five‑minute newscasts on the hour, in morning drive, at noon, and in the afternoon seven days a week will be supplemented by shorter newscasts on the half hour in morning drive.

2476             With the increase in our news commitments in our letter of August 14th, we have also increased the number of news staff to four full‑time and one part‑time.

2477             The audience for this station will start at 35 years of age with a real core being in the 45‑plus age group, and we intend to reach out to them with spoken word features that will address their needs.  Clearly, investments and health become more important as we mature.  We want to know that we will have enough money to indulge our tastes and good enough health to enjoy the possibilities open to us, to travel, to help our children and their children, and to indulge in the fine things in life.

2478             In addition to our five hours and 45 minutes of news, we will broadcast a number of program features.

2479             There is Inside Regina.  Three times a day, we will profile someone who is making a difference in Regina, a business leader, a volunteer, or perhaps a Roughriders booster.

2480             Live Tonight will focus on arts and entertainment activities around the city with plays, gallery openings, concerts, and other events.  We won't merely billboard these events, but interview those involved in presenting them.

2481             In 2004, Regina was named the cultural capital of Canada.  Live Tonight will be one way to reflect the cultural activities that help win that title.

2482             Another program is Your Town.  It will bring a focus to the civic events that are going on to make Regina a better place.  Charity auctions, not‑for‑profit events, and other information that particularly focuses on the not‑for‑profit community.

2483             As the provincial capital, Regina benefits from provincial institutions that bring arts and cultural events year round.  It has a wide range of festivals throughout the year, whether it's Mosaic, Bazart at the Norman Mackenzie Art Gallery, Pile of Bones Sunday in Wascana Park, and, of course, Buffalo Days, or one of the many summer music and other celebrations.  We will cover all these events thoroughly.

2484             During our Medicine Hat presentation, we talked about the mobile studios.  Our Regina mobile studio will allow us to not only promote the events, but to be on‑site with interviews with organizers and participants.

2485             And now to speak about Canadian talent development and to sum up, here is Mark Maheu.

2486             MR. MAHEU:  We propose to spend just over $1.5 million on Canadian talent development in Regina if we are a successful applicant.

2487             Each year, we will devote $215,000 to three initiatives.  Two of the beneficiaries will be Saskatchewan organizations, the third, a national organization.

2488             The national organization will be the Radio Starmaker Fund.  The Commission is quite familiar with the Starmaker Fund, which resulted from a Commission request that the industry develop a fund that would focus on marketing and promotion of emerging Canadian artists.  We would request that the fund direct our annual $90,000 contribution to Regina artists first, and any excess to Saskatchewan artists.

2489             Our first local initiative is to grant to the University of Regina Department of Music, $40,000 each year.  Now, half of that is going to be directed to scholarships for music students, while the remaining funds will be used to support music festivals and competitions.  We hope to help the music community develop by supporting new, young artists as they learn their trade and have an opportunity to perform before critical, but supportive audiences.

2490             The second of our Saskatchewan initiatives is an annual grant to Sask Music of $85,000.  Sask Music is also known as SRIA, the Saskatchewan Recording Industry Association.  And in their intervention supporting our applications, Sask Music pointed out, "The kinds of educational and export initiatives that they support."  They further indicate that they need additional funds to more fully underwrite their initiatives for both new and emerging artists.

2491             Madam Chair, Members of the Commission, we passionately believe that for our industry to continue to flourish, we have to continue to provide high quality and diverse radio services to Canadians.  We need more radio with more local services providing a wide range of programming, capitalizing on the over‑the‑air radio's greatest strength, its local connection.  New services expand listening, provide choice in music and editorial content and grow radio's overall share of the advertising pie.

2492             We believe that in Regina they are ready for new radio for all the economic reasons that Glenda and Brad outlined just moments ago.

2493             Harvard and Rawlco radio provide excellent radio service to this city, no question about it.  Our argument is not based upon making up for deficiencies in their service, but in a world where listeners have many alternative sources for music, listeners are not willing to settle for their second choice when it comes to a local radio station.  What they want is great local radio that engages them, speaks to their tastes, and informs them about what's going on, whether it's around the corner or around the world.  New radio choices will also cause the existing broadcasters to hone their focus by providing and superserving their core audiences while a new radio station would superserve a new constituency.

2494             If the market can support it, and we believe it can, the outcome is more choice for the listener, additional editorial voices, more targeted audiences for advertisers, and more money for Canadian talent development.  It's a win for everyone.

2495             We believe that we have provided a new radio station proposal that will be a hit with Regina listeners.  Newcap has a strong commitment to building for the long term, and that would be the case here in Regina.  A strong business plan, based on our expertise in bringing new formats to the market in exciting ways.  We're going to provide a new format that's presently not available in Regina.  A strong, local programming proposal with more than adequate programming spending to meet our proposal's needs, and a contribution to the development of Canadian talent worth over $1.5 million.

2496             Thank you very much for your time and attention.  We'd be happy to answer any questions you might have.

2497             THE CHAIRPERSON:  Thank you.

2498             Commissioner Pennefather...?

2499             COMMISSIONER PENNEFATHER:  Thank you, Madam Chair.

2500             Good afternoon.  I'm going to go through some questions on programming, and we'll start this time with the spoken word.  Thank you for your chart, again, which this time has hours and minutes, I noticed, so we're confused some more ‑‑

2501             MR. MAHEU:  We're quick learners.

2502             COMMISSIONER PENNEFATHER:  Thank you.  And I was all set to do to the other and show off.

‑‑‑ Laughter / Rires

2503             COMMISSIONER PENNEFATHER:  In your presentation, you actually are on my very first question.  Your presentation on page 10, Ms Stevenson, said you will increase the number of news staff considering the fact that this ‑‑ the 81 news packages now, and are five hours and 45 minutes is an increase.  You are then increasing the number of news staff to four full‑time and one part‑time; is that correct?

2504             MR. MAHEU:  That is correct, 4.5, four and a half.

2505             COMMISSIONER PENNEFATHER:  It was originally two journalist announcers and one news director ‑‑

2506             MR. MAHEU:  Right.

2507             COMMISSIONER PENNEFATHER: ‑‑ so my question is, with this increase in expenses, would you submit a revised 4.1 financial summary to reflect that change?  Would that not cause a change?  I know you submitted a revised in terms of CTD, but would it not require a revised 4.1 financial statement?

2508             MR. MAHEU:  It probably does need to be revised, but it's not a material revision, is it, Dave?

2509             MR. MURRAY:  No, actually the salaries in programming in 4.1 were actually already there ‑‑

2510             COMMISSIONER PENNEFATHER:  Okay.

2511             MR. MURRAY: ‑‑ it's just we hadn't had the correct number in the Brief.

2512             COMMISSIONER PENNEFATHER:  Thank you.

2513             We discussed previously the rationale behind the increase in news packages in what we outline as scheduled news here versus non‑news.  I don't mean versus in a bad sense, but just as a different ‑‑ our 75 percent local content is in your news packages.  Will this cover only the pure news portion or does it also refer to surveillance material, sports, weather, and news combined, the 75 percent local content?

2514             MR. MAHEU:  Madam Commissioner, if I understand what you're saying, you're asking if the 75 percent local content applies to just the news, weather, and sports, the scheduled portion?

2515             COMMISSIONER PENNEFATHER:  That's correct.

2516             MR. MAHEU:  Yes, the same as the previous application where, again, 75 percent on average.  If you took it out over the course of a week or whatever then you find that 75 percent of the content in those scheduled newscasts would be ‑‑ would be local.

2517             COMMISSIONER PENNEFATHER:  75 percent of the 5.45?

2518             MR. MAHEU:  Correct.

2519             COMMISSIONER PENNEFATHER:  And what about the non‑news, would it also be 75 percent local?

2520             MR. MAHEU:  It actually might be a little higher than that because those non‑news spoken word items, whether it's some of the features that we plan to run or the spoken word from our on‑air personalities, virtually, all of that would be what we would consider local.

2521             COMMISSIONER PENNEFATHER:  Does the scheduled news, five hours, 45 minutes, include ‑‑ yes, it does, I'm answering my own question, the sports and the weather and so on are all there?

2522             MR. MAHEU:  Yes, it does.

2523             COMMISSIONER PENNEFATHER:  Now, one other point that we discussed, I believe, previously as well, was many newscasts are often repeated with only minor adjustments in content and delivery to provide updates and sustain audience interests.  By increasing your weekly newscasts, do you envision an increase in original content or an increase in repetition of the same content?

2524             MR. MAHEU:  It's a good question.  We kind of talked about that a little bit as it related to our Medicine Hat proposal.  I think I'll let Sue reiterate our approach on multiple newscasts and keeping them fresh.

2525             MS STEVENSON:  All right, thank you very much.

2526             With our newscasts, we are always trying to keep things fresh.  We strive not to have the same newscast or the same content from, say, 7:30 a.m. to 8 a.m. because, frankly, that just gets boring to listeners.  We'll touch on the top news stories, but beyond that, we want to offer different local stories in different newscasts.  And, generally, we'll ‑‑ we almost day part it.  If we have a story that's running in the morning run, say, from 5:30 to nine, well, you're not going to hear that story throughout the rest of the day.  So we're always striving to have different and new local stories and to really mix things up so it's not the same newscast over and over again.

2527             COMMISSIONER PENNEFATHER:  We also were left a little wanting last time in a discussion on your point that you increased the news packages, which is the scheduled news list, 5.45 hours, in relation to changing times and to the different sources of entertainment and information that the public now has, and we asked why you wouldn't, then, increase the non‑news component.  Can you talk about that a little bit?  Why in increasing the news and information or spoken word you increased the scheduled news and not the non‑news, the ‑‑ for example, the community update and the public affairs reports.  In terms of your overall approach to ‑‑ I think you mentioned it that conventional terrestrial radio needs to look at things a little differently now.  Can you speak to that point?

2528             MR. MAHEU:  Sure.  When we put our proposal together and even as it is being presented to you here today, a couple of things.  The proposals that we're putting forth on the regularly scheduled news along with the non‑scheduled spoken word, we look at these as kind of a floor as minimums that we're certainly prepared to commit to and do.  The marketplace will dictate, in many cases, what needs to be done to be successful.  We see this as kind of a framework for the beginning of our success in building something in the marketplace.  In a number of features in the Inside Regina reports and Live Tonight in Your Town, when we originally put our proposal together in a competitive environment like Regina, with six other competing radio stations, we felt that that would be enough to get started at least to be able to ‑‑ begin to position ourselves in the community of doing things a little bit differently and having content on the air that could generate an audience and hence, a listenership.  So we look at them as really minimum amounts going forward that is going to be necessary, but the marketplace and the competitive environment will also dictate how much of that we're ‑‑ how much more we're going to need to do, if we're going to need to do more, to be successful.

2529             COMMISSIONER PENNEFATHER:  Will the same ‑‑ I believe now we're at the news staff, four full‑time, one part‑time.  Will the same news staff be working on the scheduled news as the non‑news component?

2530             MR. MAHEU:  Sue...?

2531             MS STEVENSON:  For the most part.  The news people will handle some of these specialty programs as well, but I have talked about the mobile studio, and that's where a programming end could come in and help.  A mobile studio, it's more than just a ‑‑ say, a community cruiser.  We have dedicated broadcast systems in the cruisers that are able to go out into the community and interview people and send that realtime back to the stations.  So that's one component that would lap over.  And the ‑‑ for instance, the Live Tonight, that would be produced by a news team.  Your Town and the community events, that would be something that would be done in concert with programming.  So it's kind of a hybrid situation.

2532             COMMISSIONER PENNEFATHER:  We ‑‑ also ‑‑ here do you also have the listener poll as part of your proposal?

2533             MS STEVENSON:  That would be included, generally, right in the newscasts, so it would be, you know, part of that local content during the newscasts.

2534             COMMISSIONER PENNEFATHER:  And could you tell me ‑‑ tell us a little bit more about it, how it would work?  We called it the Hat Line in Medicine Hat because it's called the Hat, Medicine Hat.

2535             MS STEVENSON:  That's right.

2536             COMMISSIONER PENNEFATHER:  My colleague made sure I understood that, and ‑‑ but what it specifically ‑‑ we're talking about a different market now.

2537             MS STEVENSON:  Right.

2538             COMMISSIONER PENNEFATHER:  Could you tell me if it's exactly the same or is there some different approach?

2539             MS STEVENSON:  It would, basically, be the same.  Of course, the name wouldn't be the same, but basically, you know, we would ask our listeners to call in on topics of the day that are of interest to the community.  One day it might be a very serious topic, the next it could be a little more light, but it's ‑‑ as I mentioned yesterday, it's a way to engage our listeners and take the pulse of the community.

2540             COMMISSIONER PENNEFATHER:  And this would become part of programming?

2541             MS STEVENSON:  It could be.  You know, we would initiate it in the news, but it's definitely a spillover topic that the announcers could also talk about.

2542             COMMISSIONER PENNEFATHER:  But it isn't the listeners being on air themselves?

2543             MS STEVENSON:  We would have listeners on air.  We would have a line to take their comments, and we would take those comments and put them on air.

2544             COMMISSIONER PENNEFATHER:  And who would be responsible for, if you will, monitoring the comments for deciding what goes on air?

2545             MS STEVENSON:  Well, that would ‑‑ that would have to be the news team.  Of course, the news director is not there all the time, so it would be the news team who is doing that and making sure nothing inappropriate gets on the air.

2546             COMMISSIONER PENNEFATHER:  And I'm looking at, now, the August 14th deficiency response, you indicated here that nearly a hundred percent of your programming will be locally produced, with the exception of some syndicated programming.  Could you tell us what parts of your proposed feature programming would be syndicated, including the types of programming and when they would be presented.

2547             MR. MAHEU:  It's our goal to have the radio station be as local and as live as possible.  And that's why we committed to the amount of live programming that we have.  We wanted to give you a sense of the type of music programming that we would be putting on the radio station, and sometimes there are syndicated programs that become available for this type of format that would be appropriate for the radio station to run.  We have no plan at this moment on exactly what syndicated features we are going to run, but we did want to give you a sense that from time to time, we're going to run some of that programming.  It's not going to be extensive, and it wouldn't be that often, but there are some great documentary syndicated programs out there, especially for oldies and oldies‑based programming.  There are a number of specials on bands like the Beatles, the history of rock'n'roll and things like that that are continuing instalment documentary type of programs that run an hour or two at a time and could run for, you know, a number of weeks.  On an average week ‑‑ over the course of a year on an average week, if we ran an hour and a half of syndicated programming on average a week, that would probably be a lot.  We don't anticipate making use of much of that type of programming, other than for special events.  There might be some things around Christmas or whatever that we would use some syndicated programming, but not very much at all.

2548             COMMISSIONER PENNEFATHER:  So could you give us a sense of what the percentage would be live programming?

2549             MR. MAHEU:  Our proposal calls for live programming during the 6 a.m. until midnight portion of the day, Monday through Sunday.  We're going to be live for those 18 hours each day, either a live announcer on the air or preproduced programming that's created on‑site by the station and broadcast at that time, and there will always be somebody in the radio station working, which we feel is important, and we're able to provide some sort of level of service and surveillance even during prerecorded programs that might have been put together by the station for broadcast at another time.  So live, 6 a.m. to midnight, Monday to Sunday.

2550             COMMISSIONER PENNEFATHER:  Let's move on to format, and I think I noted a comment in your presentation today.  Just to clarify, according to the research, you say here, the demographic for this format is adults 35 to 64 with the strength at 45 to 64, skewing 55‑percent men, women, 45 percent.  So what would be the median age of your core demographic?

2551             MR. MAHEU:  The median age is 48.

2552             COMMISSIONER PENNEFATHER:  48?  Getting close ‑‑

2553             MR. MAHEU:  I just entered into the target demo, but I'm not quite at the median age yet, so I'm getting close.

‑‑‑ Laughter / Rires

2554             COMMISSIONER PENNEFATHER:  All right.  Looking at it in terms of the content, it's broad‑based classics format.  If I go through this, it's an "oldies‑based classic hits format," quote unquote now.  Can you describe to us what a typical day would sound like and give us a sense of how much is '60s, '70s, how much is '80s, '90s because at one point, I think we did describe primarily '80s and the '70s in your Supplementary Brief.  So I'm not quite sure how it will work out through the day.

2555             MR. MAHEU:  Sure.

2556             Well, to give you an overall sense of what the radio station would sound like during the course of an average day, this is the type of format that is very mainstream, popular broad‑based.  There's no day parting involved or anything like that.  It's a the same music on a 24/7 basis.

2557             And really what this format does is it takes the very best or the essence of the oldies format ‑‑ and the oldies format is rooted firmly in songs from the mid‑'60s through the late‑'70s, and it combines it with the classic hits sound from the '70s, the '80s, and the '90s.

2558             And what you end up with is a ‑‑ very much an up tempo, fun, pop‑music‑based, gold‑based format.  When we're talking about music from the '60s and '70s, we're really talking about the great top 40 hits that people who are 45 to 64 grew up with, the Mammas and the Pappas, Diana Ross and The Supremes, the Temptations, The Guess Who, bands like that, and then moving into the '70s, artists like Three Dog Night and Steppenwolf and CCR and Rod Stewart, Doobie Brothers, those types of acts, really form the heart of oldies from the mid‑'60s through the mid‑'70s.

2559             But because of the way the regulations are with hit versus non‑hit on FM, it is impossible to do a format at this point in time that would be devoted just to music from the '60s and the '70s because they are ‑‑ it's all hit music that really drives this format.

2560             So we've had to modify it somewhat.  If the rules changed tomorrow, for instance, and the hit/non‑hit regulation went away, the research shows pretty clearly it would be an oldies station, be '60s and '70s.  And if after the radio review came out and that's what happened, then this would be a '60s and '70s radio station for the most part because that's what the folks really want.  That's where the heart and strength of it is.

2561             To comply with the regulations, we brought in over 50 percent of the music coming post‑1980, and to work with music from the late ‑‑ mid to late‑'60s and the '70s, that music from the '80s and '90s is going to be very much in the mainstream pop side of classic hits, rather than the rock side of classic hits.  So the radio station would sound very much like a mainstream popular music formatted radio station.  The classic hits part of it, which will be about 55 percent of the radio station, will be firmly from that pop‑based classic hits genre, rather than the rock side.

2562             You might recall we were talking yesterday about Medicine Hat.  Our proposal there, the classic hits portion of that format is from the rock genre side of classic hits, this one would be very much from the pop side.  So a general popular music mainstream format.

2563             COMMISSIONER PENNEFATHER:  Considering that, then, let me push that a little bit further and ask you why that wouldn't be the same as what is offered in the market today in terms of hot AC, AC, classic rock, AOR rock, how do you distinguish your proposal from what is currently available?

2564             MR. MAHEU:  We've taken a look at what is available in the marketplace, and it's an interesting market because much of the radio, demographically targeting, tends to kind of be right ‑‑ right around that middle.  Everybody is kind of converging in around the center of the popular music genres.  When you listen to the radio stations in the market today and what they're programming, there's nobody in the market today programming predominantly or a good portion of their music from the '60s and '70s in the pop genre.  The only radio station that comes even close from percentage terms would be JACKfm.  And, well, we've done BDS analysis of every radio station in the market.  We've taken a look at what they're playing, what year it comes from, and kind of give us a sense because your ears tell you one thing, and then the playlists tell you another.  And the only one that's close is JACK with about 30 ‑‑ and this was an audit that was done by BDC the week of October 18th through the 24th, so it's very recent.  It's last week.  And 36 percent of their music comes from the '60s and the '70s.  Actually, 7.3 percent from the '60s, 28.8 percent from the '70s, 36.9 percent from the '80s, 13.6 from the '90s, and 2000 until today is 13.6 percent.  Those are a lot of numbers, but in terms of the era of the music, that's one thing, but the sound of the music is quite different.  And it's interesting with the JACK format here in Regina, when you think of the JACK format, you immediately think classic hits because Rogers Radio has pioneered that format, and they've licensed the name throughout Canada and the United States.  I don't know what the arrangement is with Rawlco, but they're using the name JACK.  But it ‑‑ unlike in other marketplaces when you listen to a JACKfm radio station, it's classic hits.  Here, it's very much based on classic rock or rock, and it's even marketed that way when you look at the radio station on television.  So when we did the DDS monitor, we wanted to make sure that it ‑‑ you know, it was what it was, and we were right, it's a rock station for sure, it's not classic hits, but it's the only radio station in the market that comes close to playing that amount of music from the '60s and '70s.  And how we're different is we're very much a popular music, top 40 oldies, '60s and '70s, where they're much more rock‑based.

2565             COMMISSIONER PENNEFATHER:  Okay.  So the difference as opposed to yesterday, where we used classic hits as well as a term, is that it's more rock‑based here, and yours ‑‑ classic hits would be more pop‑based?

2566             MR. MAHEU:  Absolutely, yes.

2567             COMMISSIONER PENNEFATHER:  And can you see a distinction between what you're proposing and other applicants in this market that are proposing a similar format?

2568             MR. MAHEU:  I think we're the only one that is really proposing the level of music from the '60s and the '70s, and I think that's what makes us different.  It's what changes the targeting of the radio station slightly older as well.  I also think our proposal, for the amount of spoken word in the news commitment that we're going to do on the radio station differentiates us as well.  There is certainly a number of worthy applications.  We just felt through the research that we did and the investigation we did in the market, and we ‑‑ we came up with this format, and I'm glad we tested this wide because everybody does research a different way, and there's always ways to have fun with numbers.  But way we approach it is when we do research, we try to talk to as wide an audience as we possibly can so we don't leave very many people out.  So our research was done with people between 18 and 64, so a very large group of people.  We didn't just talk to 25 to 54s or older groups or younger groups, we talked to a representative why demographic 18 to 64 years‑old, and then we asked about nine different formats.  We didn't ask about two or three that, you know, we kind of wish we could maybe do.  We asked about country, we asked about AC, rock, pop, top 40, we did all those.  And this is what came back that the marketplace felt that was missing, and that there was a significant enough interest here that you could actually build a business around it and that's the reason we came to you with this proposal because it's the one that listeners have told us, through the research, that they like the most and feel is needed the most in the marketplace.  And when we look at the other stations in the market and what they're programming, the good news is that this format really doesn't impede or infringe on anybody's franchise in the market.  Any time a new station comes on, there's always going to be competition and a little bit of share moving around, but this radio station format proposal does not target any one particular station in the market.  So it could find its way in and maybe take a little bit of share from everybody and end up having a pretty good audience.

2569             COMMISSIONER PENNEFATHER:  Thank you.

2570             We'll move to Canadian talent development.  And I'm looking at the deficiency response of September 30th where there's a considerable discussion of the CTD contributions, as well as the earlier August 14th deficiency where there have been some changes in your proposal.  So I'd like to just clarify some aspects of this.  You indicated that the University of Regina will determine the criteria for distribution of scholarship funds and also the budget for funding festivals.  At the time, you also indicated that funding earmarked for the university should be split evenly between scholarships and funding for festivals representing a departure from your application, which indicated 75/25 split.

2571             In your other letter of August 14th, you indicated that funding to the University of Regina would be increased twofold to 40,000 per broadcast year.  So looking at all of this, do you intend the 40,000 to be split equally between scholarships and support for the university music festivals?

2572             MR. MAHEU:  I'm going to have, if I may, Brad Boechler talk to you a little bit about how that money is going to be split and the reason why.  We've had some excellent conversations with the folks at the university and found out a little bit more about what their needs are, and that's kind of driving what we're proposing and what we want to do.

2573             Brad, would you be kind enough to fill her in?

2574             MR. BOECHLER:  Thank you, Mark.

2575             A few weeks ago ‑‑ actually, more than a few weeks ago, I had a few very good conversations with Dr. Lynn Cavanagh, who is the head of the University of Regina Department of Music.  And though it looks like a beautiful facility here, and they do have a lot of very modern facilities at the university for arts and music, one of the things, as in most educational higher level institutions in Canada, they are stretched for money.  When I explained to her about what our proposal was, and I am not a ‑‑ I'm not a professor of anything for that matter, but especially music, I wanted to involve her and her department in the process as much as possible.

2576             One of the things that ‑‑ and she states it quite clearly in her letter of October 5th, supporting our ‑‑ her letter of intervention supporting our application, so I won't have to go through it in great detail, but there are a couple of highlights that I'd like to point out, if I may, and the one is a financial support of the students.  One of the things ‑‑ if we touch on festivals first, there is a festival currently in Regina, it's been operating for 25 years, supported by the Downtown Optimist Club of Regina.  They ‑‑ another colleague of mine is one of the core organizers of this festival, and his stories back to me is it is incredibly arduous to continue to look through and for ongoing corporate sponsorship in Regina.  This festival invites bands, orchestras, quartets of all genres of music from across the province to compete, normally in the spring.  The two people ‑‑ Lynn Cavanagh and this fellow that organizes were fairly unaware of each other, and so when I'd suggested, because I'd met with him prior to meeting with Lynn, about the corresponding linkage between the two, both were very receptive at the idea of being able to work together for a couple of reasons.  Number one, "The Regina Music Festivals," and if I may just quote this, "desperately needs serious sponsors.  They feel they need a financial boost it would take to thrive economically a measure equally to the creativity of that the youngsters and their music teachers are exhibiting."  Both would find a benefit because it's another ongoing way ‑‑ or another way that the University of Regina can seek out worthy scholarship applicants for their program and another way that the Optimists can grow their festival to the way ‑‑ or to the level that they expect.

2577             Another expenditure, which is also critical to them is in order to give the music festival any kind of credibility is that you need some world class adjudicators, and that's expensive because they normally come in from outside the city.  The other thing in consideration with the scholarship portion to the university is ‑‑ and, again, I quote because she says it better than I could paraphrase it, if I may.  She says, "It's a small wonder that a substantial number of our most talented, young musicians are attracted to music departments in other parts of Canada in the U.S., the ones that offer big scholarships to entering students in the amounts far above that of what we have in our disposal in our own department of music."

2578             COMMISSIONER PENNEFATHER:  One of the questions which we ask is, while considering what you just described, and I gather you've had considerable discussions with the University of Regina, how would you assure that the funds would be allocated in a manner that ‑‑ as you intend, so that they really meet with CTD eligible projects?

2579             MR. BOECHLER:  In discussion with Dr. Cavanagh, she understands some of our requirements from a CDT point of view.  Also, there are ‑‑ at the University of Regina, there are strict guidelines, if you will, on how scholarships can be awarded ‑‑ can be awarded, and she assured me that we would work with their scholarship people at that time to ensure that both are met.

2580             COMMISSIONER PENNEFATHER:  Turning now to another component of your proposed CTD, which I'm looking at the August 14th, 85,000 to Saskatchewan Recording Industry Association, correct?

2581             MR. MAHEU:  That is correct, yes.

2582             MR. BOECHLER:  Yes.

2583             COMMISSIONER PENNEFATHER:  And we asked you, I think, for further information on that particular ‑‑ on that particular project, and you gave us a breakdown on page 5 of the September 30th, and I believe that that breakdown would have changed with the total amount changing.  You increased this initiative by $15,000 per year to a total of 85,000 per broadcast year.  Can you provide us with a revised budget incorporating the $15,000‑a‑year increase?

2584             MR. MAHEU:  I have it right here.  We'd be happy to.

2585             COMMISSIONER PENNEFATHER:  Thank you.

2586             And in that breakdown, you mention ‑‑ I think it's a typo, "Marketing and branding of the east coast artists."  Did you mean ‑‑

2587             MR. MAHEU:  I hope it's a typo.  Yes, it is, yes.

2588             COMMISSIONER PENNEFATHER:  You've earmarked in this breakdown, and I assume the revised one as well, certain funds to administration costs.  Can you indicate how such an allocation would fall under eligible, direct CTD contributions?  I think there are two points ‑‑ there's administration costs of of 3,500 in the established artists program, and there's administration costs 2,300 in the emerging artists program, and a programming administrative costs.

2589             MR. MAHEU:  Those numbers have changed, by the way, in the revised budget.  The administrative costs on the established artist program is now $4,500, and the administrative costs on the emerging artists program is estimated to be $3,100 each year.  I'm not exactly sure what ‑‑ what the administrative fees are made up of, but I can certainly find out and document it with ‑‑ when we supply this budget to you, the revised budget, we can itemize what we expect the administrative cost to be composed of, if that would be okay?

2590             COMMISSIONER PENNEFATHER:  We would appreciate that if you could give us some detail on each of the administrative components, and, at the same time, if you could also describe for us the costs that are earmarked to funding artist representatives, such as publicist and managers.  As well, they may be integral to the program as you've described it, but we have to be sure that they really are monies going to artists in terms of CTD ‑‑

2591             MR. MAHEU:  Certainly or to the direct benefit of the artist, and we'll do our homework on that and provide you the appropriate documentation that supports these amounts, and we'll do that rather quickly.

2592             COMMISSIONER PENNEFATHER:  Just a comment too.  I was interested in your choices for the Canadian talent development area, and considering the presence in ‑‑ in this part of the world of something like the First Nations University of Canada, I was curious to know why you had not thought of a contribution to talent development in that area?

2593             MR. MAHEU:  I do believe that in our discussions with the university, you know, First Nations People are certainly part of their program, and they're endeavouring to make it an even bigger part of their program.

2594             Brad, I'm going to let you maybe chip in on that a little bit ‑‑

2595             MR. BOECHLER:  Sure.

2596             MR. MAHEU: ‑‑ because that is certainly part of the essence of what we're trying to do with this money to the university.

2597             MR. BOECHLER:  In both with the University of Regina and Sask Music, part of their mandate, in particular to Sask Music, is also First Nations/Aboriginal performances, so, I guess, our belief was it's already included in there.

2598             COMMISSIONER PENNEFATHER:  Thank you.

2599             Again, on CTD.  On your comments today regarding the Starmaker Fund, you say, "We will request that the fund direct our annual 90,000 contribution to Regina artists first and any excess to Saskatchewan artists."  Now, do you have any formal agreement with them in writing to this effect?

2600             MR. MAHEU:  Our agreement with Starmaker is similar to previous proposals to the extent which they can, and you requested us to provide a letter as to the ‑‑ to make sure that that was on the record, and we've asked them to supply us with that in writing as well for this application and the third application you'll be hearing from us.  So we'll be providing that to the commission within the weeks timeframe that we promised the original one.  All three letters will be in your hands.

2601             COMMISSIONER PENNEFATHER:  Thank you.

2602             We'll move on now to some questions regarding the market and your revenue projections.  One of the points we wanted to ask you to comment on was ‑‑ I'm sure you're aware of the letter from Mr. Patrick Grierson of the Canadian Broadcast Sales, CBS, contained in the intervention from Rawlco, and the comment here is the ‑‑ as he puts it, the decline in national sales revenues due to the inelastic advertising budgets, funding, significant increase, and demand in price in major markets.  Would you care to comment on this as it pertains to this market?

2603             MR. MAHEU:  I think there is a lot of truth to what Mr. Grierson is saying, and that's the reason he said it.  Regina and Saskatoon, for that matter, are not exempt from the problems that are facing markets of similar size across the country.  Ad rates in places like Toronto and Vancouver and Montreal to a great degree are escalating at an accelerated pace, and national advertisers are finding it harder and harder to squeeze their budgets, so what they end up doing, is as advertising gets more expensive in some of the major centers, some of the smaller centers or medium‑sized centers are starting to get bought around or purchased less.  We're finding this in markets where we operate in places like Moncton and Fredericton, Thunder Bay, Sudbury are all facing this same kind of squeeze, but the good news is that every radio broadcaster in markets this size knows that national business is really a smaller part of the revenue that we would be generating.  You know, 80 percent ‑‑ in a market this size, normally about 80 percent of your revenue is going to be local retail revenue, and when you do have a contraction in national advertising, although it does hurt and doesn't give you a lot of growth prospects in that small revenue slice, it's not the end of the world.  And most radio stations, and I'm sure the ones here have found new ways to generate additional incremental local revenue to make up for any shortfalls in national business.  As a company ‑‑ and I'm going to let Brad talk about this just the for a second because it's important.  Is that thunder?  It's ‑‑ this is a trend that's probably not going to reverse itself any time soon, and I think as radio broadcasters the sooner we get used to the idea in markets, you know, of under a half a million people start unhooking any reliance we have on national sales the better because the trend is quite clear in a lot of markets this size.  There is not a lot of growth in national radio advertising.  Retail is going to be where it's at, and it's going to be incumbent upon us to find new revenue sources, whether it be through things we do online with the Internet to maybe supplement some of the shortfall or the declining national sales in markets like this, and, Brad, if you could speak to that just for, you know, a couple of seconds.

2604             MR. BOECHLER:  Sure.  As you may notice in our budget projections for the first few years, in Regina, we're only forecasting 190,000 in national sales.  And as Mr. Grierson alludes to, Regina, Saskatoon, and the province of Saskatchewan are facing the same problem from a national perspective.  As Mark has mentioned, we have, in the smaller markets that we deal in on a day‑to‑day basis, our emphasis is really on the retail side.  That's where we're really going to make an impact.  National sales, at best, is a commodity buy, and when you start to come to rely on that from a certain percentage of your budget, especially when you're not in one of the nine majors, and particularly in Toronto, Vancouver, Montreal, Calgary, Edmonton, that's ‑‑ it requires some creativity.

2605             COMMISSIONER PENNEFATHER:  Just if we could keep on this discussion, I think it would be very helpful.  As you know, an important part of our evaluation of new radio applications is determining the impact on existing stations and asking if any should be licensed in a market without resulting undue impact on the existing stations.  Now, in the year ending August 31st, 2005, we note the profitability of the Regina/Saskatchewan combined radio market was below the national average for English‑language commercial radio.  Nevertheless, here we are with a number of applications.  So it would be helpful if you could tell us the factors you took into consideration in determining that the Regina/Saskatoon market was capable of supporting new stations at this time.  How ‑‑ I notice, for example, in your presentation today you present us with an analysis of, I think it's four markets, and numbers of people required to support a station that you're looking at, some indicators there, so perhaps you could also expand on that as an indicator.

2606             MR. MAHEU:  Sure.  The ‑‑ in our opening remarks when we were talking about those different markets, it was really to just illustrate markets of similar or smaller size, their capacity, to handle the amount of radio they have.  And we were kind of using that to support our premise that Regina is a market that would be large enough to support additional radio services because there are a number of centers across Canada that are smaller than Regina that have just as much radio and, in some cases, more.  It's been, I think, almost 25 years now since a new radio station has gone on in Regina.  The amount of service here has not increased.  I can't remember, but I think it was 1984 ‑‑ '82 was the last time a new radio service came to Regina.  So that's quite a long period of time.

2607             There's always ‑‑ and we know this from our experience because we do operate in a number of markets, small, medium, and large.  There is always a certain amount of trepidation as an incumbent broadcaster when new competition is coming in, especially when it's been a marketplace that is very comfortable and has been giving you pretty decent returns for quite a while.

2608             In the case of Regina, the economy here is ‑‑ is not Alberta, there's no question about that, and I don't think anybody is going to argue that it's ‑‑ this is like Calgary or Edmonton or even Medicine Hat, but the economy here is pretty good, and things are continuing to pick up, and people in Regina are optimistic about the future.  When we did radio research in the market, we also found out there is a hole in market for a new service that people would listen to that would generate enough listening share to actually make a business.  So we know that there's ‑‑ from a listeners' side, there's a need and a want for additional service.  The question really comes down to, can the market and the economy in this area support additional services, and when you look at the way the market is carved up, there are two operators, both have consolidated operations.  They have three stations each, and they enjoy the economies of scale that go with operating three.  The proposal we put forth is rather modest in terms of our revenue needs and our goals over the first seven years.  As a matter of fact, we lose a significant amount of money for the first seven years if we just execute the business plan the way it is.  But the reason for it is, that we have always entered marketplaces with the long‑term view in mind.  We know we're not going to get rich in Regina overnight.  It's going to be hard work and a lot of heavy lifting, but we're prepared to do it because we want to be doing business in this market today, tomorrow, seven years from now and 17 years from now.  So the sooner we start, the sooner we can start to enjoy some level of success after we get the hard work and the expense and the investment out of the way.  We do believe that there's room in a market this size, almost 200,000 people in Regina, for a third radio operator, especially one that's willing to come in and operate at somewhat of a disadvantage against consolidated competitors.  We believe that there's enough economies of scale with the existing operations and enough new business out there that will only come out of the woodwork if a new entrant comes into the market and starts knocking on additional doors, and that's not to say that Harvard and Rawlco do not do a good job generating revenue.  I'm sure they do, but it just goes that when there's "a new kid on the block," quote, unquote, that's willing to go out there and knock on doors that maybe aren't being knocked on right now or come to the table with new ideas to generate radio revenue, that radio pie, that revenue pie, is going to expand, and we see that in virtually every market where new radio stations have been licensed.  We're seeing it in Edmonton right now, we're seeing it in Halifax right now, we're seeing it in Ottawa right now, and we'll see it in Calgary very soon when some of these new licences go on the area.  So there's more money out there for radio, but a new entrant has to be the one to go out, knock on the doors, and ask for it, and we believe we can do that.

2609             COMMISSIONER PENNEFATHER:  I think that takes my last question away from me because I was going to go back to a very precise point, and that is that you have said that your format ‑‑ based on your format that your advertising revenues in year one, 35 percent would come from existing stations.  So it is your view that there is potential for new advertising, going back to our discussion on the retail market?

2610             MR. MAHEU:  Absolutely, and, Brad, if you could just maybe interject on that.

2611             MR. BOECHLER:  Sure.  Thanks, Mark.

2612             If we take from this day forward, by the time the decision comes down on who may be fortunate enough to come into Regina, hopefully it's us, and following FP Market's research of the market growing eight percent, and then by 23 percent by next year, within the next two years, by 2008, eight percent, we would probably be on the air some time in 2008.  So by that time, the market has already expanded.  Our estimate being by about another million dollars.  So if you can take into consideration a million dollars and our first year budget ‑‑ for our first year target is 1.3 million, in which would be less than ten percent what we believe of the radio advertising available in the market.  And just following the retail sales forward, if you take that the market will naturally expand by a million dollars, we'll take 35 percent, so call it around 350,000, and let's say for sake of argument we take it equally from Harvard and from Rawlco, that's approximately, what, 150, $160,000 per operation?  So as ‑‑ by the time the licence gets on, by the time the market naturally expands and grows, our effect on the two operators currently will be minimal at best.

2613             COMMISSIONER PENNEFATHER:  Thank you.  Thank you very much.

2614             Those are my questions, Madam Chair.

2615             THE CHAIRPERSON:  Thank you.  Is it Mr. Boechler?

2616             MR. BOECHLER:  Yes, Madam Commissioner.

2617             THE CHAIRPERSON:  Good thing you left Saskatchewan.  You're far too optimistic for us.  We're the glass is half empty.  On page 3, I wanted to ‑‑ is Moncton an ‑‑ and excuse my ignorance, is ‑‑ aren't there two languages ‑‑ dual languages operating in that market?

2618             MR. BOECHLER:  Yes, there is.

2619             THE CHAIRPERSON:  Okay.  And what about Saint John?

2620             MR. BOECHLER:  I don't believe so.

2621             MR. MAHEU:  No.

2622             THE CHAIRPERSON:  Is that a totally English market?

2623             MR. MAHEU:  English.

2624             THE CHAIRPERSON:  Okay.  And my heart did palpitate, Mr. Maheu, when we got into the COL doing a hundred percent live to air, and you then said or prerecorded.  What is the difference between being prerecorded and voice tracked?

2625             MR. MAHEU:  What I meant when I said prerecorded were if we were running ‑‑ it was, I think, in reference to some of those syndicated programs that from time to time we might run on the radio station.  We consider that to be prerecorded, so it's going to run.  We're not going to do any voice tracking on the radio station between six in the morning and midnight.  It's going to be live or live to air.  In other words, if the programming that is on the air is being run on a prerecorded basis because we're running the Beatles documentary called Day in a Life or whatever, there's still going to be somebody in the studio that when the commercial breaks come on, they're going to be able to tell you about the weather forecast and what's going on around town and then back to the show.  So we're going to have somebody on the air, in the studio on a 6 a.m. to midnight, seven‑day‑a‑week basis, no voice tracking.

2626             THE CHAIRPERSON:  Okay.  So just so it's on the record so that it ‑‑ prerecorded means syndicated programming?

2627             MR. MAHEU:  Yeah, it could be programming that was created inside the radio station as well.  You know, the morning team if they're doing ‑‑ if we develop a program where the morning team is doing some sort of Saturday night oldies show that runs for a couple of hours and might have them introducing songs and doing bits from the morning show throughout the week, that might run on a prerecorded basis on Saturday night at 9:00, but there's still somebody in the studio providing live service, live surveillance, between commercial breaks when that program is running, but it's station‑produced programming for the most part.

2628             THE CHAIRPERSON:  Okay, thank you.  And now I have remembered.  It is your time to tell us why we should licence you in the pearl of the prairies, Regina.

2629             MR. MAHEU:  We know you have many people that want to come up here and take the valuable time, so we won't take very long.

2630             Thank you for the opportunity to present ‑‑ for us to be able to present our idea for a new radio station in Regina.  It's been a long time since Regina has had a new listening option, 1982 was the last time there was a new radio station in the city.

2631             The operators here are good operators.  Rawlco and Harvard are responsible, they're professional, and they do an excellent job.  Having said that, we do believe that listeners in Regina deserve an extra choice.  We believe that the economic data supports a robust economy to the point that a new, modest radio entrant would be viable in the marketplace and have a minimum impact on the incumbent broadcasters to the benefit of everyone:  Advertisers have another choice to look at for radio, a new entrant like Newcap will help expand the radio pie.  We're prepared to bring our money to the table, a million and a half dollars over seven years for the development of Canadian talent, the programs with the university and SRIA are important, and will pay dividends in the long run.

2632             This is a new market for us in a new province.  We're not doing business here right now, and we would very much like the opportunity to do so.  And if we're awarded the licence we'll do it in the usual Newcap manner in a forthright and professional way.  And thank you for your time and attention, and we hope we have that opportunity.

2633             Thank you again.

2634             THE CHAIRPERSON:  Thank you.

2635             I hate to say we'll take five minutes.  Does anybody wish to or ‑‑ no?  Then we will simply be silent until the next applicant is seated.

2636             Madam Secretary...?

2637             THE SECRETARY:  Thank you, Madam Chair.

2638             I would now call on the next applicant, Standard Radio Inc. to come forward to the presentation table.

2639             We will now proceed with item 11 on the agenda, which is an application by Standard Radio Inc. for a licence to operate an English‑language commercial FM radio programming undertaking in Regina.  Maybe I'll just give you a few minutes.

2640             THE CHAIRPERSON:  I think, Madam Secretary, we have to wait for Mrs. Taylor and I think a few more other panelists.  Maybe we should take ten minutes.  Like, is Ms Taylor supposed to be with you?

2641             MS MITCHELL:  She is.  She's just taking a quick break for the washroom.  She'll be back in one moment.

2642             THE CHAIRPERSON:  In one moment?  Okay, we'll wait.

2643             HEARING SECRETARY:  Okay.  We'll start this again.  Okay.  We'll start this again.  We're going to proceed with item 11 on the agenda, which is an application by Standard Radio Inc. for a licence to operate an English‑language commercial FM radio programming undertaking in Regina.  The new station would operate on frequency 92.7 megahertz (channel 224C1) with an effective radiated power of 100,000 watts (non‑directional antenna/antenna height of 146.2 metres).

2644             Appearing for the applicant is Ms Sharon Taylor who will introduce her colleagues.  You will then have 20 minutes for your presentation.  Please go ahead.

PRESENTATION / PRÉSENTATION

2645             MS TAYLOR:  Thank you very much.  My apologies for my quick bathroom break.

2646             Good afternoon, Chair Cram, Members of the Commission, my name is Sharon Taylor, and I am the VP and the GM of Standard Radio Manitoba.  I oversee two FM radio stations in Winnipeg.  Hot 103, which is a CHR, and QX104, a new country.  As well, I'm also responsible for Standard Radio's two FM stations in Brandon, Manitoba, pardon me, 101.1 FM, the Farm, and a new country station, and KX96, a rock station.

2647             It certainly my pleasure to be back in Saskatchewan.  I was a market manager here in Regina just a few years ago, and early in my career, I was a program director at CHAB in Moose Jaw.

2648             Before we begin, I would like to introduce to you the members of our team, all of whom have played a key role in developing our application.  To my right, Diane Morris, director of finances for western Canada; to my left, Norine Mitchell, our retail sales manager in Brandon, Manitoba; to Norine's left, Janet Trecarten.  Janet is currently the program director of our country music station in Winnipeg, QX104 FM, and will be our general manager at Country 92 Regina, should you award us this licence.  Directly behind me, Leah Singleton.  Leah is one of our department heads in Winnipeg and the traffic manager for our Manitoba cluster.  Today, she is with us in her capacity as an Aboriginal advisor for this application.  To Leah's right is Betty Selin, regional news director for Standard Radio.  Betty is in Vernon, BC.  She is also the recent winner of the Jack Webster Fellowship, and last year, she won an RTNDA award for best small market newscast.  To Leah's left is Tom Tompkins.  Tom is a veteran of the Canadian country music scene, a past president of the Canadian Country Music Association, and our Canadian country music consultant.  Another way to figure out who Tom is to look for the one that's not like the others.

‑‑‑ Laughter / Rires

2649             MS TAYLOR:  Beside Tom is Janet Lazaris.  Janet is the principal of the Research Strategy Group in Toronto, and she handled our research.  That is our Standard Radio team.

2650             We are very pleased to be here today to apply for an FM country music station for Regina.  This radio station, which we will call Country 92 FM during our presentation ‑‑

2651             THE CHAIRPERSON:  Ms Taylor...?

2652             MS TAYLOR:  Yes.

2653             THE CHAIRPERSON:  We rushed you.  Would you like to take five minutes?

‑‑‑ Laughter / Rires

2654             MS TAYLOR:  We're fine.

2655             THE CHAIRPERSON:  Okay.

2656             MS TAYLOR:  I actually did run.

2657             COMMISSIONER WILLIAMS:  Yeah, take a minute anyway and get your breath.

‑‑‑ Laughter / Rires

2658             MS TAYLOR:  Thank you.

2659             This radio station, which we will call Country 92 FM during our presentation today will play contemporary country or new country music featuring some of Canada's and Saskatchewan's great country music stars.  Most importantly, Country 92 will play this music on FM allowing country music fans in Regina to hear their favourite music as it was intended to be heard, in crystal clear stereo and originating with pride from a radio station within their own community.

2660             Perhaps one of the most surprising things about Regina is the recent strength of the economy.  The economic growth rate here has outpaced the national average for three years in a row.  The service sector grew by 3.6 percent, the population is slightly up as are housing starts.  Household income is two percent above the national average, and it's expected to increase 22 percent over the next five years.  Another key indicator, consumer spending, it's strong.  Retail sales in 2005 grew by almost 11 percent, and you can count on continued spending growth with last Friday's announcement that the Finance Minister chopped two percentage points off the PST.  This surprising and welcome announcement was made possible, in his words, "Because the Saskatchewan economy is red hot right now."  This ordinarily stable province is poised to experience inordinate growth, and we're very enthusiastic about the potential of contributing in all areas to the opportunities that are unfolding here.

2661             The Commission has been supplied with lots of statistics and information for these hearings.  We ask that you consider one more additional point that we feel is highly relevant to the issue of whether the market can support another radio operator.  When CRTC reported radio sales across the country are compared to population, and then the provinces are ranked on per capita radio sales, Saskatchewan is the province that comes out on top, number one, with only 34 radio stations, this is clearly not an overradioed province or market.  In Canada, Regina is the city with the highest per capita radio sales with only six radio stations in the market.

2662             Radio operators in this city are profitable and comfortable.  The notion that licensing another broadcaster in the market will only thin existing revenues resulting in cutbacks of local services is not one that we subscribe to.

2663             As you know, Standard Radio is a family‑owned and operated business and a leading Canadian broadcast company.  We have a well‑known track record of serving the communities we operate in, and an almost legendary reputation and commitment to the Canadian Music Industry.  With 51 radio stations in seven provinces in markets small, medium, and large, Standard Radio truly understands the importance of local radio service.

2664             While some of our radio stations are located in major markets, like Montreal and Toronto, the majority of Standard's radio stations are in western Canada.  In fact, Allan Slate(ph) learned some of his earliest radio lessons right here in Saskatchewan, as a news reporter and announcer at CHAB Moose Jaw before he moved on to Edmonton.

2665             In preparing our application for Country 92 FM, Standard listened to the needs expressed by the many members of the Regina community.  We closely analyzed the Regina economy, and we commissioned research to accurately pinpoint what is currently missing, if anything, from the radio landscape.

2666             To highlight our research findings, Janet Lazaris of Research Strategy Group.

2667             MS LAZARIS:  The purpose of our study was to help Standard Radio identify the most appropriate format for their plans to serve the Regina radio market.

2668             First, our studies showed that there is a viable business opportunity for two different FM formats in Regina, a modern rock format, and a new country format.  Both would attract a significant audience, each with a very distinct profile.  Of the two formats, Standard chose the new country FM option for the following reasons:  First, diversity.  There is currently no country music format on FM in Regina.  A large proportion of potential listeners to Country 92 FM, 45 percent, currently identified an out‑of‑market FM station as their favourite station.  Country music fans in Regina also top the category for spending time with non‑traditional radio services.  42 percent reported listening to music from satellite radio, Internet radio, or a digital music channel in the past week, not so hard to imagine when there is no local service.

2669             Based on the results of the study, it became clear that the addition of an FM country format to the Regina radio landscape would cause minimal ratings hardship to the incumbent broadcasters, none of whom program country music on FM.

2670             Secondly, a new country format would draw a large and saleable audience.  Fully 45 percent of the 18‑plus audience indicated that they would be either very likely or somewhat likely to tune the new country format.  Based on the favourite station response, we would project that new country FM format has the potential to gain an eight‑percent share of the listening among 18‑plus adults in Regina.

2671             All in all, the research indicates that Standard's new country format would be viable with a high degree of diversity that would strengthen the local radio market and would be a welcome addition to the media landscape by both listeners and the advertisers who would like to appeal to these consumers.

2672             MS TAYLOR:  Thank you, Janet.

2673             Country 92 FM Regina will feature artists that just don't get airplay on FM radio in Regina.  We will be featuring many of the Canadian artists that Standard Radio supports across the country.  To further illustrate we've prepared this brief audio presentation for you.

‑‑‑ Audio Clip / Clip audio

2674             MR. TOMPKINS:  Regina's Country 92 FM will play artists like Toby Keith, Alan Jackson, Martina McBride, Kenny Chesney, and Keith Urban, as well as established Canadian acts like Terri Clark, Shania Twain, Brad Johner, the Wilkinsons, and Paul Brandt.  We'll have a strong focus on new and emerging Canadian artists like the Coreblund Band, the Road Hammers, Johnny Reid, and local acts such as the Poverty Plainsmen and Shane Yellowbird, as well as the annual winner of our Country 92 FM talent contest.

2675             Country 92 FM will play a variety of country artists, none of them presently heard on FM in Regina.  With the existence of an FM country music station, Canadian country music stars will be able to have their fans hear their music the way it was intended, in FM stereo.

2676             Janet Trecarten, our general manager, has a few comments regarding the programming.

2677             MS TRECARTEN:  The country music format on FM is one of the most consistently successful radio formats in Canada.  No longer a niche format, country music is now a mass appeal blockbuster.  Country music stations on FM have consistently strong audience ratings in markets across all of Canada, but they are particularly popular in western Canada.

2678             To frame our position that Regina needs and deserves an FM country music radio station, Regina is the largest western Canadian city currently without one.

2679             Standard Radio owns and operates successful country radio stations on AM and FM in both small and large markets.  Our expertise and success in this format, as well as our passion for the music and the artists who make it, will help ensure a successful and popular radio station for both advertisers in Regina and Canadian country artists.

2680             At Standard Radio, we compare playlists frequently with other liked formatted stations in our team, so if a local artist is successful in Regina, we can provide that opportunity to take their exposure from a regional to a national level.  With this proactive approach to nurturing and exposing Canadian talent and our commitment to establish Canadian superstars, in this format, reaching and maintaining 40‑percent Canadian content, including 40 percent 6 a.m. to 6 p.m. Monday to Friday will be very manageable.

2681             New and emerging country artists will be given an enormous boost on Country 92 FM.  One in ten songs played on our radio station will be from a new and emerging Canadian artist, that's ten percent of the songs that we'll air.

2682             MS MITCHELL:  As Sharon noted earlier, Saskatchewan is growing.  Private companies across Canada and around the world are voting thumbs up on Saskatchewan as a place to do business.  And as the capital city, Regina is poised to be a key benefactor in this current and future growth.

2683             In the past year, record job numbers have been posted in this province, and, with that, comes record retail spending.  The general manager of Regina's largest mall, the Cornwall Centre, sees his mall's retail spending up ten percent over last year with no let‑up in sight, and that was before the provincial sales tax cut.

2684             I've met with key advertisers in Regina, many of them radio users with a long and strong relationship with the existing broadcasters.  Many advertisers, even some who signed the incumbent's petition were anxious to find out more about our application.  They were unclear on what was being proposed for this licence, and once I presented our plans for Country 92 FM, I was truly met with enthusiastic report.

2685             Cow Town, a major retailer who has a long and successful relationship with using radio, stated that if they had known a country FM station was possible, they would have reconsidered supporting the petition.  The Country 92 FM audience is one he would very much like to reach.

2686             The owner of the Keg Restaurant stated that in comparison to other markets he does business in, he finds Regina to be underserviced and sees the benefit of a proposed radio station.

2687             The owner of Wendy's restaurants was very excited about the possibility of having a Standard Radio station in the market, as he has dealt with us, with our company, in other markets and respects our integrity and the positive influence we bring to the communities that we do serve.

2688             Finally, I spoke with Ashley Furniture, the most recent big‑box furniture that opened in Regina.  He agreed that he would use a country FM station if it were available in this market, and he did base his comment on his experience doing business in other markets with Standard's new country format and the valuable audience it delivers.

2689             Regina is open for business and growing.  Standard Radio has a plan to work hand in hand with advertisers and the community to be part of and contribute to that growth.

2690             MS SELIN:  Our application not only offers an opportunity for diversity in the Regina market, but it also brings a fresh new editorial voice to the region.  We plan to air 30 live newscasts per work week.  Our news center will provide road conditions, community information, sports, and weather.  We'll have reporters covering community meetings and events and a website that will be truly interactive bringing our listeners the information they want any time they want it.

2691             Ten percent of our workweek will be spoken word programming.  We're very proud of our community news magazine program set to air each Sunday, designed specifically for those who don't currently have a voice in mainstream media, in particular, the Aboriginal community.

2692             By awarding this new licence for Country 92 FM in Regina, the Commission will be giving radio listeners a fresh new news option.  It also helps strengthen our Standard Radio news centers across the country by adding a new Saskatchewan component.  We look forward to sharing our passion for broadcasting with the residents and businesses of the region.

2693             It's our belief the strongest option for bringing diversity to the Regina market is that of Standard Radio.

2694             To further explain our special Sunday news magazine program and our Aboriginal initiatives, Leah Singleton.

2695             MS SINGLETON:  Many Aboriginal people do not have a voice in the mainstream media in the city, yet Regina ranks second in the country in Aboriginal population per capita.  In fact, by the year 2050, it is estimated that half of Saskatchewan's population will be Aboriginal, today at 17 percent.  Needless to say, this year and every year for the next 44 years and onward, this city and this province will undergo terrific change.  It promises to be a challenging time.

2696             Our Sunday morning news magazine program will address this change and the issues that effect the large and growing First Nations community.  We will cover Band issues that relate to all Aboriginal people in the Regina region, and the weekly topics will range from local events to national events of the Grand Chief Council.

2697             Discussions ranging from Canada's Aboriginal Day, voting procedures for local Band councils, and the latest developments for survivors of residential schools will be aired weekly.  Native youth programs, such as youth leadership employment programs, health and family issues will also be on our agenda.  We'll plan on inviting Native Elders to advise youth through interviews in their Native languages, helping young people retain a sense of their history.

2698             As part of our Canadian talent development program, we will recruit and train Aboriginal stringers to provide local and relevant content for the show.  And we have earmarked $15,000 yearly for this initiative.

2699             Additionally, we will guarantee a $10,000 annual bursary at First Nations University, which is located on the University of Regina campus.  This yearly contribution will underwrite two aspiring Aboriginal broadcast journalists, as they participate in the two‑year program.

2700             Finally, Standard Radio has been a lot ‑‑ has long been a supporter of Aboriginal Voices Radio, and, again, we have an agreement with them.  They will produce programming that can and will be included on our weekly news magazine program in Regina.

2701             Many people I spoke with were very excited about this new opportunity to connect, not just within the Aboriginal community, but the greater community of Regina.

2702             MR. TOMPKINS:  Our Canadian talent development program also includes some very unique artist and music concepts for the Regina community.  First is the Shine On Saskatchewan Talent Search.  Each year, $30,000 will be devoted to this initiative, including a cash prize of $10,000 and a special showcase to introduce our winner to influential people in the music business.

2703             Standard will also direct $25,000 per year toward the Saskatchewan Recording Industry Association or Sask Music of which it is now known.

2704             This province is home to a fantastic organization that we can't wait to support.  The Saskatchewan Music Educators Association.  We are now pledging $25,000 per year to assist with two very worthwhile programs that they administrate.  The first is the Provincial Honours Group.  Children from grades 8 to 12 are teamed together with professional musicians, and, together, they put on a gala concert.  Two of the past students include last years runner up on Canadian Idol, Theresa Sokyrka, and this year's third‑place finisher on Canadian Idol, Tyler Lewis.

2705             The other program is the Heart of the City Piano Project.  There are 11 intercity schools in Regina where volunteer musicians visit to play and speak to the kids about music.  The goal is to convince kids to take up an instrument, and in doing so, help keep them interested in staying in school.  Free instruments and lessons are part of this very successful program.

2706             Standard Radio will continue to support FACTOR with a donation of $20,000 per year, and we have discussed keeping as much of that money as possible, up to 50 percent, here in Saskatchewan.  We will also direct $10,000 annually to Canadian Music Week, and those funds will underwrite Saskatchewan artists showcasing during the annual conference.

2707             Standard Radio will continue its support of the Starmaker Program with an annual cash donation of $10,000, and, finally, we will make a yearly $5,000 donation available to the Canadian Country Music Association.

2708             MS TAYLOR:  Our Canadian talent development program also includes three non‑cash benefit programs.  These include Standard's well‑known national free ad plan, which runs commercials promoting new Canadian CDs.

2709             Standard Cares, our national program assisting local children's hospitals and our national public service announcement program, which has Standard radio stations airing public service announcements every hour.

2710             In total, Standard Radio will dedicate $150,000 in cash each year or $1,050,000 cash total over the seven‑year term.

2711             With our $875,000 in‑kind programs, our total Canadian talent development package is almost $2 million over the term of the licence.

2712             In summary, we've presented what we consider to be a well‑thought out and strong application for a new and unique FM radio station for Regina.  The key highlights of our application are as follows:  Research that shows that Regina wants, needs, and can support a country music station on FM, a new independent editorial voice with national connections, 40 percent Canadian content, including 40 percent 6 a.m. to 6 p.m. Monday to Friday, a benefits package of $1,050,000 in cash over the licence term, as well as indirect Canadian talent development benefits of another $875,000, nearly two million in cash and in kind over the licence term, 20 new jobs, and almost 10 million in investment over the term of the licence, a partnership with Aboriginal Voices Radio that will be part of our news and magazine coverage to the area, a realistic and achievable business plan.

2713             We feel our application brings diversity to Regina with an exclusive format, country music on FM, and a new editorial voice.  We know that the Commission is well aware of the commitment of Standard Radio, which starts at the very top of our organization to assisting in and being part of growing Canadian talent.  It is both a pride point and the hallmark of our company.

2714             This concludes our presentation, we appreciate the opportunity to answer any questions, and thank you for suffering through my introductions.

‑‑‑ Laughter / Rires

2715             THE CHAIRPERSON:  Thank you.

2716